[4&14] G.R. No.
G.R. No. 108946 January 28, 1999 illustrations advertising copies, labels, tags, and box wraps; (p) Dramatizations,
FRANCISCO G. JOAQUIN, JR., and BJ PRODUCTIONS, INC., petitioners,
vs. HONORABLE FRANKLIN DRILON, GABRIEL ZOSA, WILLIAM
ESPOSO, FELIPE MEDINA, JR., and CASEY FRANCISCO, respondents.
Complaint; Designation of Crime by Secretary of Justice; Probable Cause; In
reviewing resolutions of prosecutors, the Secretary of Justice is not precluded from
considering errors, although unassigned, for the purpose of determining whether
there is probable cause for filing cases in court.—In reviewing resolutions of
prosecutors, the Secretary of Justice is not precluded from considering errors,
although unassigned, for the purpose of determining whether there is probable cause
for filing cases in court. He must make his own finding of probable cause and is not
confined to the issues raised by the parties during preliminary investigation.
Moreover, his findings are not subject to review unless shown to have been made
with grave abuse.
Same; Same; Same; Secretary of Justice is not precluded from making a
preliminary determination of this question in resolving whether there is probable
cause for filing the case in court.—It is indeed true that the question whether the
format or mechanics of petitioners’ television show is entitled to copyright protection
is a legal question for the court to make. This does not, however, preclude
respondent Secretary of Justice from making a preliminary determination of this
question in resolving whether there is probable cause for filing the case in court. In
doing so in this case, he did not commit any grave error.
Copyright Law (Presidential Decree 49); The format of a show is not
copyrightable under Section 2 of P.D. 49.—To begin with, the format of a show is
not copyrightable. Section 2 of P.D. No. 49, otherwise known as the DECREE ON
INTELLECTUAL PROPERTY, enumerates the classes of work entitled to copyright
protection, to wit: Section 2. The rights granted by this Decree shall, from the
moment of creation, subsist with respect to any of the following classes of works: (a)
Books, including composite and cyclopedic works, manuscripts, directories, and
gazetteers; (b) Periodicals, including pamphlets and newspapers; (c) Lectures,
sermons, addresses, dissertations prepared for oral delivery; (d) Letters; (e) Dramatic
or dramatico-musical compositions; choreographic works and entertainments in
dumb shows, the acting form of which is fixed in writing or otherwise; (f) Musical
compositions, with or without words; (g) Works of drawing, painting, architecture,
sculpture, engraving, lithography, and other works of art; models or designs for
works of art; (h) Reproductions of a work of art; (i) Original ornamental designs or
models for articles of manufacture, whether or not patentable, and other works of
applied art; (j) Maps, plans, sketches, and charts; (k) Drawings or plastic works of a
scientific or technical character; (l) Photographic works and works produced by a
process analogous to photography; lantern slides; (m) Cinematographic works and
works produced by a process analogous to cinematography or any process for
making audio-visual recordings; (n) Computer programs; (o) Prints, pictorial
IPL- Assignment No. 10 (Entire Copyright Cases)
translations, adaptations, abridgements, arrangements and other alterations of
literary, musical or artistic works or of works of the Philippine government as herein
defined, which shall be protected as provided in Section 8 of this Decree; (q)
Collections of literary, scholarly, or artistic works or of works referred to in Section
9 of this Decree which by reason of the selection and arrangement of their contents
constitute intellectual creations, the same to be protected as such in accordance with
Section 8 of this Decree; (r) Other literary, scholarly, scientific and artistic works.
This provision is substantially the same as §172 of the INTELLECTUAL
PROPERTY CODE OF THE PHILIPPINES (R.A. No. 8293).
Same; The format or mechanics of a television show is not included in the list
of protected works in §2 of P.D. No. 49. The protection afforded by the law cannot
be extended to cover them.—The format or mechanics of a television show is not
included in the list of protected works in §2 of P.D. No. 49. For this reason, the
protection afforded by the law cannot be extended to cover them. Copyright, in the
strict sense of the term, is purely a statutory right. It is a new or independent right
granted by the statute, and not simply a preexisting right regulated by the statute.
Being a statutory grant, the rights are only such as the statute confers, and may be
obtained and enjoyed only with respect to the subjects and by the persons, and on
terms and conditions specified in the statute. Since . . . copyright in published works
is purely a statutory creation, a copyright may be obtained only for a work falling
within the statutory enumeration or description. Regardless of the historical
viewpoint, it is authoritatively settled in the United States that there is no copyright
except that which is both created and secured by act of Congress.
Same; Copyright does not extend to an idea, procedure, process, system,
method of operation, concept, principle, or discovery, regardless of the form in
which it is described, explained, illustrated, or embodied in such work.—P.D. No.
49, §2, in enumerating what are subject to copyright, refers to finished works and not
to concepts. The copyright does not extend to an idea, procedure, process, system,
method of operation, concept, principle, or discovery, regardless of the form in
which it is described, explained, illustrated, or embodied in such work. Thus, the new
INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES provides: SEC.
175. Unprotected Subject Matter.—Notwithstanding the provisions of Sections 172
and 173, no protection shall extend, under this law, to any idea, procedure, system,
method or operation, concept, principle, discovery or mere data as such, even if they
are expressed, explained, illustrated or embodied in a work; news of the day and
other miscellaneous facts having the character of mere items of press information; or
any official text of a legislative, administrative or legal nature, as well as any official
translation thereof.
Same; The copyright does not extend to the general concept or format of its
dating game show.—What then is the subject matter of petitioners’ copyright? This
Court is of the opinion that petitioner BJPI’s copyright covers audio-visual
recordings of each episode of Rhoda and Me, as falling within the class of works
Page 1 of 101
mentioned in P.D. 49, §2(M), to wit: Cinematographic works and works produced by
a process analogous to cinematography or any process for making audio-visual
recordings; The copyright does not extend to the general concept or format of its
dating game show. Accordingly, by the very nature of the subject of petitioner
BJPI’s copyright, the investigating prosecutor should have the opportunity to
compare the videotapes of the two shows.
Same; Mere description by words of the general format of the two dating game
shows is insufficient; the presentation of the master videotape in evidence was
indispensable to the determination of the existence of probable cause.—Mere
description by words of the gen-eral format of the two dating game shows is
insufficient; the presentation of the master videotape in evidence was indispensable
to the determination of the existence of probable cause. As aptly observed by
respondent Secretary of Justice: A television show includes more than mere words
can describe because it involves a whole spectrum of visuals and effects, video and
audio, such that no similarity or dissimilarity may be found by merely describing the
general copyright/format of both dating game shows.
MENDOZA, J.:
This is a petition for certiorari. Petitioners seek to annul the resolution of the
Department of Justice, dated August 12, 1992, in Criminal Case No. Q-92-
27854, entitled "Gabriel Zosa, et al. v. City Prosecutor of Quezon City and
Francisco Joaquin, Jr.," and its resolution, dated December 3, 1992, denying
petitioner Joaquin's motion for reconsideration.
Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of
Copyright No. M922, dated January 28, 1971, of Rhoda and Me, a dating
game show aired from 1970 to 1977.
On June 28, 1973, petitioner BJPI submitted to the National Library an
addendum to its certificate of copyright specifying the show's format and style
of presentation.
On July 14, 1991, while watching television, petitioner Francisco Joaquin, Jr.,
president of BJPI, saw on RPN Channel 9 an episode of It's a Date, which
was produced by IXL Productions, Inc. (IXL). On July 18, 1991, he wrote a
letter to private respondent Gabriel M. Zosa, president and general manager
of IXL, informing Zosa that BJPI had a copyright to Rhoda and Me and
demanding that IXL discontinue airing It's a Date.
In a letter, dated July 19, 1991, private respondent Zosa apologized to
petitioner Joaquin and requested a meeting to discuss a possible settlement.
IXL, however, continued airing It's a Date, prompting petitioner Joaquin to
send a second letter on July 25, 1991 in which he reiterated his demand and
IPL- Assignment No. 10 (Entire Copyright Cases)
warned that, if IXL did not comply, he would endorse the matter to his
attorneys for proper legal action.
Meanwhile, private respondent Zosa sought to register IXL's copyright to the
first episode of It's a Date for which it was issued by the National Library a
certificate of copyright August 14, 1991.
Upon complaint of petitioners, an information for violation of P.D. No. 49 was
filed against private respondent Zosa together with certain officers of RPN
Channel 9, namely, William Esposo, Felipe Medina, and Casey Francisco, in
the Regional Trial Court of Quezon City where it was docketed as Criminal
Case No. 92-27854 and assigned to Branch 104 thereof. However, private
respondent Zosa sought a review of the resolution of the Assistant City
Prosecutor before the Department of Justice.
On August 12, 1992, respondent Secretary of Justice Franklin M. Drilon
reversed the Assistant City Prosecutor's findings and directed him to move
for the dismissal of the case against private respondents. 1
Petitioner Joaquin filed a motion for reconsideration, but his motion denied by
respondent Secretary of Justice on December 3, 1992. Hence, this petition.
Petitioners contend that:
1. The public respondent gravely abused his discretion amounting to lack
of jurisdiction — when he invoked non-presentation of the master tape as
being fatal to the existence of probable cause to prove infringement,
despite the fact that private respondents never raised the same as a
controverted issue.
2. The public respondent gravely abused his discretion amounting to lack
of jurisdiction when he arrogated unto himself the determination of what
is copyrightable — an issue which is exclusively within the jurisdiction of
the regional trial court to assess in a proper proceeding.
Both public and private respondents maintain that petitioners failed to
establish the existence of probable cause due to their failure to present the
copyrighted master videotape of Rhoda and Me. They contend that petitioner
BJPI's copyright covers only a specific episode of Rhoda and Me and that the
formats or concepts of dating game shows are not covered by copyright
protection under P.D. No. 49.
Non-Assignment of Error.
Petitioners claim that their failure to submit the copyrighted master videotape
of the television show Rhoda and Me was not raised in issue by private
Page 2 of 101
respondents during the preliminary investigation and, therefore, it was error
for the Secretary of Justice to reverse the investigating prosecutor's finding of
probable cause on this ground.
A preliminary investigation falls under the authority of the state prosecutor
who is given by law the power to direct and control criminal
actions. 2 He is, however, subject to the control of the Secretary of Justice.
Thus, Rule 112, §4 of the Revised Rules of Criminal Procedure, provides:
Sec. 4. Duty of investigating fiscal. — If the investigating fiscal finds
cause to hold the respondent for trial, he shall prepare the resolution and
corresponding information. He shall certify under oath that he, or as
shown by the record, an authorized officer, has personally examined the
complainant and his witnesses, that there is reasonable ground to
believe that a crime has been committed and that the accused is
probably guilty thereof, that the accused was informed of the complaint
and of the evidence submitted against him and that he was given an
opportunity to submit controverting evidence. Otherwise, he shall
recommend dismissal of the complaint.
In either case, he shall forward the records of the case to the provincial
or city fiscal or chief state prosecutor within five (5) days from his
resolution. The latter shall take appropriate action thereon ten (10) days
from receipt thereof, immediately informing the parties of said action.
No complaint or information may be filed or dismissed by an investigating
fiscal without the prior written authority or approval of the provincial or
city fiscal or chief state prosecutor.
Where the investigating assistant fiscal recommends the dismissal of the
case but his findings are reversed by the provincial or city fiscal or chief
state prosecutor on the ground that a probable cause exists, the latter
may, by himself, file the corresponding information against the
respondent or direct any other assistant fiscal or state prosecutor to do
so, without conducting another preliminary investigation.
If upon petition by a proper party, the Secretary of Justice reverses the
resolution of the provincial or city fiscal or chief state prosecutor, he shall
direct the fiscal concerned to file the corresponding information without
conducting another preliminary investigation or to dismiss or move for
dismissal of the complaint or information.
In reviewing resolutions of prosecutors, the Secretary of Justice is not
precluded from considering errors, although unassigned, for the purpose of
determining whether there is probable cause for filing cases in court. He must
IPL- Assignment No. 10 (Entire Copyright Cases)
make his own finding, of probable cause and is not confined to the issues
raised by the parties during preliminary investigation. Moreover, his findings
are not subject to review unless shown to have been made with grave abuse.
Opinion of the Secretary of Justice
Petitioners contend, however, that the determination of the question whether
the format or mechanics of a show is entitled to copyright protection is for the
court, and not the Secretary of Justice, to make. They assail the following
portion of the resolution of the respondent Secretary of Justice:
[T]he essence of copyright infringement is the copying, in whole or in
part, of copyrightable materials as defined and enumerated in Section
2 of PD. No. 49. Apart from the manner in which it is actually
expressed, however, the idea of a dating game show is, in the
opinion of this Office, a non-copyrightable material. Ideas, concepts,
formats, or schemes in their abstract form clearly do not fall within the
class of works or materials susceptible of copyright registration as
provided in PD. No. 49. 3 (Emphasis added.)
It is indeed true that the question whether the format or mechanics of
petitioners television show is entitled to copyright protection is a legal
question for the court to make. This does not, however, preclude respondent
Secretary of Justice from making a preliminary determination of this question
in resolving whether there is probable cause for filing the case in court. In
doing so in this case, he did not commit any grave error.
Presentation of Master Tape
Petitioners claim that respondent Secretary of Justice gravely abused his
discretion in ruling that the master videotape should have been predented in
order to determine whether there was probable cause for copyright
infringement. They contend that 20th Century Fox Film Corporation v. Court
of Appeals, 4 on which respondent Secretary of Justice relied in reversing
the resolution of the investigating prosecutor, is inapplicable to the case at
bar because in the present case, the parties presented sufficient evidence
which clearly establish "linkage between the copyright show "Rhoda and Me"
and the infringing TV show "It's a Date." 5
The case of 20th Century Fox Film Corporation involved raids conducted on
various videotape outlets allegedlly selling or renting out "pirated" videotapes.
The trial court found that the affidavits of NBI agents, given in support of the
application for the search warrant, were insufficient without the master tape.
Accordingly, the trial court lifted the search warrants it had previously issued
Page 3 of 101
against the defendants. On petition for review, this Court sustained the action
of the trial court and ruled: 6
The presentation of the master tapes of the copyrighted films from
which the pirated films were allegedly copied, was necessary for the
validity of search warrants against those who have in their possession
the pirated films. The petitioner's argument to the effect that the
presentation of the master tapes at the time of application may not be
necessary as these would be merely evidentiary in nature and not
determinative of whether or not a probable cause exists to justify the
issuance of the search warrants is not meritorious. The court cannot
presume that duplicate or copied tapes were necessarily reproduced
from master tapes that it owns.
The application for search warrants was directed against video tape
outlets which allegedly were engaged in the unauthorized sale and
renting out of copyrighted films belonging to the petitioner pursuant to
P.D. 49.
The essence of a copyright infringement is the similarity or at least
substantial similarity of the purported pirated works to the copyrighted
work. Hence, the applicant must present to the court the copyrighted
films to compare them with the purchased evidence of the video tapes
allegedly pirated to determine whether the latter is an unauthorized
reproduction of the former. This linkage of the copyrighted films to the
pirated films must be established to satisfy the requirements of
probable cause. Mere allegations as to the existence of the
copyrighted films cannot serve as basis for the issuance of a search
warrant.
This ruling was qualified in the later case of Columbia Pictures, Inc. v.
Court of Appeals 7 in which it was held:
In fine, the supposed  pronunciamento in said case regarding the
necessity for the presentation of the master tapes of the copyrighted
films for the validity of search warrants should at most be understood to
merely serve as a guidepost in determining the existence of probable
cause in copyright infringement cases where there is doubt as to the true
nexus between the master tape and the printed copies. An objective and
careful reading of the decision in said case could lead to no other
conclusion than that said directive was hardly intended to be a sweeping
and inflexible requirement in all or similar copyright infringement cases.
IPL- Assignment No. 10 (Entire Copyright Cases)
In the case at bar during the preliminary investigation, petitioners and private
respondents presented written descriptions of the formats of their respective
televisions shows, on the basis of which the investigating prosecutor ruled:
As may [be] gleaned from the evidence on record, the substance of the
television productions complainant's "RHODA AND ME" and Zosa's "IT'S
A DATE" is that two matches are made between a male and a female,
both single, and the two couples are treated to a night or two of dining
and/or dancing at the expense of the show. The major concepts of both
shows is the same. Any difference appear mere variations of the major
concepts.
That there is an infringement on the copyright of the show "RHODA AND
ME" both in content and in the execution of the video presentation are
established because respondent's "IT'S A DATE" is practically an exact
copy of complainant's "RHODA AND ME" because of substantial
similarities as follows, to wit:
RHODA AND ME "IT'S A DATE"
Set 1 Set 1
a. Unmarried participant of one gender (searcher) a. same
appears on one side of a divider, while three (3)
unmarried participants of the other gender are on the
other side of the divider. This arrangement is done to
ensure that the searcher does not see the searchees.
b. Searcher asks a question to be answered by each of b. same
the searchees. The purpose is to determine who among
the searchees is the most compatible with the searcher.
c. Searcher speculates on the match to the searchee.
c. same
d. Selection is made by the use of compute (sic) d. Selection is
methods, or by the way questions are answered, or based on the
similar methods. answer of the
Searchees.
Set 2 Set 2
Same as above with the genders of the searcher and same
searchees interchanged. 9
Petitioners assert that the format of Rhoda and Me is a product of ingenuity
and skill and is thus entitled to copyright protection. It is their position that the
presentation of a point-by-point comparison of the formats of the two shows
clearly demonstrates the nexus between the shows and hence establishes
the existence of probable cause for copyright infringement. Such being the
case, they did not have to produce the master tape.
Page 4 of 101
To begin with the format of a show is not copyrightable. Section 2 of P.D. No.
49, 10 otherwise known as the DECREE ON INTELLECTUAL PROPERTY,
enumerates the classes of work entitled to copyright protection, to wit:
Sec. 2. The rights granted by this Decree shall, from the moment of
creation, subsist with respect to any of the following classes of works:
(A) Books, including composite and cyclopedic works, manuscripts,
directories, and gazetteers:
(B) Periodicals, including pamphlets and newspapers;
(C) Lectures, sermons, addresses, dissertations prepared for oral
delivery;
(D) Letters;
(E) Dramatic or dramatico-musical compositions; choreographic works
and entertainments in dumb shows, the acting form of which is fixed in
writing or otherwise;
(F) Musical compositions, with or without words;
(G) Works of drawing, painting, architecture, sculpture, engraving,
lithography, and other works of art; models or designs for works of art;
(H) Reproductions of a work of art;
(I) Original ornamental designs or models for articles of manufacture,
whether or not patentable, and other works of applied art;
(J) Maps, plans, sketches, and charts;
(K) Drawings or plastic works of a scientific or technical character;
(I) Photographic works and works produced by a process analogous to
photography lantern slides;
(M) Cinematographic works and works produced by a process analogous
to cinematography or any process for making audio-visual recordings;
(N) Computer programs;
IPL- Assignment No. 10 (Entire Copyright Cases)
(O) Prints, pictorial illustrations advertising copies, labels tags, and box
wraps;
(P) Dramatizations, translations, adaptations, abridgements,
arrangements and other alterations of literary, musical or artistic works or
of works of the Philippine government as herein defined, which shall be
protected as provided in Section 8 of this Decree.
(Q) Collections of literary, scholarly, or artistic works or of works referred
to in Section 9 of this Decree which by reason of the selection and
arrangement of their contents constitute intellectual creations, the same
to be protected as such in accordance with Section 8 of this Decree.
(R) Other literary, scholarly, scientific and artistic works.
This provision is substantially the same as §172 of the INTELLECTUAL
PROPERTY CODE OF PHILIPPINES (R.A. No. 8293). 11 The format or
mechanics of a television show is not included in the list of protected works in
§2 of P.D. No. 49. For this reason, the protection afforded by the law cannot
be extended to cover them.
Copyright, in the strict sense of the term, is purely a statutory right. It is a
new or independent right granted by the statute, and not simply a pre-
existing right regulated by the statute. Being a statutory grant, the rights
are only such as the statute confers, and may be obtained and enjoyed
only with respect to the subjects and by the persons and on terms and
conditions specified in the statute. 12
Since . . . copyright in published works is purely a statutory creation, a
copyright may be obtained only for a work falling within the statutory
enumeration or description. 13
Regardless of the historical viewpoint, it is authoritatively settled in the
United States that there is no copyright except that which is both created
and secured by act of Congress . . . . . 14
P.D. No. 49, §2, in enumerating what are subject to copyright, refers to
finished works and not to concepts. The copyright does not extend to an
idea, procedure, process, system, method of operation, concept, principle, or
discovery, regardless of the form in which it is described, explained,
illustrated, or embodied in such work. 15 Thus, the new INTELLECTUAL
PROPERTY CODE OF THE PHILIPPINES provides:
Sec. 175. Unprotected Subject Matter. — Notwithstanding
the provisions of Sections 172 and 173, no protection shall
Page 5 of 101
 extend, under this law, to any idea, procedure, system,
method or operation, concept, principle, discovery or mere
data as such, even if they are expressed, explained,
illustrated or embodied in a work; news of the day and other
miscellaneous facts having the character of mere items of
press information; or any official text of a legislative,
administrative or legal nature, as well as any official
translation thereof.

What then is the subject matter of petitioners' copyright? This Court is of the
opinion that petitioner BJPI's copyright covers audio-visual recordings of
each episode of Rhoda and Me, as falling within the class of works
mentioned in P.D. 49, §2(M), to wit:

Cinematographic works and works produced by a process

analogous to cinematography or any process for making
audio-visual recordings;

The copyright does not extend to the general concept or format of its
dating game show. Accordingly, by the very nature of the subject of
petitioner BJPI's copyright, the investigating prosecutor should have
the opportunity to compare the videotapes of the two shows.

Mere description by words of the general format of the two dating game
shows is insufficient; the presentation of the master videotape in evidence
was indispensable to the determination of the existence of probable cause.
As aptly observed by respondent Secretary of Justice:

A television show includes more than mere words can describe

because it involves a whole spectrum of visuals and effects, video
and audio, such that no similarity or dissimilarity may be found by
merely describing the general copyright/format of both dating game
shows.

WHEREFORE, the petition is hereby DISMISSED

SO ORDERED.

IPL- Assignment No. 10 (Entire Copyright Cases) Page 6 of 101

[5] G.R. No. 76193 November 9, 1989
UNITED FEATURE SYNDICATE, INC., petitioner,
vs. MUNSINGWEAR CREATION MANUFACTURING
COMPANY, respondent.
Motions; Notice of hearing; Purpose of; Said purpose was served; Case at
bar.—Petitioner’s contention that the purpose of a notice of hearing to the adverse
party is to afford him an opportunity to resist the motion, more particularly the
motion for reconsideration filed by its company is well taken. Said purpose was
served when Munsingwear filed its opposition thereto on November 20, 1984 and
cured the technical defect of lack of notice of hearing complained of (Rollo, p. 52).
Otherwise stated such shortcomings of petitioner as to compliance with procedural
requirements in taking its appeal cannot be deemed sufficient to deprive it of a
chance to secure a review by this court in order to obtain substantial justice; more so
where liberality accorded to the petitioner becomes compelling because of the
ostensible merit of petitioner’s case (Olango v. Court of First Instance of Misamis
Oriental, 121 SCRA 338 [1983]).
Same; Appeals; The right to appeal should not be lightly disregarded by a
stringent application of rules of procedure; Reason.—Moreover, in Siguenza v.
Court of Appeals, (137 SCRA 570 [1985]) the Court stressed that the right to appeal
should not be lightly disregarded by a stringent application of rules of procedure
especially where the appeal is on its face meritorious and the interest of substantial
justice would be served by permitting the appeal.
PARAS, J.:
This is a petition for review on certiorari filed by United Feature Syndicate
Inc., seeking to set aside the Resolution of the Seventh Division of the Court
of Appeals * dated September 16, 1986 dismissing the appeal of petitioner-
appellant for having been filed out of time and denying its Motion for
Reconsideration for lack of merit in its Resolution dated October 14, 1986.
The Resolution dismissing the appeal, reads as follows:
We agree with the Philippine Patent Office and respondent appellee that the
decision of the aforementioned office dated October 2, 1984 had already
become final and executory at the time the Notice of Appeal was filed.
Our reasons for this conclusions are borne out by the following facts:
a) On October 2, 1984, the decision sought to be appealed was rendered by
the Philippine Patent Office and a copy thereof was received by counsel for
petitioner-appellant on October 3, 1984 —  not October 9, 1984 as stated in
the Notice of Appeal. There can be no doubt about the decision having been
received by petitioner-appellant's counsel on October 3, 1984 for this is
clearly written in the Notice of Decision (p. 61, Original Record), and in point
of fact the date of receipt cannot be October 9, 1984, as declared in the
IPL- Assignment No. 10 (Entire Copyright Cases)
Notice of Appeal (p. 1, Rollo), because in the motion for reconsideration
subsequently filed by petitioner-appellant it was stated that a copy of the
decision was received on October 4, 1984  (p. 80, Original Record).
b) On October 18, 1984 — as shown in the stamp mark of the Philippine
Patent Office (p. 80, Original Record) or on the 15th and last day either for
appealing or for moving for reconsideration, petitioner-appellant filed a
motion for reconsideration.
Sadly and unexplainably for a veteran law office, said motion did not contain
or incorporate a notice of hearing.
c) Possibly realizing the fatal defect in its motion for reconsideration,
petitioner-appellant subsequently filed a motion to set for hearing its motion
for reconsideration. This was done, however, only on October 31, 1984 (p.
162, Original Record).
The motion for reconsideration filed on the last day, fatally failing as it did to
contain a notice of hearing, said pleading did not interrupt the period for
appealing, for the motion was nothing but a piece of scrap paper (Agricultural
and Industrial Marketing, Inc. v. Court of Appeals, 118 SCRA [1982]
492; Republic Planters Bank v. Intermediate Appellate Court, 13 SCRA
[1984] 631).
This deadly and moral deficiency in the motion for reconsideration, therefore,
resulted in the decision of the Philippine Patent Office being final and
executory on October 19, 1984, the day after the motion for reconsideration
was filed, said motion having been filed on the 15th and last day for
appealing.
WHEREFORE, the motion of respondent appellee is hereby granted and the
appeal dismissed. SO ORDERED. (Rollo 42-43)
This case arose from petition filed by petitioner for the cancellation of the
registration of trademark CHARLIE BROWN (Registration No. SR. 4224) in
the name of respondent MUNSINGWEAR in Inter Partes Case No. 1350
entitled "United Feature Syndicate, Inc. v. Munsingwear Creation Mfg. Co.",
with the Philippine Patent Office alleging that petitioner is damaged by the
registration of the trademark CHARLIE BROWN of T-Shirts under Class 25
with the Registration No. SR-4224 dated September 12, 1979 in the name of
Munsingwear Creation Manufacturing Co., Inc., on the following grounds: (1)
that respondent was not entitled to the registration of the mark CHARLIE
BROWN, & DEVICE at the time of application for registration; (2) that
CHARLIE BROWN is a character creation or a pictorial illustration, the
copyright to which is exclusively owned worldwide by the petitioner; (3) that
as the owner of the pictorial illustration CHARLIE BROWN, petitioner has
since 1950 and continuously up to the present, used and reproduced the
same to the exclusion of others; (4) that the respondent-registrant has no
bona fide use of the trademark in commerce in the Philippines prior to its
application for registration. (Petition, p. 2, Rollo, p. 8)
Page 7 of 101
On October 2, 1984 the Director of the Philippine Patent Office rendered a
decision in this case holding that a copyright registration like that of the name
and likeness of CHARLIE BROWN may not provide a cause of action for the
cancellation of a trademark registration, (Petition, p. 4; Rollo, p. 10 )
Petitioner filed a motion for reconsideration of the decision rendered by the
Philippine Patent Office which was denied by the Director of said office on
the ground that the Decision No. 84-83 was already final and executory
(Petition, Rollo, pp. 11-12).
From this decision, petitioner-appellant appealed to the Court of Appeals and
respondent court in its resolution dated September 16, 1986 denied the
appeal. While the Motion for Reconsideration was filed on time, that is, on the
last day within which to appeal, still it is a mere scrap of paper because there
was no, date, of hearing stated therein.
Subsequently, petitioner-appellant filed a motion for reconsideration which
public respondent denied for lack of merit( Annex "B", Rollo p. 45)..
Hence this petition for review on certiorari.
In the resolution of April 6, 1987, the petition was given due course.
In its petition (Rollo, p. 10) and in its memorandum (Rollo, p. 97), petitioner-
appellant raised the following legal issues:
I. WHETHER THE RESPONDENT COURT OF APPEALS ACTED IN
EXCESS OF JURISDICTION AND/OR COMMITTED GRAVE ABUSE OF
DISCRETION WHEN IT BASED ITS RESOLUTION IN DISMISSING ITS
APPEAL ON STRICT TECHNICAL RULES OF PROCEDURE AS
ENUNCIATED IN RULE 15 OF THE RULES OF COURT INSTEAD OF
RELYING ON THE POLICY OF THE PHILIPPINE PATENT OFFICE AS
STRESSED IN RULE 169, AS AMENDED, OF THE RULES OF
PRACTICE IN TRADEMARK CASES.
II.WHETHER THE RESPONDENT COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO EXCESS OF
JURISDICTION WHEN BY DISMISSING THE APPEAL TO IT FROM THE
DECISION OF THE DIRECTOR OF PATENTS, IT KNOWINGLY
DISREGARDED ITS OWN DECISION IN AC-GR. SP. NO. 0342, WHICH
WAS AFFIRMED BY THIS HONORABLE SUPREME COURT TO THE
EFFECT THAT A COPYRIGHTED CHARACTER MAY NOT BE
APPROPRIATED AS A TRADEMARK BY ANOTHER UNDER
PRESIDENTIAL DECREE NO. 49.
III.WHETHER, ASSUMING ARGUENDO, BUT ONLY ASSUMING, THAT
THE DECISION OF THE DIRECTOR OF PATENTS IN THE CASE AT
BAR HAD ALREADY BECOME FINAL WHEN IT WAS APPEALED TO
THE COURT OF APPEALS, THE LATTER, BY REASON OF THE
SUPERVENING FACTS AFTER THE DECISION APPEALED FROM WAS
IPL- Assignment No. 10 (Entire Copyright Cases)
RENDERED, SHOULD HAVE HARMONIZED THE DECISION WITH LAW,
THE DEMANDS OF JUSTICE AND EQUITY.
The petitioner is impressed with merit.
Petitioner's contention that the purpose of a notice of hearing to the adverse
party is to afford him an opportunity to resist the motion, more particularly the
motion for reconsideration filed by its company is well taken. Said purpose
was served when Munsingwear filed its opposition thereto on November 20,
1984 and cured the technical defect of lack of notice of hearing complained
of (Rollo, p. 52). Otherwise stated such shortcomings of petitioner as to
compliance with procedural requirements in taking its appeal cannot be
deemed sufficient to deprive it of a chance to secure a review by this court in
order to obtain substantial justice; more so where liverality accorded to the
petitioner becomes compelling because of the ostensible merit of petitioner's
case (Olango v. Court of First Instance of Misamis Oriental, 121 SCRA 338
[1983]).
Moreover, in Siguenza v. Court of Appeals, (137 SCRA 570 [1985]) the Court
stressed that the right to appeal should not be lightly disregarded by a
stringent application of rules of procedure especially where the appeal is on
its face meritorious and the interest of substantial justice would be served by
permitting the appeal.
As enunciated in the case of Castro v. Court of Appeals  (123 SCRA 782,
[1983]) the importance and real purpose of the remedy of appeal was
stressed as follows:
An appeal is an essential part of oar judicial system. We have advised the
courts to proceed with caution so as not to deprive a party of the right to
appeal.  (National Waterworks and Sewerage Authority v. Municipality of
Libmanan, 97 SCRA 138) and instructed that every party-litigant should
be  afforded the amplest opportunity for the proper and just disposition of his
cause, freed from the constraints of technicalities. (A-One Feeds, Inc. v.
Court of Appeals, 100 SCRA 590).
The rules of procedure are not to be applied in  a very rigid and technical
sense. The rules of procedure are used only to help secure not override
substantial justice. (Gregorio v. Court of Appeals, 72 SCRA 120), therefore,
we ruled in Republic v. Court of Appeals (83 SCRA 453) that a six day
delay  in the perfection of the appeal does not warrant its dismissal.  And
again in Ramos v. Bagaso, 96 SCRA 395, this Court held that the delay of
four (4) days in filing a notice of appeal and a motion for extension of time to
file a record on appeal can be excused on the basis of equity.
Page 8 of 101
It was further emphasized that we allowed the filing of an appeal in some
cases where a stringent application of the rules would have denied it, or
when to do so would serve the demands of substantial justice and in the
exercise of our equity jurisdiction (Serrano v. Court of Appeals, 139 SCRA
179 [1085].)
In the case at bar, the petitioner's delay in filing their record on appeal should
not be strictly construed as to deprive them of the right to appeal especially
since on its face the appeal appears to be impressed with merit. (Emphasis
supplied). All aforementioned cases are cited in G.R. No. 76595, Pacific Asia
Overseas Shipping Corporation v. NLRC, et al., May 6, 1988.
Procedural technicality should not prevail over substantive rights of a party to
appeal (NEA v. CA, 126 SCRA 394).
Moreover, a judgment of the Court of Appeals that become final by reason of
the mistake of the herein petitioner's lawyer may still be reviewed on appeal
by the Supreme Court particularly where the Supreme Court already gave
due course to the petition for review (Ernesto v. Court of Appeals, 116 SCRA
755 [1982]).
Where strong considerations of substantial justice are manifest in the
petition, this Court may relax the stringent application of technical rules in the
exercise of equity jurisdiction. In addition to the basic merits of the main case,
such petition usually embodies justifying circumstances which warrant our
heeding the petitioner's cry for justice, inspite of the earlier negligence of
counsel (Serrano v. Court of Appeals et al., 139 SCRA 179 [1985]).
In a number of cases, this Court in the exercise of equity jurisdiction decided
to disregard technicalities in order to resolve the case on its merits based on
the evidence (St. Peter Memorial Park, Inc. et al. v. Cleofas, 121 SCRA 287,
[1983]; Helmuth, Jr. v. People of the Philippines, 112 SCRA 573 [1983]).
This case was brought before this Court for the resolution of the dismissal of
the appeal filed by petitioner-appellant from the decision of the Director of the
Philippines Patent Office for being filed out of time. The normal action to take
thereafter, would be to remand this case to the Court of Appeals for further
proceedings. However, in line with jurisprudence, such time consuming
procedure may be properly dispensed with to resolve the issue (Quisumbing
v. Court of Appeals, 122 SCRA 709 [1983]) where there is enough basis to
end the basic controversy between the parties here and now. In the case at
bar dispensing with such procedural steps would not anyway affect
substantially the merits of their respective claims as held in Velasco v. Court
of Appeals, (95 SCRA 621 [1980] cited in Ortigas & Co. Ltd. v. Ruiz, 148
SCRA [1987] hence the need for this Court to broaden its inquiry in this case
land decide the same on the merits rather than merely resolve the procedural
IPL- Assignment No. 10 (Entire Copyright Cases)
question raised (Dorado v. Court of Appeals, 153 SCRA 420 [1987]; De Lima
v. Laguna Tayabas Co., 160 SCRA 70 [1988]).
Petitioner contends that it will be damaged by the registration of the
trademark CHARLIE BROWN & DEVICE in favor of private respondent and
that it has a better right to CHARLIE BROWN & DEVICE since the likeness
of CHARLIE BROWN appeared in periodicals having worldwide distribution
and covered by copyright registration in its name which antedates the
certificate of registration of respondent issued only on September 12, 1979.
Petitioner further stresses that Decision No. 84-83 (TM) promulgated by the
Philippine Patent Office on October 2, 1984 which held that "the name
likeness of CHARLIE BROWN may not provide a cause of action for the
cancellation of a trademark registration," was based in the conclusion made
in the case of "Children's Television Workshop v. touch of Class" earlier
decided by the Director of Patent Office on May 10, 1984. However, when
the latter case was appealed to the then Intermediate Appellate Court,
docketed as A.C. G.R. SP No. 03432, the appellate court reversed the
decision of the Director holding said appealed decision as illegal and contrary
to law. this reversal was affirmed by this Court on August 7, 1985 in G.R. No.
71210 by denying the petition of respondent Touch of Class.
The Court of Appeals in reversing the Director of Patent's decision in Touch
of Class, Inc. succintly said:
The Patents Office ruled that a trademark, unlike a label, cannot be
copyrighted. The "Cookie Monster" is not, however, a trademark. It is a
character in a TV series entitled "Sesame Street." It was respondent which
appropriated the "Cookie Monster" as a trademark, after it has been
copyrighted. We hold that the exclusive right secured by PD 49 to the
petitioner precludes the appropriation of the "Cookie Monster" by the
respondent.
Pertinently, Section 2 of Presidential Decree No. 49, otherwise known as the
"Decree on Intellectual Property", provides:
Section 2. The rights granted by this Decree shall, from the moment of
creation, subsist with respect to any of the following classes of works:
xxx xxx xxx
(O) Prints, pictorial illustrations, advertising copies, labels, tags and box
wraps. ...
Therefore, since the name "CHARLIE BROWN" and its pictorial
representation were covered by a copyright registration way back in 1950 the
same are entitled to protection under PD No. 49.
Aside from its copyright registration, petitioner is also the owner of several
trademark registrations and application for the name and likeness of
"CHARLIE BROWN" which is the duly registered trademark and copyright of
petitioner United Feature Syndicate Inc. as early as 1957 and additionally
Page 9 of 101
also as TV SPECIALS featuring the "PEANUTS" characters "CHARLIE
BROWN" (Memorandum, Rollo p. 97 [211]).

An examination of the records show that the only appreciable defense of

respondent-registrant is embodied in its answer, which reads:

It uses, the trademark "CHARLIE BROWN" & "DEVICE" on children's wear

such as T-shirts, undershirts, sweaters, brief and sandos, in class 25;
whereas "CHARLIE BROWN" is used only by petitioner as character, in a
pictorial illustration used in a comic strip appearing in newspapers and
magazines. It has no trademark significance and therefore respondent-
registrant's use of "CHARLIE BROWN" & "DEVICE" is not in conflict with the
petitioner's use of "CHARLIE BROWN" (Rollo, p. 97 [21]).

It is undeniable from the records that petitioner is the actual owner of said
trademark due to its prior registration with the Patent's Office.
Finally, in La Chemise Lacoste S.A. v. Hon. Oscar Fernandez &
Gobindram Hemandas Sujanani v. Hon. Roberto V. Ongpin, et al.  129 SCRA
373 [1984]), the Court declared.

In upholding the right of the petitioner to maintain the present suit before our
courts for unfair competition or infringement of trademarks of a foreign
corporation, we are moreover recognizing our duties and the rights of
foregoing states under the Paris Convention for the Protection of Industrial
Property to which the Philippines and (France) U.S. are parties. We are
simply interpreting a solemn international commitment of the Philippines
embodied in a multilateral treaty to which we are a party and which we
entered into because it is in our national interest to do so.
PREMISES CONSIDERED, the Resolutions of the Court of Appeals dated
September 16, 1985 and October 14, 1986 dismissing petitioner's appeal are
hereby SET ASIDE and Certificate of Registration no. SR-424 issued to
private respondent dated September 12, 1979 is hereby CANCELLED.
SO ORDERED.

