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Sec 171 - 190 IPL CasesColumbia Pictures v. CA...................................................2

Ching v. Salinas.............................................................16

Laktaw v. Paglinawan....................................................24

Joaquin Jr. v. !rilon........................................................2"

Pearl # !ean $nc. v. Shoemart $nc.................................%%

&ili'ino Societ( o) Com'osers v. *an..............................41

+aglalang Santos v. +cCullough Printing......................44



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Columbia Pictures v. CA

[G.R. No. 110318. August 28, 1996]

COLUMBIA PICTURE, INC., ORION PICTURE CORPORATION, PARAMOUNT

PICTURE CORPORATION, T!ENTIET" CENTUR# $O% $ILM CORPORATION,

UNITE& ARTIT CORPORATION, UNI'ERAL CIT# TU&IO, INC., T"E !ALT

&INE# COMPAN#, ()* !ARNER BROT"ER, INC., petitioners, vs. COURT O$

APPEAL, UN"INE "OME 'I&EO, INC. ()* &ANILO A.

PELIN&ARIO, respondents.

& E C I I O N

REGALA&O, J .+

Before us is a petition for review on certiorari of the decision of the Court of Appeals[1] promulgated on July 22, 1992 and its resolution[2] of ay 1!, 199" denyingpetitioners motion for reconsideration, #oth of which sustained the order ["] of the$egional %rial Court, Branch 1"", a&ati, etro anila, dated 'ovem#er 22, 19((for the )uashal of *earch +arrant 'o (-.!/" earlier issued per its own order [0] on*eptem#er /, 19(( for violation of *ection / of residential 3ecree 'o 09, asamended, otherwise &nown as the 3ecree on the rotection of 4ntellectual roperty

%he material facts found #y respondent appellate court are as follows5

Complainants thru counsel lodged a formal complaint with the 'ational Bureau of 4nvestigation for violation of 3 'o 09, as amended, and sought its assistance in

their anti.film piracy drive Agents of the 'B4 and private researchers made discreetsurveillance on various video esta#lishments in etro anila including *unshine6ome 7ideo 4nc 8*unshine for #revity, owned and operated #y 3anilo A elindariowith address at 'o ayfair Center, agallanes, a&ati, etro anila

:n 'ovem#er 10, 19(-, 'B4 *enior Agent ;auro C $eyes applied for a searchwarrant with the court a quo against *unshine see&ing the sei<ure, among others, of pirated video tapes of copyrighted films all of which were enumerated in a listattached to the application= and, television sets, video cassettes and>or laser discrecordings e)uipment and other machines and paraphernalia used or intended to #eused in the unlawful e?hi#ition, showing, reproduction, sale, lease or disposition of videograms tapes in the premises a#ove descri#ed 4n the hearing of the application,

'B4 *enior Agent ;auro C $eyes, upon )uestions #y the court a quo, reiterated insu#stance his averments in his affidavit 6is testimony was corro#orated #y another

witness, r $ene C Balta<ar Atty $ico 7 3omingos deposition was also ta&en :nthe #asis of the affidavits and depositions of 'B4 *enior Agent ;auro C $eyes, $eneC Balta<ar and Atty $ico 7 3omingo, *earch +arrant 'o (-.!/" for violation of *ection / of 3 'o 09, as amended, was issued #y the court a quo

%he search warrant was served at a#out 150/ pm on 3ecem#er 10, 19(- to*unshine and>or their representatives 4n the course of the search of the premisesindicated in the search warrant, the 'B4 Agents found and sei<ed various video tapesof duly copyrighted motion pictures>films owned or e?clusively distri#uted #y privatecomplainants, and machines, e)uipment, television sets, paraphernalia, materials,accessories all of which were included in the receipt for properties accomplished #ythe raiding team Copy of the receipt was furnished and>or tendered to r 3anilo Aelindario, registered owner.proprietor of *unshine 6ome 7ideo

:n 3ecem#er 1, 19(-, a $eturn of *earch +arrant was filed with the Court

A otion %o ;ift the :rder of *earch +arrant was filed #ut was later denied for lac& of merit 8p 2(!, $ecords

A otion for reconsideration of the :rder of denial was filed %he court a quo grantedthe said motion for reconsideration and @ustified it in this manner5

4t is undisputed that the master tapes of the copyrighted films from which the piratedfilms were allegedly copies 8sic, were never presented in the proceedings for theissuance of the search warrants in )uestion %he orders of the Court granting thesearch warrants and denying the urgent motion to lift order of search warrants were,therefore, issued in error Conse)uently, they must #e set aside 8p 1", AppellantsBrief[/]

etitioners thereafter appealed the order of the trial court granting privaterespondents motion for reconsideration, thus lifting the search warrant which it hadtherefore issued, to the Court of Appeals As stated at the outset, said appeal wasdismissed and the motion for reconsideration thereof was denied 6ence, this petitionwas #rought to this Court particularly challenging the validity of respondent courtsretroactive application of the ruling in 20th Century Fox Film Corporation vs. Court of

Appeals, et al ,[] in dismissing petitioners appeal and upholding the )uashal of thesearch warrant #y the trial court

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http://sc.judiciary.gov.ph/jurisprudence/1996/aug1996/110318.htm#_edn1


















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4nceptively, we shall settle the procedural considerations on the matter of and thechallenge to petitioners legal standing in our courts, they #eing foreign corporationsnot licensed to do #usiness in the hilippines

rivate respondents aver that #eing foreign corporations, petitioners should have

such license to #e a#le to maintain an action in hilippine courts 4n so challengingpetitioners personality to sue, private respondents point to the fact that petitionersare the copyright owners or owners of e?clusive rights of distri#ution in thehilippines of copyrighted motion pictures or films, and also to the appointment of Atty $ico 7 3omingo as their attorney.in.fact, as #eing constitutive of doing#usiness in the hilippines under *ection 18f 81 and 82, $ule 1 of the $ules of theBoard of 4nvestments As foreign corporations doing #usiness in the hilippines,*ection 1"" of Batas am#ansa Blg (, or the Corporation Code of the hilippines,denies them the right to maintain a suit in hilippine courts in the a#sence of alicense to do #usiness Conse)uently, they have no right to as& for the issuance of asearch warrant[-]

4n refutation, petitioners flatly deny that they are doing #usiness in the hilippines,[(] and contend that private respondents have not adduced evidence to prove thatpetitioners are doing such #usiness here, as would re)uire them to #e licensed #ythe *ecurities and ?change Commission, other than averments in the )uotedportions of petitioners :pposition to rgent otion to ;ift :rder of *earch +arrantdated April 2(, 19(( and Atty $ico 7 3omingos affidavit of 3ecem#er 10,19(- oreover, an e?clusive right to distri#ute a product or the ownership of suche?clusive right does not conclusively prove the act of doing #usiness nor esta#lishthe presumption of doing #usiness[9]

%he Corporation Code provides5

*ec 1"" Doing business without a license 'o foreign corporation transacting#usiness in the hilippines without a license, or its successors or assigns, shall #epermitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the hilippines= #ut such corporation may #e sued or proceeded against #efore hilippine courts or administrative tri#unals on any validcause of action recogni<ed under hilippine laws

%he o#tainment of a license prescri#ed #y *ection 12/ of the Corporation Code isnot a condition precedent to the maintenance of any &ind of action in hilippinecourts #y a foreign corporation 6owever, under the afore)uoted provision, no foreigncorporation shall #e permitted to transact #usiness in the hilippines, as this phraseis understood under the Corporation Code, unless it shall have the license re)uired

#y law, and until it complies with the law in transacting #usiness here, it shall not #epermitted to maintain any suit in local courts[1!]

As thus interpreted, any foreign

corporation not doing #usiness in the hilippines may maintain an action in our courts upon any cause of action, provided that the su#@ect matter and the defendantare within the @urisdiction of the court 4t is not the a#sence of the prescri#ed license#ut doing #usiness in the hilippines without such license which de#ars the foreigncorporation from access to our courts 4n other words, although a foreign corporation

is without license to transact #usiness in the hilippines, it does not follow that it hasno capacity to #ring an action *uch license is not necessary if it is not engaged in#usiness in the hilippines[11]

*tatutory provisions in many @urisdictions are determinative of what constitutes doing#usiness or transacting #usiness within that forum, in which case said provisions arecontrolling there 4n others where no such definition or )ualification is laid downregarding acts or transactions falling within its purview, the )uestion rests primarilyon facts and intent 4t is thus held that all the com#ined acts of a foreign corporationin the *tate must #e considered, and every circumstance is material which indicatesa purpose on the part of the corporation to engage in some part of its regular #usiness in the *tate [12]

'o general rule or governing principles can #e laid down as to what constitutes doingor engaging in or transacting #usiness ach case must #e @udged in the light of itsown peculiar environmental circumstances[1"] %he true tests, however, seem to #ewhether the foreign corporation is continuing the #ody or su#stance of the #usinessor enterprise for which it was organi<ed or whether it has su#stantially retired from itand turned it over to another [10]

As a general proposition upon which many authorities agree in principle, su#@ect tosuch modifications as may #e necessary in view of the particular issue or of theterms of the statute involved, it is recogni<ed that a foreign corporation is doing,transacting, engaging in, or carrying on #usiness in the *tate when, and ordinarily

only when, it has entered the *tate #y its agents and is there engaged in carrying onand transacting through them some su#stantial part of its ordinary or customary#usiness, usually continuous in the sense that it may #e distinguished from merelycasual, sporadic, or occasional transactions and isolated acts[1/]

%he Corporation Code does not itself define or categori<e what acts constitute doingor transacting #usiness in the hilippines Jurisprudence has, however, held that theterm implies a continuity of commercial dealings and arrangements, andcontemplates, to that e?tent, the performance of acts or wor&s or the e?ercise of some of the functions normally incident to or in progressive prosecution of thepurpose and su#@ect of its organi<ation[1]

%his traditional case law definition has evolved into a statutory definition, having #eenadopted with some )ualifications in various pieces of legislation in our @urisdiction




























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or instance, $epu#lic Act 'o /0//[1-] provides5