IPL- Assignment No. 10 (Entire Copyright Cases) Page 10 of 101

[6] G.R. No. 161295               June 29, 2005
JESSIE G. CHING, petitioner,
vs. WILLIAM M. SALINAS, SR., WILLIAM M. SALINAS, JR., JOSEPHINE
L. SALINAS, JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE, JOHN
ERIC I. SALINAS, NOEL M. YABUT (Board of Directors and Officers of
WILAWARE PRODUCT CORPORATION), respondents.
Constitutional Law; Searches and Seizures; Upon the filing of the application
for search warrant, the RTC was duty-bound to determine whether probable cause
existed.—The RTC had jurisdiction to delve into and resolve the issue whether the
petitioner’s utility models are copyrightable and, if so, whether he is the owner of a
copyright over the said models. It bears stressing that upon the filing of the
application for search warrant, the RTC was duty-bound to determine whether
probable cause existed, in accordance with Section 4, Rule 126 of the Rules of
Criminal Procedure.
Same; Same; In the determination of probable cause, the court must
necessarily resolve whether or not an offense exists to justify the issuance of a
search warrant or the quashal of one already issued by the court.—In Solid Triangle
Sales Corporation v. The Sheriff of RTC QC, Br. 93, the Court held that in the
determination of probable cause, the court must necessarily resolve whether or not an
offense exists to justify the issuance of a search warrant or the quashal of one already
issued by the court. Indeed, probable cause is deemed to exist only where facts and
circumstances exist which could lead a reasonably cautious and prudent man to
believe that an offense has been committed or is being committed. Besides, in
Section 3, Rule 126 of the Rules of Criminal Procedure, a search warrant may be
issued for the search and seizure of personal property (a) subject of the offense; (b)
stolen or embezzled and other proceeds or fruits of the offense; or (c) used or
intended to be used as the means of committing an offense.
Same; Same; The absence of probable cause will cause the outright
nullification of the search warrant.—The RTC is mandated under the Constitution
and Rules of Criminal Procedure to determine probable cause. The court cannot
abdicate its constitutional obligation by refusing to determine whether an offense has
been committed. The absence of probable cause will cause the outright nullification
of the search warrant.
Intellectual Property; Copyright Law; The focus of copyright is the usefulness
of the artistic design and not its marketability.—It bears stressing that the focus of
copyright is the usefulness of the artistic design, and not its marketability. The
central inquiry is whether the article is a work of art. Works for applied art include
all original pictorials, graphics, and sculptural works that are intended to be or have
been embodied in useful article regardless of factors such as mass production,
commercial exploitation, and the potential availability of design patent protection.
IPL- Assignment No. 10 (Entire Copyright Cases)
Same; Same; While works of applied art, original intellectual, literary and
artistic works are copyrightable, useful articles and works of industrial design are
not.—As gleaned from the description of the models and their objectives, these
articles are useful articles which are defined as one having an intrinsic utilitarian
function that is not merely to portray the appearance of the article or to convey
information. Indeed, while works of applied art, original intellectual, literary and
artistic works are copyrightable, useful articles and works of industrial design are
not. A useful article may be copyrightable only if and only to the extent that such
design incorporates pictorial, graphic, or sculptural features that can be identified
separately from, and are capable of existing independently of the utilitarian aspects
of the article.
Same; Same; That the works of the petitioner may be the proper subject of a
patent does not entitle him to the issuance of a search warrant for violation of
copyright laws.—That the works of the petitioner may be the proper subject of a
patent does not entitle him to the issuance of a search warrant for violation of
copyright laws. In Kho v. Court of Appeals and Pearl & Dean (Phil.), Incorporated
v. Shoemart, Incorporated, the Court ruled that “these copyright and patent rights are
completely distinct and separate from one another, and the protection afforded by
one cannot be used interchangeably to cover items or works that exclusively pertain
to the others.”
DECISION
CALLEJO, SR., J.:
This petition for review on certiorari assails the Decision1 and
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 70411 affirming
the January 3, 2002 and February 14, 2002 Orders 3 of the Regional Trial
Court (RTC) of Manila, Branch 1, which quashed and set aside Search
Warrant Nos. 01-2401 and 01-2402 granted in favor of petitioner Jessie G.
Ching.
Jessie G. Ching is the owner and general manager of Jeshicris
Manufacturing Co., the maker and manufacturer of a Utility Model, described
as "Leaf Spring Eye Bushing for Automobile" made up of plastic.
On September 4, 2001, Ching and Joseph Yu were issued by the National
Library Certificates of Copyright Registration and Deposit of the said work
described therein as "Leaf Spring Eye Bushing for Automobile." 4
On September 20, 2001, Ching requested the National Bureau of
Investigation (NBI) for police/investigative assistance for the apprehension
and prosecution of illegal manufacturers, producers and/or distributors of the
works.5
After due investigation, the NBI filed applications for search warrants
in the RTC of Manila against William Salinas, Sr. and the officers and
members of the Board of Directors of Wilaware Product Corporation. It was
alleged that the respondents therein reproduced and distributed the said
Page 11 of 101
models penalized under Sections 177.1 and 177.3 of Republic Act (R.A.) No.
8293. The applications sought the seizure of the following:
a.) Undetermined quantity of Leaf spring eye bushing for automobile that are
made up of plastic polypropylene;
b.) Undetermined quantity of Leaf spring eye bushing for automobile that are
made up of polyvinyl chloride plastic;
c.) Undetermined quantity of Vehicle bearing cushion that is made up of
polyvinyl chloride plastic;
d.) Undetermined quantity of Dies and jigs, patterns and flasks used in the
manufacture/fabrication of items a to d;
e.) Evidences of sale which include delivery receipts, invoices and official
receipts.6
The RTC granted the application and issued Search Warrant Nos. 01-2401
and 01-2402 for the seizure of the aforecited articles. 7 In the inventory
submitted by the NBI agent, it appears that the following articles/items were
seized based on the search warrants:
Leaf Spring eye bushing
a) Plastic Polypropylene
- C190 27 }
- C240 rear 40 }
- C240 front 41 } BAG 1
b) Polyvinyl Chloride Plastic
- C190 13 }
c) Vehicle bearing cushion
- center bearing cushion 11 }
Budder for C190 mold 8 }
Diesel Mold
a) Mold for spring eye bushing rear 1 set
b) Mold for spring eye bushing front 1 set
c) Mold for spring eye bushing for C190 1 set
d) Mold for C240 rear 1 piece of the set
e) Mold for spring eye bushing for L300 2 sets
f) Mold for leaf spring eye bushing C190 with metal 1 set
g) Mold for vehicle bearing cushion 1 set8
The respondents filed a motion to quash the search warrants on the following
grounds:
2. The copyright registrations were issued in violation of the Intellectual
Property Code on the ground that:
a) the subject matter of the registrations are not artistic or literary;
b) the subject matter of the registrations are spare parts of automobiles
meaning – there (sic) are original parts that they are designed to replace.
Hence, they are not original.9
The respondents averred that the works covered by the certificates issued by
the National Library are not artistic in nature; they are considered automotive
IPL- Assignment No. 10 (Entire Copyright Cases)
spare parts and pertain to technology. They aver that the models are not
original, and as such are the proper subject of a patent, not copyright. 10
In opposing the motion, the petitioner averred that the court which issued the
search warrants was not the proper forum in which to articulate the issue of
the validity of the copyrights issued to him. Citing the ruling of the Court
in Malaloan v. Court of Appeals,11 the petitioner stated that a search warrant
is merely a judicial process designed by the Rules of Court in anticipation of
a criminal case. Until his copyright was nullified in a proper proceeding, he
enjoys rights of a registered owner/holder thereof.
On January 3, 2002, the trial court issued an Order 12 granting the
motion, and quashed the search warrant on its finding that there was no
probable cause for its issuance. The court ruled that the work covered by the
certificates issued to the petitioner pertained to solutions to technical
problems, not literary and artistic as provided in Article 172 of the Intellectual
Property Code.
His motion for reconsideration of the order having been denied by
the trial court’s Order of February 14, 2002, the petitioner filed a petition
for certiorari in the CA, contending that the RTC had no jurisdiction to delve
into and resolve the validity of the copyright certificates issued to him by the
National Library. He insisted that his works are covered by Sections 172.1
and 172.2 of the Intellectual Property Code. The petitioner averred that the
copyright certificates are prima facie evidence of its validity, citing the ruling
of the United States Court of Appeals in Wildlife Express Corporation v.
Carol Wright Sales, Inc.13 The petitioner asserted that the respondents failed
to adduce evidence to support their motion to quash the search warrants.
The petitioner noted that respondent William Salinas, Jr. was not being
honest, as he was able to secure a similar copyright registration of a similar
product from the National Library on January 14, 2002.
On September 26, 2003, the CA rendered judgment dismissing the
petition on its finding that the RTC did not commit any grave abuse of its
discretion in issuing the assailed order, to wit:
It is settled that preliminarily, there must be a finding that a specific offense
must have been committed to justify the issuance of a search warrant. In a
number of cases decided by the Supreme Court, the same is explicitly
provided, thus:
"The probable cause must be in connection with one specific offense, and
the judge must, before issuing the warrant, personally examine in the form of
searching questions and answers, in writing and under oath, the complainant
and any witness he may produce, on facts personally known to them and
attach to the record their sworn statements together with any affidavit
submitted.
Page 12 of 101
"In the determination of probable cause, the court must necessarily resolve
whether or not an offense exists to justify the issuance or quashal of the
search warrant."
In the instant case, the petitioner is praying for the reinstatement of
the search warrants issued, but subsequently quashed, for the offense
of Violation of Class Designation of Copyrightable Works under Section
177.1 in relation to Section 177.3 of Republic Act 8293, when the objects
subject of the same, are patently not copyrightable.
It is worthy to state that the works protected under the Law on
Copyright are: literary or artistic works (Sec. 172) and derivative works (Sec.
173). The Leaf Spring Eye Bushing and Vehicle Bearing Cushion fall on
neither classification. Accordingly, if, in the first place, the item subject of the
petition is not entitled to be protected by the law on copyright, how can there
be any violation?14
The petitioner’s motion for reconsideration of the said decision
suffered the same fate. The petitioner forthwith filed the present petition for
review on certiorari, contending that the revocation of his copyright
certificates should be raised in a direct action and not in a search warrant
proceeding.
The petitioner posits that even assuming ex argumenti that the trial
court may resolve the validity of his copyright in a proceeding to quash a
search warrant for allegedly infringing items, the RTC committed a grave
abuse of its discretion when it declared that his works are not copyrightable
in the first place. He claims that R.A. No. 8293, otherwise known as the
Intellectual Property Code of the Philippines, which took effect on January 1,
1998, provides in no uncertain terms that copyright protection automatically
attaches to a work by the sole fact of its creation, irrespective of its mode or
form of expression, as well as of its content, quality or purpose. 15 The law
gives a non-inclusive definition of "work" as referring to original intellectual
creations in the literary and artistic domain protected from the moment of
their creation; and includes original ornamental designs or models for articles
of manufacture, whether or not registrable as an industrial design and other
works of applied art under Section 172.1(h) of R.A. No. 8293.lawphil.net
As such, the petitioner insists, notwithstanding the classification of the works
as either literary and/or artistic, the said law, likewise, encompasses works
which may have a bearing on the utility aspect to which the petitioner’s utility
designs were classified. Moreover, according to the petitioner, what the
Copyright Law protects is the author’s intellectual creation, regardless of
whether it is one with utilitarian functions or incorporated in a useful article
produced on an industrial scale.
IPL- Assignment No. 10 (Entire Copyright Cases)
The petitioner also maintains that the law does not provide that the
intended use or use in industry of an article eligible for patent bars or
invalidates its registration under the Law on Copyright. The test of protection
for the aesthetic is not beauty and utility, but art for the copyright and
invention of original and ornamental design for design patents. 16 In like
manner, the fact that his utility designs or models for articles of manufacture
have been expressed in the field of automotive parts, or based on something
already in the public domain does not automatically remove them from the
protection of the Law on Copyright.17
The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293
which gives the same presumption to an affidavit executed by an author who
claims copyright ownership of his work.
The petitioner adds that a finding of probable cause to justify the issuance of
a search warrant means merely a reasonable suspicion of the commission of
the offense. It is not equivalent to absolute certainty or a finding of actual and
positive cause.18 He assists that the determination of probable cause does
not concern the issue of whether or not the alleged work is copyrightable. He
maintains that to justify a finding of probable cause in the issuance of a
search warrant, it is enough that there exists a reasonable suspicion of the
commission of the offense.
The petitioner contends that he has in his favor the benefit of the
presumption that his copyright is valid; hence, the burden of overturning this
presumption is on the alleged infringers, the respondents herein. But this
burden cannot be carried in a hearing on a proceeding to quash the search
warrants, as the issue therein is whether there was probable cause for the
issuance of the search warrant. The petitioner concludes that the issue of
probable cause should be resolved without invalidating his copyright.
In their comment on the petition, the respondents aver that the work of the
petitioner is essentially a technical solution to the problem of wear and tear in
automobiles, the substitution of materials, i.e., from rubber to plastic matter of
polyvinyl chloride, an oil resistant soft texture plastic material strong enough
to endure pressure brought about by the vibration of the counter bearing and
thus brings bushings. Such work, the respondents assert, is the subject of
copyright under Section 172.1 of R.A. No. 8293. The respondents posit that a
technical solution in any field of human activity which is novel may be the
subject of a patent, and not of a copyright. They insist that the certificates
issued by the National Library are only certifications that, at a point in time, a
certain work was deposited in the said office. Furthermore, the registration of
copyrights does not provide for automatic protection. Citing Section 218.2(b)
of R.A. No. 8293, the respondents aver that no copyright is said to exist if a
party categorically questions its existence and legality. Moreover, under
Section 2, Rule 7 of the Implementing Rules of R.A. No. 8293, the
registration and deposit of work is not conclusive as to copyright outlay or the
Page 13 of 101
time of copyright or the right of the copyright owner. The respondents
maintain that a copyright exists only when the work is covered by the
protection of R.A. No. 8293.
The petition has no merit.
The RTC had jurisdiction to delve into and resolve the issue whether
the petitioner’s utility models are copyrightable and, if so, whether he is the
owner of a copyright over the said models. It bears stressing that upon the
filing of the application for search warrant, the RTC was duty-bound to
determine whether probable cause existed, in accordance with Section 4,
Rule 126 of the Rules of Criminal Procedure:
SEC. 4. Requisite for issuing search warrant. – A search warrant shall not
issue but 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 he may produce, and,
particularly, describing the place to be searched and the things to be seized.
In Solid Triangle Sales Corporation v. The Sheriff of RTC QC, Br. 93,19 the
Court held that in the determination of probable cause, the court must
necessarily resolve whether or not an offense exists to justify the issuance of
a search warrant or the quashal of one already issued by the court. Indeed,
probable cause is deemed to exist only where facts and circumstances exist
which could lead a reasonably cautious and prudent man to believe that an
offense has been committed or is being committed. Besides, in Section 3,
Rule 126 of the Rules of Criminal Procedure, a search warrant may be
issued for the search and seizure of personal property (a) subject of the
offense; (b) stolen or embezzled and other proceeds or fruits of the offense;
or (c) used or intended to be used as the means of committing an offense.
The RTC is mandated under the Constitution and Rules of Criminal
Procedure to determine probable cause. The court cannot abdicate its
constitutional obligation by refusing to determine whether an offense has
been committed.20 The absence of probable cause will cause the outright
nullification of the search warrant.21
For the RTC to determine whether the crime for infringement under
R.A. No. 8293 as alleged in an application is committed, the petitioner-
applicant was burdened to prove that (a) respondents Jessie Ching and
Joseph Yu were the owners of copyrighted material; and (b) the copyrighted
material was being copied and distributed by the respondents. Thus, the
ownership of a valid copyright is essential.22
Ownership of copyrighted material is shown by proof of originality
and copyrightability. By originality is meant that the material was not copied,
and evidences at least minimal creativity; that it was independently created
by the author and that it possesses at least same minimal degree of
creativity.23 Copying is shown by proof of access to copyrighted material and
IPL- Assignment No. 10 (Entire Copyright Cases)
substantial similarity between the two works. 24 The applicant must thus
demonstrate the existence and the validity of his copyright because in the
absence of copyright protection, even original creation may be freely
copied.25
By requesting the NBI to investigate and, if feasible, file an
application for a search warrant for infringement under R.A. No. 8293 against
the respondents, the petitioner thereby authorized the RTC (in resolving the
application), to delve into and determine the validity of the copyright which he
claimed he had over the utility models. The petitioner cannot seek relief from
the RTC based on his claim that he was the copyright owner over the utility
models and, at the same time, repudiate the court’s jurisdiction to ascertain
the validity of his claim without running afoul to the doctrine of estoppel.
To discharge his burden, the applicant may present the certificate of
registration covering the work or, in its absence, other evidence. 26 A copyright
certificate provides prima facie evidence of originality which is one element of
copyright validity. It constitutes prima facie evidence of both validity and
ownership27 and the validity of the facts stated in the certificate. 28 The
presumption of validity to a certificate of copyright registration merely orders
the burden of proof. The applicant should not ordinarily be forced, in the first
instance, to prove all the multiple facts that underline the validity of the
copyright unless the respondent, effectively challenging them, shifts the
burden of doing so to the applicant.29 Indeed, Section 218.2 of R.A. No. 8293
provides:
218.2. In an action under this Chapter:
(a) Copyright shall be presumed to subsist in the work or other subject matter
to which the action relates if the defendant does not put in issue the question
whether copyright subsists in the work or other subject matter; and
(b) Where the subsistence of the copyright is established, the plaintiff shall be
presumed to be the owner of the copyright if he claims to be the owner of the
copyright and the defendant does not put in issue the question of his
ownership.
A certificate of registration creates no rebuttable presumption of copyright
validity where other evidence in the record casts doubt on the question. In
such a case, validity will not be presumed.30
To discharge his burden of probable cause for the issuance of a search
warrant for violation of R.A. No. 8293, the petitioner-applicant submitted to
the RTC Certificate of Copyright Registration Nos. 2001-197 and 2001-204
dated September 3, 2001 and September 4, 2001, respectively, issued by
the National Library covering work identified as Leaf Spring Eye Bushing for
Automobile and Vehicle Bearing Cushion both classified under Section
172.1(h) of R.A. No. 8293, to wit:
Page 14 of 101
SEC. 172. Literary and Artistic Works. – 172.1. Literary and artistic works,
hereinafter referred to as "works," are original intellectual creations in the
literary and artistic domain protected from the moment of their creation and
shall include in particular:
...
(h) Original ornamental designs or models for articles of manufacture,
whether or not registrable as an industrial design, and other works of applied
art.
Related to the provision is Section 171.10, which provides that a "work of
applied art" is an artistic creation with utilitarian functions or incorporated in a
useful article, whether made by hand or produced on an industrial scale.
But, as gleaned from the specifications appended to the application for a
copyright certificate filed by the petitioner, the said Leaf Spring Eye Bushing
for Automobile is merely a utility model described as comprising a generally
cylindrical body having a co-axial bore that is centrally located and provided
with a perpendicular flange on one of its ends and a cylindrical metal jacket
surrounding the peripheral walls of said body, with the bushing made of
plastic that is either polyvinyl chloride or polypropylene. 31 Likewise, the
Vehicle Bearing Cushion is illustrated as a bearing cushion comprising a
generally semi-circular body having a central hole to secure a conventional
bearing and a plurality of ridges provided therefore, with said cushion bearing
being made of the same plastic materials. 32 Plainly, these are not literary or
artistic works. They are not intellectual creations in the literary and artistic
domain, or works of applied art. They are certainly not ornamental designs or
one having decorative quality or value.
It bears stressing that the focus of copyright is the usefulness of the artistic
design, and not its marketability. The central inquiry is whether the article is a
work of art.33 Works for applied art include all original pictorials, graphics, and
sculptural works that are intended to be or have been embodied in useful
article regardless of factors such as mass production, commercial
exploitation, and the potential availability of design patent protection. 34
As gleaned from the description of the models and their objectives, these
articles are useful articles which are defined as one having an intrinsic
utilitarian function that is not merely to portray the appearance of the article
or to convey information. Indeed, while works of applied art, original
intellectual, literary and artistic works are copyrightable, useful articles and
works of industrial design are not. 35 A useful article may be copyrightable
only if and only to the extent that such design incorporates pictorial, graphic,
or sculptural features that can be identified separately from, and are capable
of existing independently of the utilitarian aspects of the article.
We agree with the contention of the petitioner (citing Section 171.10
of R.A. No. 8293), that the author’s intellectual creation, regardless of
whether it is a creation with utilitarian functions or incorporated in a useful
IPL- Assignment No. 10 (Entire Copyright Cases)
article produced on an industrial scale, is protected by copyright law.
However, the law refers to a "work of applied art which is an artistic creation."
It bears stressing that there is no copyright protection for works of applied art
or industrial design which have aesthetic or artistic features that cannot be
identified separately from the utilitarian aspects of the article. 36 Functional
components of useful articles, no matter how artistically designed, have
generally been denied copyright protection unless they are separable from
the useful article.37
In this case, the petitioner’s models are not works of applied art, nor artistic
works. They are utility models, useful articles, albeit with no artistic design or
value. Thus, the petitioner described the utility model as follows:
LEAF SPRING EYE BUSHING FOR AUTOMOBILE
Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile
are made of hard rubber. These rubber bushings after a time, upon
subjecting them to so much or intermittent pressure would eventually wore
(sic) out that would cause the wobbling of the leaf spring.
The primary object of this utility model, therefore, is to provide a leaf-spring
eye bushing for automobile that is made up of plastic.
Another object of this utility model is to provide a leaf-spring eye bushing for
automobiles made of polyvinyl chloride, an oil resistant soft texture plastic or
polypropylene, a hard plastic, yet both causes cushion to the leaf spring, yet
strong enough to endure pressure brought about by the up and down
movement of said leaf spring.
Yet, an object of this utility model is to provide a leaf-spring eye
bushing for automobiles that has a much longer life span than the rubber
bushings.
Still an object of this utility model is to provide a leaf-spring eye bushing for
automobiles that has a very simple construction and can be made using
simple and ordinary molding equipment.
A further object of this utility model is to provide a leaf-spring eye bushing for
automobile that is supplied with a metal jacket to reinforce the plastic eye
bushing when in engaged with the steel material of the leaf spring.
These and other objects and advantages will come to view and be
understood upon a reading of the detailed description when taken in
conjunction with the accompanying drawings.
Figure 1 is an exploded perspective of a leaf-spring eye bushing according to
the present utility model;
Figure 2 is a sectional view taken along line 2-2 of Fig. 1;
Figure 3 is a longitudinal sectional view of another embodiment of this utility
model;
Page 15 of 101
Figure 4 is a perspective view of a third embodiment; and
Figure 5 is a sectional view thereof.
Referring now to the several views of the drawings wherein like reference
numerals designated same parts throughout, there is shown a utility model
for a leaf-spring eye bushing for automobile generally designated as
reference numeral 10.
Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11
having a co-axial bore 12 centrally provided thereof.
As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a
perpendicular flange 13 on one of its ends and a cylindrical metal jacket 14
surrounding the peripheral walls 15 of said body 11. When said leaf-spring
bushing 10 is installed, the metal jacket 14 acts with the leaf-spring eye (not
shown), which is also made of steel or cast steel. In effect, the bushing 10
will not be directly in contact with steel, but rather the metal jacket, making
the life of the bushing 10 longer than those without the metal jacket.
In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl
chloride, an oil resistant soft texture plastic or a hard polypropylene plastic,
both are capable to endure the pressure applied thereto, and, in effect, would
lengthen the life and replacement therefor.
Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of
said bushing 10 is insertably provided with a steel tube 17 to reinforce the
inner portion thereof. This steel tube 17 accommodates or engages with the
leaf-spring bolt (not shown) connecting the leaf spring and the automobile’s
chassis.
Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10
is elongated and cylindrical as to its construction. Said another embodiment
is also made of polypropylene or polyvinyl chloride plastic material. The steel
tube 17 and metal jacket 14 may also be applied to this embodiment as an
option thereof.38
VEHICLE BEARING CUSHION
Known bearing cushions inserted to bearing housings for vehicle propeller
shafts are made of hard rubber. These rubber bushings after a time, upon
subjecting them to so much or intermittent pressure would eventually be worn
out that would cause the wobbling of the center bearing.
The primary object of this utility model therefore is to provide a
vehicle-bearing cushion that is made up of plastic.
Another object of this utility model is to provide a vehicle bearing cushion
made of polyvinyl chloride, an oil resistant soft texture plastic material which
causes cushion to the propeller’s center bearing, yet strong enough to
endure pressure brought about by the vibration of the center bearing.
IPL- Assignment No. 10 (Entire Copyright Cases)
Yet, an object of this utility model is to provide a vehicle-bearing cushion that
has a much longer life span than rubber bushings.
Still an object of this utility model is to provide a vehicle bearing cushion that
has a very simple construction and can be made using simple and ordinary
molding equipment.
These and other objects and advantages will come to view and be
understood upon a reading of the detailed description when taken in
conjunction with the accompanying drawings.
Figure 1 is a perspective view of the present utility model for a vehicle-
bearing cushion; and
Figure 2 is a sectional view thereof.
Referring now to the several views of the drawing, wherein like reference
numeral designate same parts throughout, there is shown a utility model for a
vehicle-bearing cushion generally designated as reference numeral 10.
Said bearing cushion 10 comprises of a generally semi-circular body 11,
having central hole 12 to house a conventional bearing (not shown). As
shown in Figure 1, said body 11 is provided with a plurality of ridges 13 which
serves reinforcing means thereof.
The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture
oil and chemical resistant plastic material which is strong, durable and
capable of enduring severe pressure from the center bearing brought about
by the rotating movement of the propeller shaft of the vehicle. 39
A utility model is a technical solution to a problem in any field of human
activity which is new and industrially applicable. It may be, or may relate to, a
product, or process, or an improvement of any of the aforesaid. 40 Essentially,
a utility model refers to an invention in the mechanical field. This is the
reason why its object is sometimes described as a device or useful
object.41 A utility model varies from an invention, for which a patent for
invention is, likewise, available, on at least three aspects: first, the requisite
of "inventive step"42 in a patent for invention is not required; second, the
maximum term of protection is only seven years 43 compared to a patent
which is twenty years,44 both reckoned from the date of the application; and
third, the provisions on utility model dispense with its substantive
examination45 and prefer for a less complicated system.
Being plain automotive spare parts that must conform to the original
structural design of the components they seek to replace, the Leaf Spring
Eye Bushing and Vehicle Bearing Cushion are not ornamental. They lack the
decorative quality or value that must characterize authentic works of applied
art. They are not even artistic creations with incidental utilitarian functions or
works incorporated in a useful article. In actuality, the personal properties
described in the search warrants are mechanical works, the principal function
of which is utility sans any aesthetic embellishment.
Page 16 of 101

Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing
Cushion as included in the catch-all phrase "other literary, scholarly, scientific
and artistic works" in Section 172.1(a) of R.A. No. 8293. Applying the
principle of ejusdem generis which states that "where a statute describes
things of a particular class or kind accompanied by words of a generic
character, the generic word will usually be limited to things of a similar nature
with those particularly enumerated, unless there be something in the context
of the state which would repel such inference," 46 the Leaf Spring Eye Bushing
and Vehicle Bearing Cushion are not copyrightable, being not of the same
kind and nature as the works enumerated in Section 172 of R.A. No. 8293.
No copyright granted by law can be said to arise in favor of the
petitioner despite the issuance of the certificates of copyright registration and
the deposit of the Leaf Spring Eye Bushing and Vehicle Bearing Cushion.
Indeed, in Joaquin, Jr. v. Drilon47 and Pearl & Dean (Phil.), Incorporated v.
Shoemart, Incorporated,48 the Court ruled that:
Copyright, in the strict sense of the term, is purely a statutory right. It is a new
or independent right granted by the statute, and not simply a pre-existing
right regulated by it. Being a statutory grant, the rights are only such as the
statute confers, and may be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and conditions specified in the
statute. Accordingly, it can cover only the works falling within the statutory
enumeration or description.
That the works of the petitioner may be the proper subject of a patent does
not entitle him to the issuance of a search warrant for violation of copyright
laws. In Kho v. Court of Appeals49 and Pearl & Dean (Phil.), Incorporated v.
Shoemart, Incorporated,50 the Court ruled that "these copyright and patent
rights are completely distinct and separate from one another, and the
protection afforded by one cannot be used interchangeably to cover items or
works that exclusively pertain to the others." The Court expounded further,
thus:
Trademark, copyright and patents are different intellectual property rights that
cannot be interchanged with one another. A trademark is any visible sign
capable of distinguishing the goods (trademark) or services (service mark) of
an enterprise and shall include a stamped or marked container of goods. In
relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a copyright is confined
to literary and artistic works which are original intellectual creations in the
literary and artistic domain protected from the moment of their creation.
Patentable inventions, on the other hand, refer to any technical solution of a
problem in any field of human activity which is new, involves an inventive
step and is industrially applicable.
The petitioner cannot find solace in the ruling of the United States Supreme
Court in Mazer v. Stein51 to buttress his petition. In that case, the artifacts
IPL- Assignment No. 10 (Entire Copyright Cases)
involved in that case were statuettes of dancing male and female figures
made of semi-vitreous china. The controversy therein centered on the fact
that although copyrighted as "works of art," the statuettes were intended for
use and used as bases for table lamps, with electric wiring, sockets and
lampshades attached. The issue raised was whether the statuettes were
copyright protected in the United States, considering that the copyright
applicant intended primarily to use them as lamp bases to be made and sold
in quantity, and carried such intentions into effect. At that time, the Copyright
Office interpreted the 1909 Copyright Act to cover works of artistic
craftsmanship insofar as their form, but not the utilitarian aspects, were
concerned. After reviewing the history and intent of the US Congress on its
copyright legislation and the interpretation of the copyright office, the US
Supreme Court declared that the statuettes were held copyrightable works of
art or models or designs for works of art. The High Court ruled that:
"Works of art (Class G) – (a) – In General. This class includes works of
artistic craftsmanship, in so far as their form but not their mechanical or
utilitarian aspects are concerned, such as artistic jewelry, enamels,
glassware, and tapestries, as well as all works belonging to the fine arts,
such as paintings, drawings and sculpture. …"
So we have a contemporaneous and long-continued construction of the
statutes by the agency charged to administer them that would allow the
registration of such a statuette as is in question here. 52
The High Court went on to state that "[t]he dichotomy of protection for the
aesthetic is not beauty and utility but art for the copyright and the invention of
original and ornamental design for design patents." Significantly, the
copyright office promulgated a rule to implement Mazer to wit:
… [I]f "the sole intrinsic function of an article is its utility, the fact that the work
is unique and attractively shaped will not qualify it as a work of art."
In this case, the bushing and cushion are not works of art. They are, as the
petitioner himself admitted, utility models which may be the subject of a
patent.
IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED
for lack of merit. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 70411 are AFFIRMED. Search Warrant Nos. 01-
2401 and 01-2402 issued on October 15, 2001 are ANNULLED AND SET
ASIDE. Costs against the petitioner.
SO ORDERED.
Page 17 of 101
[7] G.R. No. L-36402 March 16, 1987
FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS,
INC., plaintiff-appellant, vs.BENJAMIN TAN, defendant-appellee.
Copyright; Music provided by a combo in a restaurant constitutes public
performance for profit within the meaning of the Copyright Law.—In the case at bar,
it is admitted that the patrons of the restaurant in question pay only for the food and
drinks and apparently not for listening to the music. As found by the trial court, the
music provided is for the purpose of entertaining and amusing the customers in order
to make the establishment more attractive and desirable (Record on Appeal, p. 21). It
will be noted that for the playing and singing the musical compositions involved, the
combo was paid as independent contractors by the appellant (Record on Appeal, p.
24). It is therefore obvious that the expenses entailed thereby are added to the
overhead of the restaurant which are either eventually charged in the price of the
food and drinks or to the overall total of additional income produced by the bigger
volume of business which the entertainment was programmed to attract.
Consequently, it is beyond question that the playing and singing of the combo in
defendant-appellee's restaurant constituted performance for profit contemplated by
the Copyright Law. (Act 3134 as amended by P.D. No. 49 as amended).
Same; If the general public has made use of the object sought to be
copyrighted within 30 days prior to the copyright application, the law deems the
object to have been donated to the public domain and can no longer be copyrighted
as in the case of the songs at bar.—The Supreme Court has ruled that "Paragraph 33
of Patent Office Administrative Order No. 3 (as amended, dated September 18,
1947) entitled 'Rules of Practice in the Philippines Patent Office relating to the
Registration of Copyright Claims' promulgated pursuant to Republic Act 165,
provides among other things that an intellectual creation should be copyrighted thirty
(30) days after its publication, if made in Manila, or within sixty (60) days if made
elsewhere, failure of which renders such creation public property." (Santos v.
McCullough Printing Company, 12 SCRA 324-325 [1964]. Indeed, if the general
public has made use of the object sought to be copyrighted for thirty (30) days prior
to the copyright application the law deems the object to have been donated to the
public domain and the same can no longer be copyrighted.
Same; Same.—A careful study of the records reveals that the song "Dahil Sa
lyo" which was registered on April 20, 1956 (Brief for Appellant, p. 10) became
popular in radios, juke boxes, etc. long before registration (TSN, May 28, 1968, pp.
3-5; 25) while the song 'The Nearness Of You" registered on January 14, 1955 (Brief
for Appellant, p. 10) had become popular twenty five (25) years prior to 1968, (the
year of the hearing) or from 1943 (TSN, May 28, 1968, p. 27) and the songs
"Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay Tao Lamang" both registered on
July 10, 1966, appear to have been known and sang by the witnesses as early as 1965
or three years before the hearing in 1968. The testimonies of the witnesses at the
hearing of this case on this subject were unrebutted by the appellant. (Ibid, pp. 28; 29
and 30). Under the circumstances, it is clear that the musical compositions in
IPL- Assignment No. 10 (Entire Copyright Cases)
question had long become public property, and are therefore beyond the protection of
the Copyright Law.
PARAS, J.:
An appeal was made to the Court of Appeals docketed as CA-G.R. No.
46373-R * entitled Filipino Society of Composers, Authors, Publishers, Inc.,
Plaintiff-Appellant v. Benjamin Tan, Defendant-Appellee, from the decision of
the Court of First Instance of Manila, Branch VII in Civil Case No.
71222 ** "Filipino Society of Composers, Authors and Publishers, Inc.,
Plaintiff v. Benjamin Tan, Defendant," which had dismissed plaintiffs'
complaint without special pronouncement as to costs.
The Court of Appeals, finding that the case involves pure questions of law,
certified the same to the Supreme Court for final
The undisputed facts of this case are as follows:
Plaintiff-appellant is a non-profit association of authors, composers and
publishers duly organized under the Corporation Law of the Philippines and
registered with the Securities and Exchange Commission. Said association is
the owner of certain musical compositions among which are the songs
entitled: "Dahil Sa Iyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao
Lamang" and "The Nearness Of You."
On the other hand, defendant-appellee is the operator of a restaurant known
as "Alex Soda Foundation and Restaurant" where a combo with professional
singers, hired to play and sing musical compositions to entertain and amuse
customers therein, were playing and singing the above-mentioned
compositions without any license or permission from the appellant to play or
sing the same. Accordingly, appellant demanded from the appellee payment
of the necessary license fee for the playing and singing of aforesaid
compositions but the demand was ignored.
Hence, on November 7, 1967, appellant filed a complaint with the lower court
for infringement of copyright against defendant-appellee for allowing the
playing in defendant-appellee's restaurant of said songs copyrighted in the
name of the former.
Defendant-appellee, in his answer, countered that the complaint states no
cause of action. While not denying the playing of said copyrighted
compositions in his establishment, appellee maintains that the mere singing
and playing of songs and popular tunes even if they are copyrighted do not
constitute an infringement
The lower court, finding for the defendant, dismissed the complaint
Page 18 of 101
Plaintiff appealed to the Court of Appeals which as already stated certified
the case to the Supreme Court for adjudication on the legal question
involved.
In its brief in the Court of Appeals, appellant raised the following Assignment
of Errors:
I. THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL
COMPOSITIONS OF THE APPELLANT WERE IN THE NATURE
OF PUBLIC PROPERTY WHEN THEY WERE COPYRIGHTED OR
REGISTERED.
II. THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL
COMPOSITIONS OF THE APPELLANT WERE PLAYED AND
SUNG IN THE SODA FOUNTAIN AND RESTAURANT OF THE
APPELLEE BY INDEPENDENT CONTRACTORS AND ONLY
UPON THE REQUEST OF CUSTOMERS.
III. THE LOWER COURT ERRED IN HOLDING THAT THE PLAYING
AND SINGING OF COPYRIGHTED MUSICAL COMPOSITIONS IN
THE SODA FOUNTAIN AND RESTAURANT OF THE APPELLEE
ARE NOT PUBLIC PERFORMANCES FOR PROFIT OF THE SAID
COMPOSITIONS WITHIN THE MEANING AND CONTEMPLATION
OF THE COPYRIGHT LAW.
IV. THE LOWER COURT ERRED IN NOT HOLDING THAT THE
APPELLEE IS LIABLE TO THE APPELLANT FOR FOUR (4)
SEPARATE INFRINGEMENTS. (Brief for Appellant, pp. A and B).
The petition is devoid of merit.
The principal issues in this case are whether or not the playing and signing of
musical compositions which have been copyrighted under the provisions of
the Copyright Law (Act 3134) inside the establishment of the defendant-
appellee constitute a public performance for profit within the meaning and
contemplation of the Copyright Law of the Philippines; and assuming that
there were indeed public performances for profit, whether or not appellee can
be held liable therefor.
Appellant anchors its claim on Section 3(c) of the Copyright Law which
provides:
SEC. 3. The proprietor of a copyright or his heirs or assigns shall have the
exclusive right:
(c) To exhibit, perform, represent, produce, or reproduce the copyrighted
work in any manner or by any method whatever for profit or otherwise; if not
reproduced in copies for sale, to sell any manuscripts or any record
whatsoever thereof;
IPL- Assignment No. 10 (Entire Copyright Cases)
It maintains that playing or singing a musical composition is universally
accepted as performing the musical composition and that playing and singing
of copyrighted music in the soda fountain and restaurant of the appellee for
the entertainment of the customers although the latter do not pay for the
music but only for the food and drink constitute performance for profit under
the Copyright Law (Brief for the Appellant, pp. 19-25).
We concede that indeed there were "public performances for profit. "
The word "perform" as used in the Act has been applied to "One who plays a
musical composition on a piano, thereby producing in the air sound waves
which are heard as music ... and if the instrument he plays on is a piano plus
a broadcasting apparatus, so that waves are thrown out, not only upon the
air, but upon the other, then also he is performing the musical composition."
In relation thereto, it has been held that "The playing of music in dine and
dance establishment which was paid for by the public in purchases of food
and drink constituted "performance for profit" within a Copyright Law." (Buck,
et al. v. Russon No. 4489 25 F. Supp. 317). Thus, it has been explained that
while it is possible in such establishments for the patrons to purchase their
food and drinks and at the same time dance to the music of the orchestra,
the music is furnished and used by the orchestra for the purpose of inducing
the public to patronize the establishment and pay for the entertainment in the
purchase of food and drinks. The defendant conducts his place of business
for profit, and it is public; and the music is performed for profit (Ibid, p. 319).
In a similar case, the Court ruled that "The Performance in a restaurant or
hotel dining room, by persons employed by the proprietor, of a copyrighted
musical composition, for the entertainment of patrons, without charge for
admission to hear it, infringes the exclusive right of the owner of the
copyright." (Herbert v. Shanley Co.; John Church Co. v. Hillard Hotel Co., et
al., 242 U.S. 590-591). In delivering the opinion of the Court in said two
cases, Justice Holmes elaborated thus:
If the rights under the copyright are infringed only by a performance where
money is taken at the door, they are very imperfectly protected.
Performances not different in kind from those of the defendants could be
given that might compete with and even destroy the success of the monopoly
that the law intends the plaintiffs to have. It is enough to say that there is no
need to construe the statute so narrowly. The defendants' performances are
not eleemosynary. They are part of a total for which the public pays, and the
fact that the price of the whole is attributed to a particular item which those
present are expected to order is not important. It is true that the music is not
the sole object, but neither is the food, which probably could be got cheaper
elsewhere. The object is a repast in surroundings that to people having
limited power of conversation or disliking the rival noise, give a luxurious
pleasure not to be had from eating a silent meal. If music did not pay, it would
be given up. If it pays, it pays out of the public's pocket. Whether it pays or
not, the purpose of employing it is profit, and that is enough.
Page 19 of 101
 Under the circumstances, it is clear that the musical compositions in question
In the case at bar, it is admitted that the patrons of the restaurant in question had long become public property, and are therefore beyond the protection of
pay only for the food and drinks and apparently not for listening to the music. the Copyright Law.
As found by the trial court, the music provided is for the purpose of
entertaining and amusing the customers in order to make the establishment PREMISES CONSIDERED, the appealed decision of the Court of First
more attractive and desirable. It will be noted that for the playing and singing Instance of Manila in Civil Case No. 71222 is hereby AFFIRMED.
the musical compositions involved, the combo was paid as independent SO ORDERED.
contractors by the appellant (Record on Appeal, p. 24). It is therefore obvious
that the expenses entailed thereby are added to the overhead of the
restaurant which are either eventually charged in the price of the food and
drinks or to the overall total of additional income produced by the bigger
volume of business which the entertainment was programmed to attract.
Consequently, it is beyond question that the playing and singing of the
combo in defendant-appellee's restaurant constituted performance for profit
contemplated by the Copyright Law.

Nevertheless, appellee cannot be said to have infringed upon the Copyright

Law. Appellee's allegation that the composers of the contested musical
compositions waived  their right in favor of the general public when they
allowed their intellectual creations to become property of the public domain
before applying for the corresponding copyrights for the same

The Supreme Court has ruled that "Paragraph 33 of Patent Office

Administrative Order No. 3 (as amended, dated September 18, 1947) entitled
'Rules of Practice in the Philippines Patent Office relating to the Registration
of Copyright Claims' promulgated pursuant to Republic Act 165, provides
among other things that an intellectual creation should be copyrighted thirty
(30) days after its publication, if made in Manila, or within the (60) days if
made elsewhere, failure of which renders such creation public property."
(Santos v. McCullough Printing Company, 12 SCRA 324-325 [1964]. Indeed,
if the general public has made use of the object sought to be copyrighted for
thirty (30) days prior to the copyright application the law deems the object to
have been donated to the public domain and the same can no longer be
copyrighted.

A careful study of the records reveals that the song "Dahil Sa Iyo" which was
registered on April 20, 1956 (Brief for Appellant, p. 10) became popular in
radios, juke boxes, etc. long before registration (TSN, May 28, 1968, pp. 3-5;
25) while the song "The Nearness Of You" registered on January 14, 1955
(Brief for Appellant, p. 10) had become popular twenty five (25) years prior to
1968, (the year of the hearing) or from 1943 (TSN, May 28, 1968, p. 27) and
the songs "Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay Tao Lamang"
both registered on July 10, 1966, appear to have been known and sang by
the witnesses as early as 1965 or three years before the hearing in 1968.
The testimonies of the witnesses at the hearing of this case on this subject
were unrebutted by the appellant. (Ibid,  pp. 28; 29 and 30).

IPL- Assignment No. 10 (Entire Copyright Cases) Page 20 of 101

[8] G.R. No. L-30774             January 29, 1929
PHILIPPINE EDUCATION COMPANY, INC., plaintiff-appellee,
vs. VICENTE SOTTO and V. R. ALINDADA defendants.
V. R. ALINDADA, appellant.
1.COPYRIGHT LAW CONSTRUED.—Under the second paragraph of section 5,
Act No. 3134, known as the Copyright Law, where one periodical purchases, pays
for and publishes an article with notice "that all rights thereto were reserved" another
periodical has no legal right to again publish the article, without giving "the source of
reproduction" or citing the original from which it was reproduced.
2.WHEN "NOTICE OF COPYRIGHT" NOT REQUIRED.—As to the article in
question, the provisions of that section do not require "notice of copyright." It is
sufficient that the original article contains a notice in substance "that their
publication. is reserved."
3.TO WHAT EXCEPTION CONFINED.—This exception is confined and limited to
"news items, editorial paragraphs, and articles in periodicals," and does not apply to
any other provisions of the Copyright Law.
4.INTENT OF LEGISLATURE.—The purpose and intent of the Legislature was to
protect an enterprising newspaper or magazine that invests its money and pays for
the right to publish an original article.
STATEMENT
Plaintiff alleges that it is a domestic corporation, with its principal office in the
City of Manila, of which the defendants are also residents and of legal age;
that it is the proprietor and publisher of the monthly magazine Philippine
Education Magazine, which is published in the City of Manila and of general
circulation in the Philippine Islands; that the defendant, Vicente Sotto, is the
proprietor and publisher, and the defendant, V. R. Alindada, is the editor of a
weekly newspaper known as The Independent, which is also published in the
City of Manila and also of such general circulation; that in December, 1927,
plaintiff contracted with Austin Craig for the preparation and publication of an
original article to be written by him concerning Mrs. Jose Rizal, to be
published exclusively in the Philippine Education Magazine, and that by
virtue thereof, the said Craig prepared and wrote an original article entitled
"The True Story of Mrs. Rizal," and delivered it to the plaintiff which paid him
for it, and thereby became the exclusive owner of the article; that it printed
and published the article in its issue of December, 1927, and that it was on
the market for sale in the early part of that month; that as such owner the
plaintiff has the exclusive right to print and publish the article in its magazine,
and that it gave notice in that issue "that all rights thereto were reserved;"
that the defendants unlawfully and without the knowledge or consent of the
plaintiff appropriated, copied and reproduced and published the article in the
IPL- Assignment No. 10 (Entire Copyright Cases)
weekly issues of The Independent of December 24th and December 31,
1927, without citing the source of its defendants; that upon such discovery,
the plaintiff to the fact that the article in question was published "without
permission or even the courtesy of an ordinary credit line," and requested
that in his next issue that "you state in some prominent place that this article
was taken from our magazine, and I request further that you refrain from
similar thefts in the future," Also calling his attention to the fact that we have
stated plainly "on the title page of our magazine that we reserve all rights,
and you infringe on them at your peril." In answer to that latter, the editor
protested against the use of the word "thefts," and advised the plaintiff in
substance that it had not registered such right under the Copyright Law, and
that "any newspaper can reprint the article of Professor Craig without
permission from anybody. Will you appreciate this free lesson of law?" And
the article as continued was again published in the next issue of The
Independent. Plaintiff alleges that by reason of defendants' acts, it was
damaged in the sum of P5,000; that the defendants threaten to, and will
continue appropriating and reproducing the article owned by the plaintiff, in
voilation of its rights, unless restrained by the court, and plaintiff prays for
judgment against the defendants for P5,000, and that they be perpetually
enjoined from the publication of any further articles without the knowledge or
consent of the plaintiff, and for such other and further relief as the court may
deem just and equitable.
To this complaint, the defendants filed a general demurrer upon the ground
that it did not state facts sufficient to constitute a cause of action, which was
overruled. The defendants then answered in which they made a general and
specific denial of all of the material allegations of the complaint, and as a
special defense allege:
(a) That the defendant Vicente Sotto is not the owner of the magazine The
Independent, nor has he any intervention in the publication of said magazine.
(b) That the plaintiff is not the owner of the article entitled "The True Story of
Mrs. Rizal," because it is not registered in its name in the proper registry
under Act No. 3134 and the regulation concerning the registration of
intellectual property made by the Chief of the Philippine Library and Museum.
(c) That the defendant V. R. Alindada, as the editor of The Independent,
published in said magazine the article entitled "The True Story of Mrs. Rizal,"
written by Austin Craig, in good faith and in the belief that such an interesting
historical passage of the Philippines was published by the
magazine Philippine Education Magazine for the information and propaganda
of the ideas and patriotic feelings of the wife of the apostle of our country's
liberties, without any intention to prejudice anybody in his property rights.
Wherefore, the defendants pray the court that the complaint be dismissed
and the defendants absolved therefrom, with costs against the plaintiff.
The case was tried and submitted upon the following admitted facts:
Page 21 of 101
(1) That the Philippine Education Co., Inc., is the corporation that contracted
with Austin Craig for the preparation of the article "The True Story of Mrs.
Rizal," for its exclusive publication in said magazine.
(2) That said article which was prepared by Mr. Austin Craig and published in
the "Philippine Education Magazine" is not found registered in the Copyright
Office, although in the same magazine, under letter A, on the third page
containing the index, there may be read a note "All Rights Reserved."
(3) That the Philippine Education Co., Inc., paid Mr. Austin Craig a certain
sum for the preparation of said article.
(4) That The Independent, which is edited under the management of Mr. V.
R. Alindada, published the said article written by Austin Craig on December
24, 1927 and December 31st of the same year, making it appear in the
heading of the article the name of the author, the first publication of which is
marked as Exhibit B.
(5) That on December 23d when The Independent published it, the editor
of The Philippine Education Magazine wrote to Mr. V. R. Alindada, editor
of The Independent, the letter marked with letter C.
(6) That notwithstanding the letter Exhibit C, the publication of the said article
was continued in the issue of The Independent of December 31st, marked
Exhibit E, without citing the source of the article but making it appear therein
the name of the author.
(7) That the purposes of the judgment that may be rendered in this case, in
the event of adverse judgment, Mr. V. R. Alindada, one of the defendants,
admits to be solely responsible civilly.
(8) That in relation to the admission just mentioned, the document, Exhibit F,
is presented.
Mr. SOTTO. Before presenting our evidence, I request that the defendant
Vicente Sotto be excluded from the complaint.
Mr. OZAETA. Without objection.
COURT. According to the petition of the defendant Mr. Vicente Sotto, which
is concurred in by counsel for the plaintiff, the case is dismissed with respect
to him, without costs.
Upon such issues the lower court rendered judgment against the defendant,
V. R. Alindada, for P500, without costs, from which he appeals, contending,
first, that the lower court erred in overruling the demurrer to the complaint,
and second, in sentencing him to pay P500 to the plaintiff.
IPL- Assignment No. 10 (Entire Copyright Cases)
JOHNS, J.:
The question presented involves the legal construction of Act No. 3134 of the
Philippine Legislature, which is entitled "An Act to protect intellectual
property," and which is known as the Copyright Law of the Philippine Islands.
Section 2 of the Act defines and enumerates what may be copyrighted which,
among other things, includes books, composite and cyclopedic works,
manuscripts, commentaries and critical studies.
Section 4 provides:
For the purpose of this Act articles and other writings published without the
names of the authors or under pseudonyms are considered as the property
of the publishers.
And section 5 says:
Lines, passages, or paragraphs in a book or other copyrighted works may be
qouted or cited or reproduced for comment, dissertation, or criticism.
News items, editorial paragraphs, and articles in periodicals may also be
reproduced unless they contain a notice that their publication is reserved or a
notice of copyright, but the source of the reproduction or original reproduced
shall be cited. In case of musical works part of little extent may also be
reproduced.
Hence, the real question involved is the construction which should be placed
upon the second paragraph of section 5.
It is conceded that neither Professor Craig nor the palintiff applied for or
obtained a copyright of the article in question under the terms and provisions
of this Act. The defendants contends taht after the article was once published
without a copyright in plaintiff's magazine, it then became public property,
and that he had a legal right to publish it in his magazine, without giving "the
source of the reproduction."
It must be conceded that after the Copyright Law of the United States, he
would have that legal right. That is the construction which has been place
upon that law by numerous decisions both state and federal of that nation. Be
that as it may, we have carefully read and reread the Copyright Law of the
United States, and the provisions contained in the second paragraph of
section 5 of the Act No. 3134 are removed to be found in the Copyright Law
of the United States. Neither does it contain any similar provision, and for
want thereof, the decisions of those courts are not in point on the question
involved here, and, as appellant says, the legal question presented on this
appeal is one of first impression in this court, and the case is submitted
without the citation of the decision of any court under the same or similar
statute.
Section 4 specifically provides:
Page 22 of 101
For the purpose of this Act articles and other writings published without the value of the whole Copyright Law, but it will bbe notted that this exception is
names of the authors or under pseudonyms are conidered as the property of specifically confined and limited to "news items editorial paragraphs, and
the publishers. articles in periodicals," and hence could not be made to apply to any other
provisions of the Copyright Law. It will also be noted that in the instant case,
The first paragraph of section 5 says: the defendant had the legal right to publish the article in question by giving
Lines, passages, or paragraphs in book or other copyrighted works may be "the source of the reproduction." The plaintiff bought and paid for the article
qouted or cited or reproduced for comment, dissertion, or criticism. and published it with the notice that "we reserve all rights," and the defendant
published the article in question without citing "the source of the
It is very apparent that this paragraph is confined and limited to a book or reproduction," and for aught that appeared in his paper, the article was
other copyrighted works, and, hence, that it does not apply to the publication purchase and paid for by the defendant.
of the article now in question. The second paragraph of this question is
confined to news items, editorial paragraphs and articles in periodicals which We are clearly of the opinon that the language in question in the Copyright
may also be reproduced, "unless they contain a notice that their publication is Law of the Philippine Islands, which is not found in the Copyright Law of the
reserved or a notice of copyright, but the source of the reproduction or United States, was inserted for a specific purpose, and it was intended to
original reproduce shall be cited." It is admitted that the plaintiff notified the prohibit the doing of the very thing which the defendant did in this case;
defendant "that we reserve all rights and you infringe on them at your peril," otherwise, the use of all of those words is a nullity. This construction does not
and that after receipt of the notice, the defendant published the article in least impair the Copyright Law, except as to "news items, editorial
question, without giving "the source of the reproduction." paragraphs, and articles in periodicals," and it protects an enterprising
newspaper or magazine that invests its money and pays for the right to
If it had been the purpose and intent of the Legislature to limit the publish an original article, and that was the reason why the Legislature saw fit
reproduction of "news items, editorial paragraphs, and articles in periodicals," to use the language in question.
to those which have a notice or copyright only, it never would have said if
"they contain a notice that their publication is reserved." Above and beyond all this, it would seem that upon the undisputed facts in
this case, common courtesy among newspaper men would suggest that the
Analyzing the language used, it says, first, that such news items, editorial defendant would give "the source of the reproduction." It would have been a
paragraphs, and articles in periodicals may be reproduced, unless they very simple and an easy thing to do.
contain a notice that their publication is reserved, or, second, that may also
be reproduced, unless they contain a notice of copyright. But in either event, All things considered, we are clearly of the opinion that the judgment of the
the law specifically provides that "the source of the reproduction or original lower court should be affirmed, with costs. So ordered.
reproduced shall be cited," and is not confined or limited to case in which
there is "a notice of copyright," and specifically says that in either event "the
source of the reproduction or original reproduced shall be cited." To give this
section any other construction would be to nullify, eliminate and take from the
paragraph the words "they contain a notice that their publication is reserved,"
and to say that the Legislature never intended to say what it did say. This
court must construe the language found in the act. The language is plain,
clear, define and certain, and this court has no legal right to say that the
Legislature did not mean what it said when it used those words, which is all
the more apparent by the use of the word "or" after the word "reserved." In
the instant case, the plaintiff did not give notice of its copyright, for the simple
reason that it did not have a copyright, but it did notify the defendant that in
the publication of the article "we reserved all rights," which was legally
equivalent to a notice "that their publication is reserved." To give that
paragraph any other construction would eliminate, take from it, and wipe out,
the words "that their publication is reserved," and this court has no legal right
to do that. It was contended that this construction would nullify the use and

IPL- Assignment No. 10 (Entire Copyright Cases) Page 23 of 101

[9&20] G.R. No. 175769-70             January 19, 2009
ABS-CBN BROADCASTING CORPORATION, Petitioners,
vs. PHILIPPINE MULTI-MEDIA SYSTEM, INC., CESAR G. REYES,
FRANCIS CHUA (ANG BIAO), MANUEL F. ABELLADA, RAUL B. DE
MESA, AND ALOYSIUS M. COLAYCO, Respondents.
Copyrights; Broadcasting; Rebroadcasting is “the simultaneous broadcasting
by one broadcasting organization of the broadcast of another broadcasting
organization.”—Under the Rome Convention, rebroadcasting is “the simultaneous
broadcasting by one broadcasting organization of the broadcast of another
broadcasting organization.” The Working Paper prepared by the Secretariat of the
Standing Committee on Copyright and Related Rights defines broadcasting
organizations as “entities that take the financial and editorial responsibility for the
selection and arrangement of, and investment in, the transmitted content.” Evidently,
PMSI would not qualify as a broadcasting organization because it does not have the
aforementioned responsibilities imposed upon broadcasting organizations, such as
ABS-CBN.
Same; Same; While the Rome Convention gives broadcasting organizations
the right to authorize or prohibit the rebroadcasting of its broadcast, however, this
protection does not extend to cable retransmission.—While the Rome Convention
gives broadcasting organizations the right to authorize or prohibit the rebroadcasting
of its broadcast, however, this protection does not extend to cable retransmission.
The retransmission of ABS-CBN’s signals by PMSI—which functions essentially as
a cable television—does not therefore constitute rebroadcasting in violation of the
former’s intellectual property rights under the IP Code. It must be emphasized that
the law on copyright is not absolute. The IP Code provides that: Sec.
184. Limitations on Copyright.—184.1. Notwithstanding the provisions of Chapter
V, the following acts shall not constitute infringement of copyright: x x x x (h) The
use made of a work by or under the direction or control of the Government, by the
National Library or by educational, scientific or professional institutions where such
use is in the public interest and is compatible with fair use.
Same; Same; Must-Carry Rule; The imposition of the must-carry rule is within the
National Telecommunications’ (NTC’s) power to promulgate rules and regulations,
as public safety and interest may require, to encourage a larger and more effective
use of communications, radio and television broadcasting facilities, and to maintain
effective competition among private entities in these activities whenever the
commission finds it reasonably feasible.—The carriage of ABS-CBN’s signals by
virtue of the must-carry rule in Memorandum Circular No. 04-08-88 is under the
direction and control of the government though the NTC which is vested with
exclusive jurisdiction to supervise, regulate and control telecommunications and
broadcast services/facilities in the Philippines. The imposition of the must-carry rule
is within the NTC’s power to promulgate rules and regulations, as public safety and
interest may require, to encourage a larger and more effective use of
communications, radio and television broadcasting facilities, and to maintain
IPL- Assignment No. 10 (Entire Copyright Cases)
effective competition among private entities in these activities whenever the
Commission finds it reasonably feasible. As correctly observed by the Director-
General of the IPO: Accordingly, the “Must-Carry Rule” under NTC Circular No. 4-
08-88 falls under the foregoing category of limitations on copyright. This Office
agrees with the Appellant [herein respondent PMSI] that the “Must-Carry Rule” is in
consonance with the principles and objectives underlying Executive Order No. 436,
to wit: The Filipino people must be given wider access to more sources of news,
information, education, sports event and entertainment programs other than those
provided for by mass media and afforded television programs to attain a well
informed, well-versed and culturally refined citizenry and enhance their socio-
economic growth: WHEREAS, cable television (CATV) systems could support or
supplement the services provided by television broadcast facilities, local and
overseas, as the national information highway to the countryside.
Intellectual Property Code of the Philippines (R.A. No. 8293); Intellectual
property protection is merely a means towards the end of making society benefit
from the creation of its men and women of talent and genius.—Intellectual property
protection is merely a means towards the end of making society benefit from the
creation of its men and women of talent and genius. This is the essence of intellectual
property laws, and it explains why certain products of ingenuity that are concealed
from the public are outside the pale of protection afforded by the law. It also explains
why the author or the creator enjoys no more rights than are consistent with public
welfare.
Same; Broadcasting; The radio spectrum is a finite resource that is a part of the
national patrimony and the use thereof is a privilege conferred upon the grantee by
the State and may be withdrawn anytime, after due process.—PMSI was likewise
granted a legislative franchise under Republic Act No. 8630, Section 4 of which
similarly states that it “shall provide adequate public service time to enable the
government, through the said broadcasting stations, to reach the population on
important public issues; provide at all times sound and balanced programming;
promote public participation such as in community programming; assist in the
functions of public information and education x x x.” Section 5, paragraph 2 of the
same law provides that “the radio spectrum is a finite resource that is a part of the
national patrimony and the use thereof is a privilege conferred upon the grantee by
the State and may be withdrawn anytime, after due process.”
Same; Telecommunication Franchise; In Telecom & Broadcast Attys. of the
Phils., Inc. v. COMELEC, 289 SCRA 337 (1998), the Court held that a franchise is a
mere privilege which may be reasonably burdened with some form of public service.
—In Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC, 289 SCRA 337
(1998), the Court held that a franchise is a mere privilege which may be reasonably
burdened with some form of public service. Thus: All broadcasting, whether by radio
or by television stations, is licensed by the government. Airwave frequencies have to
be allocated as there are more individuals who want to broadcast than there are
frequencies to assign. A franchise is thus a privilege subject, among other things, to
Page 24 of 101
amendment by Congress in accordance with the constitutional provision that “any
such franchise or right granted . . . shall be subject to amendment, alteration or repeal
by the Congress when the common good so requires.”
Same; Same; In truth, radio and television broadcasting companies, which are
given franchises, do not own the airwaves and frequencies through which they
transmit broadcast signals and images.—In truth, radio and television broadcasting
companies, which are given franchises, do not own the airwaves and frequencies
through which they transmit broadcast signals and images. They are merely given the
temporary privilege of using them. Since a franchise is a mere privilege, the exercise
of the privilege may reasonably be burdened with the performance by the grantee of
some form of public service. x x x There is likewise no merit to ABS-CBN’s claim
that PMSI’s carriage of its signals is for a commercial purpose; that its being the
country’s top broadcasting company, the availability of its signals allegedly enhances
PMSI’s attractiveness to potential customers; or that the unauthorized carriage of its
signals by PMSI has created competition between its Metro Manila and regional
stations.
Same; Same; Anyone in the country who owns a television set and antenna can
receive ABS-CBN’s signals for free.—Administrative charges cannot be based on
mere speculation or conjecture. The complainant has the burden of proving by
substantial evidence the allegations in the complaint. Mere allegation is not evidence,
and is not equivalent to proof. Anyone in the country who owns a television set and
antenna can receive ABS-CBN’s signals for free. Other broadcasting organizations
with free-to-air signals such as GMA-7, RPN-9, ABC-5, and IBC-13 can likewise be
accessed for free. No payment is required to view the said channels because these
broadcasting networks do not generate revenue from subscription from their viewers
but from airtime revenue from contracts with commercial advertisers and producers,
as well as from direct sales.
Same; Same; It must be emphasized that, as a national broadcasting
organization, one of ABS-CBN’s responsibilities is to scatter its signal to the widest
area of coverage as possible.—There is no merit to ABS-CBN’s argument that
PMSI’s carriage of Channels 2 and 23 resulted in competition between its Metro
Manila and regional stations. ABS-CBN is free to decide to pattern its regional
programming in accordance with perceived demands of the region; however, it
cannot impose this kind of programming on the regional viewers who are also
entitled to the free-to-air channels. It must be emphasized that, as a national
broadcasting organization, one of ABS-CBN’s responsibilities is to scatter its signals
to the widest area of coverage as possible. That it should limit its signal reach for the
sole purpose of gaining profit for its regional stations undermines public interest and
deprives the viewers of their right to access to information.
Broadcasting; Must-Carry Rule; The “Must-Carry Rule” favors both
broadcasting organizations and the public.—The “Must-Carry Rule” favors both
broadcasting organizations and the public. It prevents cable television companies
IPL- Assignment No. 10 (Entire Copyright Cases)
from excluding broadcasting organization especially in those places not reached by
signal. Also, the rule prevents cable television companies from depriving viewers in
far-flung areas the enjoyment of programs available to city viewers. In fact, this
Office finds the rule more burdensome on the part of the cable television companies.
The latter carries the television signals and shoulders the costs without any recourse
of charging. On the other hand, the signals that are carried by cable television
companies are dispersed and scattered by the television stations and anybody with a
television set is free to pick them up.
Constitutional Law; One of the essential requisites for a successful judicial
inquiry into constitutional questions is that the resolution of the constitutional
question must be necessary in deciding the case.—With regard to the issue of the
constitutionality of the must-carry rule, the Court finds that its resolution is not
necessary in the disposition of the instant case. One of the essential requisites for a
successful judicial inquiry into constitutional questions is that the resolution of the
constitutional question must be necessary in deciding the case. In Spouses Mirasol v.
Court of Appeals, 351 SCRA 44 (2001), we held: As a rule, the courts will not
resolve the constitutionality of a law, if the controversy can be settled on other
grounds. The policy of the courts is to avoid ruling on constitutional questions and to
presume that the acts of the political departments are valid, absent a clear and
unmistakable showing to the contrary. To doubt is to sustain. This presumption is
based on the doctrine of separation of powers. This means that the measure had first
been carefully studied by the legislative and executive departments and found to be
in accord with the Constitution before it was finally enacted and approved.
Same; As a general rule, the question of constitutionality must be raised at the
earliest opportunity so that if not raised in the pleadings, ordinarily it may not be
raised in the trial, and if not raised in the trial court, it will not be considered on
appeal.—The records show that petitioner assailed the constitutionality of
Memorandum Circular No. 04-08-88 by way of a collateral attack before the Court
of Appeals. In Philippine National Bank v. Palma, 466 SCRA 307 (2005), we ruled
that for reasons of public policy, the constitutionality of a law cannot be collaterally
attacked. A law is deemed valid unless declared null and void by a competent court;
more so when the issue has not been duly pleaded in the trial court. As a general rule,
the question of constitutionality must be raised at the earliest opportunity so that if
not raised in the pleadings, ordinarily it may not be raised in the trial, and if not
raised in the trial court, it will not be considered on appeal. In Philippine Veterans
Bank v. Court of Appeals, 462 SCRA 336 (2005), we held: We decline to rule on the
issue of constitutionality as all the requisites for the exercise of judicial review are
not present herein. Specifically, the question of constitutionality will not be
passed upon by the Court unless, at the first opportunity, it is properly raised
and presented in an appropriate case, adequately argued, and is necessary to a
determination of the case, particularly where the issue of constitutionality is the
very lis mota presented. x x x
Page 25 of 101
 Judgments; Where the issues have become moot, there is no justiciable
controversy, thereby rendering the resolution of the same of no practical use or
value.—It bears stressing that the proceedings for punishment of indirect contempt
are criminal in nature. The modes of procedure and rules of evidence adopted in
contempt proceedings are similar in nature to those used in criminal prosecutions.
While it may be argued that the Court of Appeals should have ordered respondents to
comment, the issue has been rendered moot in light of our ruling on the merits. To
order respondents to comment and have the Court of Appeals conduct a hearing on
the contempt charge when the main case has already been disposed of in favor of
PMSI would be circuitous. Where the issues have become moot, there is no
justiciable controversy, thereby rendering the resolution of the same of no practical
use or value.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari 1 assails the July 12, 2006 Decision 2 of
the Court of Appeals in CA-G.R. SP Nos. 88092 and 90762, which affirmed
the December 20, 2004 Decision of the Director-General of the Intellectual
Property Office (IPO) in Appeal No. 10-2004-0002. Also assailed is the
December 11, 2006 Resolution3 denying the motion for reconsideration.
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is licensed under
the laws of the Republic of the Philippines to engage in television and radio
broadcasting.4 It broadcasts television programs by wireless means to Metro
Manila and nearby provinces, and by satellite to provincial stations through
Channel 2 on Very High Frequency (VHF) and Channel 23 on Ultra High
Frequency (UHF). The programs aired over Channels 2 and 23 are either
produced by ABS-CBN or purchased from or licensed by other producers.
ABS-CBN also owns regional television stations which pattern their
programming in accordance with perceived demands of the region. Thus,
television programs shown in Metro Manila and nearby provinces are not
necessarily shown in other provinces.
Respondent Philippine Multi-Media System, Inc. (PMSI) is the operator of
Dream Broadcasting System. It delivers digital direct-to-home (DTH)
television via satellite to its subscribers all over the Philippines. Herein
individual respondents, Cesar G. Reyes, Francis Chua, Manuel F. Abellada,
Raul B. De Mesa, and Aloysius M. Colayco, are members of PMSI’s Board of
Directors.
PMSI was granted a legislative franchise under Republic Act No. 8630 5 on
May 7, 1998 and was given a Provisional Authority by the National
Telecommunications Commission (NTC) on February 1, 2000 to install,
operate and maintain a nationwide DTH satellite service. When it
commenced operations, it offered as part of its program line-up ABS-CBN
IPL- Assignment No. 10 (Entire Copyright Cases)
Channels 2 and 23, NBN, Channel 4, ABC Channel 5, GMA Channel 7, RPN
Channel 9, and IBC Channel 13, together with other paid premium program
channels.
However, on April 25, 2001,6 ABS-CBN demanded for PMSI to cease and
desist from rebroadcasting Channels 2 and 23. On April 27, 2001, 7 PMSI
replied that the rebroadcasting was in accordance with the authority granted
it by NTC and its obligation under NTC Memorandum Circular No. 4-08-
88,8 Section 6.2 of which requires all cable television system operators
operating in a community within Grade “A” or “B” contours to carry the
television signals of the authorized television broadcast stations. 9
Thereafter, negotiations ensued between the parties in an effort to reach a
settlement; however, the negotiations were terminated on April 4, 2002 by
ABS-CBN allegedly due to PMSI’s inability to ensure the prevention of illegal
retransmission and further rebroadcast of its signals, as well as the adverse
effect of the rebroadcasts on the business operations of its regional television
stations.10
On May 13, 2002, ABS-CBN filed with the IPO a complaint for “Violation of
Laws Involving Property Rights, with Prayer for the Issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction,” which was docketed
as IPV No. 10-2002-0004. It alleged that PMSI’s unauthorized rebroadcasting
of Channels 2 and 23 infringed on its broadcasting rights and copyright.
On July 2, 2002, the Bureau of Legal Affairs (BLA) of the IPO granted ABS-
CBN’s application for a temporary restraining order. On July 12, 2002, PMSI
suspended its retransmission of Channels 2 and 23 and likewise filed a
petition for certiorari with the Court of Appeals, which was docketed as CA-
G.R. SP No. 71597.
Subsequently, PMSI filed with the BLA a Manifestation reiterating that it is
subject to the must-carry rule under Memorandum Circular No. 04-08-88. It
also submitted a letter dated December 20, 2002 of then NTC Commissioner
Armi Jane R. Borje to PMSI stating as follows:
This refers to your letter dated December 16, 2002 requesting for regulatory
guidance from this Commission in connection with the application and
coverage of NTC Memorandum Circular No. 4-08-88, particularly Section 6
thereof, on mandatory carriage of television broadcast signals, to the direct-
to-home (DTH) pay television services of Philippine Multi-Media System, Inc.
(PMSI).
Preliminarily, both DTH pay television and cable television services are
broadcast services, the only difference being the medium of delivering such
services (i.e. the former by satellite and the latter by cable). Both can carry
Page 26 of 101
broadcast signals to the remote areas, thus enriching the lives of the
residents thereof through the dissemination of social, economic, educational
information and cultural programs.
The DTH pay television services of PMSI is equipped to provide nationwide
DTH satellite services. Concededly, PMSI’s DTH pay television services
covers very much wider areas in terms of carriage of broadcast signals,
including areas not reachable by cable television services thereby providing
a better medium of dissemination of information to the public.
In view of the foregoing and the spirit and intent of NTC memorandum
Circular No. 4-08-88, particularly section 6 thereof, on mandatory
carriage of television broadcast signals, DTH pay television services
should be deemed covered by such NTC Memorandum Circular.
For your guidance. (Emphasis added)11
On August 26, 2003, PMSI filed another Manifestation with the BLA that it
received a letter dated July 24, 2003 from the NTC enjoining strict and
immediate compliance with the must-carry rule under Memorandum Circular
No. 04-08-88, to wit:
Dear Mr. Abellada:
Last July 22, 2003, the National Telecommunications Commission (NTC)
received a letter dated July 17, 2003 from President/COO Rene Q. Bello of
the International Broadcasting Corporation (IBC-Channel 13) complaining
that your company, Dream Broadcasting System, Inc., has cut-off, without
any notice or explanation whatsoever, to air the programs of IBC-13, a free-
to-air television, to the detriment of the public.
We were told that, until now, this has been going on.
Please be advised that as a direct broadcast satellite operator,
operating a direct-to-home (DTH) broadcasting system, with a
provisional authority (PA) from the NTC, your company, along with
cable television operators, are mandated to strictly comply with the
existing policy of NTC on mandatory carriage of television broadcast
signals as provided under Memorandum Circular No. 04-08-88, also
known as the Revised Rules and Regulations Governing Cable
Television System in the Philippines.
This mandatory coverage provision under Section 6.2 of said
Memorandum Circular, requires all cable television system operators,
operating in a community within the Grade “A” or “B” contours to
“must-carry” the television signals of the authorized television
broadcast stations, one of which is IBC-13. Said directive equally
applies to your company as the circular was issued to give consumers
IPL- Assignment No. 10 (Entire Copyright Cases)
and the public a wider access to more sources of news, information,
entertainment and other programs/contents.
This Commission, as the governing agency vested by laws with the
jurisdiction, supervision and control over all public services, which includes
direct broadcast satellite operators, and taking into consideration the
paramount interest of the public in general, hereby directs you to immediately
restore the signal of IBC-13 in your network programs, pursuant to existing
circulars and regulations of the Commission.
For strict compliance. (Emphasis added)12
Meanwhile, on October 10, 2003, the NTC issued Memorandum Circular No.
10-10-2003, entitled “Implementing Rules and Regulations Governing
Community Antenna/Cable Television (CATV) and Direct Broadcast Satellite
(DBS) Services to Promote Competition in the Sector.” Article 6, Section 8
thereof states:
As a general rule, the reception, distribution and/or transmission by any
CATV/DBS operator of any television signals without any agreement with or
authorization from program/content providers are prohibited.
On whether Memorandum Circular No. 10-10-2003 amended Memorandum
Circular No. 04-08-88, the NTC explained to PMSI in a letter dated
November 3, 2003 that:
To address your query on whether or not the provisions of MC 10-10-2003
would have the effect of amending the provisions of MC 4-08-88 on
mandatory carriage of television signals, the answer is in the negative.
The Commission maintains that, MC 4-08-88 remains valid, subsisting and
enforceable.
Please be advised, therefore, that as duly licensed direct-to-home satellite
television service provider authorized by this Commission, your
company continues to be bound by the guidelines provided for under
MC 04-08-88, specifically your obligation under its mandatory carriage
provisions, in addition to your obligations under MC 10-10-
2003. (Emphasis added)
Please be guided accordingly.13
On December 22, 2003, the BLA rendered a decision 14 finding that PMSI
infringed the broadcasting rights and copyright of ABS-CBN and ordering it to
permanently cease and desist from rebroadcasting Channels 2 and 23.
On February 6, 2004, PMSI filed an appeal with the Office of the Director-
General of the IPO which was docketed as Appeal No. 10-2004-0002. On
December 23, 2004, it also filed with the Court of Appeals a “Motion to
Withdraw Petition; Alternatively, Memorandum of the Petition for Certiorari” in
Page 27 of 101
CA-G.R. SP No. 71597, which was granted in a resolution dated February
17, 2005.
On December 20, 2004, the Director-General of the IPO rendered a
decision15 in favor of PMSI, the dispositive portion of which states:
WHEREFORE, premises considered, the instant appeal is hereby
GRANTED. Accordingly, Decision No. 2003-01 dated 22 December 2003 of
the Director of Bureau of Legal Affairs is hereby REVERSED and SET
ASIDE.
Let a copy of this Decision be furnished the Director of the Bureau of Legal
Affairs for appropriate action, and the records be returned to her for proper
disposition. The Documentation, Information and Technology Transfer
Bureau is also given a copy for library and reference purposes.
SO ORDERED.16
Thus, ABS-CBN filed a petition for review with prayer for issuance of a
temporary restraining order and writ of preliminary injunction with the Court of
Appeals, which was docketed as CA-G.R. SP No. 88092.
On July 18, 2005, the Court of Appeals issued a temporary restraining order.
Thereafter, ABS-CBN filed a petition for contempt against PMSI for
continuing to rebroadcast Channels 2 and 23 despite the restraining order.
The case was docketed as CA- G.R. SP No. 90762.
On November 14, 2005, the Court of Appeals ordered the consolidation of
CA-G.R. SP Nos. 88092 and 90762.
In the assailed Decision dated July 12, 2006, the Court of Appeals sustained
the findings of the Director-General of the IPO and dismissed both petitions
filed by ABS-CBN.17
ABS-CBN’s motion for reconsideration was denied, hence, this petition.
ABS-CBN contends that PMSI’s unauthorized rebroadcasting of Channels 2
and 23 is an infringement of its broadcasting rights and copyright under the
Intellectual Property Code (IP Code); 18that Memorandum Circular No. 04-08-
88 excludes DTH satellite television operators; that the Court of Appeals’
interpretation of the must-carry rule violates Section 9 of Article III 19 of the
Constitution because it allows the taking of property for public use without
payment of just compensation; that the Court of Appeals erred in dismissing
the petition for contempt docketed as CA-G.R. SP No. 90762 without
requiring respondents to file comment.
Respondents, on the other hand, argue that PMSI’s rebroadcasting of
Channels 2 and 23 is sanctioned by Memorandum Circular No. 04-08-88;
that the must-carry rule under the Memorandum Circular is a valid exercise of
IPL- Assignment No. 10 (Entire Copyright Cases)
police power; and that the Court of Appeals correctly dismissed CA-G.R. SP
No. 90762 since it found no need to exercise its power of contempt.
After a careful review of the facts and records of this case, we affirm the
findings of the Director-General of the IPO and the Court of Appeals.
There is no merit in ABS-CBN’s contention that PMSI violated its
broadcaster’s rights under Section 211 of the IP Code which provides in part:
Chapter XIV BROADCASTING ORGANIZATIONS
Sec. 211. Scope of Right. - Subject to the provisions of Section 212,
broadcasting organizations shall enjoy the exclusive right to carry out,
authorize or prevent any of the following acts:
211.1. The rebroadcasting of their broadcasts;
Neither is PMSI guilty of infringement of ABS-CBN’s copyright under Section
177 of the IP Code which states that copyright or economic rights shall
consist of the exclusive right to carry out, authorize or prevent the public
performance of the work (Section 177.6), and other communication to the
public of the work (Section 177.7).20
Section 202.7 of the IP Code defines broadcasting as “the transmission by
wireless means for the public reception of sounds or of images or of
representations thereof; such transmission by satellite is also ‘broadcasting’
where the means for decrypting are provided to the public by the
broadcasting organization or with its consent.”
On the other hand, rebroadcasting as defined in Article 3(g) of the
International Convention for the Protection of Performers, Producers of
Phonograms and Broadcasting Organizations, otherwise known as the 1961
Rome Convention, of which the Republic of the Philippines is a
signatory, 21 is “the simultaneous broadcasting by one broadcasting
organization of the broadcast of another broadcasting organization.”
The Director-General of the IPO correctly found that PMSI is not engaged in
rebroadcasting and thus cannot be considered to have infringed ABS-CBN’s
broadcasting rights and copyright, thus:
That the Appellant’s [herein respondent PMSI] subscribers are able to view
Appellee’s [herein petitioner ABS-CBN] programs (Channels 2 and 23) at the
same time that the latter is broadcasting the same is undisputed. The
question however is, would the Appellant in doing so be considered engaged
in broadcasting. Section 202.7 of the IP Code states that broadcasting
means
“the transmission by wireless means for the public reception of sounds or of
images or of representations thereof; such transmission by satellite is also
‘broadcasting’ where the means for decrypting are provided to the public by
the broadcasting organization or with its consent.”
Page 28 of 101

Section 202.7 of the IP Code, thus, provides two instances wherein there is
broadcasting, to wit:
1. The transmission by wireless means for the public reception of sounds or
of images or of representations thereof; and
2. The transmission by satellite for the public reception of sounds or of
images or of representations thereof where the means for decrypting are
provided to the public by the broadcasting organization or with its consent.
It is under the second category that Appellant’s DTH satellite television
service must be examined since it is satellite-based. The elements of such
category are as follows:
1. There is transmission of sounds or images or of representations thereof;
2. The transmission is through satellite;
3. The transmission is for public reception; and
4. The means for decrypting are provided to the public by the broadcasting
organization or with its consent.
It is only the presence of all the above elements can a determination that the
DTH is broadcasting and consequently, rebroadcasting Appellee’s signals in
violation of Sections 211 and 177 of the IP Code, may be arrived at.
Accordingly, this Office is of the view that the transmission contemplated
under Section 202.7 of the IP Code presupposes that the origin of the signals
is the broadcaster. Hence, a program that is broadcasted is attributed to the
broadcaster. In the same manner, the rebroadcasted program is attributed to
the rebroadcaster.
In the case at hand, Appellant is not the origin nor does it claim to be the
origin of the programs broadcasted by the Appellee. Appellant did not make
and transmit on its own but merely carried the existing signals of the
Appellee. When Appellant’s subscribers view Appellee’s programs in
Channels 2 and 23, they know that the origin thereof was the Appellee.
Aptly, it is imperative to discern the nature of broadcasting. When a
broadcaster transmits, the signals are scattered or dispersed in the air.
Anybody may pick-up these signals. There is no restriction as to its number,
type or class of recipients. To receive the signals, one is not required to
subscribe or to pay any fee. One only has to have a receiver, and in case of
television signals, a television set, and to tune-in to the right
channel/frequency. The definition of broadcasting, wherein it is required that
the transmission is wireless, all the more supports this discussion.
Apparently, the undiscriminating dispersal of signals in the air is possible only
through wireless means. The use of wire in transmitting signals, such as
cable television, limits the recipients to those who are connected. Unlike
wireless transmissions, in wire-based transmissions, it is not enough that one
IPL- Assignment No. 10 (Entire Copyright Cases)
wants to be connected and possesses the equipment. The service provider,
such as cable television companies may choose its subscribers.
The only limitation to such dispersal of signals in the air is the technical
capacity of the transmitters and other equipment employed by the
broadcaster. While the broadcaster may use a less powerful transmitter to
limit its coverage, this is merely a business strategy or decision and not an
inherent limitation when transmission is through cable.
Accordingly, the nature of broadcasting is to scatter the signals in its widest
area of coverage as possible. On this score, it may be said that making
public means that accessibility is undiscriminating as long as it [is] within the
range of the transmitter and equipment of the broadcaster. That the medium
through which the Appellant carries the Appellee’s signal, that is via satellite,
does not diminish the fact that it operates and functions as a cable television.
It remains that the Appellant’s transmission of signals via its DTH satellite
television service cannot be considered within the purview of broadcasting.
This Office also finds no evidence on record showing that the Appellant has
provided decrypting means to the public indiscriminately. Considering the
nature of this case, which is punitive in fact, the burden of proving the
existence of the elements constituting the acts punishable rests on the
shoulder of the complainant.
Accordingly, this Office finds that there is no rebroadcasting on the part of the
Appellant of the Appellee’s programs on Channels 2 and 23, as defined
under the Rome Convention.22
Under the Rome Convention, rebroadcasting is “the simultaneous
broadcasting by one broadcasting organization of the broadcast of another
broadcasting organization.” The Working Paper23 prepared by the Secretariat
of the Standing Committee on Copyright and Related Rights defines
broadcasting organizations as “entities that take the financial and editorial
responsibility for the selection and arrangement of, and investment in, the
transmitted content.”24 Evidently, PMSI would not qualify as a broadcasting
organization because it does not have the aforementioned responsibilities
imposed upon broadcasting organizations, such as ABS-CBN.
ABS-CBN creates and transmits its own signals; PMSI merely carries such
signals which the viewers receive in its unaltered form. PMSI does not
produce, select, or determine the programs to be shown in Channels 2 and
23. Likewise, it does not pass itself off as the origin or author of such
programs. Insofar as Channels 2 and 23 are concerned, PMSI merely
retransmits the same in accordance with Memorandum Circular 04-08-88.
With regard to its premium channels, it buys the channels from content
providers and transmits on an as-is basis to its viewers. Clearly, PMSI does
Page 29 of 101
not perform the functions of a broadcasting organization; thus, it cannot be
said that it is engaged in rebroadcasting Channels 2 and 23.
The Director-General of the IPO and the Court of Appeals also correctly
found that PMSI’s services are similar to a cable television system because
the services it renders fall under cable “retransmission,” as described in the
Working Paper, to wit:
(G) Cable Retransmission
47. When a radio or television program is being broadcast, it can be
retransmitted to new audiences by means of cable or wire. In the early days
of cable television, it was mainly used to improve signal reception,
particularly in so-called “shadow zones,” or to distribute the signals in large
buildings or building complexes. With improvements in technology, cable
operators now often receive signals from satellites before retransmitting them
in an unaltered form to their subscribers through cable.
48. In principle, cable retransmission can be either simultaneous with the
broadcast over-the-air or delayed (deferred transmission) on the basis of a
fixation or a reproduction of a fixation. Furthermore, they might be unaltered
or altered, for example through replacement of commercials, etc. In general,
however, the term “retransmission” seems to be reserved for such
transmissions which are both simultaneous and unaltered.
49. The Rome Convention does not grant rights against unauthorized cable
retransmission. Without such a right, cable operators can retransmit both
domestic and foreign over the air broadcasts simultaneously to their
subscribers without permission from the broadcasting organizations or other
rightholders and without obligation to pay remuneration. 25 (Emphasis added)
Thus, while the Rome Convention gives broadcasting organizations the right
to authorize or prohibit the rebroadcasting of its broadcast, however, this
protection does not extend to cable retransmission. The retransmission of
ABS-CBN’s signals by PMSI – which functions essentially as a cable
television – does not therefore constitute rebroadcasting in violation of the
former’s intellectual property rights under the IP Code.
It must be emphasized that the law on copyright is not absolute. The IP Code
provides that:
Sec. 184. Limitations on Copyright. -
184.1. Notwithstanding the provisions of Chapter V, the following acts shall
not constitute infringement of copyright:
xxxx
(h) The use made of a work by or under the direction or control of the
Government, by the National Library or by educational, scientific or
professional institutions where such use is in the public interest and is
compatible with fair use;
IPL- Assignment No. 10 (Entire Copyright Cases)
The carriage of ABS-CBN’s signals by virtue of the must-carry rule in
Memorandum Circular No. 04-08-88 is under the direction and control of the
government though the NTC which is vested with exclusive jurisdiction to
supervise, regulate and control telecommunications and broadcast
services/facilities in the Philippines.26 The imposition of the must-carry rule is
within the NTC’s power to promulgate rules and regulations, as public safety
and interest may require, to encourage a larger and more effective use of
communications, radio and television broadcasting facilities, and to maintain
effective competition among private entities in these activities whenever the
Commission finds it reasonably feasible. 27 As correctly observed by the
Director-General of the IPO:
Accordingly, the “Must-Carry Rule” under NTC Circular No. 4-08-88 falls
under the foregoing category of limitations on copyright. This Office agrees
with the Appellant [herein respondent PMSI] that the “Must-Carry Rule” is in
consonance with the principles and objectives underlying Executive Order
No. 436,28 to wit:
The Filipino people must be given wider access to more sources of news,
information, education, sports event and entertainment programs other than
those provided for by mass media and afforded television programs to attain
a well informed, well-versed and culturally refined citizenry and enhance their
socio-economic growth:
WHEREAS, cable television (CATV) systems could support or supplement
the services provided by television broadcast facilities, local and overseas, as
the national information highway to the countryside. 29
The Court of Appeals likewise correctly observed that:
[T]he very intent and spirit of the NTC Circular will prevent a situation
whereby station owners and a few networks would have unfettered power to
make time available only to the highest bidders, to communicate only their
own views on public issues, people, and to permit on the air only those with
whom they agreed – contrary to the state policy that the (franchise) grantee
like the petitioner, private respondent and other TV station owners, shall
provide at all times sound and balanced programming and assist in the
functions of public information and education.
This is for the first time that we have a structure that works to accomplish
explicit state policy goals.30
Indeed, intellectual property protection is merely a means towards the end of
making society benefit from the creation of its men and women of talent and
genius. This is the essence of intellectual property laws, and it explains why
certain products of ingenuity that are concealed from the public are outside
the pale of protection afforded by the law. It also explains why the author or
the creator enjoys no more rights than are consistent with public welfare. 31
Page 30 of 101
Further, as correctly observed by the Court of Appeals, the must-carry rule as
well as the legislative franchises granted to both ABS-CBN and PMSI are in
consonance with state policies enshrined in the Constitution, specifically
Sections 9,32 17,33 and 2434 of Article II on the Declaration of Principles and
State Policies.35
ABS-CBN was granted a legislative franchise under Republic Act No. 7966,
Section 1 of which authorizes it “to construct, operate and maintain, for
commercial purposes and in the public interest, television and radio
broadcasting in and throughout the Philippines x x x.” Section 4 thereof
mandates that it “shall provide adequate public service time to enable the
government, through the said broadcasting stations, to reach the population
on important public issues; provide at all times sound and balanced
programming; promote public participation such as in community
programming; assist in the functions of public information and education x x
x.”
PMSI was likewise granted a legislative franchise under Republic Act No.
8630, Section 4 of which similarly states that it “shall provide adequate public
service time to enable the government, through the said broadcasting
stations, to reach the population on important public issues; provide at all
times sound and balanced programming; promote public participation such
as in community programming; assist in the functions of public information
and education x x x.” Section 5, paragraph 2 of the same law provides that
“the radio spectrum is a finite resource that is a part of the national patrimony
and the use thereof is a privilege conferred upon the grantee by the State
and may be withdrawn anytime, after due process.”
In Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC, 36 the Court
held that a franchise is a mere privilege which may be reasonably burdened
with some form of public service. Thus:
All broadcasting, whether by radio or by television stations, is licensed by the
government. Airwave frequencies have to be allocated as there are more
individuals who want to broadcast than there are frequencies to assign. A
franchise is thus a privilege subject, among other things, to amendment by
Congress in accordance with the constitutional provision that “any such
franchise or right granted . . . shall be subject to amendment, alteration or
repeal by the Congress when the common good so requires.”
Indeed, provisions for COMELEC Time have been made by amendment of
the franchises of radio and television broadcast stations and, until the present
case was brought, such provisions had not been thought of as taking
property without just compensation. Art. XII, §11 of the Constitution
authorizes the amendment of franchises for “the common good.” What better
measure can be conceived for the common good than one for free air time
for the benefit not only of candidates but even more of the public, particularly
IPL- Assignment No. 10 (Entire Copyright Cases)
the voters, so that they will be fully informed of the issues in an election? “[I]t
is the right of the viewers and listeners, not the right of the broadcasters,
which is paramount.”
Nor indeed can there be any constitutional objection to the requirement that
broadcast stations give free air time. Even in the United States, there are
responsible scholars who believe that government controls on broadcast
media can constitutionally be instituted to ensure diversity of views and
attention to public affairs to further the system of free expression. For this
purpose, broadcast stations may be required to give free air time to
candidates in an election. Thus, Professor Cass R. Sunstein of the University
of Chicago Law School, in urging reforms in regulations affecting the
broadcast industry, writes:
In truth, radio and television broadcasting companies, which are given
franchises, do not own the airwaves and frequencies through which they
transmit broadcast signals and images. They are merely given the temporary
privilege of using them. Since a franchise is a mere privilege, the exercise of
the privilege may reasonably be burdened with the performance by the
grantee of some form of public service. x x x37
There is likewise no merit to ABS-CBN’s claim that PMSI’s carriage of its
signals is for a commercial purpose; that its being the country’s top
broadcasting company, the availability of its signals allegedly enhances
PMSI’s attractiveness to potential customers; 38 or that the unauthorized
carriage of its signals by PMSI has created competition between its Metro
Manila and regional stations.
ABS-CBN presented no substantial evidence to prove that PMSI carried its
signals for profit; or that such carriage adversely affected the business
operations of its regional stations. Except for the testimonies of its witnesses,
[39] no studies, statistical data or information have been submitted in
evidence.
Administrative charges cannot be based on mere speculation or conjecture.
The complainant has the burden of proving by substantial evidence the
allegations in the complaint.40 Mere allegation is not evidence, and is not
equivalent to proof.41
Anyone in the country who owns a television set and antenna can receive
ABS-CBN’s signals for free. Other broadcasting organizations with free-to-air
signals such as GMA-7, RPN-9, ABC-5, and IBC-13 can likewise be
accessed for free. No payment is required to view the said
channels42 because these broadcasting networks do not generate revenue
from subscription from their viewers but from airtime revenue from contracts
with commercial advertisers and producers, as well as from direct sales.
Page 31 of 101
In contrast, cable and DTH television earn revenues from viewer
subscription. In the case of PMSI, it offers its customers premium paid
channels from content providers like Star Movies, Star World, Jack TV, and
AXN, among others, thus allowing its customers to go beyond the limits of
“Free TV and Cable TV.”43 It does not advertise itself as a local channel
carrier because these local channels can be viewed with or without DTH
television.
Relevantly, PMSI’s carriage of Channels 2 and 23 is material in arriving at
the ratings and audience share of ABS-CBN and its programs. These ratings
help commercial advertisers and producers decide whether to buy airtime
from the network. Thus, the must-carry rule is actually advantageous to the
broadcasting networks because it provides them with increased viewership
which attracts commercial advertisers and producers.
On the other hand, the carriage of free-to-air signals imposes a burden to
cable and DTH television providers such as PMSI. PMSI uses none of ABS-
CBN’s resources or equipment and carries the signals and shoulders the
costs without any recourse of charging. 44 Moreover, such carriage of signals
takes up channel space which can otherwise be utilized for other premium
paid channels.
There is no merit to ABS-CBN’s argument that PMSI’s carriage of Channels
2 and 23 resulted in competition between its Metro Manila and regional
stations. ABS-CBN is free to decide to pattern its regional programming in
accordance with perceived demands of the region; however, it cannot impose
this kind of programming on the regional viewers who are also entitled to the
free-to-air channels. It must be emphasized that, as a national broadcasting
organization, one of ABS-CBN’s responsibilities is to scatter its signals to the
widest area of coverage as possible. That it should limit its signal reach for
the sole purpose of gaining profit for its regional stations undermines public
interest and deprives the viewers of their right to access to information.
Indeed, television is a business; however, the welfare of the people must not
be sacrificed in the pursuit of profit. The right of the viewers and listeners to
the most diverse choice of programs available is paramount. 45 The Director-
General correctly observed, thus:
The “Must-Carry Rule” favors both broadcasting organizations and the public.
It prevents cable television companies from excluding broadcasting
organization especially in those places not reached by signal. Also, the rule
prevents cable television companies from depriving viewers in far-flung areas
the enjoyment of programs available to city viewers. In fact, this Office finds
the rule more burdensome on the part of the cable television companies. The
latter carries the television signals and shoulders the costs without any
recourse of charging. On the other hand, the signals that are carried by cable
IPL- Assignment No. 10 (Entire Copyright Cases)
television companies are dispersed and scattered by the television stations
and anybody with a television set is free to pick them up.
With its enormous resources and vaunted technological capabilities,
Appellee’s [herein petitioner ABS-CBN] broadcast signals can reach almost
every corner of the archipelago. That in spite of such capacity, it chooses to
maintain regional stations, is a business decision. That the “Must-Carry Rule”
adversely affects the profitability of maintaining such regional stations since
there will be competition between them and its Metro Manila station is
speculative and an attempt to extrapolate the effects of the rule. As
discussed above, Appellant’s DTH satellite television services is of limited
subscription. There was not even a showing on part of the Appellee the
number of Appellant’s subscribers in one region as compared to non-
subscribing television owners. In any event, if this Office is to engage in
conjecture, such competition between the regional stations and the Metro
Manila station will benefit the public as such competition will most likely result
in the production of better television programs.” 46
All told, we find that the Court of Appeals correctly upheld the decision of the
IPO Director-General that PMSI did not infringe on ABS-CBN’s intellectual
property rights under the IP Code. The findings of facts of administrative
bodies charged with their specific field of expertise, are afforded great weight
by the courts, and in the absence of substantial showing that such findings
are made from an erroneous estimation of the evidence presented, they are
conclusive, and in the interest of stability of the governmental structure,
should not be disturbed.47
Moreover, the factual findings of the Court of Appeals are conclusive on the
parties and are not reviewable by the Supreme Court. They carry even more
weight when the Court of Appeals affirms the factual findings of a lower fact-
finding body,48 as in the instant case.
There is likewise no merit to ABS-CBN’s contention that the Memorandum
Circular excludes from its coverage DTH television services such as those
provided by PMSI. Section 6.2 of the Memorandum Circular requires all cable
television system operators operating in a community within Grade “A” or “B”
contours to carry the television signals of the authorized television broadcast
stations.49 The rationale behind its issuance can be found in the whereas
clauses which state:
Whereas, Cable Television Systems or Community Antenna Television
(CATV) have shown their ability to offer additional programming and to carry
much improved broadcast signals in the remote areas, thereby enriching the
lives of the rest of the population through the dissemination of social,
economic, educational information and cultural programs;
Page 32 of 101
Whereas, the national government supports the promotes the orderly growth
of the Cable Television industry within the framework of a regulated fee
enterprise, which is a hallmark of a democratic society;
Whereas, public interest so requires that monopolies in commercial mass
media shall be regulated or prohibited, hence, to achieve the same, the cable
TV industry is made part of the broadcast media;
Whereas, pursuant to Act 3846 as amended and Executive Order 205
granting the National Telecommunications Commission the authority to set
down rules and regulations in order to protect the public and promote the
general welfare, the National Telecommunications Commission hereby
promulgates the following rules and regulations on Cable Television
Systems;
The policy of the Memorandum Circular is to carry improved signals in
remote areas for the good of the general public and to promote dissemination
of information. In line with this policy, it is clear that DTH television should be
deemed covered by the Memorandum Circular. Notwithstanding the different
technologies employed, both DTH and cable television have the ability to
carry improved signals and promote dissemination of information because
they operate and function in the same way.
In its December 20, 2002 letter,50 the NTC explained that both DTH and
cable television services are of a similar nature, the only difference being the
medium of delivering such services. They can carry broadcast signals to the
remote areas and possess the capability to enrich the lives of the residents
thereof through the dissemination of social, economic, educational
information and cultural programs. Consequently, while the Memorandum
Circular refers to cable television, it should be understood as to include DTH
television which provides essentially the same services.
In Eastern Telecommunications Philippines, Inc. v. International
Communication Corporation,51 we held:
The NTC, being the government agency entrusted with the regulation of
activities coming under its special and technical forte, and possessing the
necessary rule-making power to implement its objectives, is in the best
position to interpret its own rules, regulations and guidelines. The Court has
consistently yielded and accorded great respect to the interpretation by
administrative agencies of their own rules unless there is an error of law,
abuse of power, lack of jurisdiction or grave abuse of discretion clearly
conflicting with the letter and spirit of the law.52
With regard to the issue of the constitutionality of the must-carry rule, the
Court finds that its resolution is not necessary in the disposition of the instant
case. One of the essential requisites for a successful judicial inquiry into
IPL- Assignment No. 10 (Entire Copyright Cases)
constitutional questions is that the resolution of the constitutional question
must be necessary in deciding the case. 53 In Spouses Mirasol v. Court of
Appeals,54 we held:
As a rule, the courts will not resolve the constitutionality of a law, if the
controversy can be settled on other grounds. The policy of the courts is to
avoid ruling on constitutional questions and to presume that the acts of the
political departments are valid, absent a clear and unmistakable showing to
the contrary. To doubt is to sustain. This presumption is based on the
doctrine of separation of powers. This means that the measure had first been
carefully studied by the legislative and executive departments and found to
be in accord with the Constitution before it was finally enacted and
approved.55
The instant case was instituted for violation of the IP Code and infringement
of ABS-CBN’s broadcasting rights and copyright, which can be resolved
without going into the constitutionality of Memorandum Circular No. 04-08-88.
As held by the Court of Appeals, the only relevance of the circular in this
case is whether or not compliance therewith should be considered
manifestation of lack of intent to commit infringement, and if it is, whether
such lack of intent is a valid defense against the complaint of petitioner. 56
The records show that petitioner assailed the constitutionality of
Memorandum Circular No. 04-08-88 by way of a collateral attack before the
Court of Appeals. In Philippine National Bank v. Palma, 57 we ruled that for
reasons of public policy, the constitutionality of a law cannot be collaterally
attacked. A law is deemed valid unless declared null and void by a
competent court; more so when the issue has not been duly pleaded in the
trial court.58
As a general rule, the question of constitutionality must be raised at the
earliest opportunity so that if not raised in the pleadings, ordinarily it may not
be raised in the trial, and if not raised in the trial court, it will not be
considered on appeal.59 In Philippine Veterans Bank v. Court of
Appeals,60 we held:
We decline to rule on the issue of constitutionality as all the requisites for the
exercise of judicial review are not present herein. Specifically, the question
of constitutionality will not be passed upon by the Court unless, at the
first opportunity, it is properly raised and presented in an appropriate
case, adequately argued, and is necessary to a determination of the
case, particularly where the issue of constitutionality is the very lis
mota presented.x x x61
Finally, we find that the dismissal of the petition for contempt filed by ABS-
CBN is in order.
Page 33 of 101
Indirect contempt may either be initiated (1) motu proprio by the court by
issuing an order or any other formal charge requiring the respondent to show
cause why he should not be punished for contempt or (2) by the filing of a
verified petition, complying with the requirements for filing initiatory
pleadings.62

ABS-CBN filed a verified petition before the Court of Appeals, which was
docketed CA G.R. SP No. 90762, for PMSI’s alleged disobedience to the
Resolution and Temporary Restraining Order, both dated July 18, 2005,
issued in CA-G.R. SP No. 88092. However, after the cases were
consolidated, the Court of Appeals did not require PMSI to comment on the
petition for contempt. It ruled on the merits of CA-G.R. SP No. 88092 and
ordered the dismissal of both petitions.

ABS-CBN argues that the Court of Appeals erred in dismissing the petition
for contempt without having ordered respondents to comment on the same.
Consequently, it would have us reinstate CA-G.R. No. 90762 and order
respondents to show cause why they should not be held in contempt.

It bears stressing that the proceedings for punishment of indirect contempt

are criminal in nature. The modes of procedure and rules of evidence
adopted in contempt proceedings are similar in nature to those used in
criminal prosecutions. 63 While it may be argued that the Court of Appeals
should have ordered respondents to comment, the issue has been rendered
moot in light of our ruling on the merits. To order respondents to comment
and have the Court of Appeals conduct a hearing on the contempt charge
when the main case has already been disposed of in favor of PMSI would be
circuitous. Where the issues have become moot, there is no justiciable
controversy, thereby rendering the resolution of the same of no practical use
or value.64

WHEREFORE, the petition is DENIED. The July 12, 2006 Decision of the
Court of Appeals in CA-G.R. SP Nos. 88092 and 90762, sustaining the
findings of the Director-General of the Intellectual Property Office and
dismissing the petitions filed by ABS-CBN Broadcasting Corporation, and the
December 11, 2006 Resolution denying the motion for reconsideration,
are AFFIRMED. SO ORDERED.

IPL- Assignment No. 10 (Entire Copyright Cases) Page 34 of 101

[10&18] G.R. No. 195956               March 11, 2015 Same; Certiorari; Motion for Reconsideration; Generally, “a motion for
ABS-CBN CORPORATION, Petitioner, reconsideration is a condition sine qua non before a petition for certiorari may lie,
vs. FELIPE GOZON, GILBERTO R. DUAVIT, JR., MARISSA L. FLORES, its purpose being to grant an opportunity for the [tribunal or officer] to correct any
JESSICA A. SORO, GRACE DELA PENA-REYES, JOHN OLIVER T. error attributed to it by a reexamination of the legal and factual circumstances of the
MANALASTAS, JOHN DOES AND JANE DOES, Respondents. case”; Exceptions.—Resorting to certiorari requires that there be there be
“no appeal, or any plain, speedy, and adequate remedy in the ordinary course of l
Remedial Law; Criminal Procedure; Arraignment; Rule 116, Section 11(c) of aw[,]”such as a motion for reconsideration. Generally, “a motion for reconsiderati
the Rules of Criminal Procedure allows the suspension of the accused’s arraignment on is a condition sine qua
in certain circumstances only. non before a petition for certiorari may lie, its purpose being to grant an opportun
Rule 116, Section 11(c) of the Rules of Criminal Procedure allows the ity for the [tribunal or officer] to correct any error attributed to it by a reexaminati
suspension of the accused’s arraignment in certain circumstances only: SEC. on of the legal and factual circumstances of the case.”
11. Suspension of arraignment. However, exceptions to the rule exist: (a) where the order is a patent nullity, as w
Upon motion by the proper party, the arraignment shall be suspended in the follo here the Court aquo had no jurisdiction; (b) where the questions raised in the cert
wing cases: (a) The accused appears to be suffering from an unsound mental cond iorari proceeding have been duly raised and passed upon by the lower court, or ar
ition which effectively renders him unable to fully understand the charge against h e the same as those raised and passed upon in the lower court; (c) where there is 
im and to plead intelligently thereto. In such case, the court shall order his mental  an urgent necessity for the resolution of the question and any further delay would 
examination and, if necessary, his confinement for such purpose; (b) There exists  prejudice the interests of the Government or of the petitioner or the subject matter 
a prejudicial question; and (c) A petition for review of the resolution of the of the action is perishable; (d) where, under the circumstances, a motion for recon
prosecutor is pending at either the Department of Justice, or the Office of the sideration would be useless; (e) where petitioner was deprived of due process and 
President; provided, that the period of suspension shall not exceed sixty (60) days there is extreme urgency for relief; (f) where, in a criminal case, relief from an or
counted from the filing of the petition with the reviewing office. (12a) der of arrest is urgent and the granting of such relief by the trial Court is improba
ble; (g) where the proceedings in the lower court are a nullity for lack of due proc
Same; Same; Petition for Review on Certiorari; The doctrine in Crespo v. ess; (h) where the proceedings was 
Judge Mogul, 151 SCRA 402 (1987), was reiterated in Mayor Balindong v. Court of exparte or in which the petitioner had no opportunity to object; and (i) where the i
Appeals, 447 SCRA 200 (2004), where the Supreme Court (SC) reminded the ssue raised is one purely of law or where public interest is involved.
Department of Justice (DOJ) Secretary to refrain from entertaining petitions for
review when the case is already pending with the Court.—The doctrine in Crespo Same; Criminal Procedure; 2000 NPS Rules on Appeal; Motion for
v. Judge Mogul, 151 SCRA 402 (1987),  was reiterated in Mayor Balindong v. Reconsideration; Department of Justice (DOJ) Department Circular No. 70 dated
Court of Appeals, 447 SCRA 200 July 3, 2000, or the 2000 National Prosecution Service (NPS) Rules on Appeal,
(2004), where this court reminded the Department of Justice Secretary to refrain fr provides that no second motion for reconsideration of the DOJ Secretary’s
om entertaining petitions for review when the case is already pending with this co resolution shall be entertained.—
urt: [I]n order to avoid a situation where the opinion of the Secretary of Justice w Department of Justice Department Circular No. 70 dated July 3, 2000, or the 2000 
ho reviewed the action of the fiscal may be disregarded by the trial court, the Secr NPS Rules on Appeal, provides that no second motion for reconsideration of the 
etary of Justice should, as far as practicable, refrain from entertaining a petition fo Department of Justice Secretary’s resolution shall be entertained: SECTION 13. M
r review or appeal from the action of the fiscal, when the complaint or informatio otion for
n has already been filed in the Court. The matter should be left entirely for the de reconsideration.The aggrieved party may file a motion for reconsideration within 
termination of the Court.The trial court should have proceeded with respondents D a nonextendible period of ten (10) days from receipt of the resolution on appeal, f
ela Peña-Reyes and Manalastas’ arraignment after the 60day period from the filing  urnishing the adverse party and the Prosecution Office concerned with copies ther
of the Petition for Review before the Department of Justice on March 8, 2005. It  eof and submitting proof of such service.No second or further motion for reconsid
was only on September 13, 2010 that the temporary restraining order was issued b eration shall be entertained.
y the Court of Appeals. The trial court erred when it did not act on the criminal c
ase during the interim period. It had full control and direction of the case. As Jud Same; Same; The Supreme Court (SC) has adopted a deferential attitude
ge Mogul reasoned in denying the motion to dismiss in Crespo,failure to proceed  towards review of the executive’s finding of probable cause.—
with the arraignment “disregards the requirements of due process [and] erodes the  This court has adopted a deferential attitude towards review of the executive’s fin
Court’s independence and integrity.” ding of probable cause. This is based “not only upon the respect for the investigat
ory and [prosecutorial] powers granted by the Constitution to the executive depart

IPL- Assignment No. 10 (Entire Copyright Cases) Page 35 of 101

ment but upon practicality as well.” Review of the Department of Justice Secretar
y’s decision or resolution will be allowed only when grave abuse of discretion is a
lleged.
Same; Same; Preliminary Investigation; Words and Phrases; Preliminary
investigation is the inquiry or proceeding to determine whether there is probable
cause.—Probable cause pertains to “such facts as are sufficient to engender a well
-founded belief that a crime has been committed and that respondent is probably g
uilty thereof.” Preliminary investigation is the inquiry or proceeding to determine  ich that law is designed to foster.”
whether there is probable cause.  
Intellectual Property Rights; Copyright Infringement; Under the Intellectual
Property Code (IPC), “works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as of their content, quality
and purpose.” These include “[a]udiovisual works and cinematographic works and
works produced by a process analogous to cinematography or any process for
making audiovisual recordings.”
The Intellectual Property Code is clear about the rights afforded to authors of vari
ous kinds of work. Under the Code, “works are protected by the sole fact of their  upon the potential market for or value of the copyrighted work.
creation, irrespective of their mode or form of
expression, as well as of their content, quality and purpose.” These include “[a]udi
ovisual works and cinematographic works and works produced by a process analo
gous to cinematography or any process for making audiovisual recordings.
Contrary to the old copyright law, the Intellectual Property Code does not r
equire registration of the work to fully recover in an infringement suit. Neverthele
ss, both copyright laws provide that copyright for a work is acquired by an intelle
ctual creator from the  moment of creation.
It is true that under Section 175 of the Intellectual Property Code, “news of the da
y and other miscellaneous facts
having the character of mere items of press information” are considered unprotect
ed subject matter.
Same; Same; News as expressed in a video footage is entitled to copyright
protection.Broadcasting organizations are entitled to several rights and to the prote
ction of these rights under the Intellectual Property Code. Respondents’ argument  require knowledge or criminal intent.—“Implicit in the concept of mala in
that the subject news footage is not copyrightable is erroneous. The Court of App
eals, in its assailed Decision, correctly recognized the existence of ABSCBN’s cop
yright over the news footage:Surely, private respondent has a copyright of its new
s coverage. Seemingly, for airing said video feed, petitioner GMA is liable under t
he provisions of the Intellectual Property Code, which was enacted purposely to pr
otect copyright owners from infringement.News as expressed in a video footage is  necessary, to constitute a punishable offense, for the person doing the act to have
entitled to copyright protection. Broadcasting organizations have not only copyrigh
t on but also neighboring rights over their broadcasts. Copyrightability of a work i
s different from fair use of a work for purposes of news reporting.
IPL- Assignment No. 10 (Entire Copyright Cases)
Same; Same; Fair Use; Words and Phrases; The Supreme Court (SC) defined
fair use as “a privilege to use the copyrighted material in a reasonable manner
without the consent of the copyright owner or as copying the theme or ideas rather
than their expression.”
This court defined fair use as “a privilege to use the copyrighted material in a rea
sonable manner without the consent of the copyright owner or as copying the the
me or ideas rather than their expression.” Fair use is an exception to the copyright 
owner’s monopoly of the use of the work to avoid stifling “the very creativity wh
Same; Same; Same; Section 185 of the Intellectual Property Code (IPC) lists
four (4) factors to determine if there was fair use of a copyrighted work.—
Determining fair use requires application of the fourfactor test. Section 185 of the 
Intellectual Property Code lists four (4) factors to determine if there was fair use o
f a copyrighted work: a. The purpose and character of the use, including whether 
such use is of a commercial nature or is for nonprofit educational purposes; b. Th
e nature of the copyrighted work; c. The amount and substantiality of the portion 
used in relation to the copyrighted work as a whole; and d. The effect of the use 
Same; Same; Infringement under the Intellectual Property Code (IPC) is
malum prohibitum.—Infringement under the Intellectual Property Code is malum
prohibitum. The Intellectual Property Code is a special law. Copyright is a statutor
y creation: Copyright, in the strict sense of the term, is purely a statutory right. It 
is a new or independent right granted by the statute, and not simply a preexisting 
right regulated by the statute. Being a statutory grant, the rights are only such as t
he statute confers, and may be obtained and enjoyed only with respect to the subj
ects and by the persons, and on terms and conditions specified in the statute.The g
eneral rule is that acts punished under a special law are malumprohibitum. “An act 
which is declared malum
prohibitum, malice or criminal intent is completely immaterial.”
Same; Same; Crimes mala in se presuppose that the person who did the
felonious act had criminal intent to do so, while crimes mala prohibita do not
se is that of mensrea.” Mensrea is defined as “the nonphysical element which, co
mbined with the act of the accused, makes up the crime charged. Most frequently 
it is the criminal intent, or the guilty mind[.]”Crimes malainse presuppose that the 
person who did the felonious act had criminal intent to do so, while crimes malap
rohibita do not require knowledge or criminal intent: In the case of mala in se it is
knowledge of the nature of his act and to have a criminal intent; in the case of mala
prohibita, unless such words as “knowingly” and “willfully” are contained in the
statute, neither knowledge nor criminal intent is necessary. In other words, a person
morally quite innocent and with every intention of being a law-abiding citizen
Page 36 of 101
becomes a criminal, and liable to criminal penalties, if he does an act prohibited by and infringement of copyright, or piracy, which is a synonymous term in this
these statutes. connection, consists in the doing by any person, without the consent of the owner of
the copyright, of anything the sole right to do which is conferred by statute on the
Same; Same; Unlike other jurisdictions that require intent for a criminal owner of the copyright.—
prosecution of copyright infringement, the Philippines does not statutorily support We look at the purpose of copyright in relation to criminal prosecutions requiring 
good faith as a defense.— willfulness: Most importantly, indefining the contours of what it means to willfull
Unlike other jurisdictions that require intent for a criminal prosecution of copyrigh y infringe copyright for purposes of criminal liability, the courts should remember 
t infringement, the Philippines does not statutorily support good faith as a defense.  the ultimate aim of copyright. Copyright is not primarily about providing the stron
Other jurisdictions provide in their intellectual property codes or relevant laws that  gest possible protection for copyright owners so that they have the highest possibl
mens e incentive to create more works. The control given to copyright owners is only a 
rea, whether express or implied, is an element of criminal copyright infringement. means to an end: the promotion of knowledge and learning. Achieving that underl
ying goal of copyright law also requires access to copyrighted works and it requir
Same; Same; In the Philippines, the Intellectual Property Code (IPC), as es permitting certain kinds of uses of copyrighted works without the permission of 
amended, provides for the prosecution of criminal actions for violations of the copyright owner. While a particular defendant may appear to be deserving of 
intellectual property rights.— criminal sanctions, the standard for determining willfulness should be set with refe
In the Philippines, the Intellectual Property Code, as amended, provides for the pr rence to the larger goals of copyright embodied in the Constitution and the history 
osecution of criminal actions for the following violations of intellectual property ri of copyright in this country.
ghts: Repetition of Infringement of Patent (Section 84); Utility Model (Section 10 In addition, “[t]he essence of intellectual piracy should be essayed in conceptual te
8); Industrial Design (Section 119); Trademark Infringement (Section 155 in relati rms in order to underscore its gravity by an appropriate understanding thereof. Infr
on to Section 170); Unfair Competition (Section 168 in relation to Section 170); F ingement of a copyright is a trespass on a private domain owned and occupied by 
alse Designations of Origin, False Description or Representation (Section 169.1 in  the owner of the copyright, and, therefore, protected by law, and infringement of c
relation to Section 170); infringement of copyright, moral rights, performers’ right opyright, or piracy, which is a synonymous term in this connection, consists in the 
s, producers’ rights, and broadcasting rights (Sections 177, 193, 203, 208 and 211  doing by any person, without the consent of the owner of the copyright, of anythi
in relation to Section 217); and other violations of intellectual property rights as m ng the sole right to do which is conferred by statute on the owner of the copyright
ay be defined by law. .”
The Intellectual Property Code requires strict liability for copyright infringement 
whether for a civil action or a criminal prosecution; it does not require mens Same; Same; Liability of Corporate Officers; The Supreme Court (SC) has
rea or culpa. ruled that corporate officersl and/or agents may be held individually liable for a
crime committed under the Intellectual Property Code (IPC).—
Same; Same; The Supreme Court (SC) in Habana, et al. v. Robles, 310 SCRA Corporations have separate and distinct personalities from their officers or director
511 (1999), reiterating the ruling in Columbia Pictures v. Court of Appeals, 261 s. This court has ruled that corporate officers and/or agents may be held individual
SCRA 144 (1996), ruled that lack of knowledge of infringement is not a valid ly liable for a crime committed under the Intellectual Property Code:
defense.—Contrary to respondents’ assertion, this court in Habana, et al. v. Robles, Petitioners, being corporate officers and/or directors, through whose act, default or 
310 SCRA 511 (1999), reiterating the ruling in Columbia Pictures v. Court of omission the corporation commits a crime, may themselves be individually held a
Appeals, 261 SCRA nswerable for the crime. . . . The existence of the corporate entity does not shield 
144(1996), ruled that lack of knowledge of infringement is not a valid defense. H from prosecution the corporate agent who knowingly and intentionally caused the 
abana and ColumbiaPictures may have different factual scenarios from this case,  corporation to commit a crime. Thus, petitioners cannot hide behind the cloak of t
but their rulings on copyright infringement are analogous. In Habana, petitioners  he separate corporate personality of the corporation to escape criminal liability. A 
were the authors and copyright owners of English textbooks and workbooks. The  corporate officer cannot protect himself behind a corporation where he is the actua
case was anchored on the protection of literary and artistic creations such as book l, present and efficient actor.However, the criminal liability of a corporation’s offi
s. In Columbia cers or employees stems from their active participation in the commission of the 
Pictures,video tapes of copyrighted films were the subject of the copyright infring wrongful act.
ement suit.
Same; Same; Same; An accused’s participation in criminal acts involving
Same; Same; Infringement of a copyright is a trespass on a private domain violations of intellectual property rights is the subject of allegation and proof.—
owned and occupied by the owner of the copyright, and, therefore, protected by law, An accused’s participation in criminal acts involving violations of intellectual prop