*C%4:' 1 Definitions an scope of this Act. 81 ? ? ?= and the phrase doing#usiness shall include soliciting orders, purchases, service contracts, opening offices,whether called liaison offices or #ranches= appointing representatives or distri#utors

who are domiciled in the hilippines or who in any calendar year stay in thehilippines for a period or periods totalling one hundred eighty days or more=participating in the management, supervision or control of any domestic #usinessfirm, entity or corporation in the hilippines= and any other act or acts that imply acontinuity of commercial dealings or arrangements, and contemplate to that e?tentthe performance of acts or wor&s, or the e?ercise of some of the functions normallyincident to, and in.progressive prosecution of, commercial gain or of the purpose ando#@ect of the #usiness organi<ation

residential 3ecree 'o 1-(9,[1(]

in Article / thereof, defines doing #usiness toinclude soliciting orders, purchases, service contracts, opening offices, whether called liaison offices or #ranches= appointing representatives or distri#utors who are

domiciled in the hilippines or who in any calendar year stay in the hilippines for aperiod or periods totalling one hundred eighty days or more= participating in themanagement, supervision or control of any domestic #usiness firm, entity or corporation in the hilippines, and any other act or acts that imply a continuity of commercial dealings or arrangements and contemplate to that e?tent theperformance of acts or wor&s, or the e?ercise of some of the functions normallyincident to, and in progressive prosecution of, commercial gain or of the purpose ando#@ect of the #usiness organi<ation

%he implementing rules and regulations of said presidential decree conclude theenumeration of acts constituting doing #usiness with a catch.all definition, thus5

*ec 18g 3oing Business shall #e any act or com#ination of acts enumerated in Article / of the Code 4n particular doing #usiness includes5

??? ??? ???

81! Any other act or acts which imply a continuity of commercial dealings or arrangements, and contemplate to that e?tent the performance of acts or wor&s, or the e?ercise of some of the functions normally incident to, or in the progressiveprosecution of, commercial gain or of the purpose and o#@ect of the #usinessorgani<ation

inally, $epu#lic Act 'o -!02 [19] em#odies such concept in this wise5

*C " Definitions As used in this Act5

??? ??? ???

8d the phrase doing #usiness shall include soliciting orders, service contracts,opening offices, whether called liaison offices or #ranches= appointingrepresentatives or distri#utors domiciled in the hilippines or who in any calendar

year stay in the country for a period or periods totalling one hundred eight8y 81(!days or more= participating in the management, supervision or control of anydomestic #usiness, firm, entity or corporation in the hilippines= and any other act or acts that imply a continuity of commercial dealings or arrangements, andcontemplate to that e?tent the performance of acts or wor&s, or the e?ercise of someof the functions normally incident to, and in progressive prosecution of, commercialgain or of the purpose and o#@ect of the #usiness organi<ation5 !rovie , however ,%hat the phrase doing #usiness shall not #e deemed to include mere investment as ashareholder #y a foreign entity in domestic corporations duly registered to do#usiness, and>or the e?ercise of rights as such investors= nor having a nomineedirector or officer to represent its interests in such corporation= nor appointing arepresentative or distri#utor domiciled in the hilippines which transacts #usiness in

its own name and for its own account

Based on Article 1"" of the Corporation Code and gauged #y such statutorystandards, petitioners are not #arred from maintaining the present action %here is noshowing that, under our statutory or case law, petitioners are doing, transacting,engaging in or carrying on #usiness in the hilippines as would re)uire o#tention of alicense #efore they can see& redress from our courts 'o evidence has #een offeredto show that petitioners have performed any of the enumerated acts or any other specific act indicative of an intention to conduct or transact #usiness in thehilippines

Accordingly, the certification issued #y the *ecurities and ?change

Commission[2!]

stating that its records do not show the registration of petitioner filmcompanies either as corporations or partnerships or that they have #een licensed totransact #usiness in the hilippines, while undenia#ly true, is of no conse)uence topetitioners right to #ring action in the hilippines 7erily, no record of such registration#y petitioners can #e e?pected to #e found for, as aforestated, said foreign filmcorporations do not transact or do #usiness in the hilippines and, therefore, do notneed to #e licensed in order to ta&e recourse to our courts

Although *ection 18g of the 4mplementing $ules and $egulations of the :mni#us4nvestments Code lists, among others

81 *oliciting orders, purchases 8sales or service contracts Concrete and specific

solicitations #y a foreign firm, or #y an agent of such foreign firm, not actingindependently of the foreign firm amounting to negotiations or fi?ing of the terms and














,

conditions of sales or service contracts, regardless of where the contracts areactually reduced to writing, shall constitute doing #usiness even if the enterprise hasno office or fi?ed place of #usiness in the hilippines %he arrangements agreedupon as to manner, time and terms of delivery of the goods or the transfer of titlethereto is immaterial A foreign firm which does #usiness through the middlemen

acting in their own names, such as indentors, commercial #ro&ers or commissionmerchants, shall not #e deemed doing #usiness in the hilippines But suchindentors, commercial #ro&ers or commission merchants shall #e the ones deemedto #e doing #usiness in the hilippines

82 Appointing a representative or distri#utor who is domiciled in the hilippines,unless said representative or distri#utor has an independent status, ie, it transacts#usiness in its name and for its own account, and not in the name or for the accountof a principal %hus, where a foreign firm is represented in the hilippines #y aperson or local company which does not act in its name #ut in the name of theforeign firm, the latter is doing #usiness in the hilippines

as acts constitutive of doing #usiness, the fact that petitioners are admittedlycopyright owners or owners of e?clusive distri#ution rights in the hilippines of motion pictures or films does not convert such ownership into an indicium of doing#usiness which would re)uire them to o#tain a license #efore they can sue upon acause of action in local courts

'either is the appointment of Atty $ico 7 3omingo as attorney.in.fact of petitioners,with e?press authority pursuant to a special power of attorney, inter alia

%o lay criminal complaints with the appropriate authorities and to provide evidence insupport of #oth civil and criminal proceedings against any person or persons involvedin the criminal infringement of copyright, or concerning the unauthori<ed importation,

duplication, e?hi#ition or distri#ution of any cinematographic wor&8s films or videocassettes of which ? ? ? is the owner of copyright or the owner of e?clusive rights of distri#ution in the hilippines pursuant to any agreement8s #etween ? ? ? and therespective owners of copyright in such cinematographic wor&8s, to initiate andprosecute on #ehalf of ? ? ? criminal or civil actions in the hilippines against anyperson or persons unlawfully distri#uting, e?hi#iting, selling or offering for sale anyfilms or video cassettes of which ? ? ? is the owner of copyright or the owner of e?clusive rights of distri#ution in the hilippines pursuant to any agreement8s#etween ? ? ? and the respective owners of copyright in such wor&s[21]

tantamount to doing #usiness in the hilippines +e fail to see how e?ercising oneslegal and property rights and ta&ing steps for the vigilant protection of said rights,

particularly the appointment of an attorney.in.fact, can #e deemed #y and of themselves to #e doing #usiness here

As a general rule, a foreign corporation will not #e regarded as doing #usiness in the*tate simply #ecause it enters into contracts with residents of the *tate, where suchcontracts are consummated outside the *tate [22] 4n fact, a view is ta&en that a foreigncorporation is not doing #usiness in the state merely #ecause sales of its product aremade there or other #usiness furthering its interests is transacted there #y an alleged

agent, whether a corporation or a natural person, where such activities are not under the direction and control of the foreign corporation #ut are engaged in #y the allegedagent as an independent #usiness[2"]

4t is generally held that sales made to customers in the *tate #y an independentdealer who has purchased and o#tained title from the corporation to the productssold are not a doing of #usiness #y the corporation [20] ;i&ewise, a foreign corporationwhich sells its products to persons styled distri#uting agents in the *tate, for distri#ution #y them, is not doing #usiness in the *tate so as to render it su#@ect toservice of process therein, where the contract with these purchasers is that they shall#uy e?clusively from the foreign corporation such goods as it manufactures and shallsell them at trade prices esta#lished #y it[2/]

4t has moreover #een held that the act of a foreign corporation in engaging anattorney to represent it in a ederal court sitting in a particular *tate is not doing#usiness within the scope of the minimum contact test [2] +ith much more reasonshould this doctrine apply to the mere retainer of Atty 3omingo for legal protectionagainst contingent acts of intellectual piracy

4n accordance with the rule that doing #usiness imports only acts in furtherance of the purposes for which a foreign corporation was organi<ed, it is held that the mereinstitution and prosecution or defense of a suit, particularly if the transaction which isthe #asis of the suit too& place out of the *tate, do not amount to the doing of #usiness in the *tate %he institution of a suit or the removal thereof is neither the

ma&ing of a contract nor the doing of #usiness within a constitutional provisionplacing foreign corporations licensed to do #usiness in the *tate under the sameregulations, limitations and lia#ilities with respect to such acts as domesticcorporations erely engaging in litigation has #een considered as not a sufficientminimum contact to warrant the e?ercise of @urisdiction over a foreign corporation[2-]

As a consideration aside, we have perforce to comment on private respondents #asisfor arguing that petitioners are #arred from maintaining suit in the hilippines or allegedly #eing foreign corporations doing #usiness in the hilippines without alicense, private respondents repeatedly maintain in all their pleadings that petitionershave there#y no legal personality to #ring an action #efore hilippine courts[2(]

Among the grounds for a motion to dismiss under the $ules of Court are lac& of legalcapacity to sue[29]

and that the complaint states no cause of action ["!]

;ac& of legal





























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capacity to sue means that the plaintiff is not in the e?ercise of his civil rights, or doesnot have the necessary )ualification to appear in the case, or does not have thecharacter or representation he claims ["1] :n the other hand, a case is dismissi#le for lac& of personality to sue upon proof that the plaintiff is not the real party.in.interest,hence grounded on failure to state a cause of action ["2] %he term lac& of capacity to

sue should not #e confused with the term lac& of personality to sue +hile the former refers to a plaintiffs general disa#ility to sue, such as on account of minority, insanity,incompetence, lac& of @uridical personality or any other general dis)ualifications of aparty, the latter refers to the fact that the plaintiff is not the real party. in.interest Correspondingly, the first can #e a ground for a motion to dismiss #ased onthe ground of lac& of legal capacity to sue= [""]

whereas the second can #e used as aground for a motion to dismiss #ased on the fact that the complaint, on the facethereof, evidently states no cause of action["0]

Applying the a#ove discussion to the instant petition, the ground availa#le for #arringrecourse to our courts #y an unlicensed foreign corporation doing or transacting#usiness in the hilippines should properly #e lac& of capacity to sue, not lac& of

personality to sue Certainly, a corporation whose legal rights have #een violated isundenia#ly such, if not the only, real party.in.interest to #ring suit thereon although,for failure to comply with the licensing re)uirement, it is not capacitated to maintainany suit #efore our courts

;astly, on this point, we reiterate this Courts re@ection of the common proceduraltactics of erring local companies which, when sued #y unlicensed foreigncorporations not engaged in #usiness in the hilippines, invo&e the latters supposedlac& of capacity to sue%he doctrine of lac& of capacity to sue #ased on failure to firstac)uire a local license is #ased on considerations of pu#lic policy 4t was never intended to favor nor insulate from suit unscrupulous esta#lishments or nationals incase of #reach of valid o#ligations or violations of legal rights of unsuspecting foreignfirms or entities simply #ecause they are not licensed to do #usiness in the country["/]

II

+e now proceed to the main issue of the retroactive application to the presentcontroversy of the ruling in 20th Century Fox Film Corporation vs. Court of Appeals,

et al., promulgated on August 19, 19((, ["] that for the determination of pro#a#lecause to support the issuance of a search warrant in copyright infringement casesinvolving videograms, the production of the master tape for comparison with theallegedly pirated copies is necessary

etitioners assert that the issuance of a search warrant is addressed to the discretion

of the court su#@ect to the determination of pro#a#le cause in accordance with theprocedure prescri#ed therefor under *ections " and 0 of $ule 12 As of the time of

the application for the search warrant in )uestion, the controlling criterion for thefinding of pro#a#le cause was that enunciated in "urgos vs. Chief of #taff ["-]

statingthat5

ro#a#le cause for a search warrant is defined as such facts and circumstances

which would lead a reasona#ly discrete and prudent man to #elieve that an offensehas #een committed and that the o#@ects sought in connection with the offense are inthe place sought to #e searched

According to petitioners, after complying with what the law then re)uired, the lower court determined that there was pro#a#le cause for the issuance of a search warrant,and which determination in fact led to the issuance and service on 3ecem#er 10,19(- of *earch +arrant 'o (-.!/" 4t is further argued that any search warrant soissued in accordance with all applica#le legal re)uirements is valid, for the lower court could not possi#ly have #een e?pected to apply, as the #asis for a finding of pro#a#le cause for the issuance of a search warrant in copyright infringement casesinvolving videograms, a pronouncement which was not e?istent at the time of such

determination, on 3ecem#er 10, 19(-, that is, the doctrine in the 20th Century Fox case that was promulgated only on August 19, 19((, or over eight months later

rivate respondents predicta#ly argue in support of the ruling of the Court of Appealssustaining the )uashal of the search warrant #y the lower court on the strength of that 20th Century Fox ruling which, they claim, goes into the very essence of pro#a#le causeAt the time of the issuance of the search warrant involved here,although the 20th Century Fox case had not yet #een decided, *ection 2, Article 44 4 of the Constitution and *ection ", $ule 12 of the 19(/ $ules on Criminal rocedureem#odied the prevailing and governing law on the matter %he ruling in 20th Century

Fox was merely an application of the law on pro#a#le cause 6ence, they posit thatthere was no law that was retrospectively applied, since the law had #een there all

along %o refrain from applying the 20th Century Fox ruling, which had supervened asa doctrine promulgated at the time of the resolution of private respondents motion for reconsideration see&ing the )uashal of the search warrant for failure of the trial courtto re)uire presentation of the master tapes prior to the issuance of the searchwarrant, would have constituted grave a#use of discretion ["(]

$espondent court upheld the retroactive application of the 20th Century Fox ruling #ythe trial court in resolving petitioners motion for reconsideration in favor of the)uashal of the search warrant, on this renovated thesis5

And whether this doctrine should apply retroactively, it must #e noted that in the 2!thCentury o? case, the lower court )uashed the earlier search warrant it

issued :n certiorari , the *upreme Court affirmed the )uashal on the ground amongothers that the master tapes or copyrighted films were not presented for comparison























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with the purchased evidence of the video tapes to determine whether the latter is anunauthori<ed reproduction of the former

4f the lower court in the Century o? case did not )uash the warrant, it is :ur viewthat the *upreme Court would have invalidated the warrant @ust the same considering

the very strict re)uirement set #y the *upreme Court for the determination of pro#a#le cause in copyright infringement cases as enunciated in this 2!th Centuryo? case %his is so #ecause, as was stated #y the *upreme Court in the said case,the master tapes and the pirated tapes must #e presented for comparison to satisfy

the requirement of probable cause. *o it goes #ac& to the very e?istence of pro#a#lecause ? ? ?["9]

indful as we are of the ramifications of the doctrine of stare ecisis and therudiments of fair play, it is our considered view that the 20th Century Fox rulingcannot #e retroactively applied to the instant case to @ustify the )uashal of *earch+arrant 'o (-.!/"6erein petitioners consistent position that the order of the lower court of *eptem#er /, 19(( denying therein defendants motion to lift the order of

search warrant was properly issued, there having #een satisfactory compliance withthe then prevailing standards under the law for determination of pro#a#le cause, isindeed well ta&en %he lower court could not possi#ly have e?pected more evidencefrom petitioners in their application for a search warrant other than what the law and @urisprudence, then existing an $uicially accepte , re)uired with respect to thefinding of pro#a#le cause

Article 0 of the Civil Code provides that 8laws shall have no retroactive effect, unlessthe contrary is provided Correlatively, Article ( of the same Code declares that8@udicial decisions applying the laws or the Constitution shall form part of the legalsystem of the hilippines

Jurisprudence, in our system of government, cannot #e considered as anindependent source of law= it cannot create law[0!] +hile it is true that @udicialdecisions which apply or interpret the Constitution or the laws are part of the legalsystem of the hilippines, still they are not laws Judicial decisions, though not laws,are nonetheless evidence of what the laws mean, and it is for this reason that theyare part of the legal system of the hilippines[01] Judicial decisions of the *upremeCourt assume the same authority as the statute itself[02]

4nterpreting the afore)uoted correlated provisions of the Civil Code and in light of thea#ove dis)uisition, this Court emphatically declared in Co vs. Court of Appeals, et al [0"] that the principle of prospectivity applies not only to original amendatory statutesand administrative rulings and circulars, #ut also, and properly so, to @udicial

decisions :ur holding in the earlier case of !eople vs. %ubinal [00] echoes therationale for this @udicial declaration, vi& 5

3ecisions of this Court, although in themselves not laws, are nevertheless evidenceof what the laws mean, and this is the reason why under Article ( of the 'ew CivilCode, Judicial decisions applying or interpreting the laws or the Constitution shallform part of the legal system %he interpretation upon a law #y this Court constitutes,in a way, a part of the law as of the date that the law was originally passed, since this

Courts construction merely esta#lishes the contemporaneous legislative intent thatthe law thus construed intends to effectuate %he settled rule supported #y numerousauthorities is a restatement of the legal ma?im legis interpretation legis vim

obtinet the interpretation placed upon the written law #y a competent court has theforce of law ? ? ?, #ut when a doctrine of this Court is overruled and a different viewis adopted, the new octrine shoul be applie prospectively, an shoul not apply to

parties who ha relie on the ol octrine an acte on the faith thereof ? ? ?8*tress supplied

%his was forcefully reiterated in #pouses "en&onan vs. Court of Appeals, et al.,[0/] where the Court e?pounded5

? ? ? But while our decisions form part of the law of the land, they are also su#@ect to Article 0 of the Civil Code which provides that laws shall have no retroactive effectunless the contrary is provided %his is e?pressed in the familiar legalma?imum lex prospicit, non respicit , the law loo&s forward not #ac&ward %herationale against retroactivity is easy to perceive %he retroactive application of a lawusually divests rights that have already #ecome vested or impairs the o#ligations of contract and hence, is unconstitutional 8rancisco v Certe<a, " *C$A //[191] %he same consideration underlies our rulings giving only prospective effectto decisions enunciating new doctrines ? ? ?

%he reasoning #ehind #enarillos vs. 'ermosisima[0] that @udicial interpretation of astatute constitutes part of the law as of the date it was originally passed, since the

Courts construction merely esta#lishes the contemporaneous legislative intent thatthe interpreted law carried into effect, is all too familiar *uch @udicial doctrine doesnot amount to the passage of a new law #ut consists merely of a construction or interpretation of a pre.e?isting one, and that is precisely the situation o#taining in thiscase

4t is conse)uently clear that a @udicial interpretation #ecomes a part of the law as of the date that law was originally passed, su#@ect only to the )ualification that when adoctrine of this Court is overruled and a different view is adopted, and more so whenthere is a reversal thereof, the new doctrine should #e applied prospectively andshould not apply to parties who relied on the old doctrine and acted in good faith[0-] %o hold otherwise would #e to deprive the law of its )uality of fairness and @usticethen, if there is no recognition of what had transpired prior to such ad@udication[0(]



























"

%here is merit in petitioners impassioned and well.founded argumentation5

%he case of 2!th Century o? ilm Corporation vs. Court of Appeals, et al, 10*C$A // 8August 19, 19(( 8hereinafter 2!th Century o? was ine?istent in3ecem#er of 19(- when *earch +arrant (-.!/" was issued #y the lower

court 6ence, it #oggles the imagination how the lower court could #e e?pected toapply the formulation of 2!th Century o? in finding pro#a#le cause when theformulation was yet non.e?istent

??? ??? ???