IPL- Assignment No. 10 (Entire Copyright Cases) Page 37 of 101

erty rights is the subject of allegation and proof. The showing that the accused did  Department of Justice Resolution dated August 1, 2005 that ordered the
the acts or contributed in a meaningful way in the commission of the infringement
s is certainly different from the argument of lack of intent or good faith. Active p
articipation requires a showing of overt physical acts or intention to commit such  Code.6 Respondents are officers and employees of GMA Network, Inc.
acts. Intent or good faith, on the other hand, are inferences from acts proven to ha
ve been or not been committed.
Same; Same; Same; Mere membership in the Board or being President per se
does not mean knowledge, approval, and participation in the act alleged as criminal.
There must be a showing of active participation, not simply a constructive one.—
Mere membership in the Board or being President perse does not mean knowledg
e, approval, and participation in the act alleged as criminal. There must be a show
ing of active participation, not simply a constructive one. Under principles of crim
inal law, the principals of a crime are those “who take a direct part in the executi
on of the act; [t]hose who directly force or induce others to commit it; [or] [t]hose 
who cooperate in the commission of the offense by another act without which it w
ould not have been accomplished.” There is conspiracy“when two or more persons  and as a condition for his release, a demand was made for the withdrawal of
come to an agreement concerning the commission of a felony and decide to comm
it it.”
Same; Same; Good faith, lack of knowledge of the copyright, or lack of intent
to infringe is not a defense against copyright infringement.
In its current form, the Intellectual Property Code is malum
prohibitum and prescribes a strict liability for copyright infringement. Good faith,  ABS-CBN "conducted live audio-video coverage of and broadcasted the
lack of knowledge of the copyright, or lack of intent to infringe is not a defense a
gainst copyright infringement. Copyright, however, is subject to the rules of fair u
se and will be judged on a case-to
case basis. Finding probable cause includes a determination of the defendant’s acti
ve participation, particularly when the corporate veil is pierced in cases involving 
a corporation’s criminal liability.
DECISION
LEONEN, J.:
The main issue in this case is whether there is probable cause to charge
respondents with infringement under Republic Act No. 8293, otherwise
known as the Intellectual Property Code. The resolution of this issue requires
clarification of the concept of "copyrightable material" in relation to material
that is rebroadcast live as a news story. We are also asked to rule on
whether criminal prosecution for infringement of copyrightable material, such
as live rebroadcast, can be negated by good faith.
ABS-CBN Corporation (ABS-CBN) filed the Petition for Review on
Certiorari1 to assail the November 9, 2010 Decision 2 and the March 3, 2011
Resolution3 of the Court of Appeals. The Court of Appeals reinstated the
IPL- Assignment No. 10 (Entire Copyright Cases)
withdrawal of the Information finding probable cause for respondents’
violation of Sections 1774 and 2115 of the Intellectual Property
(GMA-7). They are: Felipe Gozon (Gozon), GMA-7 President; Gilberto R.
Duavit, Jr. (Duavit, Jr.), Executive Vice-President; Marissa L. Flores (Flores),
Vice-President for New and Public Affairs; Jessica A. Soho (Soho), Director
for News; Grace Dela Peña-Reyes (Dela Peña-Reyes), Head of News and
Public Affairs; John Oliver Manalastas (Manalastas), Program Manager; and
others.
The controversy arose from GMA-7’s news coverage on the homecoming of
Filipino overseas worker and hostage victim Angelo dela Cruz on July 22,
2004. As summarized by the Court of Appeals:
Overseas Filipino worker Angelo dela Cruz was kidnapped by Iraqi militants
Filipino troops in Iraq. After negotiations, he was released by his captors and
was scheduled to return to the country in the afternoon of 22 July 2004.
Occasioned by said homecoming and the public interest it generated,
both . . . GMA Network, Inc. . . . and [petitioner] made their respective
broadcasts and coverage of the live event.7
arrival of Angelo dela Cruz at the Ninoy Aquino International Airport (NAIA)
and the subsequent press conference."8 ABS-CBN allowed Reuters
Television Service (Reuters) to air the footages it had taken earlier under a
special embargo agreement.9
ABS-CBN alleged that under the special embargo agreement, any of the
footages it took would be for the "use of Reuter’s international subscribers
only, and shall be considered and treated by Reuters under ‘embargo’
against use by other subscribers in the Philippines. . . . [N]o other Philippine
subscriber of Reuters would be allowed to use ABS-CBN footage without the
latter’s consent."10
GMA-7, to which Gozon, Duavit, Jr., Flores, Soho, Dela Peña-Reyes, and
Manalastas are connected, "assigned and stationed news reporters and
technical men at the NAIA for its live broadcast and non-live news coverage
of the arrival of dela Cruz."11 GMA-7 subscribes to both Reuters and Cable
News Network (CNN). It received a live video feed of the coverage of Angelo
dela Cruz’s arrival from Reuters.12
GMA-7 immediately carried the live news feed in its program "Flash Report,"
together with its live broadcast. 13 Allegedly, GMA-7 did not receive any notice
or was not aware that Reuters was airing footages of ABS-CBN. 14 GMA-7’s
Page 38 of 101
news control room staff saw neither the "No Access Philippines" notice nor a
notice that the video feed was under embargo in favor of ABS-CBN. 15
On August 13, 2004, ABS-CBN filed the Complaint for copyright infringement
under Sections 17716 and 21117 of the Intellectual Property Code.18
On December 3, 2004, Assistant City Prosecutor Dindo Venturanza issued
the Resolution19 finding probable cause to indict Dela Peña-Reyes and
Manalastas.20 Consequently, the Information21 for violation of the Intellectual
Property Code was filed on December 17, 2004. It reads:
That on or about the 22nd of July 2004, in Quezon City, Philippines, the
above-named accused, conspiring together, confederating with and mutually
helping each other, being the Head of News Operations and the Program
Manager, respectively, for the News and Public Affairs Department of GMA
Network, Inc., did then and there, willfully, unlawfully and feloniously use and
broadcast the footage of the arrival of Angelo [d]ela Cruz at the Ninoy Aquino
International Airport of which ABS-CBN holds the exclusive ownership and
copyright by then and there using, airing, and broadcasting the said footage
in its news program "FLASH REPORT" without first obtaining the consent or
authority of said copyright owner, to their damage and prejudice.
Contrary to law.22
On January 4, 2005, respondents filed the Petition for Review before the
Department of Justice.23 In the Resolution (Gonzalez Resolution) dated
August 1, 2005, Department of Justice Secretary Raul M. Gonzalez
(Secretary Gonzalez) ruled in favor of respondents and held that good faith
may be raised as a defense in the case. 24 The dispositive portion of the
Resolution reads:
WHEREFORE, THE PETITION FOR REVIEW FILED BY GMA-7 in I.S. No.
04-10458 is considered meritorious and is hereby GRANTED. This case is
hereby Dismissed, the resolution of the City Prosecutor of Quezon City is
hereby reversed and the same is ordered to withdraw the information if any
and report action taken to this office within ten (10) days. 25 (Emphasis in the
original)
Both parties moved for reconsideration of the Gonzalez Resolution. 26
Meanwhile, on January 19, 2005, the trial court granted the Motion to
Suspend Proceedings filed earlier by Dela Peña-Reyes and
Manalastas.27 The trial court Order reads:
IPL- Assignment No. 10 (Entire Copyright Cases)
Perusing the motion, the court finds that a petition for review was filed with
the Department of Justice on January 5, 2005 as confirmed by the public
prosecutor. Under Section 11 (c), Rule 116 of the Rules of Criminal
Procedure, once a petition for review is filed with the Department of Justice, a
suspension of the criminal proceedings may be allowed by the court.
Accordingly, to allow the Department of Justice the opportunity to act on said
petition for review, let the proceedings on this case be suspended for a
period of sixty (60) days counted from January 5, 2005, the date the petition
was filed with the Department of Justice. The arraignment of the accused on
February 1, 2005 is accordingly cancelled. Let the arraignment be
rescheduled to March 8, 2005 at 8:30 a.m. The accused through counsel are
notified in open court.
SO ORDERED.28
On June 29, 2010, Department of Justice Acting Secretary Alberto C. Agra
(Secretary Agra) issued the Resolution (Agra Resolution) that reversed the
Gonzalez Resolution and found probable cause to charge Dela Peña-Reyes
and Manalastas for violation of the Intellectual Property Code. 29 Secretary
Agra also found probable cause to indict Gozon, Duavit, Jr., Flores, and
Soho for the same violation.30 He ruled that:
[w]hile good faith may be a defense in copyright infringement, the same is a
disputable presumption that must be proven in a full-blown trial. Disputable
presumptions may be contradicted and overcome by other evidence. Thus, a
full-blown trial is the proper venue where facts, issues and laws are
evaluated and considered. The very purpose of trial is to allow a party to
present evidence to overcome the disputable presumptions involved. 31
The dispositive portion of the Agra Resolution provides:
WHEREFORE, premises considered:
(a) The Motion for Reconsideration filed by appellees ABS-CBN
Broadcasting Corporation (ABS-CBN) of our Resolution promulgated on
August 1, 2005 (Resolution No. 364, Series of 2005) and the Petition for
Review filed by complainant-appellant ABS-CBN in I.S. No. 04-10458 on
April10, 2006, are GRANTED and the City Prosecutor of Quezon City is
hereby ordered to file the necessary Information for violation of Section 177
and 211 of Republic Act No. 8293 against GMA-7. Felipe L. Gozon, Gilberto
R. Duavit, Jr., Marissa L.Flores, Jessica A. Soho, Grace Dela Pena-Reyes,
John Oliver T. Manalastas[.]
SO ORDERED.32 (Emphasis in the original)
Page 39 of 101
Respondents assailed the Agra Resolution through the Petition for Certiorari
with prayer for issuance of a temporary restraining order and/or Writ of
Preliminary Injunction on September 2, 2010 before the Court of Appeals. In
the Resolution dated September 13, 2010, the Court of Appeals granted the
temporary restraining order preventing the Department of Justice from
enforcing the Agra Resolution.33
On November 9, 2010, the Court of Appeals rendered the Decision granting
the Petition and reversing and setting aside the Agra Resolution. 34 The Court
of Appeals held that Secretary Agra committed errors of jurisdiction in issuing
the assailed Resolution. Resolving the issue of copyright infringement, the
Court of Appeals said:
Surely, private respondent has a copyright of its news coverage. Seemingly,
for airing said video feed, petitioner GMA is liable under the provisions of the
Intellectual Property Code, which was enacted purposely to protect copyright
owners from infringement. However, it is an admitted fact that petitioner GMA
had only aired a five (5) second footage of the disputed live video feed that it
had received from Reuters and CNN as a subscriber. Indeed, petitioners had
no notice of the right of ownership of private respondent over the same.
Without notice of the "No Access Philippines" restriction of the live video
feed, petitioner cannot be faulted for airing a live video feed from Reuters and
CNN.
Verily, as aptly opined by Secretary Gonzalez in his earlier Resolution, the
act of petitioners in airing the five (5) second footage was undeniably
attended by good faith and it thus serves to exculpate them from criminal
liability under the Code. While the Intellectual Property Code is a special law,
and thus generally categorized as malum prohibitum, it bears to stress that
the provisions of the Code itself do not ipso facto penalize a person or entity
for copyright infringement by the mere fact that one had used a copyrighted
work or material.
Certainly so, in the exercise of one’s moral and economic or copyrights, the
very provisions of Part IV of the Intellectual Property Code provide for the
scope and limitations on copyright protection under Section 184 and in fact
permit fair use of copyrighted work under Section 185. With the aforesaid
statutory limitations on one’s economic and copyrights and the allowable
instances where the other persons can legally use a copyrighted work,
criminal culpability clearly attaches only when the infringement had been
knowingly and intentionally committed.35 (Emphasis supplied)
The dispositive portion of the Decision reads:
WHEREFORE, the foregoing considered, the instant petition is hereby
GRANTED and the assailed Resolution dated 29 June 2010 REVERSED
IPL- Assignment No. 10 (Entire Copyright Cases)
and SET ASIDE. Accordingly, the earlier Resolution dated 1 August 2005,
which ordered the withdrawal of the Information filed, if any, against the
petitioners for violation of Sections 177 and 211 of the Intellectual Property
Code, is hereby REINSTATED. No costs.
SO ORDERED.36 (Emphasis in the original)
ABS-CBN’s Motion for Reconsideration was denied. 37 It then filed its Petition
for Review before this court assailing the Decision and Resolution of the
Court of Appeals.38
The issues for this court’s consideration are:
First, whether Secretary Agra committed errors of jurisdiction in the
Resolution dated June 29, 2010 and, therefore, whether a petition for
certiorari was the proper remedy in assailing that Resolution;
Second, whether news footage is copyrightable under the law;
Third, whether there was fair use of the broadcast material;
Fourth, whether lack of knowledge that a material is copyrighted is a defense
against copyright infringement;
Fifth, whether good faith is a defense in a criminal prosecution for violation of
the Intellectual Property Code; and
Lastly, whether the Court of Appeals was correct in overturning Secretary
Agra’s finding of probable cause.
I.
The trial court granted respondents’ Motion to Suspend Proceedings and
deferred respondents Dela Peña-Reyes and Manalastas’ arraignment for 60
days in view of the Petition for Review filed before the Department of Justice.
Rule 116, Section 11 (c) of the Rules of Criminal Procedure allows
the suspension of the accused’s arraignment in certain circumstances only:
SEC. 11. Suspension of arraignment.–Upon motion by the proper party, the
arraignment shall be suspended in the following cases:
(a) The accused appears to be suffering from an unsound mental condition
which effectively renders him unable to fully understand the charge against
Page 40 of 101
him and to plead intelligently thereto. In such case, the court shall order his
mental examination and, if necessary, his confinement for such purpose;
(b) There exists a prejudicial question; and
(c) A petition for review of the resolution of the prosecutor is pending at either
the Department of Justice, or the Office of the President; provided, that the
period of suspension shall not exceed sixty (60) days counted from the filing
of the petition with the reviewing office. (12a) (Emphasis supplied)
In Samson v. Daway,39 this court acknowledged the applicability of Rule 116,
Section (c) in a criminal prosecution for infringement under the Intellectual
Property Code. However, this court emphasized the limits of the order of
deferment under the Rule:
While the pendency of a petition for review is a ground for suspension of the
arraignment, the . . . provision limits the deferment of the arraignment to a
period of 60 days reckoned from the filing of the petition with the reviewing
office. It follows, therefore, that after the expiration of said period, the trial
court is bound to arraign the accused or to deny the motion to defer
arraignment.40
We clarify that the suspension of the arraignment should always be within the
limits allowed by law. In Crespo v. Judge Mogul,41 this court outlined the
effects of filing an information before the trial court, which includes initiating a
criminal action and giving this court "authority to hear and determine the
case":42
The preliminary investigation conducted by the fiscal for the purpose of
determining whether a prima facie case exists warranting the prosecution of
the accused is terminated upon the filing of the information in the proper
court. In turn, as above stated, the filing of said information sets in motion the
criminal action against the accused in Court. Should the fiscal find it proper to
conduct a reinvestigation of the case, at such stage, the permission of the
Court must be secured. After such reinvestigation the finding and
recommendations of the fiscal should be submitted to the Court for
appropriate action. While it is true that the fiscal has the quasi judicial
discretion to determine whether or not a criminal case should be filed in court
or not, once the case had already been brought to Court whatever disposition
the fiscal may feel should be proper in the case thereafter should be
addressed for the consideration of the Court, the only qualification is that the
action of the Court must not impair the substantial rights of the accused or
the right of the People to due process of law.
Whether the accused had been arraigned or not and whether it was due to a
reinvestigation by the fiscal or a review by the Secretary of Justice whereby a
IPL- Assignment No. 10 (Entire Copyright Cases)
motion to dismiss was submitted to the Court, the Court in the exercise of its
discretion may grant the motion or deny it and require that the trial on the
merits proceed for the proper determination of the case.
However, one may ask, if the trial court refuses to grant the motion to dismiss
filed by the fiscal upon the directive of the Secretary of Justice will there not
be a vacuum in the prosecution? A state prosecutor to handle the case
cannot possibly be designated by the Secretary of Justice who does not
believe that there is a basis for prosecution nor can the fiscal be expected to
handle the prosecution of the case thereby defying the superior order of the
Secretary of Justice. The answer is simple. The role of the fiscal or
prosecutor as We all know is to see that justice is done and not necessarily
to secure the conviction of the person accused before the Courts. Thus, in
spite of his opinion to the contrary, it is the duty of the fiscal to proceed with
the presentation of evidence of the prosecution to the Court to enable the
Court to arrive at its own independent judgment as to whether the accused
should be convicted or acquitted. The fiscal should not shirk from the
responsibility of appearing for the People of the Philippines even under such
circumstances much less should he abandon the prosecution of the case
leaving it to the hands of a private prosecutor for then the entire proceedings
will be null and void. The least that the fiscal should do is to continue to
appear for the prosecution although he may turn over the presentation of the
evidence to the private prosecutor but still under his direction and control.
The rule therefore in this jurisdiction is that once a complaint or information is
filed in Court any disposition of the case as to its dismissal or the conviction
or acquittal of the accused rests in the sound discretion of the Court.
Although the fiscal retains the direction and control of the prosecution of
criminal cases even while the case is already in Court he cannot impose his
opinion on the trial court. The Court is the best and sole judge on what to do
with the case before it. The determination of the case is within its exclusive
jurisdiction and competence. A motion to dismiss the case filed by the fiscal
should be addressed to the Court who has the option to grant or deny the
same. It does not matter if this is done before or after the arraignment of the
accused or that the motion was filed after a reinvestigation or upon
instructions of the Secretary of Justice who reviewed the records of the
investigation.43 (Emphasis supplied, citations omitted)
The doctrine in Crespo was reiterated in Mayor Balindong v. Court of
Appeals,44 where this court reminded the Department of Justice Secretary to
refrain from entertaining petitions for review when the case is already
pending with this court:
[I]n order to avoid a situation where the opinion of the Secretary of Justice
who reviewed the action of the fiscal may be disregarded by the trial court,
Page 41 of 101
the Secretary of Justice should, as far as practicable, refrain from
entertaining a petition for review or appeal from the action of the fiscal, when
the complaint or information has already been filed in the Court. The matter
should be left entirely for the determination of the Court. 45
The trial court should have proceeded with respondents Dela Peña-Reyes
and Manalastas’ arraignment after the 60-day period from the filing of the
Petition for Review before the Department of Justice on March 8, 2005. It
was only on September 13, 2010 that the temporary restraining order was
issued by the Court of Appeals. The trial court erred when it did not act on
the criminal case during the interim period. It had full control and direction of
the case. As Judge Mogul reasoned in denying the motion to dismiss in
Crespo, failure to proceed with the arraignment "disregards the requirements
of due process [and] erodes the Court’s independence and integrity." 46
II
According to ABS-CBN, the Court of Appeals erred in finding that: a motion
for reconsideration was not necessary before a petition for certiorari could be
filed; the Department of Justice Secretary committed errors of jurisdiction
since the Agra Resolution was issued within its authority and in accordance
with settled laws and jurisprudence; and respondents were not liable for
copyright infringement.
In its assailed Decision, the Court of Appeals found that respondents
committed a procedural error when they failed to file a motion for
reconsideration before filing the Petition for Certiorari. However, the Court of
Appeals held that a motion for reconsideration was unnecessary since the
Agra Resolution was a patent nullity and it would have been useless under
the circumstances: Given that a reading of the assailed Resolution and the
instant records readily reveals errors of jurisdiction on the part of respondent
Secretary, direct judicial recourse is warranted under the circumstances.
Aside from the fact that said Resolution is a patent nullity having been issued
in grave abuse of discretion amounting to lack or excess of jurisdiction, the
filing of a motion for reconsideration is evidently useless on account of the
fact that the issues and arguments before this Court have already been duly
raised and accordingly delved into by respondent Secretary in his disposition
of the petition a quo.47 (Emphasis in the original)
In Elma v. Jacobi,48 this court ruled that a petition for certiorari under Rule 65
of the Rules of Court is proper when assailing adverse resolutions of the
Department of Justice stemming from the determination of probable
cause.49 However, grave abuse of discretion must be alleged.50
In Sanrio Company Limited v. Lim, 51 this court stressed the prosecutor’s role
in determining probable cause. Judicial review will only lie when it is shown
IPL- Assignment No. 10 (Entire Copyright Cases)
that the prosecutor acted with grave abuse of discretion amounting to lack or
excess of jurisdiction:
A prosecutor alone determines the sufficiency of evidence that will establish
probable cause justifying the filing of a criminal information against the
respondent. By way of exception, however, judicial review is allowed where
respondent has clearly established that the prosecutor committed grave
abuse of discretion. Otherwise stated, such review is appropriate only when
the prosecutor has exercised his discretion in an arbitrary, capricious,
whimsical or despotic manner by reason of passion or personal hostility,
patent and gross enough to amount to an evasion of a positive duty or virtual
refusal to perform a duty enjoined by law.52 (Citations omitted)
Grave abuse of discretion refers to:
such capricious and whimsical exercise of judgment as is equivalent to lack
of jurisdiction. The abuse of discretion must be grave as where the power is
exercised in an arbitrary or despotic manner by reason of passion or
personal hostility and must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined by
or to act at all in contemplation of law.53
Resorting to certiorari requires that there be there be "no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law[,]" 54 such
as a motion for reconsideration. Generally, "a motion for reconsideration is a
condition sine qua non before a petition for certiorari may lie, its purpose
being to grant an opportunity for the [tribunal or officer] to correct any error
attributed to it by a re-examination of the legal and factual circumstances of
the case."55 However, exceptions to the rule exist:
(a) where the order is a patent nullity, as where the Court a quo had no
jurisdiction; (b) where the questions raised in the certiorari proceeding have
been duly raised and passed upon by the lower court, or are the same as
those raised and passed upon in the lower court; (c) where there is an urgent
necessity for the resolution of the question and any further delay would
prejudice the interests of the Government or of the petitioner or the subject
matter of the action is perishable; (d) where, under the circumstances, a
motion for reconsideration would be useless; (e) where petitioner was
deprived of due process and there is extreme urgency for relief; (f) where, in
a criminal case, relief from an order of arrest is urgent and the granting of
such relief by the trial Court is improbable; (g) where the proceedings in the
lower court are a nullity for lack of due process; (h) where the proceedings
was ex parte or in which the petitioner had no opportunity to object; and (i)
where the issue raised is one purely of law or where public interest is
involved.56 (Emphasis in the original, citations omitted)
Page 42 of 101
As argued by respondents, "[a] second motion for reconsideration would
have been useless and futile since the D[epartment] [of] J[ustice] had already
passed upon the same issues twice." 57 Equally pressing under the
circumstances was the need to resolve the matter, as the Information’s filing
would lead to respondents’ imminent arrest.58
Moreover, Department of Justice Department Circular No. 70 dated July 3,
2000, or the 2000 NPS Rules on Appeal, provides that no second motion for
reconsideration of the Department of Justice Secretary’s resolution shall be
entertained:
SECTION 13. Motion for reconsideration. The aggrieved party may file a
motion for reconsideration within a non-extendible period of ten (10) days
from receipt of the resolution on appeal, furnishing the adverse party and the
Prosecution Office concerned with copies thereof and submitting proof of
such service. No second or further motion for reconsideration shall be
entertained.
The Agra Resolution was the result of respondents’ Motion for
Reconsideration assailing the Gonzalez Resolution. To file a motion for
reconsideration of the Agra Resolution would be superfluous. Respondents
were, therefore, correct in filing the Petition for Certiorari of the Agra
Resolution before the Court of Appeals.
III
The Court of Appeals ruled that Secretary Agra committed errors of
jurisdiction, which then required the grant of the writ of certiorari:
So viewed, by ordering the filing of information without proof that probable
cause exists to charge petitioners with a crime, respondent Secretary clearly
committed an error of jurisdiction thus warranting the issuance of the writ of
certiorari. Surely, probable cause cannot be had when the very provisions of
the statute exculpates criminal liability in cases classified as fair use of
copyrighted materials. The fact that they admittedly used the Reuters live
video feed is not, as a matter of course, tantamount to copyright infringement
that would justify the filing of an information against the petitioners. 59
Error of jurisdiction must be distinguished from error of judgment:
A line must be drawn between errors of judgment and errors of jurisdiction.
An error of judgment is one which the court may commit in the exercise of its
jurisdiction. An error of jurisdiction renders an order or judgment void or
IPL- Assignment No. 10 (Entire Copyright Cases)
voidable. Errors of jurisdiction are reviewable on certiorari; errors of
judgment, only by appeal.60
In People v. Hon. Sandiganbayan61:
An error of judgment is one which the court may commit in the exercise of its
jurisdiction. An error of jurisdictionis one where the act complained of was
issued by the court without or in excess of jurisdiction, or with grave abuse of
discretion, which is tantamount to lack or in excess of jurisdiction and which
error is correctible only by the extraordinary writ of certiorari. Certiorari will
not be issued to cure errors of the trial court in its appreciation of the
evidence of the parties, or its conclusions anchored on the said findings and
its conclusions of law.62 (Emphasis supplied)
This court has adopted a deferential attitude towards review of the
executive’s finding of probable cause.63 This is based "not only upon the
respect for the investigatory and [prosecutorial] powers granted by the
Constitution to the executive department but upon practicality as
well."64 Review of the Department of Justice Secretary’s decision or
resolution will be allowed only when grave abuse of discretion is alleged:
The full discretionary authority to determine probable cause in a preliminary
investigation to ascertain sufficient ground for the filing of information rests
with the executive branch. Hence, judicial review of the resolution of the
Secretary of Justice is limited to a determination whether there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction. Courts
cannot substitute the executive branch’s judgment.
It is only where the decision of the Justice Secretary is tainted with grave
abuse of discretion amounting to lack or excess of jurisdiction that the Court
of Appeals may take cognizance of the case in a petition for certiorari under
Rule 65 of the Revised Rules of Civil Procedure. The Court of Appeals
decision may then be appealed to this Court by way of a petition for review
on certiorari.65 (Emphasis supplied, citations omitted)
In this case, it must be shown that Secretary Agra exceeded his authority
when he reversed the findings of Secretary Gonzalez. This court must
determine whether there is probable cause to file an information for copyright
infringement under the Intellectual Property Code.
IV
Probable cause pertains to "such facts as are sufficient to engender a well-
founded belief that a crime has been committed and that respondent is
probably guilty thereof."66 Preliminary investigation is the inquiry or
proceeding to determine whether there is probable cause. 67
Page 43 of 101
In Webb v. De Leon,68 this court ruled that determination of probable cause
during preliminary investigation does not require trial-like evaluation of
evidence since existence of probable cause does not equate to guilt:
It ought to be emphasized that in determining probable cause, the average
man weighs facts and circumstances without resorting to the calibrations of
our technical rules of evidence of which his knowledge is nil. Rather, he relies
on the calculus of common sense of which all reasonable men have an
abundance.
. . . A finding of probable cause merely binds over the suspect to stand trial. It
is not a pronouncement of guilt.69
70
In Reyes v. Pearlbank Securities, Inc.,  finding probable cause is not
equivalent to finding with moral certainty that the accused committed the
crime:
A finding of probable cause needs only to rest on evidence showing that
more likely than not a crime has been committed by the suspects. It need not
be based on clear and convincing evidence of guilt, not on evidence
establishing guilt beyond reasonable doubt, and definitely not on evidence
establishing absolute certainty of guilt. In determining probable cause, the
average man weighs facts and circumstances without resorting to the
calibrations of the rules of evidence of which he has no technical knowledge.
He relies on common sense.71
During preliminary investigation, a public prosecutor does not adjudicate on
the parties’ rights, obligations, or liabilities.72
In the recent case of Estrada v. Office of the Ombudsman, et al., 73 we
reiterated Webb on the determination of probable cause during preliminary
investigation and traced the history of probable cause as borrowed from
American jurisprudence:
The purpose in determining probable cause is to make sure that the courts
are not clogged with weak cases that will only be dismissed, as well as to
spare a person from the travails of a needless prosecution.
. . . In the United States, from where we borrowed the concept of probable
cause, the prevailing definition of probable cause is this:
In dealing with probable cause, however, as the very name implies, we deal
with probabilities. These are not technical; they are the factual and practical
considerations of everyday life on which reasonable and prudent men, not
legal technicians, act. The standard of proof is accordingly correlative to what
must be proved.
IPL- Assignment No. 10 (Entire Copyright Cases)
"The substance of all the definitions" of probable cause "is a reasonable
ground for belief of guilt." McCarthy v. De Armit, 99 Pa. St. 63, 69, quoted
with approval in the Carroll opinion. 267 U. S. at 161. And this "means less
than evidence which would justify condemnation" or conviction, as Marshall,
C. J., said for the Court more than a century ago in Locke v. United States, 7
Cranch 339, 348. Since Marshall’s time, at any rate, it has come to mean
more than bare suspicion: Probable cause exists where "the facts and
circumstances within their [the officers’] knowledge and of which they had
reasonably trustworthy information [are] sufficient in themselves to warrant a
man of reasonable caution in the belief that" an offense has been or is being
committed. Carroll v. United States, 267 U. S. 132, 162.
These long-prevailing standards seek to safeguard citizens from rash and
unreasonable interferences with privacy and from unfounded charges of
crime. They also seek to give fair leeway for enforcing the law in the
community’s protection. Because many situations which confront officers in
the course of executing their duties are more or less ambiguous, room must
be allowed for some mistakes on their part. But the mistakes must be those
of reasonable men, acting on facts leading sensibly to their conclusions of
probability. The rule of probable cause is a practical, non technical
conception affording the best compromise that has been found for
accommodating these often opposing interests. Requiring more would unduly
hamper law enforcement. To allow less would be to leave law-abiding
citizens at the mercy of the officers’ whim or caprice.
In the Philippines, there are four instances in the Revised Rules of Criminal
Procedure where probable cause is needed to be established:
(1) In Sections 1 and 3 of Rule 112: By the investigating officer, to determine
whether there is sufficient ground to engender a well-founded belief that a
crime has been committed and the respondent is probably guilty thereof, and
should be held for trial. A preliminary investigation is required before the filing
of a complaint or information for an offense where the penalty prescribed by
law is at least four years, two months and one day without regard to the fine;
(2) In Sections 6 and 9 of Rule 112: By the judge, to determine whether a
warrant of arrest or a commitment order, if the accused has already been
arrested, shall be issued and that there is a necessity of placing the
respondent under immediate custody in order not to frustrate the ends of
justice;
(3) In Section 5(b) of Rule 113:By a peace officer or a private person making
a warrantless arrest when an offense has just been committed, and he has
probable cause to believe based on personal knowledge of facts or
circumstances that the person to be arrested has committed it; and
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(4) In Section 4 of Rule 126: By the judge, to determine whether a search
warrant shall be issued, and only 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
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 all these instances, the evidence necessary to establish probable cause is
based only on the likelihood, or probability, of guilt.74
Estrada also highlighted that a "[p]reliminary investigation is not part of the
criminal action. It is merely preparatory and may even be disposed of in
certain situations."75
To determine whether there is probable cause that respondents committed
copyright infringement, a review of the elements of the crime, including the
existing facts, is required.
V it underwent a creative process, is not entitled to protection.
ABS-CBN claims that news footage is subject to copyright and prohibited use
of copyrighted material is punishable under the Intellectual Property Code. It
argues that the new footage is not a "newsworthy event" but "merely an
account of the arrival of Angelo dela Cruz in the Philippines — the latter
being the newsworthy event":76
To be clear, it is the event itself or the arrival of Angelo dela Cruz which is not
copyrightable because that is the newsworthy event. However, any footage
created from the event itself, in this case the arrival of Angelo dela Cruz, are
intellectual creations which are copyrightable. Thus, the footage created by
ABS-CBN during the arrival of Angelo dela Cruz, which includes the
statements of Dindo Amparo, are copyrightable and protected by the laws on
copyright.77
On the other hand, respondents argue that ABS-CBN’s news footage of
Angelo dela Cruz’s arrival is not copyrightable or subject to protection:
Certainly, the arrival of Angelo [d]ela Cruz, which aroused public attention
and the consciousness of the Filipino people with regard to their countrymen,
OFWs working in foreign countries and how the Philippine government
responds to the issues concerning them, is "news". There is no ingenuity or
inventiveness added in the said news footage. The video footage of this
"news" is not copyrightable by any legal standard as facts of everyday life
depicted in the news and items of press information is part of the public
domain.78 (Emphasis in the original)
IPL- Assignment No. 10 (Entire Copyright Cases)
The news footage is copyrightable.
The Intellectual Property Code is clear about the rights afforded to authors of
various kinds of work. Under the Code, "works are protected by the sole fact
of their creation, irrespective of their mode or form of expression, as well as
of their content, quality and purpose."79 These include "[a]udiovisual works
and cinematographic works and works produced by a process analogous to
cinematography or any process for making audiovisual recordings."80
Contrary to the old copyright law,81 the Intellectual Property Code does not
require registration of the work to fully recover in an infringement suit.
Nevertheless, both copyright laws provide that copyright for a work is
acquired by an intellectual creator from the moment of creation. 82
It is true that under Section 175 of the Intellectual Property Code, "news of
the day and other miscellaneous facts having the character of mere items of
press information" are considered unprotected subject matter. 83 However, the
Code does not state that expression of the news of the day, particularly when
An idea or event must be distinguished from the expression of that idea or
event. An idea has been likened to a ghost in that it "must be spoken to a
little before it will explain itself." 84 It is a concept that has eluded exact legal
definition.85 To get a better grasp of the idea/expression dichotomy, the
etymology of the term "idea" is traced:
The word "idea" is derived from a Greek term, meaning "a form, the look or
appearance of a thing as opposed to its reality, from idein, to see." In the
Timaeus, Plato saw ideas as eternal paradigms, independent objects to
which the divine demiurge looks as patterns in forming the world. This was
later modified to the religious conception of ideas as the thoughts of God. "It
is not a very long step to extend the term ‘idea’ to cover patterns, blueprints,
or plans in anyone's mind, not only in God’s." The word entered the French
and English vernacular in the 1600s and possessed two meanings. The first
was the Platonic meaning of a perfect exemplar or paradigm. The second,
which probably has its origin with Descartes, is of a mental concept or image
or, more broadly, any object of the mind when it is active. Objects of thought
may exist independently. The sun exists (probably) before and after you think
of it. But it is also possible to think of things that have never existed, such as
a unicorn or Pegasus. John Locke defined ideas very comprehensively, to
include: all objects of the mind. Language was a way of translating the
invisible, hidden ideas that make up a person’s thoughts into the external,
perceptible world of articulate sounds and visible written symbols that others
can understand.86 (Citations omitted) There is no one legal definition of "idea"
in this jurisdiction. The term "idea" is mentioned only once in the Intellectual
Property Code.87 In Joaquin, Jr. v. Drilon,88 a television format (i.e., a dating
Page 45 of 101
show format) is not copyrightable under Section 2 of Presidential Decree No.
49;89 it is a mere concept:
P.D. No. 49, §2, in enumerating what are subject to copyright, refers to
finished works and not to concepts. The copyright does not extend to an
idea, procedure, process, system, method of operation, concept, principle, or
discovery, regardless of the form in which it is described, explained,
illustrated, or embodied in such work. Thus, the new INTELLECTUAL
PROPERTY CODE OF THE PHILIPPINES provides:
SEC. 175. Unprotected Subject Matter.—Notwithstanding the provisions of
Sections 172 and 173, no protection shall extend, under this law, to any idea,
procedure, system, method or operation, concept, principle, discovery or
mere data as such, even if they are expressed, explained, illustrated or
embodied in a work; news of the day and other miscellaneous facts having
the character of mere items of press information; or any official text of a
legislative, administrative or legal nature, as well as any official translation
thereof.
What then is the subject matter of petitioners’ copyright? This Court is of the
opinion that petitioner BJPI’s copyright covers audio-visual recordings of
each episode of Rhoda and Me, as falling within the class of works
mentioned in P.D. 49, §2(M),to wit:
Cinematographic works and works produced by a process analogous to
cinematography or any process for making audio-visual recordings;
The copyright does not extend to the general concept or format of its dating
game show. Accordingly, by the very nature of the subject of petitioner BJPI’s
copyright, the investigating prosecutor should have the opportunity to
compare the videotapes of the two shows.
Mere description by words of the general format of the two dating game
shows is insufficient; the presentation of the master videotape in evidence
was indispensable to the determination of the existence of probable cause.
As aptly observed by respondent Secretary of Justice:
A television show includes more than mere words can describe because it
involves a whole spectrum of visuals and effects, video and audio, such that
no similarity or dissimilarity may be found by merely describing the general
copyright/format of both dating game shows. 90 (Emphasis supplied, citations
omitted)
Ideas can be either abstract or concrete.91 It is the concrete ideas that are
generally referred to as expression:
IPL- Assignment No. 10 (Entire Copyright Cases)
The words "abstract" and "concrete" arise in many cases dealing with the
idea/expression distinction. The Nichols court, for example, found that the
defendant’s film did not infringe the plaintiff’s play because it was "too
generalized an abstraction from what plaintiff wrote . . . only a part of her
ideas." In Eichel v. Marcin, the court said that authors may exploit facts,
experiences, field of thought, and general ideas found in another’s work,
"provided they do not substantially copy a concrete form, in which the
circumstances and ideas have been developed, arranged, and put into
shape." Judge Hand, in National Comics Publications, Inc. v. Fawcett
Publications, Inc. said that "no one infringes, unless he descends so far into
what is concrete as to invade. . . ‘expression.’"
These cases seem to be distinguishing "abstract" ideas from "concrete"
tangible embodiments of these abstractions that may be termed expression.
However, if the concrete form of a work means more than the literal
expression contained within it, it is difficult to determine what is meant by
"concrete." Webster's New Twentieth Century Dictionary of the English
Language provides several meanings for the word concrete. These include:
"having a material, perceptible existence; of, belonging to, or characterized
by things or events that can be perceived by the senses; real; actual;" and
"referring to a particular; specific, not general or abstract." 92
In Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated, 93 this court,
citing the American case of Baker v. Selden, distinguished copyright from
patents and illustrated how an idea or concept is different from the
expression of that idea:
In the oft-cited case of Baker vs. Selden, the United States Supreme Court
held that only the expression of an idea is protected by copyright, not the
idea itself. In that case, the plaintiff held the copyright of a book which
expounded on a new accounting system he had developed. The publication
illustrated blank forms of ledgers utilized in such a system. The defendant
reproduced forms similar to those illustrated in the plaintiff’s copyrighted
book. The US Supreme Court ruled that:
"There is no doubt that a work on the subject of book-keeping, though only
explanatory of well known systems, may be the subject of a copyright; but,
then, it is claimed only as a book. x x x But there is a clear distinction
between the books, as such, and the art, which it is, intended to illustrate.
The mere statement of the proposition is so evident that it requires hardly any
argument to support it. The same distinction may be predicated of every
other art as well as that of bookkeeping.
A treatise on the composition and use of medicines, be they old or new; on
the construction and use of ploughs or watches or churns; or on the mixture
and application of colors for painting or dyeing; or on the mode of drawing
Page 46 of 101
lines to produce the effect of perspective, would be the subject of copyright;
but no one would contend that the copyright of the treatise would give the
exclusive right to the art or manufacture described therein. The copyright of
the book, if not pirated from other works, would be valid without regard to the
novelty or want of novelty of its subject matter. The novelty of the art or thing
described or explained has nothing to do with the validity of the copyright. To
give to the author of the book an exclusive property in the art described
therein, when no examination of its novelty has ever been officially made,
would be a surprise and a fraud upon the public. That is the province of
letters patent, not of copyright. The claim to an invention of discovery of an
art or manufacture must be subjected to the examination of the Patent Office
before an exclusive right therein can be obtained; and a patent from the
government can only secure it.
The difference between the two things, letters patent and copyright, may be
illustrated by reference to the subjects just enumerated. Take the case of
medicines. Certain mixtures are found to be of great value in the healing art.
If the discoverer writes and publishes a book on the subject (as regular
physicians generally do), he gains no exclusive right to the manufacture and
sale of the medicine; he gives that to the public. If he desires to acquire such
exclusive right, he must obtain a patent for the mixture as a new art,
manufacture or composition of matter. He may copyright his book, if he
pleases; but that only secures to him the exclusive right of printing and
publishing his book. So of all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and
illustrations it may contain, gives no exclusive right to the modes of drawing
described, though they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to
the public.
Now, whilst no one has a right to print or publish his book, or any material
part thereof, as a book intended to convey instruction in the art, any person
may practice and use the art itself which he has described and illustrated
therein. The use of the art is a totally different thing from a publication of the
book explaining it. The copyright of a book on bookkeeping cannot secure
the exclusive right to make, sell and use account books prepared upon the
plan set forth in such book. Whether the art might or might not have been
patented, is a question, which is not before us. It was not patented, and is
open and free to the use of the public. And, of course, in using the art, the
ruled lines and headings of accounts must necessarily be used as incident to
it.
The plausibility of the claim put forward by the complainant in this case arises
from a confusion of ideas produced by the peculiar nature of the art
described in the books, which have been made the subject of copyright. In
IPL- Assignment No. 10 (Entire Copyright Cases)
describing the art, the illustrations and diagrams employed happened to
correspond more closely than usual with the actual work performed by the
operator who uses the art. x x x The description of the art in a book, though
entitled to the benefit of copyright, lays no foundation for an exclusive claim
to the art itself. The object of the one is explanation; the object of the other is
use. The former may be secured by copyright. The latter can only be
secured, if it can be secured at all, by letters patent."94 (Emphasis supplied)
News or the event itself is not copyrightable. However, an event can be
captured and presented in a specific medium. As recognized by this court in
Joaquin, television "involves a whole spectrum of visuals and effects, video
and audio."95 News coverage in television involves framing shots, using
images, graphics, and sound effects.96 It involves creative process and
originality. Television news footage is an expression of the news.
In the United States, a line of cases dwelt on the possibility of television
newscasts to be copyrighted.97 Most of these cases focused on private
individuals’ sale or resale of tapes of news broadcasts. Conflicting decisions
were rendered by its courts. Noteworthy, however, is the District Court’s
pronouncement in Pacific & Southern Co. v. Duncan, 98 which involves a
News Monitoring Service’s videotaping and sale of WXIA-TV’s news
broadcasts:
It is axiomatic that copyright protection does not extend to news "events" or
the facts or ideas which are the subject of news reports. Miller v. Universal
City Studios, Inc., 650 F.2d 1365, 1368 (5th Cir. 1981); Wainwright
Securities, Inc. v. Wall Street Transcript Corp., 558 F.2d 91, 95 (2d Cir.
1977), cert. denied, 434 U.S. 1014, 98 S.Ct. 730, 54 L.Ed.2d 759 (1978). But
it is equally well-settled that copyright protection does extend to the reports
themselves, as distinguished from the substance of the information contained
in the reports. Wainwright, 558 F.2d at 95; International News Service v.
Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211 (1918); see
Chicago Record-Herald Co. v. Tribune Assn., 275 F. 797 (7th Cir.1921); 1
Nimmer on Copyright § 2.11[B] (1983). Copyright protects the manner of
expression of news reports, "the particular form or collocation of words in
which the writer has communicated it." International News Service, 248 U.S.
at 234, 39 S.Ct. at 70. Such protection extends to electronic news reports as
well as written reports. See17 U.S.C. § 102(a) (5), (6), and (7); see also Iowa
State University Research Foundations, Inc. v. American Broadcasting Cos.,
621 F.2d 57, 61 (2d Cir. 1980).99 (Emphasis supplied)
The idea/expression dichotomy has long been subject to debate in the field of
copyright law. Abolishing the dichotomy has been proposed, in that non-
protectibility of ideas should be re-examined, if not stricken, from decisions
and the law:
Page 47 of 101
If the underlying purpose of the copyright law is the dual one expressed by
Lord Mansfield, the only excuse for the continuance of the idea-expression
test as a judicial standard for determining protectibility would be that it was or
could be a truly useful method of determining the proper balance between
the creator’s right to profit from his work and the public's right that the
"progress of the arts not be retarded."
. . . [A]s used in the present-day context[,] the dichotomy has little or no
relationship to the policy which it should effectuate. Indeed, all too often the
sweeping language of the courts regarding the non-protectibility of ideas
gives the impression that this is of itself a policy of the law, instead of merely
a clumsy and outdated tool to achieve a much more basic end. 100
The idea/expression dichotomy is a complex matter if one is trying to
determine whether a certain material is a copy of another. 101 This dichotomy
would be more relevant in determining, for instance, whether a stage play
was an infringement of an author’s book involving the same characters and
setting. In this case, however, respondents admitted that the material under
review — which is the subject of the controversy — is an exact copy of the
original. Respondents did not subject ABS-CBN’s footage to any editing of
their own. The news footage did not undergo any transformation where there
is a need to track elements of the original.
Having established the protectible nature of news footage, we now discuss
the concomitant rights accorded to authors. The authors of a work are
granted several rights in relation to it, including copyright or economic rights:
SECTION 177. Copyright or Economic Rights. — Subject to the provisions of
Chapter VIII, copyright or economic rights shall consist of the exclusive right
to carry out, authorize or prevent the following acts:
177.1. Reproduction of the work or substantial portion of the work;
177.2. Dramatization, translation, adaptation, abridgment, arrangement or
other transformation of the work;
177.3. The first public distribution of the original and each copy of the work by
sale or other forms of transfer of ownership;
177.4. Rental of the original or a copy of an audiovisual or cinematographic
work, a work embodied in a sound recording, a computer program, a
compilation of data and other materials or a musical work in graphic form,
irrespective of the ownership of the original or the copy which is the subject
of the rental; (n)
177.5. Public display of the original or a copy of the work;
IPL- Assignment No. 10 (Entire Copyright Cases)
177.6. Public performance of the work; and
177.7. Other communication to the public of the work.(Sec. 5, P. D. No. 49a)
(Emphasis supplied)
Under Section 211 of the Intellectual Property Code, broadcasting
organizations are granted a more specific set of rights called related or
neighboring rights:
SECTION 211. Scope of Right. — Subject to the provisions of Section 212,
broadcasting organizations shall enjoy the exclusive right to carry out,
authorize or prevent any of the following acts:
211.1. The rebroadcasting of their broadcasts;
211.2. The recording in any manner, including the making of films or the use
of video tape, of their broadcasts for the purpose of communication to the
public of television broadcasts of the same; and
211.3. The use of such records for fresh transmissions or for fresh recording.
(Sec. 52, P.D. No. 49) (Emphasis supplied)
Section 212 of the Code provides:
CHAPTER XV LIMITATIONS ON PROTECTION
Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not
apply where the acts referred to in those Sections are related to:
212.1. The use by a natural person exclusively for his own personal
purposes;
212.2. Using short excerpts for reporting current events;
212.3. Use solely for the purpose of teaching or for scientific research; and
212.4. Fair use of the broadcast subject to the conditions under Section 185.
(Sec. 44, P.D. No. 49a)
The Code defines what broadcasting is and who broadcasting organizations
include:
202.7. "Broadcasting" means the transmission by wireless means for the
public reception of sounds or of images or of representations thereof; such
transmission by satellite is also "broadcasting" where the means for
Page 48 of 101
decrypting are provided to the public by the broadcasting organization or with
its consent;
202.8. "Broadcasting organization" shall include a natural person or a
juridical entity duly authorized to engage in broadcasting[.]
Developments in technology, including the process of preserving once
ephemeral works and disseminating them, resulted in the need to provide a
new kind of protection as distinguished from copyright. 102 The designation
"neighboring rights" was abbreviated from the phrase "rights neighboring to
copyright."103 Neighboring or related rights are of equal importance with
copyright as established in the different conventions covering both kinds of
rights.104
Several treaties deal with neighboring or related rights of copyright. 105 The
most prominent of these is the "International Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting Organizations"
(Rome Convention).106
The Rome Convention protects the rights of broadcasting organizations in
relation to their broadcasts. Article XIII of the Rome Convention enumerates
the minimum rights accorded to broadcasting organizations:
Article 13
Minimum Rights for Broadcasting Organizations
Broadcasting organisations shall enjoy the right to authorize or prohibit:
(a) the rebroadcasting of their broadcasts;
(b) the fixation of their broadcasts;
(c) the reproduction:
(i) of fixations, made without their consent, of their broadcasts;
(ii) of fixations, made in accordance with the provisions of Article 15, of their
broadcasts, if the reproduction is made for purposes different from those
referred to in those provisions;
(d) the communication to the public of their television broadcasts if such
communication is made in places accessible to the public against payment of
an entrance fee; it shall be a matter for the domestic law of the State where
protection of this right is claimed to determine the conditions under which it
may be exercised.
IPL- Assignment No. 10 (Entire Copyright Cases)
With regard to the neighboring rights of a broadcasting organization in this
jurisdiction, this court has discussed the difference between broadcasting
and rebroadcasting:
Section 202.7 of the IP Code defines broadcasting as "the transmission by
wireless means for the public reception of sounds or of images or of
representations thereof; such transmission by satellite is also ‘broadcasting’
where the means for decrypting are provided to the public by the
broadcasting organization or with its consent."
On the other hand, rebroadcasting as defined in Article 3(g) of the
International Convention for the Protection of Performers, Producers of
Phonograms and Broadcasting Organizations, otherwise known as the 1961
Rome Convention, of which the Republic of the Philippines is a signatory, is
"the simultaneous broadcasting by one broadcasting organization of the
broadcast of another broadcasting organization."
Under the Rome Convention, rebroadcasting is "the simultaneous
broadcasting by one broadcasting organization of the broadcast of another
broadcasting organization." The Working Paper prepared by the Secretariat
of the Standing Committee on Copyright and Related Rights defines
broadcasting organizations as "entities that take the financial and editorial
responsibility for the selection and arrangement of, and investment in, the
transmitted content."107 (Emphasis in the original, citations omitted)
Broadcasting organizations are entitled to several rights and to the protection
of these rights under the Intellectual Property Code. Respondents’ argument
that the subject news footage is not copyrightable is erroneous. The Court of
Appeals, in its assailed Decision, correctly recognized the existence of ABS-
CBN’s copyright over the news footage:
Surely, private respondent has a copyright of its news coverage. Seemingly,
for airing said video feed, petitioner GMA is liable under the provisions of the
Intellectual Property Code, which was enacted purposely to protect copyright
owners from infringement.108
News as expressed in a video footage is entitled to copyright protection.
Broadcasting organizations have not only copyright on but also neighboring
rights over their broadcasts. Copyrightability of a work is different from fair
use of a work for purposes of news reporting.
VI
ABS-CBN assails the Court of Appeals’ ruling that the footage shown by
GMA-7 falls under the scope of Section 212.2 and 212.4 of the Intellectual
Property Code:
Page 49 of 101
The evidence on record, as well as the discussions above, show that the
footage used by[respondents] could hardlybe characterized as a short
excerpt, as it was aired over one and a half minutes.
Furthermore, the footage used does not fall under the contemplation of
Section 212.2 of the Intellectual Property Code. A plain reading of the
provision would reveal that copyrighted material referred to in Section 212
are short portions of an artist’s performance under Section 203, or a
producer’s sound recordings under Sections 208 and 209. Section 212 does
not refer to actual use of video footage of another as its own.
The Angelo dela Cruz footage does not fall under the rule on Section 212.4
of the Intellectual Property Code on fair use of the broadcast.
In determining fair use, several factors are considered, including the nature of
the copyrighted work, and the amount and substantiality of the person used
in relation to the copyrighted work as a whole.
In the business of television news reporting, the nature of the copyrighted
work or the video footages, are such that, footage created, must be a novelty
to be a good report. Thus, when the . . . Angelo dela Cruz footage was used
by [respondents], the novelty of the footage was clearly affected.
Moreover, given that a substantial portion of the Angelo dela Cruz footage
was utilized by GMA-7 for its own, its use can hardly be classified as fair use.
Hence, [respondents] could not be considered as having used the Angelo
dela Cruz [footage] following the provisions on fair use.
It is also worthy to note that the Honorable Court of Appeals seem to
contradict itself when it relied on the provisions of fair use in its assailed
rulings considering that it found that the Angelo dela Cruz footage is not
copyrightable, given that the fair use presupposes an existing copyright.
Thus, it is apparent that the findings of the Honorable Court of Appeals are
erroneous and based on wrong assumptions.109 (Underscoring in the original)
On the other hand, respondents counter that GMA-7’s use of ABS-CBN’s
news footage falls under fair use as defined in the Intellectual Property Code.
Respondents, citing the Court of Appeals Decision, argue that a strong
statutory defense negates any finding of probable cause under the same
statute.110 The Intellectual Property Code provides that fair use negates
infringement.
Respondents point out that upon seeing ABS-CBN’s reporter Dindo Amparo
on the footage, GMA-7 immediately shut off the broadcast. Only five (5)
seconds passed before the footage was cut. They argue that this shows that
IPL- Assignment No. 10 (Entire Copyright Cases)
GMA-7 had no prior knowledge of ABS-CBN’s ownership of the footage or
was notified of it. They claim that the Angelo dela Cruz footage is considered
a short excerpt of an event’s "news" footage and is covered by fair use. 111
Copyright protection is not absolute. 112 The Intellectual Property Code
provides the limitations on copyright:
CHAPTER VIII LIMITATIONS ON COPYRIGHT
Section 184. Limitations on Copyright. - 184.1. Notwithstanding the
provisions of Chapter V, the following acts shall not constitute infringement of
copyright:
184.2. The provisions of this section shall be interpreted in such a way as to
allow the work to be used in a manner which does not conflict with the normal
exploitation of the work and does not unreasonably prejudice the right
holder's legitimate interests.
CHAPTER XV LIMITATIONS ON PROTECTION
Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not
apply where the acts referred to in those Sections are related to:
212.2. Using short excerpts for reporting current events;
212.4. Fair use of the broadcast subject to the conditions under Section 185.
(Sec. 44, P.D. No. 49a) (Emphasis supplied)
The determination of what constitutes fair use depends on several factors.
Section 185 of the Intellectual Property Code states:
SECTION 185. Fair Use of a Copyrighted Work. —
185.1. The fair use of a copyrighted work for criticism, comment, news
reporting, teaching including multiple copies for classroom use, scholarship,
research, and similar purposes is not an infringement of copyright. . . . In
determining whether the use made of a work in any particular case is fair
use, the factors to be considered shall include:
a. The purpose and character of the use, including whether such use is of a
commercial nature or is for non-profit educational purposes;
b. The nature of the copyrighted work;
c. The amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
Page 50 of 101
d. The effect of the use upon the potential market for or value of the
copyrighted work. Respondents allege that the news footage was only five
(5) seconds long, thus falling under fair use. ABS-CBN belies this contention
and argues that the footage aired for two (2) minutes and 40
seconds.113 According to the Court of Appeals, the parties admitted that only
five (5) seconds of the news footage was broadcasted by GMA-7. 114
This court defined fair use as "aprivilege to use the copyrighted material in a
reasonable manner without the consent of the copyright owner or as copying
the theme or ideas rather than their expression." 115 Fair use is an exception
to the copyright owner’s monopoly of the use of the work to avoid stifling "the
very creativity which that law is designed to foster." 116
Determining fair use requires application of the four-factor test. Section 185
of the Intellectual Property Code lists four (4) factors to determine if there
was fair use of a copyrighted work:
a. The purpose and character of the use, including whether such use is of a
commercial nature or is for non-profit educational purposes;
b. The nature of the copyrighted work;
c. The amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
d. The effect of the use upon the potential market for or value of the
copyrighted work.
First, the purpose and character of the use of the copyrighted material must
fall under those listed in Section 185, thus: "criticism, comment, news
reporting, teaching including multiple copies for classroom use, scholarship,
research, and similar purposes."117 The purpose and character requirement is
important in view of copyright’s goal to promote creativity and encourage
creation of works. Hence, commercial use of the copyrighted work can be
weighed against fair use.
The "transformative test" is generally used in reviewing the purpose and
character of the usage of the copyrighted work. 118 This court must look into
whether the copy of the work adds "new expression, meaning or message" to
transform it into something else. 119 "Meta-use" can also occur without
necessarily transforming the copyrighted work used.120
Second, the nature of the copyrighted work is significant in deciding whether
its use was fair. If the nature of the work is more factual than creative, then
fair use will be weighed in favor of the user.
IPL- Assignment No. 10 (Entire Copyright Cases)
Third, the amount and substantiality of the portion used is important to
determine whether usage falls under fair use. An exact reproduction of a
copyrighted work, compared to a small portion of it, can result in the
conclusion that its use is not fair. There may also be cases where, though the
entirety of the copyrighted work is used without consent, its purpose
determines that the usage is still fair.121 For example, a parody using a
substantial amount of copyrighted work may be permissible as fair use as
opposed to a copy of a work produced purely for economic gain. Lastly, the
effect of the use on the copyrighted work’s market is also weighed for or
against the user. If this court finds that the use had or will have a negative
impact on the copyrighted work’s market, then the use is deemed unfair.
The structure and nature of broadcasting as a business requires assigned
values for each second of broadcast or airtime. In most cases, broadcasting
organizations generate revenue through sale of time or timeslots to
advertisers, which, in turn, is based on market share: 122 Once a news
broadcast has been transmitted, the broadcast becomes relatively worthless
to the station. In the case of the aerial broadcasters, advertising sales
generate most of the profits derived from news reports. Advertising rates are,
in turn, governed by market share. Market share is determined by the
number of people watching a show at any particular time, relative to total
viewers at that time. News is by nature time-limited, and so re-broadcasts are
generally of little worth because they draw few viewers. Newscasts compete
for market share by presenting their news in an appealing format that will
capture a loyal audience. Hence, the primary reason for copyrighting
newscasts by broadcasters would seem to be to prevent competing stations
from rebroadcasting current news from the station with the best coverage of
a particular news item, thus misappropriating a portion of the market share.
Of course, in the real world there are exceptions to this perfect economic
view. However, there are also many caveats with these exceptions. A
common exception is that some stations rebroadcast the news of others. The
caveat is that generally, the two stations are not competing for market share.
CNN, for example, often makes news stories available to local broadcasters.
First, the local broadcaster is often not affiliated with a network (hence its
need for more comprehensive programming), confining any possible
competition to a small geographical area. Second, the local broadcaster is
not in competition with CNN. Individuals who do not have cable TV (or a
satellite dish with decoder) cannot receive CNN; therefore there is no
competition. . . . Third, CNN sells the right of rebroadcast to the local
stations. Ted Turner, owner of CNN, does not have First Amendment
freedom of access argument foremost on his mind. (Else he would give
everyone free cable TV so everyone could get CNN.) He is in the business
for a profit. Giving away resources does not a profit make. 123 (Emphasis
supplied)
Page 51 of 101
The high value afforded to limited time periods is also seen in other media. In
social media site Instagram, users are allowed to post up to only 15 seconds
of video.124 In short-video sharing website Vine, 125 users are allowed a shorter
period of six (6) seconds per post. The mobile application 1 Second
Everyday takes it further by capturing and stitching one (1) second of video
footage taken daily over a span of a certain period. 126
Whether the alleged five-second footage may be considered fair use is a
matter of defense. We emphasize that the case involves determination of
probable cause at the preliminary investigation stage. Raising the defense of
fair use does not automatically mean that no infringement was committed.
The investigating prosecutor has full discretion to evaluate the facts,
allegations, and evidence during preliminary investigation. Defenses raised
during preliminary investigation are subject to further proof and evaluation
before the trial court. Given the insufficiency of available evidence,
determination of whether the Angelo dela Cruz footage is subject to fair use
is better left to the trial court where the proceedings are currently pending.
GMA-7’s rebroadcast of ABS-CBN’s news footage without the latter’s
consent is not an issue. The mere act of rebroadcasting without authority
from the owner of the broadcast gives rise to the probability that a crime was
committed under the Intellectual Property Code.
VII
Respondents cannot invoke the defense of good faith to argue that no
probable cause exists.
Respondents argue that copyright infringement is malum in se, in that
"[c]opying alone is not what is being prohibited, but its injurious effect which
consists in the lifting from the copyright owners’ film or materials, that were
the result of the latter’s creativity, work and productions and without authority,
reproduced, sold and circulated for commercial use to the detriment of the
latter."127
Infringement under the Intellectual Property Code is malum prohibitum. The
Intellectual Property Code is a special law. Copyright is a statutory creation:
Copyright, in the strict sense of the term, is purely a statutory right. It is a new
or independent right granted by the statute, and not simply a pre-existing
right regulated by the statute. Being a statutory grant, the rights are only such
as the statute confers, and may be obtained and enjoyed only with respect to
the subjects and by the persons, and on terms and conditions specified in the
statute.128
IPL- Assignment No. 10 (Entire Copyright Cases)
The general rule is that acts punished under a special law are malum
prohibitum.129 "An act which is declared malum prohibitum, malice or criminal
intent is completely immaterial."130
In contrast, crimes mala in seconcern inherently immoral acts:
Not every criminal act, however, involves moral turpitude. It is for this reason
that "as to what crime involves moral turpitude, is for the Supreme Court to
determine". In resolving the foregoing question, the Court is guided by one of
the general rules that crimes mala in se involve moral turpitude, while crimes
mala prohibita do not, the rationale of which was set forth in "Zari v. Flores,"
to wit:
It (moral turpitude) implies something immoral in itself, regardless of the fact
that it is punishable by law or not. It must not be merely mala prohibita, but
the act itself must be inherently immoral. The doing of the act itself, and not
its prohibition by statute fixes the moral turpitude. Moral turpitude does not,
however, include such acts as are not of themselves immoral but whose
illegality lies in their being positively prohibited. (Emphasis supplied)
[These] guidelines nonetheless proved short of providing a clear cut solution,
for in International Rice Research Institute v. NLRC, the Court admitted that it
cannot always be ascertained whether moral turpitude does or does not exist
by merely classifying a crime as malum in se or as malum prohibitum. There
are crimes which are mala in se and yet but rarely involve moral turpitude
and there are crimes which involve moral turpitude and are mala prohibita
only. In the final analysis, whether or not a crime involves moral turpitude is
ultimately a question of fact and frequently depends on all the circumstances
surrounding the violation of the statue.131 (Emphasis in the original)
"Implicit in the concept of mala in se is that of mens rea." 132 Mens reais
defined as "the nonphysical element which, combined with the act of the
accused, makes up the crime charged. Most frequently it is the criminal
intent, or the guilty mind[.]"133
Crimes mala in sepre suppose that the person who did the felonious act had
criminal intent to do so, while crimes mala prohibita do not require knowledge
or criminal intent:
In the case of mala in se it is necessary, to constitute a punishable offense,
for the person doing the act to have knowledge of the nature of his act and to
have a criminal intent; in the case of mala prohibita, unless such words as
"knowingly" and "willfully" are contained in the statute, neither knowledge nor
criminal intent is necessary. In other words, a person morally quite innocent
and with every intention of being a law abiding citizen becomes a criminal,
and liable to criminal penaltes, if he does an act prohibited by these
Page 52 of 101
statutes.134 (Emphasis supplied) Hence, "[i]ntent to commit the crime and
intent to perpetrate the act must be distinguished. A person may not have
consciously intended to commit a crime; but he did intend to commit an act,
and that act is, by the very nature of things, the crime itself[.]" 135 When an act
is prohibited by a special law, it is considered injurious to public welfare, and
the performance of the prohibited act is the crime itself. 136
Volition, or intent to commit the act, is different from criminal intent. Volition or
voluntariness refers to knowledge of the act being done. On the other hand,
criminal intent — which is different from motive, or the moving power for the
commission of the crime137 — refers to the state of mind beyond
voluntariness. It is this intent that is being punished by crimes mala in se.
Unlike other jurisdictions that require intent for a criminal prosecution of
copyright infringement, the Philippines does not statutorily support good faith
as a defense. Other jurisdictions provide in their intellectual property codes or
relevant laws that mens rea, whether express or implied, is an element of
criminal copyright infringement.138
In Canada, criminal offenses are categorized under three (3) kinds: "the full
mens rea offence, meaning the accused’s actual or subjective state of mind
has to be proved; strict liability offences where no mens rea has to be proved
but the accused can avoid liability if he can prove he took all reasonable
steps to avoid the particular event; [and] absolute liability offences where
Parliament has made it clear that guilt follows proof of the prescribed act
only."139 Because of the use of the word "knowingly" in Canada’s Copyright
Act, it has been held that copyright infringement is a full mens rea offense. 140
In the United States, willful intent is required for criminal copyright
infringement.141 Before the passage of the No Electronic Theft Act, "civil
copyright infringements were violations of criminal copyright laws only if a
defendant willfully infringed a copyright ‘for purposes of commercial
advantage or private financial gain.’"142 However, the No Electronic Theft Act
now allows criminal copyright infringement without the requirement of
commercial gain. The infringing act may or may not be for profit. 143
There is a difference, however, between the required liability in civil copyright
infringement and that in criminal copyright infringement in the United States.
Civil copyright infringement does not require culpability and employs a strict
liability regime144 where "lack of intention to infringe is not a defense to an
action for infringement."145
In the Philippines, the Intellectual Property Code, as amended, provides for
the prosecution of criminal actions for the following violations of intellectual
property rights: Repetition of Infringement of Patent (Section 84); Utility
Model (Section 108); Industrial Design (Section 119); Trademark
IPL- Assignment No. 10 (Entire Copyright Cases)
Infringement (Section 155 in relation to Section 170); Unfair Competition
(Section 168 in relation to Section 170); False Designations of Origin, False
Description or Representation (Section 169.1 in relation to Section 170);
infringement of copyright, moral rights, performers’ rights, producers’ rights,
and broadcasting rights (Section 177, 193, 203, 208 and 211 in relation to
Section 217); and other violations of intellectual property rights as may be
defined by law.
The Intellectual Property Code requires strict liability for copyright
infringement whether for a civil action or a criminal prosecution; it does not
require mens rea or culpa:146
SECTION 216. Remedies for Infringement. —
216.1. Any person infringing a right protected under this law shall be liable:
a. To an injunction restraining such infringement. The court may also order
the defendant to desist from an infringement, among others, to prevent the
entry into the channels of commerce of imported goods that involve an
infringement, immediately after customs clearance of such goods.
b. Pay to the copyright proprietor or his assigns or heirs such actual
damages, including legal costs and other expenses, as he may have incurred
due to the infringement as well as the profits the infringer may have made
due to such infringement, and in proving profits the plaintiff shall be required
to prove sales only and the defendant shall be required to prove every
element of cost which he claims, or, in lieu of actual damages and profits,
such damages which to the court shall appear to be just and shall not be
regarded as penalty.
c. Deliver under oath, for impounding during the pendency of the action, upon
such terms and conditions as the court may prescribe, sales invoices and
other documents evidencing sales, all articles and their packaging alleged to
infringe a copyright and implements for making them.
d. Deliver under oath for destruction without any compensation all infringing
copies or devices, as well as all plates, molds, or other means for making
such infringing copies as the court may order.
e. Such other terms and conditions, including the payment of moral and
exemplary damages, which the court may deem proper, wise and equitable
and the destruction of infringing copies of the work even in the event of
acquittal in a criminal case.
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216.2. In an infringement action, the court shall also have the power to order
the seizure and impounding of any article which may serve as evidence in
the court proceedings. (Sec. 28, P.D. No. 49a)
SECTION 217. Criminal Penalties. — 217.1. Any person infringing any right
secured by provisions of Part IV of this Actor aiding or abetting such
infringement shall be guilty of a crime punishable by:
a. Imprisonment of one (1) year to three (3) years plus a fine ranging from
Fifty thousand pesos (₱50,000) to One hundred fifty thousand pesos
(₱150,000) for the first offense.
b. Imprisonment of three (3) years and one (1) day to six (6) years plus a fine
ranging from One hundred fifty thousand pesos (₱150,000) to Five hundred
thousand pesos (₱500,000) for the second offense.
c. Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine
ranging from Five hundred thousand pesos (₱500,000) to One million five
hundred thousand pesos (₱1,500,000) for the third and subsequent offenses.
d. In all cases, subsidiary imprisonment in cases of insolvency.
217.2. In determining the number of years of imprisonment and the amount
of fine, the court shall consider the value of the infringing materials that the
defendant has produced or manufactured and the damage that the copyright
owner has suffered by reason of the infringement.
217.3. Any person who at the time when copyright subsists in a work has in
his possession an article which he knows, or ought to know, to be an
infringing copy of the work for the purpose of: a. Selling, letting for hire, or by
way of trade offering or exposing for sale, or hire, the article;
b. Distributing the article for purpose of trade, or for any other purpose to an
extent that will prejudice the rights of the copyright owner in the work; or
c. Trade exhibit of the article in public, shall be guilty of an offense and shall
be liable on conviction to imprisonment and fine as above mentioned. (Sec.
29, P.D. No. 49a) (Emphasis supplied)
The law is clear. Inasmuch as there is wisdom in prioritizing the flow and
exchange of ideas as opposed to rewarding the creator, it is the plain reading
of the law in conjunction with the actions of the legislature to which we defer.
We have continuously "recognized the power of the legislature . . . to forbid
certain acts in a limited class of cases and to make their commission criminal
without regard to the intent of the doer. Such legislative enactments are
based on the experience that repressive measures which depend for their
IPL- Assignment No. 10 (Entire Copyright Cases)
efficiency upon proof of the dealer’s knowledge or of his intent are of little use
and rarely accomplish their purposes."147
Respondents argue that live broadcast of news requires a different treatment
in terms of good faith, intent, and knowledge to commit infringement. To
argue this point, they rely on the differences of the media used in Habana et
al. v. Robles, Columbia Pictures v. Court of Appeals, and this case:
Petitioner ABS-CBN argues that lack of notice that the Angelo dela Cruz was
under embargo is not a defense in copyright infringement and cites the case
of Columbia Pictures vs. Court of Appeals and Habana et al. vs. Robles(310
SCRA 511). However, these cases refer to film and literary work where
obviously there is "copying" from an existing material so that the copier knew
that he is copying from an existing material not owned by him. But, how could
respondents know that what they are "copying was not [theirs]" when they
were not copying but merely receiving live video feed from Reuters and CNN
which they aired? What they knew and what they aired was the Reuters live
video feed and the CNN feed which GMA-7 is authorized to carry in its news
broadcast, it being a subscriber of these companies[.]
It is apt to stress that the subject of the alleged copyright infringement is not a
film or literary work but live broadcast of news footage. In a film or literary
work, the infringer is confronted face to face with the material he is allegedly
copying and therefore knows, or is presumed to know, that what he is
copying is owned by another. Upon the other hand, in live broadcast, the
alleged infringer is not confronted with the fact that the material he airs or re-
broadcasts is owned by another, and therefore, he cannot be charged of
knowledge of ownership of the material by another. This specially obtains in
the Angelo dela Cruz news footage which GMA-7 received from Reuters and
CNN. Reuters and CNN were beaming live videos from the coverage which
GMA-7 received as a subscriber and, in the exercise of its rights as a
subscriber, GMA-7 picked up the live video and simultaneously re-broadcast
it. In simultaneously broadcasting the live video footage of Reuters, GMA-7
did not copy the video footage of petitioner ABS-CBN[.] 148 (Emphasis in the
original)
Respondents’ arguments must fail.
Respondents are involved and experienced in the broadcasting business.
They knew that there would be consequences in carrying ABS-CBN’s
footage in their broadcast. That is why GMA-7 allegedly cut the feed from
Reuters upon seeing ABS-CBN’s ogo and reporter. To admit a different
treatment for broadcasts would mean abandonment of a broadcasting
organization’s minimum rights, including copyright on the broadcast material
and the right against unauthorized rebroadcast of copyrighted material. The
nature of broadcast technology is precisely why related or neighboring rights
Page 54 of 101
were created and developed. Carving out an exception for live broadcasts
would go against our commitments under relevant international treaties and
agreements, which provide for the same minimum rights. 149
Contrary to respondents’ assertion, this court in Habana, 150 reiterating the
ruling in Columbia Pictures,151 ruled that lack of knowledge of infringement is
not a valid defense. Habana and Columbia Pictures may have different
factual scenarios from this case, but their rulings on copyright infringement
are analogous. In Habana, petitioners were the authors and copyright owners
of English textbooks and workbooks. The case was anchored on the
protection of literary and artistic creations such as books. In Columbia
Pictures, video tapes of copyrighted films were the subject of the copyright
infringement suit.
In Habana, knowledge of the infringement is presumed when the infringer
commits the prohibited act:
The essence of intellectual piracy should be essayed in conceptual terms in
order to underscore its gravity by an appropriate understanding thereof.
Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law, and
infringement of copyright, or piracy, which is a synonymous term in this
connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by
statute on the owner of the copyright.
A copy of a piracy is an infringement of the original, and it is no defense that
the pirate, in such cases, did not know whether or not he was infringing any
copyright; he at least knew that what he was copying was not his, and he
copied at his peril.
In cases of infringement, copying alone is not what is prohibited. The copying
must produce an "injurious effect". Here, the injury consists in that
respondent Robles lifted from petitioners’ book materials that were the result
of the latter’s research work and compilation and misrepresented them as her
own. She circulated the book DEP for commercial use and did not
acknowledge petitioners as her source.152 (Emphasis supplied)
Habana and Columbia Pictures did not require knowledge of the infringement
to constitute a violation of the copyright. One does not need to know that he
or she is copying a work without consent to violate copyright law. Notice of
fact of the embargo from Reuters or CNN is not material to find probable
cause that respondents committed infringement. Knowledge of infringement
is only material when the person is charged of aiding and abetting a copyright
infringement under Section 217 of the Intellectual Property Code. 153
IPL- Assignment No. 10 (Entire Copyright Cases)
We look at the purpose of copyright in relation to criminal prosecutions
requiring willfulness: Most importantly, in defining the contours of what it
means to willfully infringe copyright for purposes of criminal liability, the
courts should remember the ultimate aim of copyright. Copyright is not
primarily about providing the strongest possible protection for copyright
owners so that they have the highest possible incentive to create more
works. The control given to copyright owners is only a means to an end: the
promotion of knowledge and learning. Achieving that underlying goal of
copyright law also requires access to copyrighted works and it requires
permitting certain kinds of uses of copyrighted works without the permission
of the copyright owner. While a particular defendant may appear to be
deserving of criminal sanctions, the standard for determining willfulness
should be set with reference to the larger goals of copyright embodied in the
Constitution and the history of copyright in this country. 154
In addition, "[t]he essence of intellectual piracy should be essayed in
conceptual terms in order to underscore its gravity by an appropriate
understanding thereof. Infringement of a copyright is a trespass on a private
domain owned and occupied by the owner of the copyright, and, therefore,
protected by law, and infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the doing by any person,
without the consent of the owner of the copyright, of anything the sole right to
do which is conferred by statute on the owner of the copyright." 155
Intellectual property rights, such as copyright and the neighboring right
against rebroadcasting, establish an artificial and limited monopoly to reward
creativity. Without these legally enforceable rights, creators will have extreme
difficulty recovering their costs and capturing the surplus or profit of their
works as reflected in their markets. This, in turn, is based on the theory that
the possibility of gain due to creative work creates an incentive which may
improve efficiency or simply enhance consumer welfare or utility. More
creativity redounds to the public good.
These, however, depend on the certainty of enforcement. Creativity, by its
very nature, is vulnerable to the free rider problem. It is easily replicated
despite the costs to and efforts of the original creator. The more useful the
creation is in the market, the greater the propensity that it will be copied. The
most creative and inventive individuals are usually those who are unable to
recover on their creations.
Arguments against strict liability presuppose that the Philippines has a social,
historical, and economic climate similar to those of Western jurisdictions. As
it stands, there is a current need to strengthen intellectual property
protection.
Page 55 of 101
Thus, unless clearly provided in the law, offenses involving infringement of
copyright protections should be considered malum prohibitum. It is the act of
infringement, not the intent, which causes the damage. To require or assume
the need to prove intent defeats the purpose of intellectual property
protection.
Nevertheless, proof beyond reasonable doubt is still the standard for criminal
prosecutions under the Intellectual Property Code.
VIII
Respondents argue that GMA-7’s officers and employees cannot be held
liable for infringement under the Intellectual Property Code since it does not
expressly provide direct liability of the corporate officers. They explain that
"(i) a corporation may be charged and prosecuted for a crime where the
penalty is fine or both imprisonment and fine, and if found guilty, may be
fined; or (ii) a corporation may commit a crime but if the statute prescribes
the penalty therefore to be suffered by the corporate officers, directors or
employees or other persons, the latter shall be responsible for the offense." 156
Section 217 of the Intellectual Property Code states that "any person" may be
found guilty of infringement. It also imposes the penalty of both imprisonment
and fine:
Section 217. Criminal Penalties. - 217.1. Any person infringing any right
secured by provisions of Part IV of this Act or aiding or abetting such
infringement shall be guilty of a crime punishable by:
(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from
Fifty thousand pesos (₱50,000) to One hundred fifty thousand pesos
(₱150,000) for the first offense.
(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a
fine ranging from One hundred fifty thousand pesos (₱150,000) to Five
hundred thousand pesos (₱500,000) for the second offense.
(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine
ranging from five hundred thousand pesos (₱500,000) to One million five
hundred thousand pesos (₱1,500,000) for the third and subsequent offenses.
(d) In all cases, subsidiary imprisonment in cases of insolvency. (Emphasis
supplied) Corporations have separate and distinct personalities from their
officers or directors.157 This court has ruled that corporate officers and/or
agents may be held individually liable for a crime committed under the
Intellectual Property Code:158
IPL- Assignment No. 10 (Entire Copyright Cases)
Petitioners, being corporate officers and/or directors, through whose act,
default or omission the corporation commits a crime, may themselves be
individually held answerable for the crime. . . . The existence of the corporate
entity does not shield from prosecution the corporate agent who knowingly
and intentionally caused the corporation to commit a crime. Thus, petitioners
cannot hide behind the cloak of the separate corporate personality of the
corporation to escape criminal liability. A corporate officer cannot protect
himself behind a corporation where he is the actual, present and efficient
actor.159
However, the criminal liability of a corporation’s officers or employees stems
from their active participation in the commission of the wrongful act:
The principle applies whether or not the crime requires the consciousness of
wrongdoing. It applies to those corporate agents who themselves commit the
crime and to those, who, by virtue of their managerial positions or other
similar relation to the corporation, could be deemed responsible for its
commission, if by virtue of their relationship to the corporation, they had the
power to prevent the act. Moreover, all parties active in promoting a crime,
whether agents or not, are principals. Whether such officers or employees
are benefited by their delictual acts is not a touchstone of their criminal
liability. Benefit is not an operative fact. 160 (Emphasis supplied) An accused’s
participation in criminal acts involving violations of intellectual property rights
is the subject of allegation and proof. The showing that the accused did the
acts or contributed in a meaningful way in the commission of the
infringements is certainly different from the argument of lack of intent or good
faith. Active participation requires a showing of overt physical acts or
intention to commit such acts. Intent or good faith, on the other hand, are
inferences from acts proven to have been or not been committed.
We find that the Department of Justice committed grave abuse of discretion
when it resolved to file the Information against respondents despite lack of
proof of their actual participation in the alleged crime.
Ordering the inclusion of respondents Gozon, GMA-7 President; Duavit, Jr.,
Executive Vice-President; Flores, Vice-President for News and Public Affairs;
and Soho, Director for News, as respondents, Secretary Agra overturned the
City Prosecutor’s finding that only respondents Dela Peña-Reyes and
Manalastas are responsible for the crime charged due to their duties. 161 The
Agra Resolution reads:
Thus, from the very nature of the offense and the penalty involved, it is
necessary that GMA-7’s directors, officers, employees or other officers
thereof responsible for the offense shall be charged and penalized for
violation of the Sections 177 and 211 of Republic Act No. 8293. In their
complaint for libel, respondents Felipe L Gozon, Gilberto R. Duavit, Jr.,
Page 56 of 101
Marissa L. Flores, Jessica A.Soho, Grace Dela Pena-Reyes, John Oliver T.
Manalastas felt they were aggrieved because they were "in charge of the
management, operations and production of news and public affairs programs
of the network" (GMA-7). This is clearly an admission on respondents’ part.
Of course, respondents may argue they have no intention to infringe the
copyright of ABS-CBN; that they acted in good faith; and that they did not
directly cause the airing of the subject footage, but again this is preliminary
investigation and what is required is simply probable cause. Besides, these
contentions can best be addressed in the course of trial. 162 (Citation omitted)
In contrast, the Office of the City Prosecutor, in the Resolution dated
December 3, 2004, found that respondents Gozon, Duavit, Jr., Flores, and
Soho did not have active participation in the commission of the crime
charged:
This Office, however, does not subscribe to the view that respondents Atty.
Felipe Gozon, Gilberto Duavit, Marissa Flores and Jessica Soho should be
held liable for the said offense. Complainant failed to present clear and
convincing evidence that the said respondents conspired with Reyes and
Manalastas. No evidence was adduced to prove that these respondents had
an active participation in the actual commission of the copyright infringement
or they exercised their moral ascendancy over Reyes and Manalastas in
airing the said footage. It must be stressed that, conspiracy must be
established by positive and conclusive evidence. It must be shown to exist as
clearly and convincingly as the commission of the offense itself. 163 (Emphasis
supplied, citations omitted)
The City Prosecutor found respondents Dela Peña-Reyes and Manalastas
liable due to the nature of their work and responsibilities. He found that:
[t]his Office however finds respondents Grace Dela Peña-Reyes and John
Oliver T. Manalastas liable for copyright infringement penalized under
Republic Act No. 8293. It is undisputed that complainant ABSCBN holds the
exclusive ownership and copyright over the "Angelo [d]ela Cruz news
footage". Hence, any airing and re-broadcast of the said footage without any
consent and authority from ABS-CBN will be held as an infringement and
violation of the intellectual property rights of the latter. Respondents Grace
Dela Peña-Reyes as the Head of the News Operation and John Oliver T.
Manalastas as the Program Manager cannot escape liability since the news
control room was under their direct control and supervision. Clearly, they
must have been aware that the said footage coming from Reuters or CNN
has a "No Access Philippines" advisory or embargo thus cannot be re-
broadcast. We find no merit to the defense of ignorance interposed by the
respondents. It is simply contrary to human experience and logic that
experienced employees of an established broadcasting network would be
IPL- Assignment No. 10 (Entire Copyright Cases)
remiss in their duty in ascertaining if the said footage has an
embargo.164 (Emphasis supplied)
We agree with the findings as to respondents Dela Peña-Reyes and
Manalastas. Both respondents committed acts that promoted infringement of
ABS-CBN’s footage. We note that embargoes are common occurrences in
and between news agencies and/or broadcast organizations. 165 Under its
Operations Guide, Reuters has two (2) types of embargoes: transmission
embargo and publication embargo. 166 Under ABS-CBN’s service contract with
Reuters, Reuters will embargo any content contributed by ABS-CBN from
other broadcast subscribers within the same geographical location:
4a. Contributed Content
You agree to supply us at our request with news and sports news stories
broadcast on the Client Service of up to three (3) minutes each for use in our
Services on a non-exclusive basis and at a cost of US$300.00 (Three
Hundred United States Dollars) per story. In respect of such items we agree
to embargo them against use by other broadcast subscribers in the Territory
and confirm we will observe all other conditions of usage regarding
Contributed Content, as specified in Section 2.5 of the Reuters Business
Principles for Television Services. For the purposes of clarification, any
geographical restriction imposed by you on your use of Contributed Content
will not prevent us or our clients from including such Contributed Content in
online transmission services including the internet. We acknowledge
Contributed Content is your copyright and we will not acquire any intellectual
property rights in the Contributed Content.167 (Emphasis supplied)
Respondents Dela Peña-Reyes and Manalastas merely denied receiving the
advisory sent by Reuters to its clients, including GMA-7. As in the records,
the advisory reads:
ADVISORY - - +++LIVE COVER PLANS+++ PHILIPPINES: HOSTAGE
RETURN
**ATTENTION ALL CLIENTS**
PLEASE BE ADVISED OF THE FOLLOWING LIVE COVER
PLANNED FOR THURSDAY, JULY 22:
SOURCE: ABS-CBN
TV AND WEB RESTRICTIONS: NO ACCESS PHILIPPINES.168
There is probable cause that respondents Dela Peña-Reyes and Manalastas
directly committed copyright infringement of ABS-CBN’s news footage to
warrant piercing of the corporate veil. They are responsible in airing the
Page 57 of 101
embargoed Angelo dela Cruz footage. They could have prevented the act of
infringement had they been diligent in their functions as Head of News
Operations and Program Manager.
Secretary Agra, however, committed grave abuse of discretion when he
ordered the filing of the Information against all respondents despite the
erroneous piercing of the corporate veil. Respondents Gozon, Duavit, Jr.,
Flores, and Soho cannot be held liable for the criminal liability of the
corporation.
Mere membership in the Board or being President per se does not mean
knowledge, approval, and participation in the act alleged as criminal. There
must be a showing of active participation, not simply a constructive one.
Under principles of criminal law, the principals of a crime are those "who take
a direct part in the execution of the act; [t]hose who directly force or induce
others to commit it; [or] [t]hose who cooperate in the commission of the
offense by another act without which it would not have been
accomplished."169 There is conspiracy "when two or more persons come to
an agreement concerning the commission of a felony and decide to commit
it":170
held that good faith, as. well as lack of knowledge of infringement, is a
defense against criminal prosecution for copyright and neighboring rights
infringement. In its current form, the Intellectual Property Code is malum
prohibitum and prescribes a strict liability for copyright infringement. Good
faith, lack of knowledge of the copyright, or lack of intent to infringe is not a
defense against copyright infringement. Copyright, however, is subject to the
rules of fair. use and will be judged on a case-to-case basis. Finding probable
cause includes a determination of the defendant's active participation,
particularly when the corporate veil is pierced in cases involving a
corporation's criminal liability.
WHEREFORE, the Petition is partially GRANTED. The Department of Justice
Resolution dated June 29, 2010 ordering the filing of the Information is
hereby REINSTATED as to respondents Grace Dela Pena-Reyes and John
Oliver T. Manalastas. Branch 93 of the Regional Trial Court of Quezon City is
directed to continue with the proceedings in Criminal Case No. Q-04-131533.
SO ORDERED.

Conspiracy is not presumed. Like the physical acts constituting the crime
itself, the elements of conspiracy must be proven beyond reasonable
doubt.1âwphi1 While conspiracy need not be established by direct evidence,
for it may be inferred from the conduct of the accused before, during and
after the commission of the crime, all taken together, however, the evidence
must be strong enough to show the community of criminal design. For
conspiracy to exist, it is essential that there must be a conscious design to
commit an offense. Conspiracy is the product of intentionality on the part of
the cohorts.

It is necessary that a conspirator should have performed some overt act as a

direct or indirect contribution to the execution of the crime committed. The
overt act may consist of active participation in the actual commission of the
crime itself, or it may consist of moral assistance to his co-conspirators by
being present at the commission of the crime or by exerting moral
ascendancy over the other co-conspirators[.]171 (Emphasis supplied, citations
omitted)

In sum, the trial court erred in failing to resume the proceedings after the
designated period. The Court of Appeals erred when it held that Secretary
Agra committed errors of jurisdiction despite its own pronouncement that
ABS-CBN is the owner of the copyright on the news footage. News should be
differentiated from expression of the news, particularly when the issue
involves rebroadcast of news footage. The Court of Appeals also erroneously

IPL- Assignment No. 10 (Entire Copyright Cases) Page 58 of 101

[11] G.R. No. L-25265 May 9, 1978
PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs. SOCORRO C. RAMOS, defendant-appellee, PHOENIX PUBLISHING
HOUSE INC., intervenor.
Certiorari; Prohibition; Appeal; Criminal Procedure; Denial of motion to
quash an information may be a ground for certiorari and prohibition, as when
information is patently defective or the crime is shown to have already prescribed.—
As We had occasion to hold in Quizon vs. Baltazar, 76 SCRA 559: “As to the
contention of respondents that the denial of a motion to quash is not a ground for
certiorari and prohibition, suffice it to state that to allow an accused to undergo the
ordeals of trial and conviction when the information or complaint against him is
patently defective or the offense charged therein has been indisputably shown to
have already prescribed is unfair and unjust for which reason, procedurally, the
ordinary remedy of appeal cannot be plain and adequate.”
Mandamus; Criminal Procedure; To quash an information is not a ministerial
function, hence not a ground for mandamus.—As to mandamus, We are inclined to
agree with respondent’s allegation that “petitioner has no cause of action for
mandamus which is a writ quash an information is not a ministerial function.”
Prescription; Same; Criminal Law; Copyright Law; The Copyright Law
provides a two-year period of prescription for acts punishable thereunder, hence the
four-year period of prescription in Act No. 3326 is not applicable for Copyright Law
violations.—On the applicability of the four-year prescriptive period provided in Act
No. 3326. The same is not applicable, x x x Act No. 3326 applies only if the special
act does not provide for its own prescriptive period. It has no application here, where
the Copyright Law provides for its own prescriptive period.
Same; Same; Same; Same; For purposes of computing the prescriptive period
where there is a leap year involved February 28, 29 should be counted as separate
days not as one day.—Now on the main issue of prescription. The question to be
resolved is the proper computation of the two-year period of prescription from
September 3, 1963. Resolution of this issue hinges, in turn, on whether February 28
and 29 of a leap year, 1964, should be counted as one day, as proposed by the
prosecution; or as separate days, as alleged by the defense. This issue which was in
1965 still undetermined is now a settled matter. It was held in 1969 in Namarco vs.
Tuazon that February 28 and 29 of a leap year should be counted as separate days in
computing periods of prescription. Thus, this court, speaking thru former Chief
Justice Roberto Concepcion, held that where the prescriptive period was supposed to
commence on December 21, 1955, the filing of the action December 21, 1965, was
done after the ten-year period has lapsed—since 1960 and 1964 were both leap years
and the case was thus filed two (2) days too late. Since this case filed on September
3, 1965, it was filed one day too late; considering that the 730th day fell on
September 2, 1965—the year 1964 being a leap year.
IPL- Assignment No. 10 (Entire Copyright Cases)
Same; Same; Same; Same; When prescriptive period should commence for
alleged acts committed in violation of the Copyright Law; Prescriptive period is
interrupted by the filing of the complaint in court, not by the reporting of the alleged
criminal act to the fiscal.—Finally, there is no merit in the allegation that the
reckoning of the prescriptive period should start from September 4, 1963. This was
the date when the police authorites discovered several pirated books in accused’s
store. But the accused was charged, in both Criminal Cases Nos. 80006 and 80007,
with having allegedly sold and distributed spurious and pirated copies of the
textbook in question. not of illegal possession of the same. The prosecution’s claim
that the preliminary investigation proceedings in the Manila City Fiscal’s Office and
in the Prosecution Division of the Department of Justice Interrupted the running of
the prescriptive period, is also without merit. We held in People vs. Tayco that the
running of the period of prescription is interrupted not by the act of the offended
party in reporting the offense to the fiscal, but by the filing of the complaint or
information in court.
SANTOS, J.:
The above-entitled cases — the first an appeal and the second a special civil
action — are decided jointly because they raise a common — issue which
arose from the prosecution of a common defendant, Socorro C. Ramos, for
alleged violations of the copyright law—viz, whether or not the extra day in
the leap year, 1964 should be taken into consideration in the computation of
the two-year period of prescription provided in Section 24 of the copyright
law.
The factual and procedural antecedents follow.
On September 3, 1965, two criminal cases — No. 80006 of the Court of First
Instance of Manila, Branch III, and No. 80007 also of the same Court, Branch
XIV— identical in every respect, except for the fact that they pertain to
different editions of the same textbook, were filed against Socorro C. Ramos,
for alleged violations of Act 3134, otherwise known as the Copyright Law, as
amended. The information in Criminal Case No. 80007 alleged —
That on or about July to September, 1963, in the City of Manila and within the
jurisdiction of this Honorable Court, the said accused, as the proprietor aid
general manager of the National Book Store, as enterprise engaged in the
business of publishing, selling and distributing books, did then and there,
wilfully and illegaly sell and distribute spurious and pirated copies of the high
school textbook, entitled General Science Today for Philippine School, First
Year, by Gilam, Van Houten and Cornista, said accused knowing that said
book was duly copyrighted by the Phoenix Publishing House, Inc., and was
being distributed exclusively by its sister corporation, Alemar's or Sibal and
Sons, Inc.1
Page 59 of 101
On September 7, 1965, identical motions to quash 2 were filed by accused
Ramos on the ground of prescription, alleging therein, inter alia, that:
xxx xxx xxx
Consequently, the delivery of the alleged offense was made as early as July
17, 1963 and all subsequent knowledge or discoveries of posterior sales and
possession of said books by the respondents, including that involved in the
police search of September 4, 1963 were only confirmatory of the first. Under
91 of the Revised Penal Code and in the light of the afore-quoted ruling
announced in the Pangasinan Trans. Co. case, supra; the prescriptive
period, therefore, commenced to run on the day after such discovery on July
17, 1963 and, accordingly, the offense has long since prescribed since under
the Copyright Law, Act 3134:
Sec. 24. All actions, suits, or proceedings arising under this Act shall be
originally cognizable by the Court of First Instance of the Philippine Islands
and shall prescribe after two years from the time the cause of action arose.
Assuming arguendo, that the last actual sale should be the starting point of
computation, again the offense charged has prescribed, since, as already
pointed out, the documented evidence on this point shows that the last sale
was made on August 30, 1963.
The prosecution, also in both cases, filed its Opposition to the Motion to
Quash 3 raising two issues, to wit:
1. That the issue of prescription in this case can be resolved only after the
presentation of evidence and hence, it is premature to raise that issue before
trial
2. That, as the violation committed by the defendant was a continuing
offense, the two-year prescriptive period may be counted from September 3,
1963, or one day before the search in defendants' premises , which
confirmed her possession of spurious and pirated copies of the textbook in
question.
The prosecution's theory is that "(T)he crime being a continuing offense, the
statute of limitations begins to run from the completion of the last act or
series of acts which constitute the offense, " and this last act was committed
on September 3, 1963. Therefore when the information was filed on
September 3, 1965, it was filed within the two-year period, albeit the last day
of the prescriptive period.
Again, in both the accused filed a "Reply to Opposition to Motion to
Quash." 4 She alleged that even assuming that the crime is a continuing
offense, the prescriptive period should start from August 30, 1963, the date of
the last invoiced sale, and not September 3, 1963, as there was no
indubitable proof that she had sold copies of the questioned book on that
date. Nonetheless, accused contended that even if the prescriptive period
IPL- Assignment No. 10 (Entire Copyright Cases)
should start from September 3, 1963, as proposed by the prosecution, the
two-year period was tolled on September 2, 1965. She pointed out that two
years mean a period of 730 days in accordance with Article 13 of the New
Civil Code, and 1964, being a leap year consisting of 366 days, the 730th
day fell on September 2, 1965. Hence, "... . when the information was filed on
September 3, 1965, the offense, if any, had already prescribed. "
The prosecution filed a Rejoinder 5 in both cases alleging as follow:
l. That February 28, and 29, 1964, should be regarded as one day only, and
consequently, the two-year period commencing on September 3, 1963 would
end on September 3, 1965;
2. That under Act No. 3326, the prescriptive period was interrupted by the
filing of the proceedings in the fiscal's office;
3. That prescription would not lie in this case because the complainant never
waived the right to prosecute the defendant.
Accused Ramos, also in cases, filed an Urgent Motion to Strike the
Rejoinder, 6 on the ground that it was filed after the case had been submitted
for resolution. She prayed that "in the event that the same should at all be
considered and allowed, that the accused be notified thereof and granted
reasonable opportunity to file a surrejoinder...".
It appears that the Rejoinder was admitted by both trial courts, but a
Surrejoinder 7 was filed only in Criminal Case No. 80006. Here, the accused
traversed the prosecution's contentions in the Rejoinder, thus:
1. Under applicable and specific provisions of Philippine law, the two-year
period of prescription commencing on September 3, 1963 ended on
September 2, 1965 ...;
2. The filing (of) proceedings in the Office of the City Fiscal of Manila did not
interrupt the prescriptive period.
In Criminal Case No. 80007, Hon. Jesus De Veyra granted the motion to
quash by an order dated October 7, 1965. 8 Pertinent portion of his order
reads:
. . . . And now to the main issue - whether the crime has prescribed. In the
Opposition to the Motion to Quash, the Prosecution, in its insistence on the
theory of a continuing crime, admits that the two-year prescriptive period
should run from September 3, 1963. This case was filed on September 3,
1965 - one day too late. Article 13, CCP provides that year shall mean a
period of 365 days. This had been applied to criminal cases (People v. del
Page 60 of 101
Rosario, 51 O.G., 2686). 1964 was a leap year so that when this case was
filed,  it was filed one day too late.
The Motion to Quash is, therefore, granted and this case dismissed on the
ground that the crime has already prescribed. (Emphasis supplied.)
The prosecution appealed the above order to this Court on October 15,
1965. 9
Meanwhile, in Criminal Case No. 80006, the motion to quash was not
resolved until December 23, 1965. On this date, Hon. Placido Ramos denied
the motion to quash, and set the arraignment of the accused on January 12,
1966, thus —
Wherefore, finding the information to have been filed well within the statutory
period of two years from the date of the last offense committed by the
accused the Court denies the motion to quash.
The arraignment of the accused is hereby set on January 12, 1966 at 8:30
A.M.
The trial court refused to accept the prosecution's view that the prescriptive
period should run from September 3, held instead, that the same should
commence on September 4, 1963.
The evidence shows that on September 4, 1963, the Manila Police by virtue
of a search warrant procured by the offended party, seized, among other
articles, 69 copies of  General Science Today for Philippine Schools,  First
Year, by Gilman, Van Houten and Cornista and one copy of the same
textbook for Second Year (Exhibit 5). The evidence likewise shows that on
September 3, 1963, the National Book Store, run and managed by the
accused, sold one said textbook, Exhibit 'D' and Exhibit '2'. The mere
possession by the accused on September 4, 1963 of several copies of this
textbook which is the textbook alleged to be spurious and pirated, indicates
that said accused was distributing or selling said textbook on September 4,
1963 . . . This being the case, it follows of necessity that the period of
prescription commenced to run from September 4, 1963 and two years from
this date, by excluding the first and including the last, would expire on
September 4, 1965 and hence, the action, which was instituted on
September 3, 1965 is well within the prescriptive period.
Furthermore, the trial court ignored the accused's theory on leap year:
Even if the last sale of said textbook could be considered to have taken place
on September 3, 1963, Exhibits 'D' and '2', the Court is also of the opinion
that the two-year period would expire September 3, 1965.
IPL- Assignment No. 10 (Entire Copyright Cases)
The argument that inasmuch as 1964 is a leap year the two-year period must
contain 731 days, as contemplated by Article 13 of the Civil Code of the
Philippines, is, in the opinion of the Court, without merits for this particular
legal provision that a year is understood to be of 365 days each is applicable
only in determining the number of days a year must legally contain but not for
the purpose of ascertaining the period of prescription based on years. In the
computation of the period of prescription, a year should be construed as the
calendar year comprising the whole period from January 1 to December 31,
regardless of the number of days it contains. Consequently, in this particular
case, if it is considered that the last sale took place on September 3, 1963,
the two-year period, following the rule exclude the- first-and-include-the-last,
will expire on September 3, 1965.
The accused filed a Motion for Reconsideration. 10 Two more pleadings were
filed, 11 after which, the trial court finally denied said motion for
reconsideration for lack of merit, 12 and reset the arraignment of the accused
on February 24, 1966 at 8:30 A.M.
The accused thus filed with this Court this petition
for certiorari, mandamus and prohibition, 13 with the following prayer:
(a) Forthwith issue, upon filing by petitioner of a bond in such amount as this
Honorable Court may fix, a Writ of Preliminary Injunction restraining,
enjoining and prohibiting respondents from further proceedings in Criminal
Case No. 80006 of the Court of First instance of Manila, Branch III, daring the
pendency of this Action:
(b) After due hearing, to render judgment in favor of petitioner and against
respondents —
(1) Annulling and setting aside the Orders of the respondent Judge of
December 23, 1965 (Annex 'G') denying petitioner's motion to quash, and of
January 20, 1966 (Annex 'K') denying petitioner's motion for reconsideration;
(2) Ordering respondent Judge to dismiss Criminal Case No. 80006
aforesaid; and
(3) Making the writ of preliminary injunction hereafter La be issued
permanent and final.
This Court on February 11, 1966, issued a writ of preliminary injunction
restraining the trial Court from further proceedings in Criminal Case No.
80006. 14 Also on the same date, the two cases, G.R. No. L-25265 and G.R.
No. L-25644, were consolidated.
Page 61 of 101
1. In G.R. No. L-25265, the appeal, then Solicitor General Arturo Alafriz filed
a four-page brief dated December 21, 1965 15 wherein he recommended
affirmance of the order of 'Judge De Veyra quashing the information, and the
dismissal of the appeal, for the simple reason that "the order appealed from
is in accordance with law." Accused, now appellee Ramos, filed a brief dated
January 21, 1966 16 reiterating her previous allegations in the lower court.
The Phoenix Publishing House, Inc., the offended party, filed a motion to
intervene in this appeal, on the following grounds:
a) That the Solicitor General, instead of prosecuting the appeal,
recommended its dismissal
b) That, to protect its interest, it is necessary that the movant be allowed to
intervene and to submit memorandum to sustain its view that the criminal
action against the accused had not yet prescribed. 17
Over the opposition of the accused-appellee, this Court granted the
same. 18 Accordingly, the Phoenix Publishing House, Inc. filed its
Memorandum 19 wherein it alleged that the trial court erred
I. IN ACTING ON DEFENDANT'S MOTION TO QUASH WITHOUT
REQUIRING THE PRESENTATION OF EVIDENCE IN SUPPORT OF THE
PLEA OF PRESCRIPTION.
II. IN NOT APPLYING TO THIS CASE THE FOUR-YEAR PRESCRIPTIVE
PERIOD PROVIDED FOR IN ACT NO. 3326.
III. IN NOT HOLDING THAT THE PRELIMINARY INVESTIGATION
PROCEEDINGS IN THE MANILA CITY FISCAL'S OFFICE AND IN THE
DEPARTMENT OF JUSTICE INTERRUPTED PRESCRIPTION.
IV. IN NOT CONSIDERING FEBRUARY 28 AND 29, 1964, AS ONE DAY
FOR PURPOSES OF PRESCRIPTION.
20
Accused-appellee, Ramos, filed a Reply Memorandum   refuting intervenor's
assignment of errors. Subsequent pleadings 21 focused on whether February
28, and 29 of a leap year should be counted as one day or separate days in
computing the period of prescription.
2. In G.R. No. L-25644-the special civil action — the issues raised in the
foregoing assignment of errors were relied upon in respondent People's
Answer. 22 And, following respondent Judge Ramos' reasoning, it was
contended that the period of prescription should start from September 4,
1963, and not September 3, 1963, as originally proposed by the prosecution.
Furthermore, as an affirmative defense, it was alleged that the petitioner has
IPL- Assignment No. 10 (Entire Copyright Cases)
no cause of action for certiorari, prohibition and mandamus since Judge
Ramos did not commit any grave abuse of discretion in refusing to quash the
information. Respondent contended that the "(P)etitioner's remedy is to
appeal the judgment of conviction rendered after a trial on the merits. " This
allegation was opposed by petitioner Ramos; 23 she insisted that she had a
cause of action for certiorari prohibition and mandamus. Respondent People
filed a Reply Memorandum 24 disputing petitioner's allegations.
We are, thus, faced with conflicting orders of two different Branches of the
Court of First Instance of Manila-one holding that the crime has prescribed,
the other that it has not.
1. Now to resolve the preliminary issues:
a. On the propriety of the special civil action for certiorari and prohibition.
We find for petitioner. As We had occasion to hold in Quizon vs. Baltazar, 76
SCRA 559:
As to the contention of respondents that the denial of a motion to quash is
not a ground for certiorari and prohibition, suffice it to state that to allow an
accused to undergo the ordeals of trial and conviction when the information
or complaint against him is patently defective or the offense charged therein
has been indisputably shown to have already prescribed is unfair and unjust
for which reason, procedurally, the ordinary remedy of appeal cannot be plain
and adequate.
As to mandamus, We are incline to agree with respondent's allegation that
"petitioner has no cause of action for mandamus which is a writ intended to
control the exercise of a purely ministerial function. To quash an information
is not a ministerial function," 25 However, mandamus as a remedy is a
superfluity here, considering that petitioner can obtain full relief thru certiorari
and prohibition.
b. On the applicability of the four-year prescriptive period provided in Act No.
3326. 26
The same is not applicable. Said Act provides:
Section 1. Violations penalized by special acts shall unless otherwise
provided in such acts, prescribe in accordance with the following rules:
(a)........... (b) after four years for those punished by imprisonment for more
than one month, but less than two years; ... (Emphasis supplied.)
Page 62 of 101
Act No. 3326 applies only if the special act does not provide for its own
prescriptive period. It has no application here, where the Copyright Law
provides for its own prescriptive period, viz:
Section 24. All actions, suits, or proceedings arising under this Act shall be
originally cognizable by the Courts of First Instance of the Philippines and
shall prescribe after two years from the time the cause of action arose.
2. Now on the main issue of prescription. The question to be resolved is the
proper computation of the two-year period of prescription from September 3,
1963. Resolution of this issue hinges, in turn, on whether February 28, and
29 of a leap year, 1964, should be counted as one day, as proposed by the
prosecution; or as separate days, as alleged by the defense.
This issue which was in 1965 still undetermined is now a settled matter. It
was held in 1969 in Namarco vs. Tuazon  27 that February 28 and 29 of a leap
year should be counted as separate days in computing periods of
prescription. Thus, this Court, speaking thru former Chief Justice Roberto
Concepcion, held that where the prescriptive period was supposed to
commence on December 21, 1955, the filing of the action on December 21,
1965, was done after the ten-year period has lapsed — since 1960 and 1964
were both leap years and the case was thus filed two (2) days too late. Since
this case was filed on September 3, 1965, it was filed one day too late;
considering that the 730th day fell on September 2, 1965 — the year 1964
being a leap year.
In explaining the rationale for its holding, the Court took pains to trace the
antecedent decisional and statutory bases for its conclusion, thus —
Prior to the approval of the Civil Code of Spain, the Supreme Court thereof
held, on March 30, 1887, that, when the law spoke of months, it meant a
'natural' month or 'solar' month, in the absence of express provision to the
contrary. Such provision was incorporated into the Civil Code of Spain,
subsequently promulgated. Hence, the same Supreme Court declared that,
pursuant to Article 7 of said Code, 'whenever months are referred to in the
law. it shall be understood that months are of 30 days,' not the 'natural',
'solar' or 'calendar' months, unless they are 'designated by name,' in which
case, 'they shall be computed by the actual number of days they have.' This
concept was, later, modified in the Philippines, by Section 13 of the Revised
Administrative Code, pursuant to which 'month shall be understood to refer to
a calendar month.' With the approval of the Civil Code of the Philippines (RA
386) we have reverted to the provisions of the Spanish Civil Code in
accordance with which a month is to be considered as the regular 30-month
and not the solar or civil month with the particularity that, whereas the
Spanish Civil Code merely mentioned 'months, days or nights,' ours has
IPL- Assignment No. 10 (Entire Copyright Cases)
added thereto the term 'years' and explicitly ordains in Article 13 that it shall
be understood that years are of three hundred sixty-five days. 28
With respect to the opinion of some members of the Court that Article 13 of
the Civil Code is unrealistic, the Court adverted to the proper remedy thus —
Although some justices of the Supreme Court are inclined to think that Article
13 of the Civil Code defining 'years' to mean 365 days is not realistic, the
remedy is not judicial legislation. If public interest demands a reversion to the
policy embodied in the Revised Administrative Code, this may be done
through legislative process, not by judicial decree. 29
Finally, there is no merit in the allegation that the reckoning of the
prescriptive period should start from September 4, 1963. This was the date
when the police authorities discovered several pirated books in accused's
store. But the accused was charged, in both Criminal Cases Nos. 80006 and
80007, with having allegedly sold  and distributed  spurious and pirated copies
of the textbook in question, not of illegal possession of the same. The
prosecution's claim that the preliminary investigation proceedings in the
Manila City Fiscal's Office and in the prosecution Division of the Department
of Justice interrupted the running of the prescriptive period, is also without
merit. We held in People vs. Tayco  30 that the running of the period of
prescription is interrupted not by the act of the offended party in reporting the
offense to the final but the filing of the complaint or information in court.
WHEREFORE, the order dated October 7, 1965 of the Court of First Instance
of Manila Branch XIV in Criminal Case No. 80007 dismissing the case on the
ground of prescription, is AFFIRMED. The order dated December 23, 1965 of
the same court, Branch III, in Criminal Case No. 80006, is REVERSED and
SET ASIDE, and the case is DISMISSED, on the ground that the crime
charged therein had already prescribed. Without pronouncement as to costs.
SO ORDERED.
Page 63 of 101
[12] G.R. No. L-11937            April 1, 1918
PEDRO SERRANO LAKTAW, plaintiff-appellant,
vs. MAMERTO PAGLINAWAN, defendant-appellee.
1.INTELLECTUAL PROPERTY; DlCTIONARIES; REPRODUCTION OF.—
Where one in publishing a Spanish-Tagalog dictionary has but copied the
equivalents, definitions and different meanings given in another's Spanish-Tagalog
dictionary, although making some additions of his own and some unimportant
changes in the examples to illustrate the meanings of the words, such as substituting
"Tayabas" for "Bulacan" in the expression "Voy a Bulacan" (I am going to Bulacan),
it is evident that he merely reproduced the dictionary of the other author in violation
of the Law of January 10, 1879, on Intellectual Property.
2.ID,; ID,; PROPERTY OF AUTHOR.—Dictionaries are not common property, but
property of the author, whose right thereto is recognized by article 7, in connection
with article 2, of the Law of January 10, 1879, and nobody can reproduce them
without the permission of the author.
3.ID.; LAW OF JANUARY 10, 1879; OPERATION OF.—The Law of January 10,
1879, on Intellectual Property, was extended to the Philippine Islands by royal decree
of May 5, 1887, and published in the "Gaceta de Manila," with the approval of the
Governor-General, on June 15, 1887, and took effect in these Islands six months
after its promulgation or publication. And even .supposing that it ceased to operate in
these Islands upon the change of sovereignty, yet the author of a dictionary published
in 1889, who had complied with its requirements, has a vested right to his work,
which is recognized and protected by the Treaty of Paris of December 10, 1898, and
must be respected.
4. ID.; ID.; REPRODUCTION OF ANOTHER'S WORK; DAMAGES.—The author
of a dictionary published in 1889 having an exclusive right thereto, vested under the
Law of January 10, 1879, and protected by the Treaty of Paris of December 10,
1898, every violator of said right will be held responsible for the damages the said
author may have sustained.
ARAULLO, J.:
In the complaint presented in the Court of First Instance of the City of Manila
on February 20, 1915, it was alleged: (1) That the plaintiff was, according to
the laws regulating literary properties, the registered owner and author of a
literary work entitled Diccionario Hispano-Tagalog (Spanish-Tagalog
Dictionary) published in the City of Manila in 1889 by the printing
establishment La Opinion, and a copy of which was attached to the
complaint, as Exhibit A; (2) that the defendant, without the consent of the
IPL- Assignment No. 10 (Entire Copyright Cases)
plaintiff, reproduced said literary work, improperly copied the greater part
thereof in the work published by him and entitled Diccionariong Kastila-
Tagalog (Spanish-Tagalog Dictionary), a copy of which was also attached to
the complaint as Exhibit B; (3) that said act of the defendant, which is a
violation of article 7 of the Law of January 10, 1879, on Intellectual Property,
caused irreparable injuries to the plaintiff, who was surprised when, on
publishing his new work entitled Diccionario Tagalog-Hispano (Tagalog-
Spanish Dictionary) he learned of the fact, and (4) that the damages
occasioned to the plaintiff by the publication of defendant's work amounted to
$10,000. The plaintiff therefore prayed the court to order the defendant to
withdraw from sale all stock of the work herein identified as Exhibit B and to
pay the plaintiff the sum of $10,000, with costs.
The defendant in his answer denied generally each and every allegation of
the complaint and prayed the court to absolve him from the complaint. After
trial and the introduction of evidence by both parties, the court on August 20,
1915, rendered judgment, absolving the defendant from the complaint, but
without making any special pronouncement as to costs. The plaintiff moved
for a new trial on the ground that the judgment was against the law and the
weight of the evidence. Said motion having been overruled, plaintiff excepted
to the order overruling it, and appealed the case to the Supreme Court upon
a bill of exceptions.
The ground of the decision appealed from is that a comparison of the
plaintiff's dictionary with that of the defendant does not show that the latter is
an improper copy of the former, which has been published and offered for
sale by the plaintiff for about twenty-five years or more. For this reason the
court held that the plaintiff had no right of action and that the remedy sought
by him could not be granted.
The appellant contends that court below erred in not declaring that the
defendant had reproduced the plaintiff's work and that the defendant had
violated article 7 of the Law of January 10, 1879, on Intellectual Property.
Said article provides:
Nobody may reproduce another person's work without the owner's consent,
even merely to annotate or add anything to it, or improve any edition thereof.
Page 64 of 101
Therefore, in order that said article may be violated, it is not necessary, as
the court below seems to have understood, that a work should be an "CH" 76 10
improper copy of another work previously published. It is enough that
another's work has been reproduced without the consent of the owner, even
though it be only to annotate, add something to it, or improve any edition "D" 874 231
thereof.
"E" 880 301
Upon making a careful and minute comparison of Exhibit A, the dictionary
written and published by the plaintiff, and Exhibit B, written and published by
the defendant, and, taking into account the memorandum (fols. 55 to 59) "F" 383 152
presented by the defendant, in which he enumerates the words and terms
which, according to him, are in his dictionary but not in that of that of the
plaintiff, and viceversa, and the equivalents or definitions given by the "G" 302 111
plaintiff, as well as the new Tagalog words which are in the dictionary of the
defendant but not in that of the plaintiff; and considering the notes, Exhibit C, "H" 57 64
first series, presented by the plaintiff, in which the terms copied by the
defendant from the plaintiff's dictionary are enumerated in detail and in
relation to each letter of the alphabet and which the plaintiff's own words and "I" 814 328
terms are set forth, with a summary, at the foot of each group of letters,
which shows the number of initial Spanish words contained in the
"J" 113 25
defendant's dictionary, the words that are his own and the fact that the
remaining ones are truly copied from the plaintiff's dictionary — considering
all of these facts, we come to a conclusion completely different and contrary "K" 11 11
to that of the trial court, for said evidence clearly shows:

1. That, of the Spanish words in the defendant's dictionary, Exhibit B, which "L" 502 94
correspond to each letter of the alphabet, those that are enumerated below
have been copied and reproduced from the plaintiff's dictionary, with the "LL" 36 2
exception of those that are stated to be defendant's own.

"M" 994 225

Letter Words Defendant's own

"N" 259 53
"A" 1,184 231

"Ñ" 6 2
"B" 364 28

"O" 317 67
"C" 660 261

IPL- Assignment No. 10 (Entire Copyright Cases) Page 65 of 101

 Tagalog, given in plaintiff's dictionary, having reproduced, as to some words,
"P" 803 358 everything that appears in the plaintiff's dictionary for similar Spanish words,
although as to some he made some additions of his own. Said copies and
reproductions are numerous as may be seen, by comparing both dictionaries
"Q" 84 11 and using as a guide or index the defendant's memorandum and notes, first
series, Exhibit C, in which, as to each word, the similarities and differences
between them are set forth in detail.
"R" 847 140
3. That the printer's errors in the plaintiff's dictionary as to the expression of
"S" 746 118 some words in Spanish as well as their equivalents in Tagalog are also
reproduced, a fact which shows that the defendant, in preparing his
dictionary, literally copied those Spanish words and their meanings and
"T" 591 147 equivalents in Tagalog from the plaintiff's dictionary.

"U" 107 15 The trial court has chosen at random, as is stated in the judgment appealed
from, some words from said dictionaries in making the comparison on which
its conclusion is based, and consequently the conclusion reached by it must
"V" 342 96 be inaccurate and not well founded, because said comparison was not
complete.

"X" 6 6
In said judgment some words of the defendant's dictionary are transcribed,
the equivalents and meanings of which in Tagalog are exactly the same as
"Y" 24 4 those that are given in the plaintiff's dictionary, with the exception, as to some
of them, of only one acceptation, which is the defendant's own production.
And with respect to the examples used by the defendant in his dictionary,
"Z" 73 17 which, according to the judgment, are not copied from the plaintiff's — the
judgment referring to the preposition a (to), in Tagalog sa  — it must be noted
  ______ _____ that the defendant, in giving in his dictionary an example of said preposition,
uses the expression "voy a Tayabas" (I am going to Tayabas) instead of
"voy a Bulacan" (I am going to Bulacan), as the plaintiff does in his dictionary,
  23,560 3,108 or what is the same thing, that one speaks of Bulacan while the other speaks
of Tayabas. This does not show that there was no reproduction or copying by
Therefore, of the 23,560 Spanish words in the defendant's dictionary, after the defendant of the plaintiffs work, but just the opposite, for he who intends
deducting 17 words corresponding to the letters K and X (for the plaintiff has to imitate the work of another, tries to make it appear in some manner that
no words corresponding to them), only 3,108 words are the defendant's own, there is some difference between the original and the imitation; and in the
or, what is the same thing, the defendant has added only this number of example referred to, with respect to the preposition a (to), that dissimilarity as
words to those that are in the plaintiff's dictionary, he having reproduced or to the province designated seems to effect the same purpose.
copied the remaining 20,452 words.
In the judgment appealed from, the court gives one to understand that the
2. That the defendant also literally reproduced and copied for the Spanish reproduction of another's dictionary without the owner's consent does not
words in his dictionary, the equivalents, definitions and different meanings in

IPL- Assignment No. 10 (Entire Copyright Cases) Page 66 of 101

constitute a violation of the Law of Intellectual Property for the court's idea of
a dictionary is stated in the decision itself, as follows:
Dictionaries have to be made with the aid of others, and they are improved
by the increase of words. What may be said of a pasture ground may be said
also of a dictionary, i. e., that it should be common property for all who may
desire to write a new dictionary, and the defendant has come to this pasture
ground and taken whatever he needed from it in the exercise of a perfect
right.
Such idea is very erroneous, especially in relation to the Law of Intellectual
Property. Danvilla y Collado the author of the Law of January 10, 1879, on
Intellectual Property, which was discussed and approved in the Spanish
Cortes, in his work entitled La Propiedad Intelectual (page 362, 1st ed.)
states with respect to dictionaries and in relation to article 7 of said law:
The protection of the law cannot be denied to the author of a dictionary, for
although words are not the property of anybody, their definitions, the example
that explain their sense, and the manner of expressing their different
meanings, may constitute a special work. On this point, the correctional court
of the Seine held, on August 16, 1864, that a dictionary constitutes property,
although some of the words therein are explained by mere definitions
expressed in a few lines and sanctioned by usage, provided that the greater
part of the other words contain new meanings; new meanings which
evidently may only belonged to the first person who published them.
Therefore, the plaintiff, Pedro Serrano, cannot be denied the legal protection
which he seeks, and which is based on the fact that the dictionary published
by him in 1889 is his property — said property right being recognized and
having been granted by article 7, in connection with article 2, of said law —
and on the further fact that said work was reproduced by the defendant
without his permission.
This law was published in the Gaceta de Madrid on January 12, 1879. It took
effect in these Islands six months after its promulgation or publication, as
provided in article 56 thereof. The body of rules for the execution of said law
having been approved by royal decree of September 3, 1880, and published
in the Gaceta de Madrid on September 6, 1880 and extended to the
Philippine Islands by royal decree of May 5, 1887, it was in turn published in
the Gaceta de Manila, with the approval of the Governor-General of the
Islands, on June 15, 1887. Said law of January 10, 1879, and the rules for its
IPL- Assignment No. 10 (Entire Copyright Cases)
application, were therefore in force in these Islands when the plaintiff's
dictionary was edited and published in 1889.
It appears from the evidence that although the plaintiff did not introduce at
the trial the certificate of registration of his property rights to said work which,
according to said rules, was kept in the Central Government of these Islands,
and was issued to him in 1890, the same having been lost during the
revolution against Spain, and no trace relative to the issuance of said
certificate being obtainable in the Division of Archives of the Executive
Bureau on account of the loss of the corresponding records, yet as in the first
page of said dictionary the property right of the plaintiff was reserved by
means of the words "Es propiedad del autor" (All rights reserved), taken in
connection with the permission granted him by the Governor-General on
November 24, 1889, to print and publish said dictionary, after an examination
thereof by the permanent committee of censors, which examination was
made, and the necessary license granted to him, these facts constitute
sufficient proof, under the circumstances of the case, as they have not been
overcome by any evidence on the part of the defendant, showing that said
plaintiff did not comply with the requirements of article 36 of said law, which
was the prerequisite to the enjoyment of the benefits thereof according to the
preceding articles, among which is article 7, which is alleged in the complaint
to have been violated by the defendant.
Even considering that said Law of January 10, 1879, ceased to operate in
these Islands, upon the termination of Spanish sovereignty and the
substitution thereof by that of the United States of America, the right of the
plaintiff to invoke said law in support of the action instituted by him in the
present case cannot be disputed. His property right to the work Diccionario
Hispano-Tagalog (Spanish-Tagalog Dictionary), published by him and edited
in 1889, is recognized and sanctioned by said law, and by virtue thereof, he
had acquired a right of which he cannot be deprived merely because the law
is not in force now or is of no actual application. This conclusion is necessary
to protect intellectual property rights vested after the sovereignty of Spain
was superseded by that of the United States. It was so held superseded by
that of the United States. It was so held in the Treaty of Paris of December
10, 1898, between Spain and the United States, when it declared in article 13
thereof that the rights to literary, artistic, and industrial properties acquired by
the subject of Spain in the Island of Cuba and in Puerto Rico and the
Philippines and other ceded territories, at the time of the exchange of the
ratification of said Treaty, shall continue to be respect.
Page 67 of 101
In addition to what has been said, according to article 428 of the Civil Code,
the author of a literary, scientific, or artistic work, has the right to exploit it and
dispose thereof at will. In relation to this right, there exists the exclusive right
of the author, who is the absolute owner of his own work, to produce it,
according to article 2 of the Law of January 10, 1879, and consequently,
nobody may reproduce it, without his permission, not even to annotate or add
something to it, or to improve any edition thereof, according to article 7 of
said law. Manresa, in his commentaries on article 429 of the Civil Code (vol.
3, p. 633, 3d ed.) says that the concrete statement of the right to literary
properties is found in the legal doctrine according to which nobody may
reproduce another person's work, without the consent of his owner, or even
to annotate or add something to it or to improve any edition thereof. And on
page 616 of said volume, Manresa says the following:
He who writes a book, or carves a statue, or makes an invention, has the
absolute right to reproduce or sell it, just as the owner of land has the
absolute right to sell it or its fruits. But while the owner of land, by selling it
and its fruits, perhaps fully realizes all its economic value, by receiving its
benefits and utilities, which are presented, for example, by the price, on the
other hand the author of a book, statue or invention, does not reap all the
benefits and advantages of his own property by disposing of it, for the most
important form of realizing the economic advantages of a book, statue or
invention, consists in the right to reproduce it in similar or like copies,
everyone of which serves to give to the person reproducing them all the
conditions which the original requires in order to give the author the full
enjoyment thereof. If the author of a book, after its publication, cannot
prevent its reproduction by any person who may want to reproduce it, then
the property right granted him is reduced to a very insignificant thing and the
effort made in the production of the book is no way rewarded.
Indeed the property right recognized and protected by the Law of January 10,
1879, on Intellectual Property, would be illusory if, by reason of the fact that
said law is no longer in force as a consequence of the change of sovereignty
in these Islands, the author of a work, who has the exclusive right to
reproduce it, could not prevent another person from so doing without his
consent, and could not enforce this right through the courts of justice in order
to prosecute the violator of this legal provision and the defrauder or usurper
of his right, for he could not obtain the full enjoyment of the book or other
work, and his property right thereto, which is recognized by law, would be
reduced, as Manresa says, to an insignificant thing, if he should have no
more right than that of selling his work.
IPL- Assignment No. 10 (Entire Copyright Cases)
The reproduction by the defendant without the plaintiff's consent of
the Diccionario Hispano-Tagalog (Spanish-Tagalog Dictionary), published
and edited in the City of Manila in 1889, by the publication of
the Diccionariong Kastila-Tagalog  (Spanish-Tagalog Dictionary), published in
the same city and edited in the press El Progreso in 1913, as appears from
Exhibit B, which is attached to the complaint, has caused the plaintiff,
according to the latter, damages in the sum of $10,000. It is true that it
cannot be denied that the reproduction of the plaintiff's book by the defendant
has caused damages to the former, but the amount thereof has not been
determined at the trial, for the statement of the plaintiff as to the proceeds he
would have realized if he had printed in 1913 the number of copies of his
work which he stated in his declaration — a fact which he did not do because
the defendant had reproduced it — was not corroborated in any way at the
trial and is based upon mere calculations made by the plaintiff himself; for
which reason no pronouncement can be made in this decision as to the
indemnification for damages which the plaintiff seeks to recover.
The plaintiff having prayed, not for a permanent injunction against the
defendant, as the plaintiff himself in his brief erroneously states, but for a
judgment ordering the defendant to withdraw from sale all stock of his
work Diccionariong Kastila-Tagalog (Spanish-Tagalog Dictionary), of which
Exhibit B is a copy, and the suit instituted by said plaintiff being proper, we
reverse the judgment appealed from and order the defendant to withdraw
from sale, as prayed for in the complaint, all stock of his work above-
mentioned, and to pay the costs of first instance. We make no special
pronouncement as to the costs of this instance. So ordered.
Page 68 of 101
[13] G.R. No. 131522 July 19, 1999
PACITA I. HABANA, ALICIA L. CINCO and JOVITA N.
FERNANDO, petitioners, vs. FELICIDAD C. ROBLES and GOODWILL
TRADING CO., INC., respondents.
Copyright Law; Statutes; Republic Act No. 8293; At present, all laws dealing with
the protection of intellectual property rights have been consolidated and as the law
now stands, the protection of copyrights is governed by Republic Act No. 8293.—
The complaint for copyright infringement was filed at the time that Presidential
Decree No. 49 was in force. At present, all laws dealing with the protection of
intellectual property rights have been consolidated and as the law now stands, the
protection of copyrights is governed by Republic Act No. 8293. Notwithstanding the
change in the law, the same principles are reiterated in the new law under Section
177.
Same; Infringement of Copyright; If so much is taken that the value of the
original work is substantially diminished, there is an infringement of copyright and
to an injurious extent, the work is appropriated.—We believe that respondent
Robles’ act of lifting from the book of petitioners substantial portions of discussions
and examples, and her failure to acknowledge the same in her book is an
infringement of petitioners’ copyrights. When is there a substantial reproduction of a
book? It does not necessarily require that the entire copyrighted work, or even a large
portion of it, be copied. If so much is taken that the value of the original work is
substantially diminished, there is an infringement of copyright and to an injurious
extent, the work is appropriated.
Same; Same; Intellectual Piracy; Words and Phrases; Infringement of
copyright, or piracy, which is a synonymous term in this connection, consists in
doing by any person, without the consent of the owner of the copyright, of anything
the sole right to do which is conferred by statute on the owner of the copyright.—In
determining the question of infringement, the amount of matter copied from the
copyrighted work is an important consideration. To constitute infringement, it is not
necessary that the whole or even a large portion of the work shall have been copied.
If so much is taken that the value of the original is sensibly diminished, or the labors
of the original author are substantially and to an injurious extent appropriated by
another, that is sufficient in point of law to constitute piracy. The essence of
intellectual piracy should be essayed in conceptual terms in order to underscore its
gravity by an appropriate understanding thereof. Infringement of a copyright is a
trespass on a private domain owned and occupied by the owner of the copyright, and,
therefore, protected by law, and infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the doing by any person, without the
consent of the owner of the copyright, of anything the sole right to do which is
conferred by statute on the owner of the copyright.
Same; Same; Same; Even if two authors were of the same background in terms of
teaching experience and orientation, it is not an excuse for them to be identical even
in examples contained in their books.—The respondents claim that their similarity in
IPL- Assignment No. 10 (Entire Copyright Cases)
style can be attributed to the fact that both of them were exposed to the APCAS
syllabus and their respective academic experience, teaching approach and
methodology are almost identical because they were of the same background.
However, we believe that even if petitioners and respondent Robles were of the same
background in terms of teaching experience and orientation, it is not an excuse for
them to be identical even in examples contained in their books. The similarities in
examples and material contents are so obviously present in this case. How can
similar/identical examples not be considered as a mark of copying?
Same; Same; Same; In cases of infringement, copying alone is not what is
prohibited—the copying must produce an “injurious effect.”—In cases of
infringement, copying alone is not what is prohibited. The copying must produce an
“injurious effect.” Here, the injury consists in that respondent Robles lifted from
petitioners’ book materials that were the result of the latter’s research work and
compilation and misrepresented them as her own. She circulated the book DEP for
commercial use and did not acknowledge petitioners as her source.
Same; Same; Same; In copyrighting books the purpose is to give protection to
the intellectual product of an author.—Hence, there is a clear case of appropriation
of copyrighted work for her benefit that respondent Robles committed. Petitioners’
work as authors is the product of their long and assiduous research and for another to
represent it as her own is injury enough. In copyrighting books the purpose is to give
protection to the intellectual product of an author. This is precisely what the law on
copyright protected, under Section 184.1 (b). Quotations from a published work if
they are compatible with fair use and only to the extent justified by the purpose,
including quotations from newspaper articles and periodicals in the form of press
summaries are allowed provided that the source and the name of the author, if
appearing on the work, are mentioned.
Same; Same; Same; To allow another to copy a book without appropriate
acknowledgment is injury enough.—In the case at bar, the least that respondent
Robles could have done was to acknowledge petitioners Habana, et al. as the source
of the portions of DEP. The final product of an author’s toil is her book. To allow
another to copy the book without appropriate acknowledgment is injury enough.
 
PARDO, J.:
The case before us is a petition for review on certiorari1 to set aside the (a)
decision or the Court of Appeals2, and (b) the resolution denying petitioners'
motion for reconsideration,3 in which the appellate court affirmed the trial
court's dismissal of the complaint for infringement and/or unfair competition
and damages but deleted the award for attorney's fees.1âwphi1.nêt
The facts are as follows:
Page 69 of 101
Petitioners are authors and copyright owners of duly issued certificates of
copyright registration covering their published works, produced through their
combined resources and efforts, entitled COLLEGE ENGLISH FOR TODAY
(CET for brevity), Books 1 and 2, and WORKBOOK FOR COLLEGE
FRESHMAN ENGLISH, Series 1.
Respondent Felicidad Robles and Goodwill Trading Co., Inc. are the
author/publisher and distributor/seller of another published work entitled
"DEVELOPING ENGLISH PROFICIENCY" (DEP for brevity), Books 1 and 2
(1985 edition) which book was covered by copyrights issued to them.
In the course of revising their published works, petitioners scouted and
looked around various bookstores to check on other textbooks dealing with
the same subject matter. By chance they came upon the book of respondent
Robles and upon perusal of said book they were surprised to see that the
book was strikingly similar to the contents, scheme of presentation,
illustrations and illustrative examples in their own book, CET.
After an itemized examination and comparison of the two books (CET and
DEP), petitioners found that several pages of the respondent's book are
similar, if not all together a copy of petitioners' book, which is a case of
plagiarism and copyright infringement.
Petitioners then made demands for damages against respondents and also
demanded that they cease and desist from further selling and distributing to
the general public the infringed copies of respondent Robles' works.
However, respondents ignored the demands, hence, on July 7, 1988;
petitioners filed with the Regional Trial Court, Makati, a complaint for
"Infringement and/or unfair competition with damages" 4 against private
respondents.5
In the complaint, petitioners alleged that in 1985, respondent Felicidad C.
Robles being substantially familiar with the contents of petitioners' works, and
without securing their permission, lifted, copied, plagiarized and/or
transposed certain portions of their book CET. The textual contents and
illustrations of CET were literally reproduced in the book DEP. The
plagiarism, incorporation and reproduction of particular portions of the book
CET in the book DEP, without the authority or consent of petitioners, and the
misrepresentations of respondent Robles that the same was her original work
and concept adversely affected and substantially diminished the sale of the
petitioners' book and caused them actual damages by way of unrealized
income.
Despite the demands of the petitioners for respondents to desist from
committing further acts of infringement and for respondent to recall DEP from
IPL- Assignment No. 10 (Entire Copyright Cases)
the market, respondents refused. Petitioners asked the court to order the
submission of all copies of the book DEP, together with the molds, plates and
films and other materials used in its printing destroyed, and for respondents
to render an accounting of the proceeds of all sales and profits since the time
of its publication and sale.
Respondent Robles was impleaded in the suit because she authored and
directly committed the acts of infringement complained of, while respondent
Goodwill Trading Co., Inc. was impleaded as the publisher and joint co-owner
of the copyright certificates of registration covering the two books authored
and caused to be published by respondent Robles with obvious connivance
with one another.
On July 27, 1988, respondent Robles filed a motion for a bill of
particulars6 which the trial court approved on August 17, 1988. Petitioners
complied with the desired particularization, and furnished respondent Robles
the specific portions, inclusive of pages and lines, of the published and
copyrighted books of the petitioners which were transposed, lifted, copied
and plagiarized and/or otherwise found their way into respondent's book.
On August 1, 1988, respondent Goodwill Trading Co., Inc. filed its answer to
the complaint7 and alleged that petitioners had no cause of action against
Goodwill Trading Co., Inc. since it was not privy to the misrepresentation,
plagiarism, incorporation and reproduction of the portions of the book of
petitioners; that there was an agreement between Goodwill and the
respondent Robles that Robles guaranteed Goodwill that the materials
utilized in the manuscript were her own or that she had secured the
necessary permission from contributors and sources; that the author
assumed sole responsibility and held the publisher without any liability.
On November 28, 1988, respondent Robles filed her answer 8, and denied the
allegations of plagiarism and copying that petitioners claimed. Respondent
stressed that (1) the book DEP is the product of her independent researches,
studies and experiences, and was not a copy of any existing valid
copyrighted book; (2) DEP followed the scope and sequence or syllabus
which are common to all English grammar writers as recommended by the
Association of Philippine Colleges of Arts and Sciences (APCAS), so any
similarity between the respondents book and that of the petitioners was due
to the orientation of the authors to both works and standards and syllabus;
and (3) the similarities may be due to the authors' exercise of the "right to fair
use of copyrigthed materials, as guides."
Respondent interposed a counterclaim for damages on the ground that bad
faith and malice attended the filing of the complaint, because petitioner
Habana was professionally jealous and the book DEP replaced CET as the
Page 70 of 101
official textbook of the graduate studies department of the Far Eastern
University.9
During the pre-trial conference, the parties agreed to a stipulation of
facts 10 and for the trial court to first resolve the issue of infringement before
disposing of the claim for damages.
After the trial on the merits, on April 23, 1993, the trial court rendered its
judgment finding thus:
WHEREFORE, premises considered, the court hereby orders that the
complaint filed against defendants Felicidad Robles and Goodwill Trading
Co., Inc. shall be DISMISSED; that said plaintiffs solidarily reimburse
defendant Robles for P20,000.00 attorney's fees and defendant Goodwill for
P5,000.00 attorney's fees. Plaintiffs are liable for cost of suit.
IT IS SO ORDERED.
Done in the City of Manila this 23rd day of April, 1993.
(s/t) MARVIE R. ABRAHAM SINGSON
Assisting Judge
S. C. Adm. Order No. 124-92 11
On May 14, 1993, petitioners filed their notice of appeal with the trial court 12,
and on July 19, 1993, the court directed its branch clerk of court to forward all
the records of the case to the Court of Appeals. 13
In the appeal, petitioners argued that the trial court completely disregarded
their evidence and fully subscribed to the arguments of respondent Robles
that the books in issue were purely the product of her researches and studies
and that the copied portions were inspired by foreign authors and as such not
subject to copyright. Petitioners also assailed the findings of the trial court
that they were animated by bad faith in instituting the complaint. 14
On June 27, 1997, the Court of Appeals rendered judgment in favor of
respondents Robles and Goodwill Trading Co., Inc. The relevant portions of
the decision state:
It must be noted, however, that similarity of the allegedly infringed work to the
author's or proprietor's copyrighted work does not of itself establish copyright
infringement, especially if the similarity results from the fact that both works
deal with the same subject or have the same common source, as in this
case.
IPL- Assignment No. 10 (Entire Copyright Cases)
Appellee Robles has fully explained that the portion or material of the book
claimed by appellants to have been copied or lifted from foreign books. She
has duly proven that most of the topics or materials contained in her book,
with particular reference to those matters claimed by appellants to have been
plagiarized were topics or matters appearing not only in appellants and her
books but also in earlier books on College English, including foreign
books, e.i. Edmund Burke's "Speech on Conciliation", Boerigs' "Competence
in English" and Broughton's, "Edmund Burke's Collection."
Appellant's reliance on the last paragraph on Section II is misplaced. It must
be emphasized that they failed to prove that their books were made sources
by appellee. 15
The Court of Appeals was of the view that the award of attorneys' fees was
not proper, since there was no bad faith on the part of petitioners Habana et
al. in instituting the action against respondents.
On July 12, 1997, petitioners filed a motion for reconsideration, 16 however,
the Court of Appeals denied the same in a Resolution 17 dated November 25,
1997.
Hence, this petition.
In this appeal, petitioners submit that the appellate court erred in affirming the
trial court's decision.
Petitioners raised the following issues: (1) whether or not, despite the
apparent textual, thematic and sequential similarity between DEP and CET,
respondents committed no copyright infringement; (2) whether or not there
was animus furandi on the part of respondent when they refused to withdraw
the copies of CET from the market despite notice to withdraw the same; and
(3) whether or not respondent Robles abused a writer's right to fair use, in
violation of Section 11 of Presidential Decree No. 49. 18
We find the petition impressed with merit.
The complaint for copyright infringement was filed at the time that
Presidential Decree No. 49 was in force. At present, all laws dealing with the
protection of intellectual property rights have been consolidated and as the
law now stands, the protection of copyrights is governed by Republic Act No.
8293. Notwithstanding the change in the law, the same principles are
reiterated in the new law under Section 177. It provides for the copy or
economic rights of an owner of a copyright as follows:
Page 71 of 101
Sec. 177. Copy or Economic rights. — Subject to the provisions of chapter
VIII, copyright or economic rights shall consist of the exclusive right to carry
out, authorize or prevent the following acts:
177.1 Reproduction of the work or substanlial portion of the work;
177.2 Dramatization, translation, adaptation, abridgement, arrangement or
other transformation of the work;
177.3 The first public distribution of the original and each copy of the work by
sale or other forms of transfer of ownership;
177.4 Rental of the original or a copy of an audiovisual or cinematographic
work, a work embodied in a sound recording, a computer program, a
compilation of data and other materials or a musical work in graphic form,
irrespective of the ownership of the original or the copy which is the subject
of the rental; (n)
177.5 Public display of the original or copy of the work;
177.6 Public performance of the work; and
177.7 Other communication to the public of the work 19
The law also provided for the limitations on copyright, thus:
Sec. 184.1 Limitations on copyright. — Notwithstanding the provisions of
Chapter V, the following acts shall not constitute infringement of copyright:
(a) the recitation or performance of a work, once it has been lawfully made
accessible to the public, if done privately and free of charge or if made strictly
for a charitable or religious institution or society; [Sec. 10(1), P.D. No. 49]
(b) The making of quotations from a published work if they are compatible
with fair use and only to the extent justified for the purpose, including
quotations from newspaper articles and periodicals in the form of press
summaries; Provided, that the source and the name of the author, if
appearing on the work are mentioned; (Sec. 11 third par. P.D. 49)
(e) The inclusion of a work in a publication, broadcast, or other
communication to the public, sound recording of film, if such inclusion is
made by way of illustration for teaching purposes and is compatible with fair
use: Provided, That the source and the name of the author, if appearing in
the work is mentioned; 20
IPL- Assignment No. 10 (Entire Copyright Cases)
In the above quoted provisions, "work" has reference to literary and artistic
creations and this includes books and other literary, scholarly and scientific
works. 21
A perusal of the records yields several pages of the book DEP that are
similar if not identical with the text of CET.
On page 404 of petitioners' Book 1 of College English for Today, the authors
wrote:
Items in dates and addresses:
He died on Monday, April 15, 1975.
Miss Reyes lives in 214 Taft Avenue,
Manila 22
On page 73 of respondents Book 1 Developing English Today, they wrote:
He died on Monday, April 25, 1975.
Miss Reyes address is 214 Taft Avenue Manila 23
On Page 250 of CET, there is this example on parallelism or repetition of
sentence structures, thus:
The proposition is peace. Not peace through the medium of war; not peace to
be hunted through the labyrinth of intricate and endless negotiations; not
peace to arise out of universal discord, fomented from principle, in all parts of
the empire; not peace to depend on the juridical determination of perplexing
questions, or the precise marking of the boundary of a complex government.
It is simple peace; sought in its natural course, and in its ordinary haunts. It is
peace sought in the spirit of peace, and laid in principles purely pacific.
— Edmund Burke, "Speech on Criticism." 24
On page 100 of the book DEP 25, also in the topic of parallel structure and
repetition, the same example is found in toto. The only difference is that
petitioners acknowledged the author Edmund Burke, and respondents did
not.
In several other pages 26 the treatment and manner of presentation of the
topics of DEP are similar if not a rehash of that contained in CET.
Page 72 of 101
We believe that respondent Robles' act of lifting from the book of petitioners
substantial portions of discussions and examples, and her failure to
acknowledge the same in her book is an infringement of petitioners'
copyrights.
When is there a substantial reproduction of a book? It does not necessarily
require that the entire copyrighted work, or even a large portion of it, be
copied. If so much is taken that the value of the original work is substantially
diminished, there is an infringement of copyright and to an injurious extent,
the work is appropriated. 27
In determining the question of infringement, the amount of matter copied from
the copyrighted work is an important consideration. To constitute
infringement, it is not necessary that the whole or even a large portion of the
work shall have been copied. If so much is taken that the value of the original
is sensibly diminished, or the labors of the original author are substantially
and to an injurious extent appropriated by another, that is sufficient in point of
law to constitute piracy. 28
The essence of intellectual piracy should be essayed in conceptual terms in
order to underscore its gravity by an appropriate understanding thereof.
Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law, and
infringement of copyright, or piracy, which is a synonymous term in this
connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by
statute on the owner of the copyright. 29
The respondents' claim that the copied portions of the book CET are also
found in foreign books and other grammar books, and that the similarity
between her style and that of petitioners can not be avoided since they come
from the same background and orientation may be true. However, in this
jurisdiction under Sec 184 of Republic Act 8293 it is provided that:
Limitations on Copyright. Notwithstanding the provisions of Chapter V, the
following shall not constitute infringement of copyright:
x x x           x x x          x x x
(c) The making of quotations from a published work if they are compatible
with fair use and only to the extent justified for the purpose, including
quotations from newspaper articles and periodicals in the form of press
summaries: Provided, That the source and the name of the author, if
appearing on the work, are mentioned.
IPL- Assignment No. 10 (Entire Copyright Cases)
A copy of a piracy is an infringement of the original, and it is no defense that
the pirate, in such cases, did not know whether or not he was infringing any
copyright; he at least knew that what he was copying was not his, and he
copied at his peril. 30
The next question to resolve is to what extent can copying be injurious to the
author of the book being copied. Is it enough that there are similarities in
some sections of the books or large segments of the books are the same?
In the case at bar, there is no question that petitioners presented several
pages of the books CET and DEP that more or less had the same contents. It
may be correct that the books being grammar books may contain materials
similar as to some technical contents with other grammar books, such as the
segment about the "Author Card". However, the numerous pages that the
petitioners presented showing similarity in the style and the manner the
books were presented and the identical examples can not pass as similarities
merely because of technical consideration.
The respondents claim that their similarity in style can be attributed to the fact
that both of them were exposed to the APCAS syllabus and their respective
academic experience, teaching approach and methodology are almost
identical because they were of the same background.
However, we believe that even if petitioners and respondent Robles were of
the same background in terms of teaching experience and orientation, it is
not an excuse for them to be identical even in examples contained in their
books. The similarities in examples and material contents are so obviously
present in this case. How can similar/identical examples not be considered
as a mark of copying?
We consider as an indicia of guilt or wrongdoing the act of respondent
Robles of pulling out from Goodwill bookstores the book DEP upon learning
of petitioners' complaint while pharisaically denying petitioners' demand. It
was further noted that when the book DEP was re-issued as a revised
version, all the pages cited by petitioners to contain portion of their book
College English for Today were eliminated.
In cases of infringement, copying alone is not what is prohibited. The copying
must produce an "injurious effect". Here, the injury consists in that
respondent Robles lifted from petitioners' book materials that were the result
of the latter's research work and compilation and misrepresented them as her
own. She circulated the book DEP for commercial use did not acknowledged
petitioners as her source.
Hence, there is a clear case of appropriation of copyrighted work for her
benefit that respondent Robles committed. Petitioners' work as authors is the
Page 73 of 101
product of their long and assiduous research and for another to represent it
as her own is injury enough. In copyrighting books the purpose is to give
protection to the intellectual product of an author. This is precisely what the
law on copyright protected, under Section 184.1 (b). Quotations from a
published work if they are compatible with fair use and only to the extent
justified by the purpose, including quotations from newspaper articles and
periodicals in the form of press summaries are allowed provided that the
source and the name of the author, if appearing on the work, are mentioned.

In the case at bar, the least that respondent Robles could have done was to
acknowledge petitioners Habana et. al. as the source of the portions of DEP.
The final product of an author's toil is her book. To allow another to copy the
book without appropriate acknowledgment is injury enough.

WHEREFORE, the petition is hereby GRANTED. The decision and resolution

of the Court of Appeals in CA-G. R. CV No. 44053 are SET ASIDE. The case
is ordered remanded to the trial court for further proceedings to receive
evidence of the parties to ascertain the damages caused and sustained by
petitioners and to render decision in accordance with the evidence submitted
to it.

SO ORDERED.