4n short, the lower court was convinced at that time after conducting searchinge?amination )uestions of the applicant and his witnesses that an offense had #eencommitted and that the o#@ects sought in connection with the offense 8were in theplace sought to #e searched 8Burgos v Chief of *taff, et al, 1"" *C$A (!! 4t isindisputa#le, therefore, that at the time of the application, or on 3ecem#er 10, 19(-,the lower court did not commit any error nor did it fail to comply with any legal

re)uirement for the valid issuance of search warrant

? ? ? 8+e #elieve that the lower court should #e considered as having followed there)uirements of the law in issuing *earch +arrant 'o (-.!/" %he search warrant istherefore valid and #inding 4t must #e noted that nowhere is it found in theallegations of the $espondents that the lower court failed to apply the law as then

interprete in ()*+. 6ence, we find it a#surd that it is 8sic should #e seen otherwise,#ecause it is simply impossi#le to have re)uired the lower court to apply aformulation which will only #e defined si? months later

urthermore, it is un@ust and unfair to re)uire compliance with legal and>or doctrinalre)uirements which are ine?istent at the time they were supposed to have #een

complied with

??? ??? ???

? ? ? 4f the lower courts reversal will #e sustained, what encouragement can #egiven to courts and litigants to respect the law and rules if they can e?pect withreasona#le certainty that upon the passage of a new rule, their conduct can still #eopen to )uestionD %his certainly #reeds insta#ility in our system of dispensing @ustice or etitioners who too& special effort to redress their grievances and toprotect their property rights #y resorting to the remedies provided #y the law, it ismost unfair that fealty to the rules and procedures then o#taining would #ear #utfruits of in@ustice[09]

+ithal, even the proposition that the prospectivity of @udicial decisions importsapplication thereof not only to future cases #ut also to cases still ongoing or not yetfinal when the decision was promulgated, should not #e countenanced in the @uralsphere on account of its inevita#ly unsettling repercussions ore to the point, it isfelt that the reasona#leness of the added re)uirement in 20th Century Fox calling for

the production of the master tapes of the copyrighted films for determination of pro#a#le cause in copyright infringement cases needs revisiting and clarification

4t will #e recalled that the 20th Century Fox case arose from search warrantproceedings in anticipation of the filing of a case for the unauthori<ed sale or rentingout of copyrighted films in videotape format in violation of residential 3ecree 'o09 4t revolved around the meaning of pro#a#le cause within the conte?t of theconstitutional provision against illegal searches and sei<ures, as applied to copyrightinfringement cases involving videotapes

%herein it was ruled that

%he presentation of master tapes of the copyrighted films from which the pirated filmswere allegedly copied, was necessary for the validity of search warrants againstthose who have in their possession the pirated films %he petitioners argument to theeffect that the presentation of the master tapes at the time of application may not #enecessary as these would #e merely evidentiary in nature and not determinative of whether or not a pro#a#le cause e?ists to @ustify the issuance of the search warrantsis not meritorious %he court cannot presume that duplicate or copied tapes werenecessarily reproduced from master tapes that it owns

%he application for search warrants was directed against video tape outlets whichallegedly were engaged in the unauthori<ed sale and renting out of copyrighted films#elonging to the petitioner pursuant to 3 09

%he essence of a copyright infringement is the similarity or at least su#stantialsimilarity of the purported pirated wor&s to the copyrighted wor& 6ence, theapplicant must present to the court the copyrighted films to compare them with thepurchased evidence of the video tapes allegedly pirated to determine whether thelatter is an unauthori<ed reproduction of the former %his lin&age of the copyrightedfilms to the pirated films must #e esta#lished to satisfy the re)uirements of pro#a#lecause ere allegations as to the e?istence of the copyrighted films cannot serve as#asis for the issuance of a search warrant

or a closer and more perspicuous appreciation of the factual antecedentsof 20th Century Fox , the pertinent portions of the decision therein are )uoted

hereunder, to wit5





4n the instant case, the lower court lifted the three )uestioned search warrantsagainst the private respondents on the ground that it acted on the application for theissuance of the said search warrants and granted it on the misrepresentations of applicant 'B4 and its witnesses that infringement of copyright or a piracy of aparticular film have #een committed %hus the lower court stated in its )uestioned

order dated January 2, 19(5

According to the movant, all three witnesses during the proceedings in theapplication for the three search warrants testified of their own personal&nowledge et, Atty. Albino -eyes of the "/ state that the counsel or

representative of the wentieth Century Fox Corporation will testify on the vieo

cassettes that were pirate, so that he i not have personal 1nowlege of the

allege piracy. he witness "acani also sai that the vieo cassettes were pirate

without stating the manner it was pirate an that it was Atty. Domingo that has

1nowlege of that fact

:n the part of Atty 3omingo, he said that the re.taping of the allegedly pirated tapes

was from master tapes allegedly #elonging to the %wentieth Century o?, #ecause,according to him it is of his personal &nowledge

At the hearing of the otion for $econsideration, *enior 'B4 Agent Atty Al#ino $eyestestified that when the complaint for infringement was brought to the "/, the master

tapes of the allegely pirate tapes were shown to him an he mae comparisons of

the tapes with those purchase by their man "acani. hy the master tapes or at

least the film reels of the allegely pirate tapes were not shown to the Court uring

the application gives some misgivings as to the truth of that bare statement of the

"/ agent on the witness stan

Again as the application and search proceedings is a prelude to the f iling of criminal

cases under 3 09, the copyright infringement law, and although what is re)uiredfor the issuance thereof is merely the presence of pro#a#le cause, that pro#a#lecause must #e satisfactory to the Court, for it is a time.honored precept thatproceedings to put a man to tas& as an offender under our laws should #e interpretedin strictissimi $uris against the government and li#erally in favor of the allegedoffender

??? ??? ???

%his doctrine has never #een overturned, and as a matter of fact it had #eenenshrined in the Bill of $ights in our 19-" Constitution

#o that lac1ing in persuasive effect, the allegation that master tapeswere viewe by the "/ an were compare to the purchase an sei&e vieo

tapes from the responents establishments, it shoul be ismisse as not supporte

by competent evience an for that matter the probable cause hovers in that grey

ebatable twilight &one between blac1 an white resolvable in favor of responents

herein

But the glaring fact is that Cocoon, the first video tape mentioned in the searchwarrant, was not even duly registered or copyrighted in the hilippines 8Anne? C of :pposition, p 1/2, record *o that lac&ing in the re)uisite presentation to the Courtof an alleged master tape for purposes of comparison with the purchased evidenceof the video tapes allegedly pirated and those sei<ed from respondents, there was noway to determine whether there really was piracy, or copying of the film of thecomplainant %wentieth Century o?

??? ??? ???

he lower court, therefore, lifte the three 345 questione search warrants in the

absence of probable cause that the private responents violate !.D. 6). As foun

by the court, the "/ agents who acte as witnesses i not have personal 1nowlege of the sub$ect matter of their testimony which was the allege commission

of the offense by the private responents :nly the petitioners counsel who was alsoa witness during the application for the issuance of the search warrants stated thathe had personal &nowledge that the confiscated tapes owned #y the privaterespondents were pirated tapes ta&en from master tapes #elonging to thepetitioner 6owever, the lower court did not give much credence to his testimony inview of the fact that the master tapes of the allegedly pirated tapes were not shownto the court during the application 84talics ours

%he italici<ed passages readily e?pose the reason why the trial court therein re)uiredthe presentation of the master tapes of the allegedly pirated films in order to convince

itself of the e?istence of pro#a#le cause under the factual milieu peculiar to thatcase 4n the case at #ar, respondent appellate court itself o#served5

+e feel that the rationale #ehind the afore)uoted doctrine is that the pirated copiesas well as the master tapes, unli&e the other types of personal properties which may#e sei<ed, were available for presentation to the court at the time of the application

for a search warrant to determine the e?istence of the lin&age of the copyrighted filmswith the pirated ones %hus, there is no reason not to present them 84talics suppliedfor emphasis[/!]

4n fine, the supposed pronunciamento in said case regarding the necessity for thepresentation of the master tapes of the copyrighted films for the validity of search

warrants should at most #e understood to merely serve as a guidepost indetermining the e?istence of pro#a#le cause in copyright infringement cases where





1/

there is oubt as to the true nexus between the master tape an the pirate

copies An o#@ective and careful reading of the decision in said case could lead to noother conclusion than that said directive was hardly intended to #e a sweeping andinfle?i#le re)uirement in all or similar copyright infringement cases %uicial

icta should always #e construed within the factual matri? of their parturition,

otherwise a careless interpretation thereof could unfairly fault the writer with the viceof overstatement and the reader with the fallacy of undue generali<ation

4n the case at #ar, 'B4 *enior Agent ;auro C $eyes who filed the application for search warrant with the lower court following a formal complaint lodged #ypetitioners, @udging from his affidavit[/1] and his deposition,[/2] did testify on matterswithin his personal &nowledge #ased on said complaint of petitioners as well as hisown investigation and surveillance of the private respondents video rentalshop ;i&ewise, Atty $ico 7 3omingo, in his capacity as attorney.in.fact, stated in hisaffidavit[/"] and further e?pounded in his deposition [/0] that he personally &new of thefact that private respondents had never #een authori<ed #y his clients to reproduce,lease and possess for the purpose of selling any of the copyrighted films

Both testimonies of Agent $eyes and Atty 3omingo were corro#orated #y $ene CBalta<ar, a private researcher retained #y otion ictures Association of America,4nc 8AA, 4nc, who was li&ewise presented as a witness during the searchwarrant proceedings[//] %he records clearly reflect that the testimonies of thea#ovenamed witnesses were straightforward and stemmed from matters within their personal &nowledge %hey displayed none of the am#ivalence and uncertainty thatthe witnesses in the 20th Century Fox case e?hi#ited %his categorical forthrightnessin their statements, among others, was what initially and correctly convinced the trialcourt to ma&e a finding of the e?istence of pro#a#le cause

%here is no originality in the argument of private respondents against the validity of

the search warrant, o#viously #orrowed from 20th Century Fox , that petitionerswitnesses 'B4 Agent ;auro C $eyes, Atty $ico 7 3omingo and $ene C Balta<ar did not have personal &nowledge of the su#@ect matter of their respective testimoniesand that said witnesses claim that the video tapes were pirated, without stating themanner #y which these were pirated, is a conclusion of fact without #asis [/] %hedifference, it must #e pointed out, is that the records in the present case reveal that81 there is no allegation of misrepresentation, much less a finding thereof #y thelower court, on the part of petitioners witnesses= 82 there is no denial on the part of private respondents that the tapes sei<ed were illegitimate copies of the copyrightedones nor have they shown that they were given any authority #y petitioners to copy,sell, lease, distri#ute or circulate, or at least, to offer for sale, lease, distri#ution or circulation the said video tapes= and 8" a discreet #ut e?tensive surveillance of thesuspected area was underta&en #y petitioners witnesses sufficient to ena#le them to

e?ecute trustworthy affidavits and depositions regarding matters discovered in thecourse thereof and of which they have personal &nowledge