IPL- Assignment No. 10 (Entire Copyright Cases) Page 74 of 101

[15] G.R. No. 148222               August 15, 2003
PEARL & DEAN (PHIL.), INCORPORATED, Petitioner,
vs. SHOEMART, INCORPORATED, and NORTH EDSA MARKETING,
INCORPORATED, Respondents.
Intellectual Property; Copyrights; Patents; Being a mere statutory grant, the
rights are limited to what the statute confers; It can cover only the works falling
within the statutory enumeration or description.—Copyright, in the strict sense of
the term, is purely a statutory right. Being a mere statutory grant, the rights are
limited to what the statute confers. It may be obtained and enjoyed only with respect
to the subjects and by the persons, and on terms and conditions specified in the
statute. Accordingly, it can cover only the works falling within the statutory
enumeration or description.
Same; Same; Same; The three legal rights are completely distinct and
separate from one another and the protection afforded by one cannot be used
interchangeably to cover items or works that exclusively pertain to the others.—
During the trial, the president of P & D himself admitted that the light box was
neither a literary not an artistic work but an “engineering or marketing invention.”
Obviously, there appeared to be some confusion regarding what ought or ought not
to be the proper subjects of copyrights, patents and trademarks. In the leading case
of Kho vs. Court of Appeals, we ruled that these three legal rights are completely
distinct and separate from one another, and the protection afforded by one cannot be
used interchangeably to cover items or works that exclusively pertain to the others.
Same; Same; Same; There can be no infringement of a patent until a patent
has been issued since whatever right one has to the invention covered by the patent
arises alone from the grant of patent.—For some reason or another, petitioner never
secured a patent for the light boxes. It therefore acquired no patent rights which
could have protected its invention, if in fact it really was. And because it had no
patent, petitioner could not legally prevent anyone from manufacturing or
commercially using the contraption. In Creser Precision Systems, Inc. vs. Court of
Appeals, we held that “there can be no infringement of a patent until a patent has
been issued, since whatever right one has to the invention covered by the
patent arises alone from the grant of patent. x x x (A)n inventor has no common law
right to a monopoly of his invention. He has the right to make use of and vend his
invention, but if he voluntarily discloses it, such as by offering it for sale, the world
is free to copy and use it with impunity. A patent, however, gives the inventor the
right to exclude all others. As a patentee, he has the exclusive right of making,
selling or using the invention.
Same; Same; Same; To be able to effectively and legally preclude others from
copying and profiting from the invention, a patent is a primordial requirement.—To
be able to effectively and legally preclude others from copying and profiting from
the invention, a patent is a primordial requirement. No patent, no protection. The
IPL- Assignment No. 10 (Entire Copyright Cases)
ultimate goal of a patent system is to bring new designs and technologies into the
public domain through disclosure. Ideas, once disclosed to the public without the
protection of a valid patent, are subject to appropriation without significant restraint.
Same; Same; Same; Patent law has a three-fold purpose.—The patent law has
a three-fold purpose: “first, patent law seeks to foster and reward invention; second,
it promotes disclosures of inventions to stimulate further innovation and to permit the
public to practice the invention once the patent expires; third, the stringent
requirements for patent protection seek to ensure that ideas in the public domain
remain there for the free use of the public.”
Same; Same; Same; One who has adopted and used a trademark on his goods
does not prevent the adoption and use of the same trademark by others for products
which are of a different description.—Under the circumstances, the Court of Appeals
correctly cited Faberge Inc. vs. Intermediate Appellate Court, where we, invoking
Section 20 of the old Trademark Law, ruled that “the certificate of registration issued
by the Director of Patents can confer (upon petitioner) the exclusive right to use its
own symbol only to those goods specified in the certificate, subject to any conditions
and limitations specified in the certificate x x x. One who has adopted and used a
trademark on his goods does not prevent the adoption and use of the same trademark
by others for products which are of a different description.” Faberge, Inc. was
correct and was in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of
Appeals.
Same; Same; Same; Unfair Competition; There can be no unfair competition
under the law on copyrights although it is applicable to disputes over the use of
trademarks.—By the nature of things, there can be no unfair competition under the
law on copyrights although it is applicable to disputes over the use of trademarks.
Even a name or phrase incapable of appropriation as a trademark or trade name may,
by long and exclusive use by a business (such that the name or phrase becomes
associated with the business or product in the mind of the purchasing public), be
entitled to protection against unfair competition. In this case, there was no evidence
that P & D’s use of “Poster Ads” was distinctive or well-known. As noted by the
Court of Appeals, petitioner’s expert witnesses himself had testified that “Poster
Ads” was too generic a name. So it was difficult to identify it with any company,
honestly speaking.”
DECISION
CORONA, J.:
In the instant petition for review on certiorari under Rule 45 of the Rules of
Court, petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001
decision1 of the Court of Appeals reversing the October 31, 1996 decision 2 of
the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516
Page 75 of 101
which declared private respondents Shoemart Inc. (SMI) and North Edsa
Marketing Inc. (NEMI) liable for infringement of trademark and copyright, and
unfair competition.
FACTUAL ANTECEDENTS
The May 22, 2001 decision of the Court of Appeals 3 contained a summary of
this dispute:
"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in
the manufacture of advertising display units simply referred to as light boxes.
These units utilize specially printed posters sandwiched between plastic
sheets and illuminated with back lights. Pearl and Dean was able to secure a
Certificate of Copyright Registration dated January 20, 1981 over these
illuminated display units. The advertising light boxes were marketed under
the trademark "Poster Ads". The application for registration of the trademark
was filed with the Bureau of Patents, Trademarks and Technology Transfer
on June 20, 1983, but was approved only on September 12, 1988, per
Registration No. 41165. From 1981 to about 1988, Pearl and Dean employed
the services of Metro Industrial Services to manufacture its advertising
displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant
Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM
City North Edsa. Since SM City North Edsa was under construction at that
time, SMI offered as an alternative, SM Makati and SM Cubao, to which
Pearl and Dean agreed. On September 11, 1985, Pearl and Dean’s General
Manager, Rodolfo Vergara, submitted for signature the contracts covering
SM Cubao and SM Makati to SMI’s Advertising Promotions and Publicity
Division Manager, Ramonlito Abano. Only the contract for SM Makati,
however, was returned signed. On October 4, 1985, Vergara wrote Abano
inquiring about the other contract and reminding him that their agreement for
installation of light boxes was not only for its SM Makati branch, but also for
SM Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMI’s house counsel informed
Pearl and Dean that it was rescinding the contract for SM Makati due to non-
performance of the terms thereof. In his reply dated February 17, 1986,
Vergara protested the unilateral action of SMI, saying it was without basis. In
the same letter, he pushed for the signing of the contract for SM Cubao.
Two years later, Metro Industrial Services, the company formerly contracted
by Pearl and Dean to fabricate its display units, offered to construct light
boxes for Shoemart’s chain of stores. SMI approved the proposal and ten
(10) light boxes were subsequently fabricated by Metro Industrial for SMI.
After its contract with Metro Industrial was terminated, SMI engaged the
IPL- Assignment No. 10 (Entire Copyright Cases)
services of EYD Rainbow Advertising Corporation to make the light boxes.
Some 300 units were fabricated in 1991. These were delivered on a
staggered basis and installed at SM Megamall and SM City.
Sometime in 1989, Pearl and Dean, received reports that exact copies of its
light boxes were installed at SM City and in the fastfood section of SM
Cubao. Upon investigation, Pearl and Dean found out that aside from the two
(2) reported SM branches, light boxes similar to those it manufactures were
also installed in two (2) other SM stores. It further discovered that defendant-
appellant North Edsa Marketing Inc. (NEMI), through its marketing arm,
Prime Spots Marketing Services, was set up primarily to sell advertising
space in lighted display units located in SMI’s different branches. Pearl and
Dean noted that NEMI is a sister company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December
11, 1991 to both SMI and NEMI enjoining them to cease using the subject
light boxes and to remove the same from SMI’s establishments. It also
demanded the discontinued use of the trademark "Poster Ads," and the
payment to Pearl and Dean of compensatory damages in the amount of
Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two
hundred twenty-four (224) light boxes and NEMI took down its
advertisements for "Poster Ads" from the lighted display units in SMI’s stores.
Claiming that both SMI and NEMI failed to meet all its demands, Pearl and
Dean filed this instant case for infringement of trademark and copyright,
unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently
developed its poster panels using commonly known techniques and available
technology, without notice of or reference to Pearl and Dean’s copyright. SMI
noted that the registration of the mark "Poster Ads" was only for stationeries
such as letterheads, envelopes, and the like. Besides, according to SMI, the
word "Poster Ads" is a generic term which cannot be appropriated as a
trademark, and, as such, registration of such mark is invalid. It also stressed
that Pearl and Dean is not entitled to the reliefs prayed for in its complaint
since its advertising display units contained no copyright notice, in violation of
Section 27 of P.D. 49. SMI alleged that Pearl and Dean had no cause of
action against it and that the suit was purely intended to malign SMI’s good
name. On this basis, SMI, aside from praying for the dismissal of the case,
also counterclaimed for moral, actual and exemplary damages and for the
cancellation of Pearl and Dean’s Certification of Copyright Registration No.
PD-R-2558 dated January 20, 1981 and Certificate of Trademark
Registration No. 4165 dated September 12, 1988.
Page 76 of 101
NEMI, for its part, denied having manufactured, installed or used any
advertising display units, nor having engaged in the business of advertising.
It repleaded SMI’s averments, admissions and denials and prayed for similar
reliefs and counterclaims as SMI."
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable
for infringement of copyright under Section 2 of PD 49, as amended, and
infringement of trademark under Section 22 of RA No. 166, as amended, and
are hereby penalized under Section 28 of PD 49, as amended, and Sections
23 and 24 of RA 166, as amended. Accordingly, defendants are hereby
directed:
(1) to pay plaintiff the following damages:
(a) actual damages - ₱16,600,000.00, representing profits derived by
defendants as a result of infringement of plaintiff’s copyright from 1991 to
1992
(b) moral damages - ₱1,000.000.00
(c) exemplary damages - ₱1,000,000.00
(d) attorney’s fees - ₱1,000,000.00
plus
(e) costs of suit;
(2) to deliver, under oath, for impounding in the National Library, all light
boxes of SMI which were fabricated by Metro Industrial Services and EYD
Rainbow Advertising Corporation;
(3) to deliver, under oath, to the National Library, all filler-posters using the
trademark "Poster Ads", for destruction; and
(4) to permanently refrain from infringing the copyright on plaintiff’s light
boxes and its trademark "Poster Ads".
Defendants’ counterclaims are hereby ordered dismissed for lack of merit.
SO ORDERED.4
On appeal, however, the Court of Appeals reversed the trial court:
IPL- Assignment No. 10 (Entire Copyright Cases)
Since the light boxes cannot, by any stretch of the imagination, be
considered as either prints, pictorial illustrations, advertising copies, labels,
tags or box wraps, to be properly classified as a copyrightable class "O"
work, we have to agree with SMI when it posited that what was copyrighted
were the technical drawings only, and not the light boxes themselves, thus:
42. When a drawing is technical and depicts a utilitarian object, a copyright
over the drawings like plaintiff-appellant’s will not extend to the actual object.
It has so been held under jurisprudence, of which the leading case is Baker
vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a
copyright protection for a book entitled "Selden’s Condensed Ledger or
Bookkeeping Simplified" which purported to explain a new system of
bookkeeping. Included as part of the book were blank forms and illustrations
consisting of ruled lines and headings, specially designed for use in
connection with the system explained in the work. These forms showed the
entire operation of a day or a week or a month on a single page, or on two
pages following each other. The defendant Baker then produced forms which
were similar to the forms illustrated in Selden’s copyrighted books. The Court
held that exclusivity to the actual forms is not extended by a copyright. The
reason was that "to grant a monopoly in the underlying art when no
examination of its novelty has ever been made would be a surprise and a
fraud upon the public; that is the province of letters patent, not of copyright."
And that is precisely the point. No doubt aware that its alleged original design
would never pass the rigorous examination of a patent application, plaintiff-
appellant fought to foist a fraudulent monopoly on the public by conveniently
resorting to a copyright registration which merely employs a recordal system
without the benefit of an in-depth examination of novelty.
The principle in Baker vs. Selden was likewise applied in Muller vs.
Triborough Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case,
Muller had obtained a copyright over an unpublished drawing entitled "Bridge
Approach – the drawing showed a novel bridge approach to unsnarl traffic
congestion". The defendant constructed a bridge approach which was
alleged to be an infringement of the new design illustrated in plaintiff’s
drawings. In this case it was held that protection of the drawing does not
extend to the unauthorized duplication of the object drawn because copyright
extends only to the description or expression of the object and not to the
object itself. It does not prevent one from using the drawings to construct the
object portrayed in the drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895
and Scholtz Homes, Inc. v. Maddox, 379 F. 2d 84, it was held that there is no
copyright infringement when one who, without being authorized, uses a
copyrighted architectural plan to construct a structure. This is because the
copyright does not extend to the structures themselves.
Page 77 of 101
In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright
over the technical drawings of the latter’s advertising display units.
The Supreme Court trenchantly held in Faberge, Incorporated vs.
Intermediate Appellate Court that the protective mantle of the Trademark Law
extends only to the goods used by the first user as specified in the certificate
of registration, following the clear mandate conveyed by Section 20 of
Republic Act 166, as amended, otherwise known as the Trademark Law,
which reads:
SEC. 20. Certification of registration prima facie evidence of validity.- A
certificate of registration of a mark or trade-name shall be prima
facie evidence of the validity of the registration, the registrant’s ownership of
the mark or trade-name, and of the registrant’s exclusive right to use the
same in connection with the goods, business or services specified in the
certificate, subject to any conditions and limitations stated therein."
(underscoring supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the
registration of the trademark "Poster Ads" with the Bureau of Patents,
Trademarks, and Technology Transfer. Said trademark was recorded in the
Principal Register on September 12, 1988 under Registration No. 41165
covering the following products: stationeries such as letterheads, envelopes
and calling cards and newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability
on the part of the defendants-appellants for their use of the words "Poster
Ads", in the advertising display units in suit. Jurisprudence has interpreted
Section 20 of the Trademark Law as "an implicit permission to a
manufacturer to venture into the production of goods and allow that producer
to appropriate the brand name of the senior registrant on goods other than
those stated in the certificate of registration." The Supreme Court further
emphasized the restrictive meaning of Section 20 when it stated, through
Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods
not specified therein, then a situation may arise whereby an applicant may be
tempted to register a trademark on any and all goods which his mind may
conceive even if he had never intended to use the trademark for the said
goods. We believe that such omnibus registration is not contemplated by our
Trademark Law.
While we do not discount the striking similarity between Pearl and Dean’s
registered trademark and defendants-appellants’ "Poster Ads" design, as well
as the parallel use by which said words were used in the parties’ respective
advertising copies, we cannot find defendants-appellants liable for
IPL- Assignment No. 10 (Entire Copyright Cases)
infringement of trademark. "Poster Ads" was registered by Pearl and Dean
for specific use in its stationeries, in contrast to defendants-appellants who
used the same words in their advertising display units. Why Pearl and Dean
limited the use of its trademark to stationeries is simply beyond us. But,
having already done so, it must stand by the consequence of the registration
which it had caused.
We are constrained to adopt the view of defendants-appellants that the
words "Poster Ads" are a simple contraction of the generic term poster
advertising. In the absence of any convincing proof that "Poster Ads" has
acquired a secondary meaning in this jurisdiction, we find that Pearl and
Dean’s exclusive right to the use of "Poster Ads" is limited to what is written
in its certificate of registration, namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the
trademark "Poster Ads".
There being no finding of either copyright or trademark infringement on the
part of SMI and NEMI, the monetary award granted by the lower court to
Pearl and Dean has no leg to stand on.
WHEREFORE, premises considered, the assailed decision is REVERSED
and SET ASIDE, and another is rendered DISMISSING the complaint and
counterclaims in the above-entitled case for lack of merit. 5
Dissatisfied with the above decision, petitioner P & D filed the instant petition
assigning the following errors for the Court’s consideration:
A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM
AND NEMI;
B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO
INFRINGEMENT OF PEARL & DEAN’S TRADEMARK "POSTER ADS"
WAS COMMITTED BY RESPONDENTS SM AND NEMI;
C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE
AWARD OF THE TRIAL COURT, DESPITE THE LATTER’S FINDING, NOT
DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS
GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING
CONTRACTS WITH PEARL & DEAN.
D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING
RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR
ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEY’S FEES AND
COSTS OF SUIT.6
Page 78 of 101
ISSUES
In resolving this very interesting case, we are challenged once again to put
into proper perspective four main concerns of intellectual property law —
patents, copyrights, trademarks and unfair competition arising from
infringement of any of the first three. We shall focus then on the following
issues:
(1) if the engineering or technical drawings of an advertising display unit (light
box) are granted copyright protection (copyright certificate of registration) by
the National Library, is the light box depicted in such engineering drawings
ipso facto also protected by such copyright?
(2) or should the light box be registered separately and protected by a patent
issued by the Bureau of Patents Trademarks and Technology Transfer (now
Intellectual Property Office) — in addition to the copyright of the engineering
drawings?
(3) can the owner of a registered trademark legally prevent others from using
such trademark if it is a mere abbreviation of a term descriptive of his goods,
services or business?
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
Petitioner P & D’s complaint was that SMI infringed on its copyright over the
light boxes when SMI had the units manufactured by Metro and EYD
Rainbow Advertising for its own account. Obviously, petitioner’s position was
premised on its belief that its copyright over the engineering drawings
extended ipso facto to the light boxes depicted or illustrated in said drawings.
In ruling that there was no copyright infringement, the Court of Appeals held
that the copyright was limited to the drawings alone and not to the light box
itself. We agree with the appellate court.
First, petitioner’s application for a copyright certificate — as well as Copyright
Certificate No. PD-R2588 issued by the National Library on January 20, 1981
— clearly stated that it was for a class "O" work under Section 2 (O) of PD 49
(The Intellectual Property Decree) which was the statute then prevailing. Said
Section 2 expressly enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation,
subsist with respect to any of the following works:
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box
wraps;
IPL- Assignment No. 10 (Entire Copyright Cases)
Although petitioner’s copyright certificate was entitled "Advertising Display
Units" (which depicted the box-type electrical devices), its claim of copyright
infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a
mere statutory grant, the rights are limited to what the statute confers. It may
be obtained and enjoyed only with respect to the subjects and by the
persons, and on terms and conditions specified in the statute. 7 Accordingly, it
can cover only the works falling within the statutory enumeration or
description.8
P & D secured its copyright under the classification class "O" work. This
being so, petitioner’s copyright protection extended only to the technical
drawings and not to the light box itself because the latter was not at all in the
category of "prints, pictorial illustrations, advertising copies, labels, tags and
box wraps." Stated otherwise, even as we find that P & D indeed owned a
valid copyright, the same could have referred only to the technical drawings
within the category of "pictorial illustrations." It could not have possibly
stretched out to include the underlying light box. The strict application 9 of the
law’s enumeration in Section 2 prevents us from giving petitioner even a little
leeway, that is, even if its copyright certificate was entitled "Advertising
Display Units." What the law does not include, it excludes, and for the good
reason: the light box was not a literary or artistic piece which could be
copyrighted under the copyright law. And no less clearly, neither could the
lack of statutory authority to make the light box copyrightable be remedied by
the simplistic act of entitling the copyright certificate issued by the National
Library as "Advertising Display Units."
In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the
public without license from P & D, then no doubt they would have been guilty
of copyright infringement. But this was not the case. SMI’s and NEMI’s acts
complained of by P & D were to have units similar or identical to the light box
illustrated in the technical drawings manufactured by Metro and EYD
Rainbow Advertising, for leasing out to different advertisers. Was this an
infringement of petitioner’s copyright over the technical drawings? We do not
think so.
During the trial, the president of P & D himself admitted that the light box was
neither a literary not an artistic work but an "engineering or marketing
invention."10 Obviously, there appeared to be some confusion regarding what
ought or ought not to be the proper subjects of copyrights, patents and
trademarks. In the leading case of Kho vs. Court of Appeals,11 we ruled that
these three legal rights are completely distinct and separate from one
another, and the protection afforded by one cannot be used interchangeably
to cover items or works that exclusively pertain to the others:
Page 79 of 101
Trademark, copyright and patents are different intellectual property rights that
cannot be interchanged with one another. A trademark is any visible sign
capable of distinguishing the goods (trademark) or services (service mark) of
an enterprise and shall include a stamped or marked container of goods. In
relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a copyright is confined
to literary and artistic works which are original intellectual creations in the
literary and artistic domain protected from the moment of their
creation. Patentable inventions, on the other hand, refer to any technical
solution of a problem in any field of human activity which is new, involves an
inventive step and is industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
This brings us to the next point: if, despite its manufacture and commercial
use of the light boxes without license from petitioner, private respondents
cannot be held legally liable for infringement of P & D’s copyright over
its technical drawings of the said light boxes, should they be liable instead for
infringement of patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light
boxes. It therefore acquired no patent rights which could have protected its
invention, if in fact it really was. And because it had no patent, petitioner
could not legally prevent anyone from manufacturing or commercially using
the contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,12 we
held that "there can be no infringement of a patent until a patent has been
issued, since whatever right one has to the invention covered by the patent
arises alone from the grant of patent. x x x (A)n inventor has no common law
right to a monopoly of his invention. He has the right to make use of and
vend his invention, but if he voluntarily discloses it, such as by offering it for
sale, the world is free to copy and use it with impunity. A patent, however,
gives the inventor the right to exclude all others. As a patentee, he has the
exclusive right of making, selling or using the invention. 13 On the assumption
that petitioner’s advertising units were patentable inventions, petitioner
revealed them fully to the public by submitting the engineering drawings
thereof to the National Library.
To be able to effectively and legally preclude others from copying and
profiting from the invention, a patent is a primordial requirement. No patent,
no protection. The ultimate goal of a patent system is to bring new designs
and technologies into the public domain through disclosure. 14 Ideas, once
disclosed to the public without the protection of a valid patent, are subject to
appropriation without significant restraint.15
On one side of the coin is the public which will benefit from new ideas; on the
other are the inventors who must be protected. As held in Bauer & Cie vs.
IPL- Assignment No. 10 (Entire Copyright Cases)
O’Donnel,16 "The act secured to the inventor the exclusive right to make use,
and vend the thing patented, and consequently to prevent others from
exercising like privileges without the consent of the patentee. It was passed
for the purpose of encouraging useful invention and promoting new and
useful inventions by the protection and stimulation given to inventive genius,
and was intended to secure to the public, after the lapse of the exclusive
privileges granted the benefit of such inventions and improvements."
The law attempts to strike an ideal balance between the two interests:
"(The p)atent system thus embodies a carefully crafted bargain for
encouraging the creation and disclosure of new useful and non-obvious
advances in technology and design, in return for the exclusive right to
practice the invention for a number of years. The inventor may keep his
invention secret and reap its fruits indefinitely. In consideration of its
disclosure and the consequent benefit to the community, the patent is
granted. An exclusive enjoyment is guaranteed him for 17 years, but upon
the expiration of that period, the knowledge of the invention inures to the
people, who are thus enabled to practice it and profit by its use." 17
The patent law has a three-fold purpose: "first, patent law seeks to foster and
reward invention; second, it promotes disclosures of inventions to stimulate
further innovation and to permit the public to practice the invention once the
patent expires; third, the stringent requirements for patent protection seek to
ensure that ideas in the public domain remain there for the free use of the
public."18
It is only after an exhaustive examination by the patent office that a patent is
issued. Such an in-depth investigation is required because "in rewarding a
useful invention, the rights and welfare of the community must be fairly dealt
with and effectively guarded. To that end, the prerequisites to obtaining a
patent are strictly observed and when a patent is issued, the limitations on its
exercise are equally strictly enforced. To begin with, a genuine invention or
discovery must be demonstrated lest in the constant demand for new
appliances, the heavy hand of tribute be laid on each slight technological
advance in art."19
There is no such scrutiny in the case of copyrights nor any notice published
before its grant to the effect that a person is claiming the creation of a work.
The law confers the copyright from the moment of creation 20 and the
copyright certificate is issued upon registration with the National Library of a
sworn ex-parte claim of creation.
Page 80 of 101
Therefore, not having gone through the arduous examination for patents, the
petitioner cannot exclude others from the manufacture, sale or commercial
use of the light boxes on the sole basis of its copyright certificate over the
technical drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity
for the patent office (IPO) to scrutinize the light box’s eligibility as a
patentable invention. The irony here is that, had petitioner secured a patent
instead, its exclusivity would have been for 17 years only. But through the
simplified procedure of copyright-registration with the National Library —
without undergoing the rigor of defending the patentability of its invention
before the IPO and the public — the petitioner would be protected for 50
years. This situation could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden 21 , the United States Supreme Court
held that only the expression of an idea is protected by copyright, not the
idea itself. In that case, the plaintiff held the copyright of a book which
expounded on a new accounting system he had developed. The publication
illustrated blank forms of ledgers utilized in such a system. The defendant
reproduced forms similar to those illustrated in the plaintiff’s copyrighted
book. The US Supreme Court ruled that:
"There is no doubt that a work on the subject of book-keeping, though only
explanatory of well known systems, may be the subject of a copyright; but,
then, it is claimed only as a book. x x x. But there is a clear distinction
between the books, as such, and the art, which it is, intended to illustrate.
The mere statement of the proposition is so evident that it requires hardly any
argument to support it. The same distinction may be predicated of every
other art as well as that of bookkeeping. A treatise on the composition and
use of medicines, be they old or new; on the construction and use of ploughs
or watches or churns; or on the mixture and application of colors for painting
or dyeing; or on the mode of drawing lines to produce the effect of
perspective, would be the subject of copyright; but no one would contend that
the copyright of the treatise would give the exclusive right to the art or
manufacture described therein. The copyright of the book, if not pirated from
other works, would be valid without regard to the novelty or want of novelty of
its subject matter. The novelty of the art or thing described or explained has
nothing to do with the validity of the copyright. To give to the author of the
book an exclusive property in the art described therein, when no
examination of its novelty has ever been officially made, would be
a surprise and a fraud upon the public. That is the province of letters
patent, not of copyright. The claim to an invention of discovery of an art
or manufacture must be subjected to the examination of the Patent
Office before an exclusive right therein can be obtained; and a patent
from the government can only secure it.
IPL- Assignment No. 10 (Entire Copyright Cases)
The difference between the two things, letters patent and copyright, may be
illustrated by reference to the subjects just enumerated. Take the case of
medicines. Certain mixtures are found to be of great value in the healing
art. If the discoverer writes and publishes a book on the subject (as
regular physicians generally do), he gains no exclusive right to the
manufacture and sale of the medicine; he gives that to the public. If he
desires to acquire such exclusive right, he must obtain a patent for the
mixture as a new art, manufacture or composition of matter. He may
copyright his book, if he pleases; but that only secures to him the
exclusive right of printing and publishing his book. So of all other
inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and
illustrations it may contain, gives no exclusive right to the modes of drawing
described, though they may never have been known or used before. By
publishing the book without getting a patent for the art, the latter is given to
the public.
Now, whilst no one has a right to print or publish his book, or any material
part thereof, as a book intended to convey instruction in the art, any person
may practice and use the art itself which he has described and illustrated
therein. The use of the art is a totally different thing from a publication
of the book explaining it. The copyright of a book on bookkeeping cannot
secure the exclusive right to make, sell and use account books prepared
upon the plan set forth in such book. Whether the art might or might not have
been patented, is a question, which is not before us. It was not patented, and
is open and free to the use of the public. And, of course, in using the art, the
ruled lines and headings of accounts must necessarily be used as incident to
it.
The plausibility of the claim put forward by the complainant in this case arises
from a confusion of ideas produced by the peculiar nature of the art
described in the books, which have been made the subject of copyright. In
describing the art, the illustrations and diagrams employed happened to
correspond more closely than usual with the actual work performed by the
operator who uses the art. x x x The description of the art in a book,
though entitled to the benefit of copyright, lays no foundation for an
exclusive claim to the art itself. The object of the one is explanation; the
object of the other is use. The former may be secured by copyright. The
latter can only be secured, if it can be secured at all, by letters
patent." (underscoring supplied)
ON THE ISSUE OF TRADEMARK INFRINGEMENT
This issue concerns the use by respondents of the mark "Poster Ads" which
petitioner’s president said was a contraction of "poster advertising." P & D
Page 81 of 101
was able to secure a trademark certificate for it, but one where the goods
specified were "stationeries such as letterheads, envelopes, calling cards
and newsletters."22 Petitioner admitted it did not commercially engage in or
market these goods. On the contrary, it dealt in electrically operated backlit
advertising units and the sale of advertising spaces thereon, which, however,
were not at all specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc.
vs. Intermediate Appellate Court,23 where we, invoking Section 20 of the old
Trademark Law, ruled that "the certificate of registration issued by the
Director of Patents can confer (upon petitioner) the exclusive right to use its
own symbol only to those goods specified in the certificate, subject to any
conditions and limitations specified in the certificate x x x. One who has
adopted and used a trademark on his goods does not prevent the adoption
and use of the same trademark by others for products which are of a
different description."24 Faberge, Inc. was correct and was in fact recently
reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.25
Assuming arguendo that "Poster Ads" could validly qualify as a trademark,
the failure of P & D to secure a trademark registration for specific use on the
light boxes meant that there could not have been any trademark infringement
since registration was an essential element thereof.1âwphi1
Ads" could not be associated with P & D showed that, in the mind of the
public, the goods and services carrying the trademark "Poster Ads" could not
be distinguished from the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary
meaning. "Poster Ads" was generic and incapable of being used as a
trademark because it was used in the field of poster advertising, the very
business engaged in by petitioner. "Secondary meaning" means that a word
or phrase originally incapable of exclusive appropriation with reference to an
article in the market (because it is geographically or otherwise descriptive)
might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of
the purchasing public, the word or phrase has come to mean that the article
was his property.29 The admission by petitioner’s own expert witness that he
himself could not associate "Poster Ads" with petitioner P & D because it was
"too generic" definitely precluded the application of this exception.
Having discussed the most important and critical issues, we see no need to
belabor the rest.
All told, the Court finds no reversible error committed by the Court of Appeals
when it reversed the Regional Trial Court of Makati City.

ON THE ISSUE OF UNFAIR COMPETITION WHEREFORE, the petition is hereby DENIED and the decision of the Court
of Appeals dated May 22, 2001 is AFFIRMED in toto.
If at all, the cause of action should have been for unfair competition, a
situation which was possible even if P & D had no registration. 26 However, SO ORDERED.
while the petitioner’s complaint in the RTC also cited unfair competition, the
trial court did not find private respondents liable therefor. Petitioner
did not appeal this particular point; hence, it cannot now revive its claim of
unfair competition.

But even disregarding procedural issues, we nevertheless cannot hold

respondents guilty of unfair competition.

By the nature of things, there can be no unfair competition under the law on
copyrights although it is applicable to disputes over the use of trademarks.
Even a name or phrase incapable of appropriation as a trademark or
tradename may, by long and exclusive use by a business (such that the
name or phrase becomes associated with the business or product in the
mind of the purchasing public), be entitled to protection against unfair
competition.27 In this case, there was no evidence that P & D’s use of "Poster
Ads" was distinctive or well-known. As noted by the Court of Appeals,
petitioner’s expert witnesses himself had testified that " ‘Poster Ads’ was too
generic a name. So it was difficult to identify it with any company, honestly
speaking."28 This crucial admission by its own expert witness that "Poster