4t is evidently incorrect to suggest, as the ruling in 2!th Century o? may appear todo, that in copyright infringement cases, the presentation of master tapes of the

copyrighted films is always necessary to meet the re)uirement of pro#a#le causeand that, in the a#sence thereof, there can #e no finding of pro#a#le cause for theissuance of a search warrant 4t is true that such master tapes are o#@ect evidence,with the merit that in this class of evidence the ascertainment of the controverted factis made through demonstrations involving the direct use of the senses of thepresiding magistrate[/-] *uch au?iliary procedure, however, does not rule out the useof testimonial or documentary evidence, depositions, admissions or other classes of evidence tending to prove thefactum probanum,[/(] especially where the productionin court of o#@ect evidence would result in delay, inconvenience or e?penses out of proportion to its evidentiary value[/9]

:f course, as a general rule, constitutional and statutory provisions relating to search

warrants prohi#it their issuance e?cept on a showing of pro#a#le cause, supported#y oath or affirmation %hese provisions prevent the issuance of warrants on loose,vague, or dou#tful #ases of fact, and emphasi<e the purpose to protect against allgeneral searches[!] 4ndeed, Article 444 of our Constitution mandates in *ec 2 thereof that no search warrant shall issue e?cept upon pro#a#le cause to #e determinedpersonally #y the @udge after e?amination under oath or affirmation of thecomplainant and the witnesses he may produce, and particularly descri#ing the placeto #e searched and the things to #e sei<ed= and *ec " thereof provides that anyevidence o#tained in violation of the preceding section shall #e inadmissi#le for anypurpose in any proceeding

%hese constitutional strictures are implemented #y the following provisions of $ule

12 of the $ules of Court5

*ec " -equisites for issuing search warrant A search warrant shall not issue #utupon pro#a#le cause in connection with one specific offense to #e determinedpersonally #y the @udge after e?amination under oath or affirmation of thecomplainant and the witnesses he may produce, and particularly descri#ing the placeto #e searched and the things to #e sei<ed

*ec 0 7xamination of complainant8 recor %he @udge must, #efore issuing thewarrant, personally e?amine in the form of searching )uestions and answers, inwriting and under oath the complainant and any witnesses he may produce on factspersonally &nown to them and attach to the record their sworn statements together

with any affidavits su#mitted






























11

*ec / /ssuance an form of search warrant 4f the @udge is thereupon satisfied of thee?istence of facts upon which the application is #ased, or that there is pro#a#lecause to #elieve that they e?ist, he must issue the warrant, which must #esu#stantially in the form prescri#ed #y these $ules

%he constitutional and statutory provisions of various @urisdictions re)uiring ashowing of pro#a#le cause #efore a search warrant can #e issued are mandatoryand must #e complied with, and such a showing has #een held to #e an un)ualifiedcondition precedent to the issuance of a warrant A search warrant not #ased onpro#a#le cause is a nullity, or is void, and the issuance thereof is, in legalcontemplation, ar#itrary[1] 4t #ehooves us, then, to review the concept of pro#a#lecause, firstly, from representative holdings in the American @urisdiction from which wepatterned our doctrines on the matter

Although the term pro#a#le cause has #een said to have a well.defined meaning inthe law, the term is e?ceedingly difficult to define, in this case, with any degree of precision= indeed, no definition of it which would @ustify the issuance of a search

warrant can #e formulated which would cover every state of facts which might arise,and no formula or standard, or hard and fast rule, may #e laid down which may #eapplied to the facts of every situation[2] As to what acts constitute pro#a#le causeseem incapa#le of definition["]%here is, of necessity, no e?act test [0]

At #est, the term pro#a#le cause has #een understood to mean a reasona#le groundof suspicion, supported #y circumstances sufficiently strong in themselves to warranta cautious man in the #elief that the person accused is guilty of the offense withwhich he is charged=[/] or the e?istence of such facts and circumstances as woulde?cite an honest #elief in a reasona#le mind acting on all the facts andcircumstances within the &nowledge of the magistrate that the charge made #y theapplicant for the warrant is true[]

ro#a#le cause does not mean actual and positive cause, nor does it import a#solutecertainty %he determination of the e?istence of pro#a#le cause is not concerned withthe )uestion of whether the offense charged has #een or is #eing committed in fact,or whether the accused is guilty or innocent, #ut only whether the affiant hasreasona#le grounds for his #elief [-] %he re)uirement is less than certainty or proof,

but more than suspicion or possibility [(]

4n hilippine @urisprudence, pro#a#le cause has #een uniformly defined as such factsand circumstances which would lead a reasona#le, discreet and prudent man to#elieve that an offense has #een committed, and that the o#@ects sought inconnection with the offense are in the place sought to #e searched[9] 4t #eing the

duty of the issuing officer to issue, or refuse to issue, the warrant as soon aspractica#le after the application therefor is filed,[-!] the facts warranting the conclusion

of pro#a#le cause must #e assessed at the time of such @udicial determination #ynecessarily using legal standards then set forth in law an $urispruence, an not

those that have yet to be crafte thereafter

As already stated, the definition of pro#a#le cause enunciated in "urgos, #r. vs.

Chief of #taff, et al., supra, vis9a9vis the provisions of *ections " and 0 of $ule 12,were the prevailing and controlling legal standards, as they continue to #e, #y whicha finding of pro#a#le cause is tested *ince the proprietary of the issuance of asearch warrant is to #e determined at the time of the application therefor, which inturn must not #e too remote in time from the occurrence of the offense alleged tohave #een committed, the issuing @udge, in determining the e?istence of pro#a#lecause, can and should logically loo& to the touchstones in the laws therefore enactedand the decisions already promulgated at the time, and not to those which had notyet even #een conceived or formulated

4t is worth noting that neither the Constitution nor the $ules of Court attempt to definepro#a#le cause, o#viously for the purpose of leaving such matter to the courts

discretion within the particular facts of each case Although the Constitution prohi#itsthe issuance of a search warrant in the a#sence of pro#a#le cause, suchconstitutional inhi#ition does not command the legislature to esta#lish a definition or formula for determining what shall constitute pro#a#le cause[-1] %hus, Congress,despite its #road authority to fashion standards of reasona#leness for searches andsei<ures,[-2] does not venture to ma&e such a definition or standard formulation of pro#a#le cause, nor categori<e what facts and circumstances ma&e up the same,much less limit the determination thereof to and within the circumscription of aparticular class of evidence, all in deference to @udicial discretion and pro#ity[-"]

Accordingly, to restrict the e?ercise of discretion #y a @udge #y adding a particular re)uirement 8the presentation of master tapes, as intimated #y 20th Century Fox not

provided nor implied in the law for a finding of pro#a#le cause is #eyond the realm of @udicial competence or statemanship 4t serves no purpose #ut to stultify and constrictthe @udicious e?ercise of a courtEs prerogatives and to denigrate the @udicial duty of determining the e?istence of pro#a#le cause to a mere ministerial or mechanicalfunction %here is, to repeat, no law or rule which re)uires that the e?istence of pro#a#le cause is or should #e determined solely #y a specific &ind of evidence *urely, this could not have #een contemplated #y the framers of theConstitution, and we do not #elieve that the Court intended the statement in 20th

Century Fox regarding master tapes as the dictum for all seasons and reasons ininfringement cases

%urning now to the case at #ar, it can #e gleaned from the records that the lower

court followed the prescri#ed procedure for the issuances of a search warrant5 81 thee?amination under oath or affirmation of the complainant and his witnesses, with








































12

them particularly descri#ing the place to #e searched and the things to #e sei<ed= 82an e?amination personally conducted #y the @udge in the form of searching )uestionsand answers, in writing and under oath of the complainant and witnesses on factspersonally &nown to them= and, 8" the ta&ing of sworn statements, together with theaffidavits su#mitted, which were duly attached to the records

%hereafter, the court a quo made the following factual findings leading to theissuance of the search warrant now su#@ect to this controversy5

4n the instant case, the following facts have #een esta#lished5 81 copyrighted videotapes #earing titles enumerated in *earch +arrant 'o (-.!/" were #eing sold,leased, distri#uted or circulated, or offered for sale, lease, distri#ution, or transferredor caused to #e transferred #y defendants at their video outlets, without the writtenconsent of the private complainants or their assignee= 82 recovered or confiscatedfrom defendantsE possession were video tapes containing copyrighted motion picturefilms without the authority of the complainant= 8" the video tapes originated fromspurious or unauthori<ed persons= and 80 said video tapes were e?act reproductions

of the films listed in the search warrant whose copyrights or distri#ution rights wereowned #y complainants

%he #asis of these facts are the affidavits and depositions of 'B4 *enior Agent ;auroC $eyes, Atty $ico 7 3omingo, and $ene C Balta<ar otion ictures Associationof America, 4nc 8AA thru their counsel, Atty $ico 7 3omingo, filed a complaintwith the 'ational Bureau of 4nvestigation against certain video esta#lishments one of which is defendant, for violation of 3 'o 09 as amended #y 3 'o, 19(( Atty;auro C $eyes led a team to conduct discreet surveillance operations on said videoesta#lishments er information earlier gathered #y Atty 3omingo, defendants wereengaged in the illegal sale, rental, distri#ution, circulation or pu#lic e?hi#ition of copyrighted films of AA without its written authority or its mem#ers Fnowing that

defendant *unshine 6ome 7ideo and its proprietor, r 3anilo elindario, were notauthori<ed #y AA to reproduce, lease, and possess for the purpose of selling anyof its copyrighted motion pictures, he instructed his researcher, r $ene Balta<ar torent two video cassettes from said defendants on :cto#er 21, 19(- $ene CBalta<ar proceeded to *unshine 6ome 7ideo and rented tapes containing ;ittle *hopof 6orror 6e was issued rental slip 'o 2"2 dated :cto#er 21, 19(- for 1!!!with a deposit of 1!!!! Again, on 3ecem#er 11, 19(-, he returned to *unshine6ome 7ideo and rented $o#ocop with a rental slip 'o 2/2-1 also for 1!!! :n the#asis of the complaint of AA thru counsel, Atty ;auro C $eyes personally went to*unshine 6ome 7ideo at 'o ayfair Center, agallanes Commercial Center,a&ati 6is last visit was on 3ecem#er -, 19(- %here, he found the video outletrenting, leasing, distri#uting video cassette tapes whose titles were copyrighted andwithout the authority of AA

Given these facts, a pro#a#le cause e?ists ? ? ?[-0]

%he lower court su#se)uently e?ecuted a volte9face, despite its prior detailed andsu#stantiated findings, #y stating in its order of 'ovem#er 22, 19(( denyingpetitioners motion for reconsideration and )uashing the search warrant that

? ? ? %he two 82 cases have a common factual milieu= #oth involve alleged piratedcopyrighted films of private complainants which were found in the possession or control of the defendants 6ence, the necessity of the presentation of the master tapes from which the pirated films were allegedly copied is necessary in the instantcase, to esta#lish the e?istence of pro#a#le cause[-/]

Being #ased solely on an un@ustifia#le and improper retroactive application of themaster tape re)uirement generated #y 20th Century Fox upon a factual situationcompletely different from that in the case at #ar, and without anything more, this later order clearly defies elemental fair play and is a gross reversi#le error 4n fact, thiso#servation of the Court in :a Chemise :acoste, #.A. vs. Fernane&, et al , supra,

may @ust as easily apply to the present case5

A review of the grounds invo&ed ? ? ? in his motion to )uash the search warrantsreveals the fact that they are not appropriate for )uashing a warrant %hey arematters of defense which should #e ventilated during the trial on the merits of thecase ? ? ?

As correctly pointed out #y petitioners, a #lind espousal of the re)uisite of presentation of the master tapes in copyright infringement cases, as the primedeterminant of pro#a#le cause, is too e?acting and impractica#le a re)uirement to #ecomplied with in a search warrant application which, it must not #e overloo&ed, isonly an ancillary proceeding urther, on realistic considerations, a strict application

of said re)uirement militates against the elements of secrecy and speed whichunderlie covert investigative and surveillance operations in police enforcementcampaigns against all forms of criminality, considering that the master tapes of amotion picture re)uired to #e presented #efore the court consists of several reelscontained in circular steel casings which, #ecause of their #ul&, will definitely drawattention, unli&e diminutive o#@ects li&e video tapes which can #e easily concealed[-] +ith hundreds of titles #eing pirated, this onerous and tedious imposition would #emultiplied a hundredfold #y @udicial fiat, discouraging and preventing legal recoursesin foreign @urisdictions

Given the present international awareness and furor over violations in large scale of intellectual property rights, calling for transnational sanctions, it #ears calling to mind

the Courts admonition also in :a Chemise :acoste, supra, that











1%

? ? ? Judges all over the country are well advised to remem#er that court processesshould not #e used as instruments to, unwittingly or otherwise, aid counterfeiters andintellectual pirates, tie the hands of the law as it see&s to protect the ilipinoconsuming pu#lic and frustrate e?ecutive and administrative implementation of solemn commitments pursuant to international conventions and treaties

III

%he amendment of *ection / of residential 3ecree 'o 09 #y residential 3ecree'o 19(-,[--] which should here #e pu#lici<ed @udicially, #rought a#out the revision of its penalty structure and enumerated additional acts considered violative of saiddecree on intellectual property, namely, 81 directly or indirectly transferring or causing to #e transferred any sound recording or motion picture or other audio.visualwor&s so recorded with intent to sell, lease, pu#licly e?hi#it or cause to #e sold,leased or pu#licly e?hi#ited, or to use or cause to #e used for profit such articles onwhich sounds, motion pictures, or other audio.visual wor&s are so transferred withoutthe written consent of the owner or his assignee= 82 selling, leasing, distri#uting,

circulating, pu#licly e?hi#iting, or offering for sale, lease, distri#ution, or possessingfor the purpose of sale, lease, distri#ution, circulation or pu#lic e?hi#ition any of thea#ovementioned articles, without the written consent of the owner or his assignee=and, 8" directly or indirectly offering or ma&ing availa#le for a fee, rental, or any other form of compensation any e)uipment, machinery, paraphernalia or any material withthe &nowledge that such e)uipment, machinery, paraphernalia or material will #eused #y another to reproduce, without the consent of the owner, any phonographrecord, disc, wire, tape, film or other article on which sounds, motion pictures or other audio.visual recordings may #e transferred, and which provide distinct #ases for criminal prosecution, #eing crimes independently punisha#le under residential3ecree 'o 09, as amended, aside from the act of infringing or aiding or a#ettingsuch infringement under *ection 29

%he trial courts finding that private respondents committed acts in #latanttransgression of residential 3ecree 'o 09 all the more #olsters its findings of pro#a#le cause, which determination can #e reached even in the a#sence of master tapes #y the @udge in the e?ercise of sound discretion %he e?ecutive concern andresolve e?pressed in the foregoing amendments to the decree for the protection of intellectual property rights should #e matched #y corresponding @udicial vigilance andactivism, instead of the apathy of su#mitting to technicalities in the face of ampleevidence of guilt

%he essence of intellectual piracy should #e essayed in conceptual terms in order tounderscore its gravity #y an appropriate understanding thereof 4nfringement of a

copyright is a trespass on a private domain owned and occupied #y the owner of thecopyright, and, therefore, protected #y law, and infringement of copyright, or piracy,

which is a synonymous term in this connection, consists in the doing #y any person,without the consent of the owner of the copyright, of anything the sole right to dowhich is conferred #y 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 &now what wor&s he was indirectly copying, or did not&now whether or not he was infringing any copyright= he at least &new that what hewas copying was not his, and he copied at his peril 4n determining the )uestion of infringement, the amount of matter copied from the copyrighted wor& is an importantconsideration %o constitute infringement, it is not necessary that the whole or even alarge portion of the wor& shall have #een copied 4f so much is ta&en that the value of the original is sensi#ly diminished, or the la#ors of the original author aresu#stantially and to an in@urious e?tent appropriated #y another, that is sufficient inpoint of law to constitute a piracy[-9] %he )uestion of whether there has #een anactiona#le infringement of a literary, musical, or artistic wor& in motion pictures, radioor television #eing one of fact,[(!] it should properly #e determined during thetrial %hat is the stage calling for conclusive or preponderating evidence, and not the

summary proceeding for the issuance of a search warrant wherein #oth lower courtserroneously re)uire the master tapes

4n disregarding private respondents argument that *earch +arrant 'o (-.!/" is ageneral warrant, the lower court o#served that it was worded in a manner that theenumerated sei<a#le items #ear direct relation to the offense of violation of *ec /of 3 09 as amended 4t authori<ed only the sei<ur8e of articles used or intended to#e used in the unlawful sale, lease and other unconcerted acts in violation of 3 09as amended ? ? ?[(1]

:n this point, "ache an Co., 3!hil.5, /nc., et al. vs. -ui&, et al ,[(2] instructs andenlightens5

A search warrant may #e said to particularly descri#e the things to #e sei<ed whenthe description therein is as specific as the circumstances will ordinarily allow8eople vs. $u#io, /- hil "(0= or when the description e?presses a conclusion of fact not of law #y which the warrant officer may #e guided in ma&ing the search andsei<ure 8iem, dissent of A#ad *antos, % ,= or when the things descri#ed are limitedto those which #ear direct relation to the offense for which the warrant is #eing issued8*ec 2, $ule 12, $evised $ules of Court ? ? ? 4f the articles desired to #e sei<edhave any direct relation to an offense committed, the applicant must necessarily havesome evidence, other than those articles, to prove the said offense= and the articlessu#@ect of search and sei<ure should come in handymerely to strengthen such evidence ? ? ?




















14

:n private respondents averment that the search warrant was made applica#le tomore than one specific offense on the ground that there are as many offenses of infringement as there are rights protected and, therefore, to issue one search warrantfor all the movie titles allegedly pirated violates the rule that a search warrant must#e issued only in connection with one specific offense, the lower court said5

? ? ? As the face of the search warrant itself indicates, it was issued for violation of *ection /, 3 09 as amended only %he specifications therein 8in Anne? A merelyrefer to the titles of the copyrighted motion pictures>films #elonging to privatecomplainants which defendants were in control>possession for sale, lease,distri#ution or pu#lic e?hi#ition in contravention of *ec /, 3 09 as amended[("]

%hat there were several counts of the offense of copyright infringement and thesearch warrant uncovered several contra#and items in the form of pirated videotapes is not to #e confused with the num#er of offenses charged %he search warrantherein issued does not violate the one.specific.offense rule

4t is pointless for private respondents to insist on compliance with the registration anddeposit re)uirements under residential 3ecree 'o 09 as prere)uisites for invo&ingthe courts protective mantle in copyright infringement cases As e?plained #y thecourt #elow5

3efendants.movants contend that 3 09 as amended covers only producers whohave complied with the re)uirements of deposit and notice 8in other wordsregistration under *ections 09 and /! thereof A#sent such registration, as in thiscase, there was no right created, hence, no infringement under 3 09 asamended %his is not well.ta&en

As correctly pointed out #y private complainants.oppositors, the 3epartment of

Justice has resolved this legal )uestion as far #ac& as 3ecem#er 12, 19-( in its:pinion 'o 191 of the then *ecretary of Justice 7icente A#ad *antos which statedthat *ections 2 and /! do not apply to cinematographic wor&s and 3 'o 09 haddone away with the registration and deposit of cinematographic wor&s and that evenwithout prior registration and deposit of a wor& which may #e entitled to protectionunder the 3ecree, the creator can file action for infringement of its rights 6e cannotdemand, however, payment of damages arising from infringement %he same opinionstressed that the re)uirements of registration and deposit are thus retained under the3ecree, not as conditions for the ac)uisition of copyright and other rights, #ut asprere)uisites to a suit for damages%he statutory interpretation of the ?ecutiveBranch #eing correct, is entitled 8to weight and respect

??? ??? ???