IPL- Assignment No. 10 (Entire Copyright Cases) Page 82 of 101

[15] G.R. No. 147043               June 21, 2005
NBI - MICROSOFT CORPORATION & LOTUS DEVELOPMENT
CORP., petitioners,
vs. JUDY C. HWANG, BENITO KEH & YVONNE K. CHUA/BELTRON
COMPUTER PHILIPPINES INC., JONATHAN K. CHUA, EMILY K. CHUA,
BENITO T. SANCHEZ, NANCY I. VELASCO, ALFONSO CHUA, ALBERTO
CHUA, SOPHIA ONG, DEANNA CHUA/TAIWAN MACHINERY DISPLAY &
TRADE CENTER, INC., and THE SECRETARY OF JUSTICE, respondents.
Remedial Law; Civil Procedure; Actions; Forum Shopping; Forum shopping
takes place when a litigant files multiple suits involving the same parties, either
simultaneously or successively, to secure a favorable judgment; It exists where the
elements of litis pendentia are present.—Forum shopping takes place when a litigant
files multiple suits involving the same parties, either simultaneously or successively,
to secure a favorable judgment. Thus, it exists where the elements of litis
pendentia are present, namely: (a) identity of parties, or at least such parties who
represent the same interests in both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same facts; and (c) the identity with
respect to the two preceding particulars in the two cases is such that any judgment
that may be rendered in the pending case, regardless of which party is successful,
would amount to res judicata in the other case.
Same; Criminal Procedure; Preliminary Investigations; It is the lower
standard of probable cause which is applied during the preliminary investigation to
determine whether the accused should be held for trial.—Generally, this Court is
loath to interfere in the prosecutor’s discretion in determining probable cause—
unless such discretion is shown to have been abused. This case falls under the
exception. Unlike the higher quantum of proof beyond reasonable doubt required to
secure a conviction, it is the lower standard of probable cause which is applied
during the preliminary investigation to determine whether the accused should be held
for trial. This standard is met if the facts and circumstances incite a reasonable belief
that the act or omission complained of constitutes the offense charged.
Criminal Law; Infringement; The gravamen of copyright infringement is not
merely the unauthorized “manufacturing” of intellectual works but rather the
unauthorized performance of any of the acts covered by Section 5 of PD 49.—
Section 5 of PD 49 (“Section 5”) enumerates the rights vested exclusively on the
copyright owner. Contrary to the DOJ’s ruling, the gravamen of copyright
infringement is not merely the unauthorized “manufacturing” of intellectual works
but rather the unauthorized performance of any of the acts covered by Section 5.
Hence, any person who performs any of the acts under Section 5 without obtaining
the copyright owner’s prior consent renders himself civilly and criminally liable for
copyright infringement.
Same; Unfair Competition; Elements of Unfair Competition under Article
189(1) of the Revised Penal Code.—On the other hand, the elements of unfair
IPL- Assignment No. 10 (Entire Copyright Cases)
competition under Article 189(1) of the Revised Penal Code are: (a) That the
offender gives his goods the general appearance of the goods of another
manufacturer or dealer; (b) That the general appearance is shown in the (1) goods
themselves, or in the (2) wrapping of their packages, or in the (3) device or words
therein, or in (4) any other feature of their appearance[;] (c) That the offender offers
to sell or sells those goods or gives other persons a chance or opportunity to do the
same with a like purpose[; and] (d) That there is actual intent to deceive the public or
defraud a competitor.
DECISION
CARPIO, J.:
The Case
This is a petition for certiorari1 of the Resolutions2 of the Department of
Justice dismissing for "lack of merit and insufficiency of evidence" petitioner
Microsoft Corporation’s complaint against respondents for copyright
infringement and unfair competition.
The Facts
Petitioner Microsoft Corporation ("Microsoft"), a Delaware, United States
corporation, owns the copyright and trademark to several computer
software.3 Respondents Benito Keh and Yvonne Keh are the
President/Managing Director and General Manager, respectively, of
respondent Beltron Computer Philippines, Inc. ("Beltron"), a domestic
corporation. Respondents Jonathan K. Chua, Emily K. Chua, Benito T.
Sanchez, and Nancy I. Velasco are Beltron’s Directors. On the other hand,
respondents Alfonso Chua, Alberto Chua, Judy K. Chua Hwang, Sophia Ong,
and Deanna Chua are the Directors of respondent Taiwan Machinery Display
& Trade Center, Inc. ("TMTC"), also a domestic corporation. 4
In May 1993, Microsoft and Beltron entered into a Licensing Agreement
("Agreement"). Under Section 2(a) of the Agreement, as amended in January
1994, Microsoft authorized Beltron, for a fee, to:
(i) xxx reproduce and install no more than one (1) copy of [Microsoft]
software on each Customer System hard disk or Read Only Memory
("ROM"); [and]
(ii) xxx distribute directly or indirectly and license copies of the Product
(reproduced as per Section 2(a)(i) and/or acquired from Authorized
Replicator or Authorized Distributor) in object code form to end users[.] xxxx 5
Page 83 of 101
The Agreement also authorized Microsoft and Beltron to terminate the
contract if the other fails to comply with any of the Agreement’s provisions.
Microsoft terminated the Agreement effective 22 June 1995 for Beltron’s non-
payment of royalties.6
Afterwards, Microsoft learned that respondents were illegally copying and
selling Microsoft software. Consequently, Microsoft, through its Philippine
agent,7 hired the services of Pinkerton Consulting Services ("PCS"), a private
investigative firm. Microsoft also sought the assistance of the National
Bureau of Investigation ("NBI"). On 10 November 1995, PCS employee John
Benedic8 Sacriz ("Sacriz") and NBI agent Dominador Samiano, Jr.
("Samiano"), posing as representatives of a computer shop, 9 bought
computer hardware (central processing unit ("CPU") and computer monitor)
and software (12 computer disks ("CDs") in read-only memory ("ROM")
format) from respondents. The CPU contained pre-installed 10 Microsoft
Windows 3.1 and MS-DOS software. The 12 CD-ROMs, encased in plastic
containers with Microsoft packaging, also contained Microsoft software. 11 At
least two of the CD-ROMs were "installers," so-called because they contain
several software (Microsoft only or both Microsoft and non-
Microsoft).12 Sacriz and Samiano were not given the Microsoft end-user
license agreements, user’s manuals, registration cards or certificates of
authenticity for the articles they purchased. The receipt issued to Sacriz and
Samiano for the CPU and monitor bore the heading "T.M.T.C. (PHILS.) INC.
BELTRON COMPUTER."13 The receipt for the 12 CD-ROMs did not indicate
its source although the name "Gerlie" appears below the entry "delivered
by."14
On 17 November 1995, Microsoft applied for search warrants against
respondents in the Regional Trial Court, Branch 23, Manila ("RTC"). 15 The
RTC granted Microsoft’s application and issued two search warrants
("Search Warrant Nos. 95-684 and 95-685"). 16 Using Search Warrant Nos.
95-684 and 95-685, the NBI searched the premises of Beltron and TMTC and
seized several computer-related hardware, software, accessories, and
paraphernalia. Among these were 2,831 pieces of CD-ROMs containing
Microsoft software.17
Based on the articles obtained from respondents, Microsoft and a certain
Lotus Development Corporation ("Lotus Corporation") charged respondents
before the Department of Justice ("DOJ") with copyright infringement under
Section 5(A) in relation to Section 29 of Presidential Decree No. 49, as
amended, ("PD 49")18 and with unfair competition under Article 189(1) 19 of the
Revised Penal Code. In its Complaint ("I.S. No. 96-193"), which the NBI
indorsed, Microsoft alleged that respondents illegally copied and sold
Microsoft software.20
IPL- Assignment No. 10 (Entire Copyright Cases)
In their joint counter-affidavit, respondents Yvonne Keh ("respondent Keh")
and Emily K. Chua ("respondent Chua") denied the charges against
respondents. Respondents Keh and Chua alleged that: (1) Microsoft’s real
intention in filing the complaint under I.S. No. 96-193 was to pressure Beltron
to pay its alleged unpaid royalties, thus Microsoft should have filed a
collection suit instead of a criminal complaint; (2) TMTC bought the
confiscated 59 boxes of MS-DOS CDs from a Microsoft dealer in Singapore
(R.R. Donnelly); (3) respondents are not the "source" of the Microsoft
Windows 3.1 software pre-installed in the CPU bought by Sacriz and
Samiano, but only of the MS-DOS software; (4) Microsoft’s alleged proof of
purchase (receipt) for the 12 CD-ROMs is inconclusive because the receipt
does not indicate its source; and (5) respondents Benito Keh, Jonathan K.
Chua, Alfonso Chua, Alberto Chua, Judy K. Chua Hwang, Sophia Ong, and
Deanna Chua are stockholders of Beltron and TMTC in name only and thus
cannot be held criminally liable.21
The other respondents did not file counter-affidavits.
Meanwhile, respondents moved to quash Search Warrant Nos. 95-684 and
95-685. The RTC partially granted their motion in its Order of 16 April 1996.
Microsoft sought reconsideration but the RTC denied Microsoft’s motion in its
Order of 19 July 1996. Microsoft appealed to the Court of Appeals in CA-G.R.
CV No. 54600. In its Decision of 29 November 2001, the Court of Appeals
granted Microsoft’s appeal and set aside the RTC Orders of 16 April 1996
and 19 July 1996. The Court of Appeals’ Decision became final on 27
December 2001.
The DOJ Resolutions
In the Resolution of 26 October 1999, DOJ State Prosecutor Jocelyn A. Ong
("State Prosecutor Ong") recommended the dismissal of Microsoft’s
complaint for lack of merit and insufficiency of evidence. State Prosecutor
Ong also recommended the dismissal of Lotus Corporation’s complaint for
lack of interest to prosecute and for insufficiency of evidence. Assistant Chief
State Prosecutor Lualhati R. Buenafe ("Assistant Chief State Prosecutor
Buenafe") approved State Prosecutor Ong’s recommendations. 22 The 26
October 1999 Resolution reads in part:
[T]wo (2) issues have to be resolved in this case, namely:
a) Whether or not Beltron Computer and/or its stockholders should be held
liable for the offenses charged.
b) Whether or not prima facie case exist[s] against Taiwan Machinery Display
and Trade Center, Inc. (TMTC) for violation of the offense charged.
Page 84 of 101
Complainant had alleged that from the time the license agreement was
terminated, respondent/s is/are no longer authorized to copy/distribute/sell
Microsoft products. However, respondent/s averred that the case is civil in
nature, not criminal, considering that the case stemmed only out of the desire
of complainant to collect from them the amount of US$135,121.32 and that
the contract entered into by the parties cannot be unilaterally terminated.
In the order of Honorable William Bayhon dated July 19, 1996 [denying
reconsideration to the Order partially quashing the search warrants], he
observed the following:
"It is further argued by counsel for respondent that the act taken by private
complainant is to spite revenge against the respondent Beltron for the latter
failed to pay the alleged monetary obligation in the amount of
US$135,121.32. That respondent has some monetary obligation to
complainant which is not denied by the complainant."
["]It appears therefore that prior to the issuance of the subject search
warrants, complainant had some business transactions with the respondent
[Beltron] along the same line of products. Complainant failed to reveal the
true circumstances existing between the two of them as it now appears,
indeed the search warrant[s] xxx [are] being used as a leverage to secure
collection of the money obligation which the Court cannot allow."
From said order, it can be gleaned that the [RTC] xxx, had admitted that the
search warrants applied for by complainant were merely used as a leverage
for the collection of the alleged monetary obligation of the respondent/s.
From said order, it can be surmise (sic) that the obligations between the
parties is civil in nature not criminal.
Moreover, complainant had time and again harped that respondent/s is/are
not authorized to sell/copy/distribute Microsoft products at the time of the
execution of the search warrants. Still, this office has no power to pass upon
said issue for one has then to interpret the provisions of the contract entered
into by the parties, which question, should be raised in a proper civil
proceeding.
Accordingly, absen[t] a resolution from the proper court of (sic) whether or
not the contract is still binding between the parties at the time of the
execution of the search warrants, this office cannot pass upon the issue of
whether respondent/s is or are liable for the offense charged.
As to the second issue, we find for the respondent/s. TMTC had provided
sufficient evidence such as pro-forma invoice from R.R. Donnelley; Debt
Advice of the Bank of Commerce; Official Receipts from the Bureau of
IPL- Assignment No. 10 (Entire Copyright Cases)
Customs; and Import Entry Declaration of the Bureau of Customs to prove
that indeed the Microsoft software in their possession were bought from
Singapore.
Thus, respondent/s in this case has/have no intent to defraud the public, as
provided under Article 189 of the Revised Penal Code, for they bought said
Microsoft MS-DOS 6.0 from an alleged licensee of Microsoft in Singapore,
with all the necessary papers. In their opinion, what they have are genuine
Microsoft software, therefore no unfair competition exist.
Moreover, violation of P.D. 49 does not exist, for respondent/s was/were not
the manufacturers of the Microsoft software seized and were selling their
products as genuine Microsoft software, considering that they bought it from
a Microsoft licensee.
Complainant, on the other hand, considering that it has the burden of proving
that the respondent/s is/are liable for the offense charged, has not presented
any evidence that the items seized namely the 59 boxes of MS-DOS 6.0
software are counterfeit.
The certification issued on December 12, 1995 by Christopher Austin,
Corporate Attorney of the complainant, does not disclose this fact. For the
term used by Mr. Austin was that the items seized were unauthorized.
The question now, is whether the products were unauthorized because
TMTC has no license to sell Microsoft products, or is it unauthorized because
R.R. Donnelley has no authority to sell said products here in the Philippines.
Still, to determine the culpability of the respondents, complainant should
present evidence that what is in the possession of the respondent/s is/are
counterfeit Microsoft products.
This it failed to do.23
Microsoft sought reconsideration and prayed for an ocular inspection of the
articles seized from respondents. However, in the Resolution of 3 December
1999, Assistant Chief State Prosecutor Buenafe, upon State Prosecutor
Ong’s recommendation, denied Microsoft’s motion.24
Microsoft appealed to the Office of the DOJ Secretary. In the Resolution of 3
August 2000, DOJ Undersecretary Regis V. Puno dismissed Microsoft’s
appeal.25 Microsoft sought reconsideration but its motion was denied in the
Resolution of 22 December 2000.26
Hence, this petition. Microsoft contends that:
Page 85 of 101
I. THE DOJ ERRED IN RULING THAT THE LIABILITY OF RESPONDENTS
WAS ONLY CIVIL IN NATURE BY VIRTUE OF THE LICENSE
AGREEMENT.
II. THE DOJ MISAPPRECIATED THE FACT THAT RESPONDENTS WERE
ENGAGED IN THE ILLEGAL IMPORTATION, SALE AND DISTRIBUTION
OF COUNTERFEIT SOFTWARE AS EVIDENCED BY THE ITEMS
PURCHASED DURING THE TEST-BUY AND THE ITEMS SEIZED FROM
RESPONDENTS’ PREMISES.
III. THE DOJ MISAPPRECIATED THE LAW ON COPYRIGHT
INFRINGEMENT AND UNFAIR COMPETITION.
IV. ONLY TWO OUT OF THE NINE RESPONDENTS BOTHERED TO FILE
COUNTER-AFFIDAVITS; HENCE, THE CHARGES AGAINST SEVEN
[RESPONDENTS] REMAIN UNCONTROVERTED.27
In its Comment, filed by the Solicitor General, the DOJ maintains that it did
not commit grave abuse of discretion in dismissing Microsoft’s complaint. 28
For their part, respondents allege in their Comment that Microsoft is guilty of
forum-shopping because its petition in CA-G.R. CV No. 54600 was filed
ahead of, and has a "common interest" with, this petition. On the merits,
respondents reiterate their claims in their motion to quash Search Warrant
Nos. 95-684 and 95-685 that the articles seized from them were either owned
by others, purchased from legitimate sources, or not produced by Microsoft.
Respondents also insist that the Agreement entitled Beltron to "copy and
replicate or reproduce" Microsoft products. On the confiscated 2,831 CD-
ROMs, respondents allege that a certain corporation 29 left the CD-ROMs with
them for safekeeping. Lastly, respondents claim that there is no proof that the
CPU Sacriz and Samiano bought from them contained pre-installed Microsoft
software because the receipt for the CPU does not indicate "[s]oftware hard
disk." 30
In its Reply, Microsoft counters that it is not liable for forum-shopping
because its petition in CA-G.R. CV No. 54600 involved the Orders of the
RTC partially quashing Search Warrant Nos. 95-684 and 95-685 while this
petition concerns the DOJ Resolutions dismissing its complaint against
respondents for copyright infringement and unfair competition. On the merits,
Microsoft maintains that respondents should be indicted for copyright
infringement and unfair competition.31
The Issues
The petition raises the following issues:
IPL- Assignment No. 10 (Entire Copyright Cases)
(1) Whether Microsoft engaged in forum-shopping; and
(2) Whether the DOJ acted with grave abuse of discretion in not finding
probable cause to charge respondents with copyright infringement and unfair
competition.
The Ruling of the Court
The petition has merit.
Microsoft did not Engage in Forum-Shopping
Forum-shopping takes place when a litigant files multiple suits involving the
same parties, either simultaneously or successively, to secure a favorable
judgment.32 Thus, it exists where the elements of litis pendentia are present,
namely: (a) identity of parties, or at least such parties who represent the
same interests in both actions; (b) identity of rights asserted and relief prayed
for, the relief being founded on the same facts; and (c) the identity with
respect to the two preceding particulars in the two cases is such that any
judgment that may be rendered in the pending case, regardless of which
party is successful, would amount to res judicata in the other case.33 Forum-
shopping is an act of malpractice because it abuses court processes. 34 To
check this pernicious practice, Section 5, Rule 7 of the 1997 Rules of Civil
Procedure requires the principal party in an initiatory pleading to submit a
certification against forum-shopping. 35 Failure to comply with this requirement
is a cause for the dismissal of the case and, in case of willful forum-shopping,
for the imposition of administrative sanctions.
Here, Microsoft correctly contends that it is not liable for forum-shopping.
What Microsoft appealed in CA-G.R. CV No. 54600 were the RTC Orders
partially quashing Search Warrant Nos. 95-684 and 95-685. In the present
case, Microsoft is appealing from the DOJ Resolutions dismissing its
complaint against respondents for copyright infringement and unfair
competition. Thus, although the parties in CA-G.R. CV No. 54600 and this
petition are identical, the rights asserted and the reliefs prayed for are not
such that the judgment in CA-G.R. CV No. 54600 does not amount to res
judicata in the present case. This renders forum-shopping impossible here.
The DOJ Acted with Grave Abuse of Discretion in not Finding Probable
Cause to Charge Respondents with Copyright Infringement and Unfair
Competition
Generally, this Court is loath to interfere in the prosecutor’s discretion in
determining probable cause36 — unless such discretion is shown to have
been abused.37 This case falls under the exception.
Page 86 of 101
Unlike the higher quantum of proof beyond reasonable doubt required to
secure a conviction, it is the lower standard of probable cause which is
applied during the preliminary investigation to determine whether the
accused should be held for trial. This standard is met if the facts and
circumstances incite a reasonable belief that the act or omission complained
of constitutes the offense charged. As we explained in Pilapil v.
Sandiganbayan:38
The term [probable cause] does not mean "actual and positive cause" nor
does it import absolute certainty. It is merely based on opinion and
reasonable belief. Thus, a finding of probable cause does not require an
inquiry into whether there is sufficient evidence to procure a conviction. It is
enough that it is believed that the act or omission complained of constitutes
the offense charged. Precisely, there is a trial for the reception of evidence of
the prosecution in support of the charge.
PD 49 and Article 189(1)
Section 539 of PD 49 ("Section 5") enumerates the rights vested exclusively
on the copyright owner. Contrary to the DOJ’s ruling, the gravamen of
copyright infringement is not merely the unauthorized "manufacturing" of
intellectual works but rather the unauthorized performance of any of the acts
covered by Section 5. Hence, any person who performs any of the acts under
Section 5 without obtaining the copyright owner’s prior consent renders
himself civilly40 and criminally41 liable for copyright infringement. We held
in Columbia Pictures, Inc. v. Court of Appeals:42
Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law,
and infringement of copyright, or piracy, which is a synonymous term in this
connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by
statute on the owner of the copyright. (Emphasis supplied)
Significantly, under Section 5(A), a copyright owner is vested with the
exclusive right to "copy, distribute, multiply, [and] sell" his intellectual works.
On the other hand, the elements of unfair competition under Article
189(1)43 of the Revised Penal Code are:
(a) That the offender gives his goods the general appearance of the goods of
another manufacturer or dealer;
(b) That the general appearance is shown in the (1) goods themselves, or in
the (2) wrapping of their packages, or in the (3) device or words  therein, or in
(4) any other feature of their appearance[;]
IPL- Assignment No. 10 (Entire Copyright Cases)
(c) That the offender offers to sell or sells those goods or gives other persons
a chance or opportunity to do the same with a like purpose[; and]
(d) That there is actual intent to deceive  the public or defraud a competitor.44
The element of intent to deceive may be inferred from the similarity of the
goods or their appearance.45
On the Sufficiency of Evidence to Support a Finding of Probable Cause
Against Respondents
In its pleadings filed with the DOJ, Microsoft invoked three clusters of
evidence to support its complaint against respondents, namely: (1) the 12
CD-ROMs containing Microsoft software Sacriz and Samiano bought from
respondents; (2) the CPU with pre-installed Microsoft software Sacriz and
Samiano also purchased from respondents; and (3) the 2,831 CD-ROMs
containing Microsoft software seized from respondents. 46 The DOJ, on the
one hand, refused to pass upon the relevance of these pieces of evidence
because: (1) the "obligations between the parties is civil and not criminal"
considering that Microsoft merely sought the issuance of Search Warrant
Nos. 95-684 and 95-685 to pressure Beltron to pay its obligation under the
Agreement, and (2) the validity of Microsoft’s termination of the Agreement
must first be resolved by the "proper court." On the other hand, the DOJ ruled
that Microsoft failed to present evidence proving that what were obtained
from respondents were counterfeit Microsoft products.
This is grave abuse of discretion.47
First. Being the copyright and trademark owner of Microsoft software,
Microsoft acted well within its rights in filing the complaint under I.S. No. 96-
193 based on the incriminating evidence obtained from respondents. Hence,
it was highly irregular for the DOJ to hold, based on the RTC Order of 19 July
1996, that Microsoft sought the issuance of Search Warrant Nos. 95-684 and
95-685, and by inference, the filing of the complaint under I.S. No. 96-193,
merely to pressure Beltron to pay its overdue royalties to Microsoft.
Significantly, in its Decision in CA-G.R. CV No. 54600 dated 29 November
2001, the Court of Appeals set aside the RTC Order of 19 July 1996.
Respondents no longer contested that ruling which became final on 27
December 2001.
Second. There is no basis for the DOJ to rule that Microsoft must await a
prior "resolution from the proper court of (sic) whether or not the [Agreement]
is still binding between the parties." Beltron has not filed any suit to question
Microsoft’s termination of the Agreement. Microsoft can neither be expected
nor compelled to wait until Beltron decides to sue before Microsoft can seek
remedies for violation of its intellectual property rights.
Page 87 of 101
Furthermore, some of the counterfeit CD-ROMs bought from respondents
were "installer" CD-ROMs containing Microsoft software only or both
Microsoft and non-Microsoft software. These articles are counterfeit per
se because Microsoft does not (and could not have authorized anyone to)
produce such CD-ROMs. The copying of the genuine Microsoft software to
produce these fake CD-ROMs and their distribution are illegal even if the
copier or distributor is a Microsoft licensee. As far as these installer CD-
ROMs are concerned, the Agreement (and the alleged question on the
validity of its termination) is immaterial to the determination of respondents’
liability for copyright infringement and unfair competition.
Lastly, Section 10(b)48 of the Agreement provides that Microsoft’s "rights and
remedies" under the contract are "not xxx exclusive and are in addition to any
other rights and remedies provided by law or [the] Agreement." Thus, even if
the Agreement still subsists, Microsoft is not precluded from seeking
remedies under PD 49 and Article 189(1) of the Revised Penal Code to
vindicate its rights.
Third. The Court finds that the 12 CD-ROMs ("installer" and "non-installer")
and the CPU with pre-installed Microsoft software Sacriz and Samiano
bought from respondents and the 2,831 Microsoft CD-ROMs seized from
respondents suffice to support a finding of probable cause to indict
respondents for copyright infringement under Section 5(A) in relation to
Section 29 of PD 49 for unauthorized copying and selling of protected
intellectual works. The installer CD-ROMs with Microsoft software, to repeat,
are counterfeit per se. On the other hand, the illegality of the "non-installer"
CD-ROMs purchased from respondents and of the Microsoft software pre-
installed in the CPU is shown by the absence of the standard features
accompanying authentic Microsoft products, namely, the Microsoft end-user
license agreements, user’s manuals, registration cards or certificates of
authenticity.
On the 2,831 Microsoft CD-ROMs49 seized from respondents, respondent
Beltron, the only respondent who was party to the Agreement, could not have
reproduced them under the Agreement as the Solicitor General 50 and
respondents contend. Beltron’s rights51 under the Agreement were limited to:
(1) the "reproduc[tion] and install[ation of] no more than one copy of
[Microsoft] software on each Customer System hard disk or Read Only
Memory ("ROM")"; and
(2) the "distribut[ion] xxx and licens[ing of] copies of the [Microsoft]
Product [as reproduced above] and/or acquired from Authorized
Replicator or Authorized Distributor) in object code form to end users."
IPL- Assignment No. 10 (Entire Copyright Cases)
The Agreement defines an authorized replicator as "a third party approved by
[Microsoft] which may reproduce and manufacture [Microsoft] Product[s] for
[Beltron] xxx."52 An authorized distributor, on the other hand, is a "third party
approved by [Microsoft] from which [Beltron] may purchase
MED53 Product."54 Being a mere reproducer/installer of one Microsoft
software copy on each customer’s hard disk or ROM, Beltron could only have
acquired the hundreds of Microsoft CD-ROMs found in respondents’
possession from Microsoft distributors or replicators.
However, respondents makes no such claim. What respondents contend is
that these CD-ROMs were left to them for safekeeping. But neither is this
claim tenable for lack of substantiation. Indeed, respondents Keh and Chua,
the only respondents who filed counter-affidavits, did not make this claim in
the DOJ. These circumstances give rise to the reasonable inference that
respondents mass-produced the CD-ROMs in question without securing
Microsoft’s prior authorization.
The counterfeit "non-installer" CD-ROMs Sacriz and Samiano bought from
respondents also suffice to support a finding of probable cause to indict
respondents for unfair competition under Article 189(1) of the Revised Penal
Code for passing off Microsoft products. From the pictures of the CD-ROMs’
packaging,55 one cannot distinguish them from the packaging of CD-ROMs
containing genuine Microsoft software. Such replication, coupled with the
similarity of content of these fake CD-ROMs and the CD-ROMs with genuine
Microsoft software, implies intent to deceive.
Respondents’ contention that the 12 CD-ROMs Sacriz and Samiano
purchased cannot be traced to them because the receipt for these articles
does not indicate its source is unavailing. The receipt in question should be
taken together with Microsoft’s claim that Sacriz and Samiano bought the
CD-ROMs from respondents.56 Together, these considerations point to
respondents as the vendor of the counterfeit CD-ROMs. Respondents do not
give any reason why the Court should not give credence to Microsoft’s claim.
For the same reason, the fact that the receipt for the CPU does not indicate
"[s]oftware hard disk" does not mean that the CPU had no pre-installed
Microsoft software. Respondents Keh and Chua admit in their counter-
affidavit that respondents are the "source" of the pre-installed MS-DOS
software.
WHEREFORE, we GRANT the petition. We SET ASIDE the Resolutions
dated 26 October 1999, 3 December 1999, 3 August 2000, and 22 December
2000 of the Department of Justice.
SO ORDERED.
Page 88 of 101
[16] G.R. No. 195835, March 14, 2016
SISON OLAÑO, SERGIO T. ONG, MARILYN O. GO, AND JAP FUK
HAI, Petitioners, v. LIM ENG CO, Respondent.
Judicial Review; Judicial review of the resolution of the Secretary of Justice is
limited to a determination of whether there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction.—It is a settled judicial policy that courts
do not reverse the Secretary of Justice’s findings and conclusions on the matter of
probable cause. Courts are not empowered to substitute their judgment for that of the
executive branch upon which full discretionary authority has been delegated in the
determination of probable cause during a preliminary investigation. Courts may,
however, look into whether the exercise of such discretionary authority was attended
with grave abuse of discretion. Otherwise speaking, “judicial review of the resolution
of the Secretary of Justice is limited to a determination of whether there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction.”
Grave Abuse of Discretion; Words and Phrases; Grave abuse of discretion has
been defined as such capricious and whimsical exercise of judgment as is equivalent
to lack of jurisdiction.—Grave abuse of discretion has been defined as “such
capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction. The abuse of discretion must be grave as where the power is exercised
in an arbitrary or despotic manner by reason of passion or personal hostility and must
be so patent and gross as to amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined by or to act at all in contemplation of law.”
‘“Capricious,’ usually used in tandem with the term ‘arbitrary,’ conveys the notion of
willful and unreasoning action.”
Probable Cause; Words and Phrases; Probable cause has been defined as the
existence of such facts and circumstances as would excite the belief in a reasonable
mind, acting on the facts within the knowledge of the prosecutor, that the person
charged was guilty of the crime for which he was prosecuted.—“Probable cause has
been defined as the existence of such facts and circumstances as would excite the
belief in a reasonable mind, acting on the facts within the knowledge of the
prosecutor, that the person charged was guilty of the crime for which he was
prosecuted. It is a reasonable ground of presumption that a matter is, or may be, well-
founded on such a state of facts in the mind of the prosecutor as would lead a person
of ordinary caution and prudence to believe, or entertain an honest or strong
suspicion, that a thing is so.” “The term does not mean actual and positive cause nor
does it import absolute certainty. It is merely based on opinion and reasonable belief.
Thus, a finding of probable cause does not require an inquiry into whether there is
sufficient evidence to procure a conviction. It is enough that it is believed that the act
or omission complained of constitutes the offense charged.” “In order that probable
cause to file a criminal case may be arrived at, or in order to engender the well-
founded belief that a crime has been committed, the elements of the crime charged
IPL- Assignment No. 10 (Entire Copyright Cases)
should be present. This is based on the principle that every crime is defined by its
elements, without which there should be — at the most — no criminal offense.”
Mercantile Law; Intellectual Properties; Copyright; A copyright refers to “the
right granted by a statute to the proprietor of an intellectual production to its
exclusive use and enjoyment to the extent specified in the statute.”—A copyright
refers to “the right granted by a statute to the proprietor of an intellectual production
to its exclusive use and enjoyment to the extent specified in the statute.” Under
Section 177 of R.A. No. 8293, the Copyright or Economic Rights consist of the
exclusive right to carry out, authorize or prevent the following acts: 177.1
Reproduction of the work or substantial portion of the work; 177.2 Dramatization,
translation, adaptation, abridgment, arrangement or other transformation of the work;
177.3 The first public distribution of the original and each copy of the work by sale
or other forms of transfer of ownership; 177.4 Rental of the original or a copy of an
audiovisual or cinematographic work, a work embodied in a sound recording, a
computer program, a compilation of data and other materials or a musical work in
graphic form, irrespective of the ownership of the original or the copy which is the
subject of the rental; 177.5 Public display of the original or a copy of the work; 177.6
Public performance of the work; and 177.7 Other communication to the public of the
work.
Same; Same; Same; Copyright Infringement; Copyright infringement is thus
committed by any person who shall use original literary or artistic works, or
derivative works, without the copyright owner’s consent in such a manner as to
violate the foregoing copy and economic rights.—Copyright infringement is thus
committed by any person who shall use original literary or artistic works, or
derivative works, without the copyright owner’s consent in such a manner as to
violate the foregoing copy and economic rights. For a claim of copyright
infringement to prevail, the evidence on record must demonstrate: (1) ownership of a
validly copyrighted material by the complainant; and (2) infringement of the
copyright by the respondent.
Same; Same; Same; Same; To constitute infringement, the usurper must have
copied or appropriated the original work of an author or copyright proprietor,
absent copying, there can be no infringement of copyright.—Since the hatch doors
cannot be considered as either illustrations, maps, plans, sketches, charts and three-
dimensional works relative to geography, topography, architecture or science, to be
properly classified as a copyrightable class “I” work, what was copyrighted were
their sketches/drawings only, and not the actual hatch doors themselves. To
constitute infringement, the usurper must have copied or appropriated the original
work of an author or copyright proprietor, absent copying, there can be no
infringement of copyright. “Unlike a patent, a copyright gives no exclusive right to
the art disclosed; protection is given only to the expression of the idea — not the idea
itself.”
Page 89 of 101
 Same; Same; Same; Same; The applicant should not ordinarily be forced, in
the first instance, to prove all the multiple facts that underline the validity of the
copyright unless the respondent, effectively challenging them, shifts the burden of
doing so to the applicant.—“Ownership of copyrighted material is shown by proof of
originality and copyrightability.” While it is true that where the complainant presents
a copyright certificate in support of the claim of infringement, the validity and
ownership of the copyright is presumed. This presumption, however, is rebuttable
and it cannot be sustained where other evidence in the record casts doubt on the
question of ownership, as in the instant case. Moreover, “[t]he presumption of
validity to a certificate of copyright registration merely orders the burden of proof.
The applicant should not ordinarily be forced, in the first instance, to prove all the
multiple facts that underline the validity of the copyright unless the respondent,
effectively challenging them, shifts the burden of doing so to the applicant.”
Same; Same; Same; Same; The only instance when a useful article may be the
subject of copyright protection is when it incorporates a design element that is
physically or conceptually separable from the underlying product.—A “useful
article” defined as an article “having an intrinsic utilitarian function that is not
merely to portray the appearance of the article or to convey information” is excluded
from copyright eligibility. The only instance when a useful article may be the subject
of copyright protection is when it incorporates a design element that is physically or
conceptually separable from the underlying product. This means that the utilitarian
article can function without the design element. In such an instance, the design
element is eligible for copyright protection. The design of a useful article shall be
considered a pictorial, graphic, or sculptural work only if, and only to the extent that,
such design incorporates pictorial, graphic, or sculptural features that can be
identified separately from, and are capable of existing independently of, the
utilitarian aspects of the article.
Same; Same; Same; Same; Being articles of manufacture already in existence,
they cannot be deemed as original creations. As earlier stated, valid copyright
ownership denotes originality of the copyrighted material.—In the present case,
LEC’s hatch doors bore no design elements that are physically and conceptually
separable, independent and distinguishable from the hatch door itself. The allegedly
distinct set of hinges and distinct jamb, were related and necessary hence, not
physically or conceptually separable from the hatch door’s utilitarian function as an
apparatus for emergency egress. Without them, the hatch door will not function.
More importantly, they are already existing articles of manufacture sourced from
different suppliers. Based on the records, it is unrebutted that: (a) the hinges are
similar to those used in truck doors; (b) the gaskets were procured from a company
named Pemko and are not original creations of LEC; and (c) the locking device are
ordinary drawer locks commonly used in furniture and office desks. Being articles of
manufacture already in existence, they cannot be deemed as original creations. As
earlier stated, valid copyright ownership denotes originality of the copyrighted
material. Originality means that the material was not copied, evidences at least
minimal creativity and was independently created by the author. It connotes
IPL- Assignment No. 10 (Entire Copyright Cases)
production as a result of independent labor. LEC did not produce the door jambs and
hinges; it bought or acquired them from suppliers and thereafter affixed them to the
hatch doors. No independent original creation can be deduced from such acts.
DECISION
REYES, J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court,
assailing the Decision2 dated July 9, 2010 and Resolution 3 dated February
24, 2011 of the Court of Appeals (CA) in CA-G.R. SP No. 95471, which
annulled the Resolutions dated March 10, 2006 4 and May 25, 20065 of the
Department of Justice (DOJ) in I.S. No. 2004-925, finding no probable cause
for copyright infringement against Sison Olano, Sergio Ong, Marilyn Go and
Jap Fuk Hai (petitioners) and directing the withdrawal of the criminal
information filed against them.
The Antecedents
The petitioners are the officers and/or directors of Metrotech Steel Industries,
Inc. (Metrotech).6 Lim Eng Co (respondent), on the other hand, is the
Chairman of LEC Steel Manufacturing Corporation (LEC), a company which
specializes in architectural metal manufacturing.7
Sometime in 2002, LEC was invited by the architects of the Manansala
Project (Project), a high-end residential building in Rockwell Center, Makati
City, to submit design/drawings and specifications for interior and exterior
hatch doors. LEC complied by submitting on July 16, 2002, shop
plans/drawings, including the diskette therefor, embodying the designs and
specifications required for the metal hatch doors.8
After a series of consultations and revisions, the final shop plans/drawings
were submitted by LEC on January 15, 2004 and thereafter copied and
transferred to the title block of Ski-First Balfour Joint Venture (SKI-FB), the
Project's contractor, and then stamped approved for construction on
February 3, 2004.9
LEC was thereafter subcontracted by SKI-FB, to manufacture and install
interior and exterior hatch doors for the 7 th to 22nd floors of the Project based
on the final shop plans/drawings.10
Sometime thereafter, LEC learned that Metrotech was also subcontracted to
install interior and exterior hatch doors for the Project's 23 rd to 41st floors.11
On June 24, 2004, LEC demanded Metrotech to cease from infringing its
intellectual property rights. Metrotech, however, insisted that no copyright
Page 90 of 101
infringement was committed because the hatch doors it manufactured were
patterned in accordance with the drawings provided by SKI-FB. 12
On July 2, 2004, LEC deposited with the National Library the final shop
plans/drawings of the designs and specifications for the interior and exterior
hatch doors of the Project.13 On July 6, 2004, LEC was issued a Certificate of
Copyright Registration and Deposit showing that it is the registered owner of
plans/drawings for interior and exterior hatch doors under Registration Nos.
1-2004-13 and 1-2004-14, respectively.14 This copyright pertains to class
work "I" under Section 172 of Republic Act (R.A.) No. 8293, The Intellectual
Property Code of the Philippines, which covers "illustrations, maps, plans,
sketches, charts and three-dimensional works relative to geography,
topography, architecture or science."
On December 9, 2004, LEC was issued another Certificate of Copyright
Registration and Deposit showing that it is the registered owner of
plans/drawings for interior and exterior hatch doors under Registration Nos.
H-2004-566 and H-2004-56715 which is classified under Section 172(h) of
R.A. No. 8293 as "original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial design, and other
works of applied art."
When Metrotech still refused to stop fabricating hatch doors based on LEC's
shop plans/drawings, the latter sought the assistance of the National Bureau
of Investigation (NBI) which in turn applied for a search warrant before the
Regional Trial Court (RTC) of Quezon City, Branch 24. The application was
granted on August 13, 2004 thus resulting in the confiscation of finished and
unfinished metal hatch doors as well as machines used in fabricating and
manufacturing hatch doors from the premises of Metrotech. 16
On August 13, 2004, the respondent filed a Complaint-Affidavit 17 before the
DOJ against the petitioners for copyright infringement. In the meantime or on
September 8, 2004, the RTC quashed the search warrant on the ground that
copyright infringement was not established.18
Traversing the complaint, the petitioners admitted manufacturing hatch doors
for the Project. They denied, however, that they committed copyright
infringement and averred that the hatch doors they manufactured were
functional inventions that are proper subjects of patents and that the records
of the Intellectual Property Office reveal that there is no patent, industrial
design or utility model registration on LEC's hatch doors. Metrotech further
argued that the manufacturing of hatch doors per se is not copyright
infringement because copyright protection does not extend to the objects
depicted in the illustrations and plans. Moreover, there is no artistic or
ornamental expression embodied in the subject hatch doors that would
subject them to copyright protection.19
IPL- Assignment No. 10 (Entire Copyright Cases)
Resolutions of the DOJ
In a Resolution20 dated August 18, 2005, the investigating prosecutor
dismissed the respondent's complaint based on inadequate evidence
showing that: (1) the petitioners committed the prohibited acts under Section
177 of R.A. No. 8293; and (2) the interior and exterior hatch doors of the
petitioners are among the classes of copyrightable work enumerated in
Sections 172 and 173 of the same law.21
Adamant, the respondent filed a petition for review before the DOJ but it was
also denied due course in the Resolution 22 dated November 16, 2005.
Upon the respondent's motion for reconsideration, however, the
Resolution23 dated January 27, 2006 of the DOJ reversed and set aside the
Resolution dated August 18, 2005 and directed the Chief State Prosecutor to
file the appropriate information for copyright infringement against the
petitioners.24 The DOJ reasoned that the pieces of evidence adduced show
that the subject hatch doors are artistic or ornamental with distinctive hinges,
door and jamb, among others. The petitioners were not able to sufficiently
rebut these allegations and merely insisted on the non-artistic nature of the
hatch doors. The DOJ further held that probable cause was established
insofar as the artistic nature of the hatch doors and based thereon the act of
the petitioners in manufacturing or causing to manufacture hatch doors
similar to those of the respondent can be considered as unauthorized
reproduction; hence, copyright infringement under Section 177.1 in relation to
Section 216 of R.A. No. 8293.25
Aggrieved, the petitioners moved for reconsideration. This time, the DOJ
made a complete turn around by granting the motion, vacating its Resolution
dated January 27, 2006 and declaring that the evidence on record did not
establish probable cause because the subject hatch doors were plainly metal
doors with functional components devoid of any aesthetic or artistic features.
Accordingly, the DOJ Resolution26 dated March 10, 2006 disposed as
follows:
WHEREFORE, finding cogent reason to reverse the assailed resolution, the
motion for reconsideration is GRANTED finding no probable cause against
the [petitioners]. Consequently, the City Prosecutor of Manila is hereby
directed to cause the withdrawal of the information, if any has been filed in
court, and to report the action taken thereon within TEN (10) DAYS from
receipt hereof.
SO ORDERED.
The respondent thereafter filed a motion for reconsideration of the foregoing
resolution but it was denied 28 on May 25, 2006. The respondent then sought
recourse before the CA via a petition for certiorari29 ascribing grave abuse of
discretion on the part of the DOJ.
Page 91 of 101
In its assailed Decision30 dated July 9, 2010, the CA granted the petition. The
CA held that the vacillating findings of the DOJ on the presence or lack of
probable cause manifest capricious and arbitrary exercise of discretion
especially since its opposite findings were based on the same factual
evidence and arguments.
The CA then proceeded to make its own finding of probable cause and held
that:
[F]or probable cause for copyright infringement to exist, essentially, it must
be shown that the violator reproduced the works without the consent of the
owner of the copyright.
In the present case before Us, [the petitioners] do not dispute that: (1) LEG
was issued copyrights for the illustrations of the hatch doors under Section
171.i, and for the hatch doors themselves as ornamental design or model for
articles of manufacture pursuant to Section 171.h of R.A. [No.] 8293; and (2)
they manufactured hatch doors based on drawings and design furnished by
SKI-FB, which consists of LEC works subject of copyrights. These two (2)
circumstances, taken together, are sufficient to excite the belief in a
reasonable mind that [the petitioners] are probably guilty of copyright
infringement. First, LEC has indubitably established that it is the owner of the
copyright for both the illustrations of the hatch doors and [the] hatch doors
themselves, and second, [the petitioners] manufactured hatch doors based
on LEC's works, sans EEC's consent.
[T]he fact that LEC enjoys ownership of copyright not only on the illustrations
of the hatch doors but on the hatch doors itself and that [the petitioners]
manufactured the same is sufficient to warrant a finding of probable cause for
copyright infringement. x x x.31ChanRoblesVirtualawlibrary
The CA further ruled that any allegation on the non-existence of ornamental
or artistic values on the hatch doors are matters of evidence which are best
ventilated in a full-blown trial rather than during the preliminary investigation
stage. Accordingly, the CA disposed as follows:
WHEREFORE, considering the foregoing premises, the present Petition
is GRANTED, and accordingly, the assailed Resolutions dated 10 March
2006 and 25 May 2006 are ANNULLED and SET ASIDE. The Resolution of
the Secretory of Justice dated 27 January 2006 finding probable cause
against [the petitioners], is REINSTATED.
SO ORDERED.32
The CA reiterated the above ruling in its Resolution 33 dated February 24,
2011 when it denied the petitioners' motion for reconsideration. Hence, the
present appeal, arguing that:
I. There was no evidence of actual reproduction of the hatch doors
during the preliminary investigation that would lead the investigating
prosecutor to declare the existence of probable cause; 34
IPL- Assignment No. 10 (Entire Copyright Cases)
II. Even assuming that the petitioners manufactured hatch doors based
on the illustrations and plans covered by the respondent's Certificate
of Registration Nos. 1-2004-13 and 1-2004-14, the petitioners could
not have committed copyright infringement. Certificate of Registration
Nos. 1-2004-13 and 1-2004-14 are classified under Section 172(i)
which pertains to "illustrations, maps, plans, sketches, charts and
three-dimensional works relative to geography, topography,
architecture or science." Hence the original works that are
copyrighted are the illustrations and plans of interior hatch doors and
exterior hatch doors. Thus, it is the reproduction of the illustrations
and plans covered by the copyright registration that amounts to
copyright infringement. The petitioners did not reproduce the
illustrations and plans covered under Certificate of Registration Nos.
1-2004-13 and 1-2004-14.
The manufacturing of hatch doors per se does not fall within the
purview of copyright infringement because copyright protection does
not extend to the objects depicted in the illustrations and plans; 35 and
III. LEC's copyright registration certificates are not conclusive proofs that
the items covered thereby are copyrightable. The issuance of
registration certificate and acceptance of deposit by the National
Library is ministerial in nature and does not involve a determination
of whether the item deposited is copyrightable or not. Certificates of
registration and deposit serve merely as a notice of recording and
registration of the work but do not confer any right or title upon the
registered copyright owner or automatically put his work under the
protective mantle of the copyright law.36
Ruling of the Court
It is a settled judicial policy that courts do not reverse the Secretary of
Justice's findings and conclusions on the matter of probable cause. Courts
are not empowered to substitute their judgment for that of the executive
branch upon which full discretionary authority has been delegated in the
determination of probable cause during a preliminary investigation. Courts
may, however, look into whether the exercise of such discretionary authority
was attended with grave abuse of discretion.37
Otherwise speaking, "judicial review of the resolution of the Secretary of
Justice is limited to a determination of whether there has been a grave abuse
of discretion amounting to lack or excess of jurisdiction." 38
The CA anchored its act of reversing the DOJ Resolution dated March 10,
2006 upon the foregoing tenets. Thus, the Court's task in the present petition
is only to determine if the CA erred in concluding that the DOJ committed
Page 92 of 101
grave abuse of discretion in directing the withdrawal of any criminal
information filed against the petitioners.
Grave abuse of discretion has been defined as "such capricious and
whimsical exercise of judgment as is equivalent to lack of jurisdiction. The
abuse of discretion must be grave as where the power is exercised in an
arbitrary or despotic manner by reason of passion or personal hostility and
must be so patent and gross as to amount to an evasion of positive duty or to
a virtual refusal to perform the duty enjoined by or to act at all in
contemplation of law."39 "'Capricious,' usually used in tandem with the term
'arbitrary,' conveys the notion of willful and unreasoning action." 40cralawred
According to the CA, the DOJ's erratic findings on the presence or absence
of probable cause constitute grave abuse of discretion. The CA explained:
chanRoblesvirtualLawlibrary
This, to Our minds, in itself creates a nagging, persistent doubt as to whether
[the DOJ Secretary] issued the said resolutions untainted with a whimsical
and arbitrary use of his discretion. For one cannot rule that there is reason to
overturn the investigating prosecutor's findings at the first instance and then
go on to rule that ample evidence exists showing that the hatch doors
possess artistic and ornamental elements at the second instance and
proceed to rule that no such artistry can be found on the purely utilitarian
hatch doors at the last instance. x x x.41ChanRoblesVirtualawlibrary
The Court disagrees. It has been held that the issuance by the DOJ of
several resolutions with varying findings of fact and conclusions of law on the
existence of probable cause, by itself, is not indicative of grave abuse of
discretion.42
Inconsistent findings and conclusions on the part of the DOJ will denote
grave abuse of discretion only if coupled with gross misapprehension of
facts,43 which, after a circumspect review of the records, is not attendant in
the present case.
The facts upon which the resolutions issued by the investigating prosecutor
and the DOJ were actually uniform, viz:
(a) LEC is the registered owner of plans/drawings for interior and exterior
hatch doors under Certificate of Registration Nos. 1-2004-13 and 1-2004-
14 classified under Section 172(i) of R.A. No. 8293 as pertaining to
"illustrations, maps, plans, sketches, charts and three-dimensional works
relative to geography, topography, architecture or science";
(b) LEC is also the registered owner of plans/drawings for interior and
exterior hatch doors under Certificate of Registration Nos. H-2004-566
and H-2004-567 classified under Section 172(h) of R.A. No. 8293 as to
"original ornamental designs or models for articles of manufacture,
IPL- Assignment No. 10 (Entire Copyright Cases)
whether or not registrable as an industrial design, and other works of
applied art";
(c) LEC as the subcontractor of SKI-FB in the Project first manufactured and
installed the interior and exterior hatch doors at the Manansala Tower in
Rockwell Center, Makati City, from the 7 th to 22nd floors. The hatch doors
were based on the plans/drawings submitted by LEC to SKI-FB and
subject of the above copyright registration numbers; and
(d) thereafter, Metrotech fabricated and installed hatch doors at the same
building's 23rd to 41st floor based on the drawings and specifications
provided by SKI-FB.44
The positions taken by the DOJ and the investigating prosecutor differed only
in the issues tackled and the conclusions arrived at.
It may be observed that in the Resolution dated August 18, 2005 issued by
the investigating prosecutor, the primary issue was whether the hatch doors
of LEC fall within copyrightable works. This was resolved by ruling that hatch
doors themselves are not covered by LEC's Certificate of Registration Nos.
1-2004-13 and 1-2004-14 issued on the plans/drawing depicting them. The
DOJ reversed this ruling in its Resolution dated January 27, 2006 wherein
the issue was streamlined to whether the illustrations of the hatch doors
under LEC's Certificate of Registration Nos. H-2004-566 and H-2004-567
bore artistic ornamental designs.
This situation does not amount to grave abuse of discretion but rather a mere
manifestation of the intricate issues involved in the case which thus resulted
in varying conclusions of law. Nevertheless, the DOJ ultimately pronounced
its definite construal of copyright laws and their application to the evidence on
record through its Resolution dated March 10, 2006 when it granted the
petitioners' motion for reconsideration. Such construal, no matter how
erroneous to the CA's estimation, did not amount to grave abuse of
discretion. "[I]t is elementary that not every erroneous conclusion of law or
fact is an abuse of discretion."45
More importantly, the Court finds that no grave abuse of discretion was
committed by the DOJ in directing the withdrawal of the criminal information
against the respondents because a finding of probable cause contradicts the
evidence on record, law, and jurisprudence.
"Probable cause has been defined as the existence of such facts and
circumstances as would excite the belief in a reasonable mind, acting on the
facts within the knowledge of the prosecutor, that the person charged was
guilty of the crime for which he was prosecuted. It is a reasonable ground of
presumption that a matter is, or may be, well-founded on such a state of facts
in the mind of the prosecutor as would lead a person of ordinary caution and
prudence to believe, or entertain an honest or strong suspicion, that a thing is
Page 93 of 101
so."46
"The term does not mean actual and positive cause nor does it import
absolute certainty. It is merely based on opinion and reasonable belief. Thus,
a finding of probable cause does not require an inquiry into whether there is
sufficient evidence to procure a conviction. It is enough that it is believed that
the act or omission complained of constitutes the offense charged." 47
"In order that probable cause to file a criminal case may be arrived at, or in
order to engender the well-founded belief that a crime has been committed,
the elements of the crime charged should be present. This is based on the
principle that every crime is defined by its elements, without which there
should be - at the most - no criminal offense."48
A copyright refers to "the right granted by a statute to the proprietor of an
intellectual production to its exclusive use and enjoyment to the extent
specified in the statute."49 Under Section 177 of R.A. No. 8293, the Copyright
or Economic Rights consist of the exclusive right to carry out, authorize or
prevent the following acts:
177.1 Reproduction of the work or substantial portion of the work;
177.2 Dramatization, translation, adaptation, abridgment, arrangement or
other transformation of the work;
177.3 The first public distribution of the original and each copy of the work
by sale or other forms of transfer of ownership;
177.4 Rental of the original or a copy of an audiovisual or cinematographic
work, a work embodied in a sound recording, a computer program, a
compilation of data and other materials or a musical work in graphic
form, irrespective of the ownership of the original or the copy which is
the subject of the rental;
177.5 Public display of the original or a copy of the work;
177.6 Public performance of the work; and
177.7 Other communication to the public of the work.
Copyright infringement is thus committed by any person who shall use
original literary or artistic works, or derivative works, without the copyright
owner's consent in such a manner as to violate the foregoing copy and
economic rights. For a claim of copyright infringement to prevail, the
evidence on record must demonstrate: (1) ownership of a validly copyrighted
material by the complainant; and (2) infringement of the copyright by the
respondent.50
While both elements subsist in the records, they did not simultaneously
concur so as to substantiate infringement of LEC's two sets of copyright
IPL- Assignment No. 10 (Entire Copyright Cases)
registrations.
The respondent failed to substantiate the alleged reproduction of the
drawings/sketches of hatch doors copyrighted under Certificate of
Registration Nos. 1-2004-13 and 1-2004-14. There is no proof that the
respondents reprinted the copyrighted sketches/drawings of LEC's hatch
doors. The raid conducted by the NBI on Metrotech's premises yielded no
copies or reproduction of LEC's copyrighted sketches/drawings of hatch
doors. What were discovered instead were finished and unfinished hatch
doors.
Certificate of Registration Nos. 1-2004-13 and 1-2004-14 pertain to class
work "I" under Section 172 of R.A. No. 8293 which covers "illustrations,
maps, plans, sketches, charts and three-dimensional works relative to
geography, topography, architecture or science." 51 As such, LEC's copyright
protection there under covered only the hatch door sketches/drawings and
not the actual hatch door they depict.52
As the Court held in Pearl and Dean (Philippines), Incorporated v. Shoemart,
Incorporated:53
Copyright, in the strict sense of the term, is purely a statutory right. Being a
mere statutory grant, the rights are limited to what the statute confers. It may
be obtained and enjoyed only with respect to the subjects and by the
persons, and on terms and conditions specified in the statute. Accordingly, it
can cover only the works falling within the statutory enumeration or
description.54 (Citations omitted and italics in the original)
Since the hatch doors cannot be considered as either illustrations, maps,
plans, sketches, charts and three-dimensional works relative to geography,
topography, architecture or science, to be properly classified as a
copyrightable class "I" work, what was copyrighted were their
sketches/drawings only, and not the actual hatch doors themselves. To
constitute infringement, the usurper must have copied or appropriated the
original work of an author or copyright proprietor, absent copying, there can
be no infringement of copyright.55
"Unlike a patent, a copyright gives no exclusive right to the art disclosed;
protection is given only to the expression of the idea — not the idea itself." 56
The respondent claimed that the petitioners committed copyright infringement
when they fabricated/manufactured hatch doors identical to those installed by
LEC. The petitioners could not have manufactured such hatch doors in
substantial quantities had they not reproduced the copyrighted
plans/drawings submitted by LEC to SK1-FB. This insinuation, without more,
does not suffice to establish probable cause for infringement against the
petitioners. "[Although the determination of probable cause requires less than
Page 94 of 101
evidence which would justify conviction, it should at least be more than mere
suspicion."57
Anent, LEC's Certificate of Registration Nos. H-2004-566 and H-2004-567,
the Court finds that the ownership thereof was not established by the
evidence on record because the element of copyrightability is absent.
"Ownership of copyrighted material is shown by proof of originality and
copyrightability."58 While it is true that where the complainant presents a
copyright certificate in support of the claim of infringement, the validity and
ownership of the copyright is presumed. This presumption, however, is
rebuttable and it cannot be sustained where other evidence in the record
casts doubt on the question of ownership, 59 as in the instant case.
Moreover, "[t]he presumption of validity to a certificate of copyright
registration merely orders the burden of proof. The applicant should not
ordinarily be forced, in the first instance, to prove all the multiple facts that
underline the validity of the copyright unless the respondent, effectively
challenging them, shifts the burden of doing so to the applicant." 60
Here, evidence negating originality and copyrightability as elements of
copyright ownership was satisfactorily proffered against LEC's certificate of
registration.
The following averments were not successfully rebuffed by LEC:
[T]he hinges on LEC's "hatch doors" have no ornamental or artistic value. In
fact, they are just similar to hinges found in truck doors that had been in
common use since the 1960's. The gaskets on LEC's "hatch doors", aside
from not being ornamental or artistic, were merely procured from a company
named Pemko and are not original creations of LEC. The locking device in
LEC's "hatch doors" are ordinary drawer locks commonly used in furniture
and office desks.6
In defending the copyrightability of its hatch doors' design, LEC merely
claimed:
LEC's Hatch Doors were particularly designed to blend in with the floor of the
units in which they are installed and, therefore, appeal to the aesthetic sense
of the owner of units or any visitors thereto[;]
LEC's Hatch Doors have a distinct set of hinges, a distinct door a distinct
jamb, all of which are both functional or utilitarian and artistic or ornamental
at the same time[;] and
IPL- Assignment No. 10 (Entire Copyright Cases)
Moreover, the Project is a high-end residential building located in the
Rockwell Center, a very prime area in Metro Manila. As such, the owner of
the Project is not expected to settle for Hatch Doors that simply live up to
their function as such. The owner would require, as is the case for the
Project, Hatch Doors that not only fulfill their utilitarian purposes but also
appeal to the artistic or ornamental sense of their beholders. 62
From the foregoing description, it is clear that the hatch doors were not
artistic works within the meaning of copyright laws. A copyrightable work
refers to literary and artistic works defined as original intellectual creations in
the literary and artistic domain.63
A hatch door, by its nature is an object of utility. It is defined as a small door,
small gate or an opening that resembles a window equipped with an escape
for use in case of fire or emergency. 64 It is thus by nature, functional and
utilitarian serving as egress access during emergency. It is not primarily an
artistic creation but rather an object of utility designed to have aesthetic
appeal. It is intrinsically a useful article, which, as a whole, is not eligible for
copyright.
A "useful article" defined as an article "having an intrinsic utilitarian function
that is not merely to portray the appearance of the article or to convey
information" is excluded from copyright eligibility.65
The only instance when a useful article may be the subject of copyright
protection is when it incorporates a design element that is physically or
conceptually separable from the underlying product. This means that the
utilitarian article can function without the design element. In such an instance,
the design element is eligible for copyright protection. 66
The design of a useful article shall be considered a pictorial, graphic, or
sculptural work only if, and only to the extent that, such design incorporates
pictorial, graphic, or sculptural features that can be identified separately from,
and are capable of existing independently of, the utilitarian aspects of the
article.67
A belt, being an object utility with the function of preventing one's pants from
falling down, is in itself not copyrightable. However, an ornately designed belt
buckle which is irrelevant to or did not enhance the belt's function hence,
conceptually separable from the belt, is eligible for copyright. It is
copyrightable as a sculptural work with independent aesthetic value, and not
as an integral element of the belt's functionality. 68
A table lamp is not copyrightable because it is a functional object intended for
the purpose of providing illumination in a room. The general shape of a table
lamp is likewise not copyrightable because it contributes to the lamp's ability
Page 95 of 101
to illuminate the reaches of a room. But, a lamp base in the form of a statue Department of Justice in I.S. No. 2004-925 dismissing the complaint for
of male and female dancing figures made of semi vitreous china is copyright infringement are REINSTATED.
copyrightable as a work of art because it is unrelated to the lamp's utilitarian SO ORDERED.
function as a device used to combat darkness.69

In the present case, LEC's hatch doors bore no design elements that are
physically and conceptually separable, independent and distinguishable from
the hatch door itself. The allegedly distinct set of hinges and distinct jamb,
were related and necessary hence, not physically or conceptually separable
from the hatch door's utilitarian function as an apparatus for emergency
egress. Without them, the hatch door will not function.

More importantly, they are already existing articles of manufacture sourced

from different suppliers. Based on the records, it is unrebutted that: (a) the
hinges are similar to those used in truck doors; (b) the gaskets were procured
from a company named Pemko and are not original creations of LEC; and (c)
the locking device are ordinary drawer locks commonly used in furniture and
office desks.

Being articles of manufacture already in existence, they cannot be deemed

as original creations. As earlier stated, valid copyright ownership denotes
originality of the copyrighted material. Originality means that the material was
not copied, evidences at least minimal creativity and was independently
created by the author.70 It connotes production as a result of independent
labor.71 LEC did not produce the door jambs and hinges; it bought or
acquired them from suppliers and thereafter affixed them to the hatch doors.
No independent original creation can be deduced from such acts.

The same is true with respect to the design on the door's panel. As LEC has
stated, the panels were "designed to blend in with the floor of the units in
which they [were] installed."72 Photos of the panels indeed show that their
color and pattern design were similar to the wooden floor parquet of the
condominium units.73 This means that the design on the hatch door panel
was not a product of LEC's independent artistic judgment and discretion but
rather a mere reproduction of an already existing design.

Verily then, the CA erred in holding that a probable cause for copyright
infringement is imputable against the petitioners. Absent originality and
copyrightability as elements of a valid copyright ownership, no infringement
can subsist.

WHEREFORE, premises considered, the petition is hereby GRANTED. The

Decision dated July 9, 2010 and Resolution dated February 24, 2011 of the
Court of Appeals in CA-G.R. SP No. 95471 are REVERSED and SET
ASIDE. The Resolutions dated March 10, 2006 and May 25, 2006 of the

IPL- Assignment No. 10 (Entire Copyright Cases) Page 96 of 101

[19] G.R. No. 166391
MICROSOFT CORPORATION, Petitioner
vs. ROLANDO D. MANANSALA and/or MEL MANANSALA, doing
business as DATAMAN TRADING COMPANY and/or COMIC ALLEY,
Respondent
Remedial Law; Criminal Procedure; Probable Cause; Although the general
rule is that the determination of the existence of probable cause by the public
prosecutor is not to be judicially scrutinized because it is an executive function, an
exception exists when the determination is tainted with grave abuse of discretion.—
Although the general rule is that the determination of the existence of probable cause
by the public prosecutor is not to be judicially scrutinized because it is an executive
function, an exception exists when the determination is tainted with grave abuse of
discretion. Bearing this in mind, we hold that the DOJ committed grave abuse of
discretion in sustaining the public prosecutor’s dismissal of the charge of copyright
infringement under Section 29 of Presidential Decree No. 49 on the ground of lack of
evidence because the public prosecutor thereby flagrantly disregarded the existence
of acts sufficient to engender the well-founded belief that the crime of copyright
infringement had been committed, and that the respondent was probably guilty
thereof.
Criminal Law; Copyright Infringement; The commission of any of the acts
mentioned in Section 5 of Presidential Decree (PD) No. 49 without the copyright
owner’s consent constituted actionable copyright infringement.—Accordingly, the
commission of any of the acts mentioned in Section 5 of Presidential Decree No. 49
without the copyright owner’s consent constituted actionable copyright infringement.
In Columbia Pictures, Inc. v. Court of Appeals, 261 SCRA 144 (1996), the Court has
emphatically declared: Infringement of a copyright is a trespass on a private domain
owned and occupied by the owner of the copyright, and, therefore, protected by law,
and infringement of copyright, or piracy, which is a synonymous term in this
connection, consists in the doing by any person, without the consent of the owner of
the copyright, of anything the sole right to do which is conferred by statute on the
owner of the copyright.
Statutory Construction; A more important rule of statutory construction
dictates that laws should be construed in a manner that avoids absurdity or
unreasonableness.—The CA erred in its reading and interpretation of Section 5 of
Presidential Decree No. 49. Under the rules on syntax, the conjunctive word “and”
denotes a “joinder or union” of words, phrases, or clause; it is different from the
disjunctive word “or” that signals disassociation or independence. However, a more
important rule of statutory construction dictates that laws should be construed in a
manner that avoids absurdity or unreasonableness.
Criminal Law; Copyright Infringement; To hold, as the Court of Appeals (CA)
incorrectly did, that the legislative intent was to require that the computer programs
be first photographed, photo-engraved, or pictorially illustrated as a condition for
IPL- Assignment No. 10 (Entire Copyright Cases)
the commission of copyright infringement invites ridicule.—Presidential Decree No.
49 thereby already acknowledged the existence of computer programs as works or
creations protected by copyright. To hold, as the CA incorrectly did, that the
legislative intent was to require that the computer programs be first photographed,
photo-engraved, or pictorially illustrated as a condition for the commission of
copyright infringement invites ridicule. Such interpretation of Section 5(a) of
Presidential Decree No. 49 defied logic and common sense because it focused on
terms like “copy,” “multiply,” and “sell,” but blatantly ignored terms like
“photographs,” “photo-engravings,” and “pictorial illustrations.” Had the CA taken
the latter words into proper account, it would have quickly seen the absurdity of its
interpretation.
Same; Same; The mere sale of the illicit copies of the software programs was
enough by itself to show the existence of probable cause for copyright infringement.
There was no need for the petitioner to still prove who copied, replicated or
reproduced the software programs.—The mere sale of the illicit copies of the
software programs was enough by itself to show the existence of probable cause for
copyright infringement. There was no need for the petitioner to still prove who
copied, replicated or reproduced the software programs. Indeed, the public
prosecutor and the DOJ gravely abused their discretion in dismissing the petitioner’s
charge for copyright infringement against the respondents for lack of evidence. There
was grave abuse of discretion because the public prosecutor and the DOJ acted
whimsically or arbitrarily in disregarding the settled jurisprudential rules on finding
the existence of probable cause to charge the offender in court. Accordingly, the CA
erred in upholding the dismissal by the DOJ of the petitioner’s petition for review.
DECISION
BERSAMIN, J.:
This appeal seeks to overturn the decision promulgated on February 27,
2004,1 whereby the Court of Appeals (CA) dismissed the petition
for certiorari filed by petitioner to annul the orders of the Department of
Justice (DOJ) dated March 20, 2000, 2 May 15, 2001,3 and January 27,
20034 dismissing the criminal charge of violation of Section 29 of Presidential
Decree No. 49 (Decree on Intellectual Property) it had instituted against the
respondents; and the resolution promulgated on December 6, 2004 denying
its motion for reconsideration.5
Antecedents
The CA summarized the factual and procedural antecedents thusly:
Petitioner (Microsoft Corporation) is the copyright and trademark owner of all
rights relating to all versions and editions of Microsoft software (computer
programs) such as, but not limited to, MS-DOS (disk operating system),
Page 97 of 101
Microsoft Encarta, Microsoft Windows, Microsoft Word, Microsoft Excel,
Microsoft Access, Microsoft Works, Microsoft Powerpoint, Microsoft Office,
Microsoft Flight Simulator and Microsoft FoxPro, among others, and their
user’s guide/manuals.
Private Respondent-Rolando Manansala is doing business under the name
of DATAMAN TRADING COMPANY and/or COMIC ALLEY with business
address at 3rd Floor, University Mall Building, Taft Ave., Manila.
Private Respondent Manansala, without authority from petitioner, was
engaged in distributing and selling Microsoft computer software programs.
On November 3, 1997, Mr. John Benedict A. Sacriz, a private investigator
accompanied by an agent from the National Bureau of Investigation (NBI)
was able to purchase six (6) CD-ROMs containing various computer
programs belonging to petitioner.
As a result of the test-purchase, the agent from the NBI applied for a search
warrant to search the premises of the private respondent.
On November 17, 1997, a Search Warrant was issued against the premises
of the private respondent.
On November 19, 1997, the search warrant was served on the private
respondent’s premises and yielded several illegal copies of Microsoft
programs.
Subsequently, petitioner, through Atty. Teodoro Kalaw IV filed an Affidavit-
Complaint in the DOJ based on the results of the search and seizure
operation conducted on private respondent’s premises.
However, in a Resolution dated March 20, 2000, public respondent State
Prosecutor dismissed the charge against private respondent for violation of
Section 29 P.D. 49 in this wise, to quote:
‘The evidence is extant in the records to show that respondent is selling
Microsoft computer software programs bearing the copyrights and
trademarks owned by Microsoft Corporation. There is, however, no proof that
respondent was the one who really printed or copied the products of
complainant for sale in his store.
WHEREFORE, it is hereby, recommended that respondent be charged for
violation of Article 189 of the Revised Penal Code. The charge for violation of
Section 29 of
PD No. 49 is recommended dismissed for lack of evidence.’
IPL- Assignment No. 10 (Entire Copyright Cases)
Petitioner filed a Motion for Partial Reconsideration arguing that printing or
copying is not essential in the crime of copyright infringement under Section
29 of PD No. 49.
On May 15, 2001, the public respondent issued a Resolution denying the
Motion for Partial Reconsideration.
Thereafter, petitioner filed a Petition for Review with the DOJ, which denied
the petition for review.6
Dissatisfied with the outcome of its appeal, the petitioner filed its petition
for certiorari in the CA to annul the DOJ’s dismissal of its petition for review
on the ground of grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the DOJ.
On February 27, 2004, the CA rendered the assailed decision affirming the
dismissal by the DOJ,7 disposing as follows:
WHEREFORE, premises considered, the instant petition is DENIED.
Consequently, the Orders dated March 20, 2000, May 15, 2001 and January
27, 2003 respectively are hereby AFFIRMED. SO ORDERED.8
Issue
The petitioner insists that printing or copying was not essential in the
commission of the crime of copyright infringement under Section 29 of
Presidential Decree No. 49; hence, contrary to the holding of the DOJ, as
upheld by the CA, the mere selling of pirated computer software constituted
copyright infringement.9
Ruling of the Court
The appeal is meritorious.
Although the general rule is that the determination of the existence of
probable cause by the public prosecutor is not to be judicially scrutinized
because it is an executive function, an exception exists when the
determination is tainted with grave abuse of discretion. 10 Bearing this in mind,
we hold that the DOJ committed grave abuse of discretion in sustaining the
public prosecutor’s dismissal of the charge of copyright infringement under
Section 29 of Presidential Decree No. 49 on the ground of lack of evidence
because the public prosecutor thereby flagrantly disregarded the existence of
acts sufficient to engender the well-founded belief that the crime of copyright
infringement had been committed, and that the respondent was probably
guilty thereof.11
Page 98 of 101
Section 5 of Presidential Decree No. 49 specifically defined copyright as an
exclusive right in the following manner:
Section 5. Copyright shall consist in the exclusive right;
(A) To print, reprint, publish, copy, distribute, multiply, sell, and make
photographs, photo-engravings, and pictorial illustrations of the works;
(B) To make any translation or other version or extracts or arrangements or
adaptations thereof; to dramatize it if it be a non-dramatic work; to convert it
into a non-dramatic work if it be a drama; to complete or execute if it be a
model or design;
(C) To exhibit, perform, represent, produce, or reproduce, the work in any
manner or by any method whatever for profit or otherwise; it not reproduced
in copies for sale, to sell any manuscript or any record whatsoever thereof;
(D) To make any other use or disposition of the work consistent with the laws
of the land.
Accordingly, the commission of any of the acts mentioned in Section 5 of
Presidential Decree No. 49 without the copyright owner’s consent constituted
actionable copyright infringement. In Columbia Pictures, Inc. v. Court of
Appeals,12 the Court has emphatically declared:
Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law, and
infringement of copyright, or piracy, which is a synonymous term in this
connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by
statute on the owner of the copyright.
The "gravamen of copyright infringement," according to NBI-Microsoft
Corporation v. Hwang:13
is not merely the unauthorized manufacturing of intellectual works but rather
the unauthorized performance of any of the acts covered by Section 5.
Hence, any person who performs any of the acts under Section 5 without
obtaining the copyright owners prior consent renders himself civilly and
criminally liable for copyright infringement.14
The CA stated in the assailed decision as follows:
A reading of Section 5 (a) of the Copyright Law shows that the acts
enumerated therein are punctuated by commas and the last phrase is
conjoined by the words ‘and’. Clearly, the same should be interpreted to
IPL- Assignment No. 10 (Entire Copyright Cases)
mean as ‘relating to one another’ because it is basic in legal hermeneutics
that the word ‘and’ is not meant to separate words but is a conjunction used
to denote a ‘joinder’ or ‘union’.
In the book of Noli C. Diaz entitled as STATUTORY CONSTRUCTION, the
word ‘and’ was defined as a ‘conjunction connecting words or phrases
expressing the idea that the latter is to be added to or taken along with the
first’. Stated differently, the word ‘and’ is a conjunction pertinently defined as
meaning ‘together with’, ‘joined with’, ‘along or together with’, ‘added to or
linked to’ used to conjoin ‘word with word’, ‘phrase with phrase’, ‘clause with
clause’. The word ‘and’ does not mean ‘or’, it is a conjunction used to denote
a joinder or union, ‘binding together’, relating the one to the other.
Hence the key to interpret and understand Section 5 (a) of P.D. 49 is the
word ‘and’. From the foregoing definitions of the word ‘and’ it is unmistakable
that to hold a person liable under the said provision of law, all the acts
enumerated therein must be present and proven. As such, it is not correct to
construe the acts enumerated therein as being separate or independent from
one another.
In the case at bar, petitioner failed to allege and adduce evidence showing
that the private respondent is the one who copied, replicated or reproduced
the software programs of the petitioner. In other words, ‘sale’ alone of pirated
copies of Microsoft software programs does not constitute copyright
infringement punishable under P.D. 49.15
The CA erred in its reading and interpretation of Section 5 of Presidential
Decree No. 49. Under the rules on syntax, the conjunctive word "and"
denotes a "joinder or union" of words, phrases, or clause; 16 it is different from
the disjunctive word "or" that signals disassociation or
independence.17 However, a more important rule of statutory construction
dictates that laws should be construed in a manner that avoids absurdity or
unreasonableness.18 As the Court pointed out in Automotive Parts &
Equipment Company, Inc. v. Lingad:19
Nothing is better settled then that courts are not to give words a meaning
which would lead to absurd or unreasonable consequence. That is a principle
that goes back to In re Allen decided on October 29, 1903, where it was held
that a literal interpretation is to be rejected if it would be unjust or lead to
absurd results. That is a strong argument against its adoption. The words of
Justice Laurel are particularly apt. Thus: ‘The fact that the construction
placed upon the statute by the appellants would lead to an absurdity is
another argument for rejecting it x x x.’
It is of the essence of judicial duty to construe statutes so as to avoid such a
deplorable result. That has long been a judicial function. A literal reading of a
Page 99 of 101
legislative act which could be thus characterized is to be avoided if the
language thereof can be given a reasonable application consistent with the
legislative purpose. In the apt language of Frankfurter: "A decent respect for
the policy of Congress must save us from imputing to it a self-defeating, if not
disingenuous purpose. Certainly, we must reject a construction that at best
amounts to a manifestation of verbal ingenuity but hardly satisfies the test of
rationality on which law must be based.20
The conjunctive "and" should not be taken in its ordinary acceptation, but
should be construed like the disjunctive "or" if the literal interpretation of the
law would pervert or obscure the legislative intent. 21 To accept the CA’s
reading and interpretation is to accept absurd results because the violations
listed in Section 5(a) of Presidential Decree No. 49 – "To print, reprint,
publish, copy, distribute, multiply, sell, and make photographs, photo-
engravings, and pictorial illustrations of the works" – cannot be carried out on
all of the classes of works enumerated in Section 2 of Presidential Decree
No. 49, viz.:
Section 2. - The Rights granted by this Decree shall, from the moment of
creation, subsist with respect to any of the following classes of works:
(A) Books, including composite and encyclopedic works, manuscripts,
directories, and gazetteers;
(B) Periodicals, including pamphlets and newspapers;
(C) Lectures, sermons, addresses, dissertations prepared for oral delivery;
(D) Letters;
(E) Dramatic or dramatico-musical compositions; choreographic works and
entertainments in dumb shows, the acting form of which is fixed in writing or
otherwise;
(F) Musical compositions, with or without words;
(G) Works of drawing, painting, architecture, sculpture, engraving,
lithography, and other works of art; models or designs for works of art;
(H) Reproductions of a work of art;
(I) Original ornamental designs or models for articles of manufacture,
whether or not patentable, and other works of applied art;
(J) Maps, plans, sketches, and charts;
IPL- Assignment No. 10 (Entire Copyright Cases)
(K) Drawings, or plastic works of a scientific or technical character;
(L) Photographic works and works produced by a process analogous to
photography; lantern slides;
(M) Cinematographic works and works produced by a process analogous to
cinematography or any process for making audio-visual recordings;
(N) Computer programs;
(O) Prints, pictorial, illustration, advertising copies, labels, tags, and box
wraps;
(P) Dramatization, translations, adaptations, abridgements, arrangements
and other alterations of literary, musical or artistic works or of works of the
Philippine Government as herein defined, which shall be protected as
provided in Section 8 of this Decree.
(Q) Collection of literary, scholarly, or artistic works or of works referred to in
Section 9 of this Decree which by reason of the selection and arrangement of
their contents constitute intellectual creations, the same to be protected as
such in accordance with Section 8 of this Decree.
(R) Other literary, scholarly, scientific and artistic works.
Presidential Decree No. 49 thereby already acknowledged the existence of
computer programs as works or creations protected by copyright. 22 To hold,
as the CA incorrectly did, that the legislative intent was to require that the
computer programs be first photographed, photoengraved, or pictorially
illustrated as a condition for the commission of copyright infringement invites
ridicule. Such interpretation of Section 5(a) of Presidential Decree No. 49
defied logic and common sense because it focused on terms like "copy,"
"multiply," and "sell," but blatantly ignored terms like "photographs," "photo-
engravings," and "pictorial illustrations."
Had the CA taken the latter words into proper account, it would have quickly
seen the absurdity of its interpretation.
The mere sale of the illicit copies of the software programs was enough by
itself to show the existence of probable cause for copyright
infringement.1âwphi1 There was no need for the petitioner to still prove who
copied, replicated or reproduced the software programs. Indeed, the public
prosecutor and the DOI gravely abused their discretion in dismissing the
petitioner's charge for copyright infringement against the respondents for lack
of evidence. There was grave abuse of discretion because the public
prosecutor and the DOI acted whimsically or arbitrarily in disregarding the
Page 100 of 101
settled jurisprudential rules on finding the existence of probable cause to
charge the offender in court. Accordingly, the CA erred in upholding the
dismissal by the DOI of the petitioner's petition for review. We reverse.

WHEREFORE, the Court GRANTS the petition for review

on certiorari; REVERSES and SETS ASIDE the decision promulgated on
February 27, 2004 in C.A.-G.R. SP No. 76402; DIRECTS the Department of
Justice to render the proper resolution to charge respondent ROLANDO D.
MANANSALA and/or MEL MANANSALA, doing business as DATAMAN
TRADING COMPANY and/or COMIC ALLEY in accordance with this
decision; and ORDERS the respondents to pay the costs of suit.

SO ORDERED.

IPL- Assignment No. 10 (Entire Copyright Cases) Page 101 of 101