3efendants.movants maintain that complainant and his witnesses led the Court to#elieve that a crime e?isted when in fact there was none %his is wrong As earlier discussed, 3 09 as amended, does not re)uire registration and deposit for a creator to #e a#le to file an action for infringement of his rights %hese conditions are merelypre.re)uisites to an action for damages *o, as long as the proscri#ed acts are

shown to e?ist, an action for infringement may #e initiated[(0]

Accordingly, the certifications[(/] from the Copyright *ection of the 'ational ;i#rary,presented as evidence #y private respondents to show non.registration of some of the films of petitioners, assume no evidentiary weight or significance, whatsoever

urthermore, a closer review of residential 3ecree 'o 09 reveals that even withrespect to wor&s which are re)uired under *ection 2 thereof to #e registered andwith copies to #e deposited with the 'ational ;i#rary, such as #oo&s, includingcomposite and cyclopedic wor&s, manuscripts, directories and ga<etteers= andperiodicals, including pamphlets and newspapers= lectures, sermons, addresses,dissertations prepared for oral delivery= and letters, the failure to comply with said

re)uirements does not deprive the copyright owner of the right to sue for infringement *uch non.compliance merely limits the remedies availa#le to him andsu#@ects him to the corresponding sanction

%he reason for this is e?pressed in *ection 2 of the decree which prefaces itsenumeration of copyrighta#le wor&s with the e?plicit statement that the rights grantedunder this 3ecree shall, from the moment of creation, su#sist with respect to any of the following classes of wor&s %his means that under the present state of the law,the copyright for a wor& is ac)uired #y an intellectual creator from the moment of creation even in the a#sence of registration and deposit As has #een authoritativelyclarified5

%he registration and deposit of two complete copies or reproductions of the wor& withthe 'ational ;i#rary within three wee&s after the first pu#lic dissemination or performance of the wor&, as provided for in *ection 2 83 'o 09, as amended, isnot for the purpose of securing a copyright of the wor&, #ut rather to avoid the penaltyfor non.compliance of the deposit of said two copies and in order to recover damages in an infringement suit [(]

:ne distressing o#servation %his case has #een fought on the #asis of, and itsresolution long delayed #y resort to, technicalities to a virtually a#usive e?tent #yprivate respondents, without so much as an attempt to adduce any credi#le evidenceshowing that they conduct their #usiness legitimately and fairly %he fact that privaterespondents could not show proof of their authority or that there was consent from

the copyright owners for them to sell, lease, distri#ute or circulate petitionerscopyrighted films immeasura#ly #olsters the lower courts initial finding of pro#a#le













1,

cause %hat private respondents are licensed #y the 7ideogram $egulatory Boarddoes not insulate them from criminal and civil lia#ility for their unlawful #usinesspractices +hat is more deplora#le is that the reprehensi#le acts of someunscrupulous characters have stigmati<ed the hilippines with an unsavoryreputation as a hu# for intellectual piracy in this part of the glo#e, formerly in the

records of the General Agreement on %ariffs and %rade and, now, of the +orld %rade:rgani<ation *uch acts must not #e glossed over #ut should #e denounced andrepressed lest the hilippines #ecome an international pariah in the glo#alintellectual community

!"ERE$ORE, the assailed @udgment and resolution of respondent Court of Appeals,and necessarily inclusive of the order of the lower court dated 'ovem#er 22, 19((,are here#y $7$*3 and *% A*43. %he order of the court a quo of *eptem#er /, 19(( upholding the validity of *earch +arrant 'o (-.!/" is here#y $4'*%A%3,and said court is 34$C%3 to ta&e and e?peditiously proceed with such appropriateproceedings as may #e called for in this case %re#le costs are further assessedagainst private respondents

O OR&ERE&.

arvasa, C.%., !ailla, Davie, %r., -omero, ;elo, !uno, <itug, =apunan, ;eno&a,

Francisco, 'ermosisima, %r., !anganiban,and orres, %r., %%., concur .

"ellosillo, %., no part in deli#erations

Ching v. Salinas

$epu#lic of the hilippinesUPREME COURT

anila



16

*C:'3 3474*4:'

G.R. No. 16129 -u) 29, 200

-EIE G. C"ING, petitioner,

vs!ILLIAM M. ALINA, R., !ILLIAM M. ALINA, -R., -OEP"INE L.

ALINA, -ENNI$ER #. ALINA, ALONTO OLAIMAN ALLE, -O"N ERIC I.

ALINA, NOEL M. #ABUT /Bo(* o &tos ()* Os o !ILA!ARE

PRO&UCT CORPORATION4, respondents

3 C 4 * 4 : '

CALLE-O, R., J.:

%his petition for review on certiorari assails the 3ecision1 and $esolution2 of theCourt of Appeals 8CA in CA.G$ * 'o -!011 affirming the January ", 2!!2 ande#ruary 10, 2!!2 :rders" of the $egional %rial Court 8$%C of anila, Branch 1,which )uashed and set aside *earch +arrant 'os !1.20!1 and !1.20!2 granted infavor of petitioner Jessie G Ching

Jessie G Ching is the owner and general manager of Jeshicris anufacturing Co,the ma&er and manufacturer of a tility odel, descri#ed as H;eaf *pring yeBushing for Automo#ileH made up of plastic

:n *eptem#er 0, 2!!1, Ching and Joseph Iu were issued #y the 'ational ;i#raryCertificates of Copyright $egistration and 3eposit of the said wor& descri#ed thereinas H;eaf *pring ye Bushing for Automo#ileH0

:n *eptem#er 2!, 2!!1, Ching re)uested the 'ational Bureau of 4nvestigation 8'B4

for police>investigative assistance for the apprehension and prosecution of illegalmanufacturers, producers and>or distri#utors of the wor&s/

After due investigation, the 'B4 filed applications for search warrants in the $%C of anila against +illiam *alinas, *r and the officers and mem#ers of the Board of 3irectors of +ilaware roduct Corporation 4t was alleged that the respondentstherein reproduced and distri#uted the said models penali<ed under *ections 1--1and 1--" of $epu#lic Act 8$A 'o (29" %he applications sought the sei<ure of thefollowing5

a ndetermined )uantity of ;eaf spring eye #ushing for automo#ile that are madeup of plastic polypropylene=

# ndetermined )uantity of ;eaf spring eye #ushing for automo#ile that are madeup of polyvinyl chloride plastic=

c ndetermined )uantity of 7ehicle #earing cushion that is made up of polyvinylchloride plastic=

d ndetermined )uantity of 3ies and @igs, patterns and flas&s used in themanufacture>fa#rication of items a to d=

e vidences of sale which include delivery receipts, invoices and official receipts

%he $%C granted the application and issued *earch +arrant 'os !1.20!1 and !1.20!2 for the sei<ure of the aforecited articles- 4n the inventory su#mitted #y the 'B4agent, it appears that the following articles>items were sei<ed #ased on the searchwarrants5

;eaf *pring eye #ushing

a lastic olypropylene

. C19! 2-

. C20! rear 0!

. C20! front 01 BAG 1

# olyvinyl Chloride lastic

. C19! 1"

c 7ehicle #earing cushion

. center #earing cushion 11

Budder for C19! mold (

3iesel old

a old for spring eye #ushing rear 1 set

# old for spring eye #ushing front 1 set

c old for spring eye #ushing for C19! 1 set

d old for C20! rear 1 piece of the set

http://www.lawphil.net/judjuris/juri2005/jun2005/gr_161295_2005.html#fnt1



















1-

e old for spring eye #ushing for ;"!! 2 sets

f old for leaf spring eye #ushing C19! with metal 1 set

g old for vehicle #earing cushion 1 set(

%he respondents filed a motion to )uash the search warrants on the followinggrounds5

2 %he copyright registrations were issued in violation of the 4ntellectual ropertyCode on the ground that5

a the su#@ect matter of the registrations are not artistic or li terary=

# the su#@ect matter of the registrations are spare parts of automo#iles meaning Kthere 8sic are original parts that they are designed to replace 6ence, they are notoriginal9

%he respondents averred that the wor&s covered #y the certificates issued #y the'ational ;i#rary are not artistic in nature= they are considered automotive spare partsand pertain to technology %hey aver that the models are not original, and as suchare the proper su#@ect of a patent, not copyright1!

4n opposing the motion, the petitioner averred that the court which issued the searchwarrants 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;alaloan v. Court of

Appeals,11 the petitioner stated that a search warrant is merely a @udicial processdesigned #y the $ules of Court in anticipation of a criminal case ntil his copyrightwas nullified in a proper proceeding, he en@oys rights of a registered owner>holder thereof

:n January ", 2!!2, the trial court issued an :rder 12 granting the motion, and)uashed the search warrant on its finding that there was no pro#a#le cause for itsissuance %he court ruled that the wor& covered #y the certificates issued to thepetitioner pertained to solutions to technical pro#lems, not literary and artistic asprovided in Article 1-2 of the 4ntellectual roperty Code

6is motion for reconsideration of the order having #een denied #y the trial courtLs:rder of e#ruary 10, 2!!2, the petitioner filed a petition for certiorari in the CA,contending that the $%C had no @urisdiction to delve into and resolve the validity of the copyright certificates issued to him #y the 'ational ;i#rary 6e insisted that hiswor&s are covered #y *ections 1-21 and 1-22 of the 4ntellectual roperty Code

%he petitioner averred that the copyright certificates are prima facie evidence of itsvalidity, citing the ruling of the nited *tates Court of Appeals in illife 7xpress

Corporation v. Carol right #ales, /nc .1" %he petitioner asserted that the respondentsfailed to adduce evidence to support their motion to )uash the search warrants %hepetitioner noted that respondent +illiam *alinas, Jr was not #eing honest, as he wasa#le to secure a similar copyright registration of a similar product from the 'ational;i#rary on January 10, 2!!2

:n *eptem#er 2, 2!!", the CA rendered @udgment dismissing the petition on itsfinding that the $%C did not commit any grave a#use of its discretion in issuing theassailed order, to wit5

4t is settled that preliminarily, there must #e a finding that a specific offense musthave #een committed to @ustify the issuance of a search warrant 4n a num#er of cases decided #y the *upreme Court, the same is e?plicitly provided, thus5

H%he pro#a#le cause must #e in connection with one specific offense, and the @udgemust, #efore issuing the warrant, personally e?amine in the form of searching)uestions and answers, in writing and under oath, the complainant and any witness

he may produce, on facts personally &nown to them and attach to the record their sworn statements together with any affidavit su#mitted

H4n the determination of pro#a#le cause, the court must necessarily resolve whether or not an offense e?ists to @ustify the issuance or )uashal of the search warrantH

4n the instant case, the petitioner is praying for the reinstatement of the searchwarrants issued, #ut su#se)uently )uashed, for the offense of <iolation of Class

Designation of Copyrightable or1s uner #ection (++.( in relation to #ection (++.4

of -epublic Act *2)4, when the o#@ects su#@ect of the same, are patently notcopyrighta#le

4t is worthy to state that the wor&s protected under the ;aw on Copyright are5 literaryor artistic wor&s 8*ec 1-2 and derivative wor&s 8*ec 1-" %he ;eaf *pring yeBushing and 7ehicle Bearing Cushion fall on neither classification Accordingly, if, inthe first place, the item su#@ect of the petition is not entitled to #e protected #y the lawon copyright, how can there #e any violationD10

%he petitionerLs motion for reconsideration of the said decision suffered the samefate %he petitioner forthwith filed the present petition for review on certiorari ,contending that the revocation of his copyright certificates should #e raised in a directaction and not in a search warrant proceeding

%he petitioner posits that even assuming ex argumenti that the trial court may resolve

the validity of his copyright in a proceeding to )uash a search warrant for allegedlyinfringing items, the $%C committed a grave a#use of its discretion when it declared






















1"

that his wor&s are not copyrighta#le in the first place 6e claims that $A 'o (29",otherwise &nown as the 4ntellectual roperty Code of the hilippines, which too&effect on January 1, 199(, provides in no uncertain terms that copyright protectionautomatically attaches to a wor& #y the sole fact of its creation, irrespective of itsmode or form of e?pression, as well as of its content, )uality or purpose 1/ %he law

gives a non.inclusive definition of Hwor&H as referring to original intellectual creationsin the literary and artistic domain protected from the moment of their creation= andincludes original ornamental designs or moels for articles of manufacture, whether or not registra#le as an industrial design and other wor&s of applied art under *ection1-218h of $A 'o (29"lawphil.net

As such, the petitioner insists, notwithstanding the classification of the wor&s aseither literary and>or artistic, the said law, li&ewise, encompasses wor&s which mayhave a #earing on the utility aspect to which the petitionerLs utility designs wereclassified oreover, according to the petitioner, what the Copyright ;aw protects isthe authorLs intellectual creation, regardless of whether it is one with utilitarianfunctions or incorporated in a useful article produced on an industrial scale

%he petitioner also maintains that the law does not provide that the intended use or use in industry of an article eligi#le for patent #ars or invalidates its registration under the ;aw on Copyright %he test of protection for the aesthetic is not #eauty and utility,#ut art for the copyright and invention of original and ornamental design for designpatents1 4n li&e manner, the fact that his utility designs or models for articles of manufacture have #een e?pressed in the field of automotive parts, or #ased onsomething already in the pu#lic domain does not automatically remove them from theprotection of the ;aw on Copyright1-

%he petitioner faults the CA for ignoring *ection 21( of $A 'o (29" which gives thesame presumption to an affidavit e?ecuted #y an author who claims copyright

ownership of his wor&

%he petitioner adds that a finding of pro#a#le cause to @ustify the issuance of asearch warrant means merely a reasona#le suspicion of the commission of theoffense 4t is not e)uivalent to a#solute certainty or a finding of actual and positivecause1( 6e assists that the determination of pro#a#le cause does not concern theissue of whether or not the alleged wor& is copyrighta#le 6e maintains that to @ustifya finding of pro#a#le cause in the issuance of a search warrant, it is enough thatthere e?ists a reasona#le suspicion of the commission of the offense

%he petitioner contends that he has in his favor the #enefit of the presumption thathis copyright is valid= hence, the #urden of overturning this presumption is on the

alleged infringers, the respondents herein But this #urden cannot #e carried in ahearing on a proceeding to )uash the search warrants, as the issue therein is

whether there was pro#a#le cause for the issuance of the search warrant %hepetitioner concludes that the issue of pro#a#le cause should #e resolved withoutinvalidating his copyright

4n their comment on the petition, the respondents aver that the wor& of the petitioner

is essentially a technical solution to the pro#lem of wear and tear in automo#iles, thesu#stitution of materials, i.e., from ru##er to plastic matter of polyvinyl chloride, an oilresistant soft te?ture plastic material strong enough to endure pressure #roughta#out #y the vi#ration of the counter #earing and thus #rings #ushings *uch wor&,the respondents assert, is the su#@ect of copyright under *ection 1-21 of $A 'o(29" %he respondents posit that a technical solution in any field of human activitywhich is novel may #e the su#@ect of a patent, and not of a copyright %hey insist thatthe certificates issued #y the 'ational ;i#rary are only certifications that, at a point intime, a certain wor& was deposited in the said office urthermore, the registration of copyrights does not provide for automatic protection Citing *ection 21(28# of $A'o (29", the respondents aver that no copyright is said to e?ist if a partycategorically )uestions its e?istence and legality oreover, under *ection 2, $ule -

of the 4mplementing $ules of $A 'o (29", the registration and deposit of wor& isnot conclusive as to copyright outlay or the time of copyright or the right of thecopyright owner %he respondents maintain that a copyright e?ists only when thewor& is covered #y the protection of $A 'o (29"

%he petition has no merit

%he $%C had @urisdiction to delve into and resolve the issue whether the petitionerLsutility models are copyrighta#le and, if so, whether he is the owner of a copyrightover the said models 4t #ears stressing that upon the filing of the application for search warrant, the $%C was duty.#ound to determine whether pro#a#le causee?isted, in accordance with *ection 0, $ule 12 of the $ules of Criminal rocedure5

*C 0 -equisite for issuing search warrant. K A search warrant shall not issue #utupon pro#a#le cause in connection with one specific offense to #e determinedpersonally #y the @udge after e?amination under oath or affirmation of thecomplainant and the witnesses he may produce, and, particularly, descri#ing theplace to #e searched and the things to #e sei<ed

4n #oli riangle #ales Corporation v. he #heriff of -C >C, "r. )4,19 the Court heldthat in the determination of pro#a#le cause, the court must necessarily resolvewhether or not an offense e?ists to @ustify the issuance of a search warrant or the)uashal of one already issued #y the court 4ndeed, pro#a#le cause is deemed toe?ist only where facts and circumstances e?ist which could lead a reasona#ly

cautious and prudent man to #elieve that an offense has #een committed or is #eingcommitted Besides, in *ection ", $ule 12 of the $ules of Criminal rocedure, a
















1

search warrant may #e issued for the search and sei<ure of personal property 8asu#@ect of the offense= 8# stolen or em#e<<led and other proceeds or fruits of theoffense= or 8c used or intended to #e used as the means of committing an offense

%he $%C is mandated under the Constitution and $ules of Criminal rocedure to

determine pro#a#le cause %he court cannot a#dicate its constitutional o#ligation #yrefusing to determine whether an offense has #een committed2! %he a#sence of pro#a#le cause will cause the outright nullification of the search warrant21

or the $%C to determine whether the crime for infringement under $A 'o (29" asalleged in an application is committed, the petitioner.applicant was #urdened toprove that 8a respondents Jessie Ching and Joseph Iu were the owners of copyrighted material= and 8# the copyrighted material was #eing copied anddistri#uted #y the respondents %hus, the ownership of a valid copyright is essential22

:wnership of copyrighted material is shown #y proof of originality andcopyrighta#ility By originality is meant that the material was not copied, and

evidences at least minimal creativity= that it was independently created #y the author and that it possesses at least same minimal degree of creativity 2" Copying is shown#y proof of access to copyrighted material and su#stantial similarity #etween the twowor&s20 %he applicant must thus demonstrate the e?istence and the validity of hiscopyright #ecause in the a#sence of copyright protection, even original creation may#e freely copied2/

By re)uesting the 'B4 to investigate and, if feasi#le, file an application for a searchwarrant for infringement under $A 'o (29" against the respondents, the petitioner there#y authori<ed the $%C 8in resolving the application, to delve into and determinethe validity of the copyright which he claimed he had over the utility models %hepetitioner cannot see& relief from the $%C #ased on his claim that he was the

copyright owner over the utility models and, at the same time, repudiate the courtLs @urisdiction to ascertain the validity of his claim without running afoul to the doctrine of estoppel

%o discharge his #urden, the applicant may present the certificate of registrationcovering the wor& or, in its a#sence, other evidence2 A copyright certificateprovides prima facie evidence of originality which is one element of copyright validity4t constitutes prima facie evidence of #oth validity and ownership2- and the validity of the facts stated in the certificate2( %he presumption of validity to a certificate of copyright registration merely orders the #urden of proof %he applicant should notordinarily #e forced, in the first instance, to prove all the multiple facts that underlinethe validity of the copyright unless the respondent, effectively challenging them, shifts

the #urden of doing so to the applicant 29 4ndeed, *ection 21(2 of $A 'o (29"provides5

21(2 4n an action under this Chapter5

8a Copyright shall #e presumed to su#sist in the wor& or other su#@ect matter towhich the action relates if the defendant does not put in issue the )uestion whether copyright su#sists in the wor& or other su#@ect matter= and

8# +here the su#sistence of the copyright is esta#lished, the plaintiff shall #epresumed to #e the owner of the copyright if he claims to #e the owner of thecopyright and the defendant does not put in issue the )uestion of his ownership

A certificate of registration creates no re#utta#le presumption of copyright validitywhere other evidence in the record casts dou#t on the )uestion 4n such a case,validity will not #e presumed"!

%o discharge his #urden of pro#a#le cause for the issuance of a search warrant for violation of $A 'o (29", the petitioner.applicant su#mitted to the $%C Certificate of Copyright $egistration 'os 2!!1.19- and 2!!1.2!0 dated *eptem#er ", 2!!1 and

*eptem#er 0, 2!!1, respectively, issued #y the 'ational ;i#rary covering wor&identified as ;eaf *pring ye Bushing for Automo#ile and 7ehicle Bearing Cushion#oth classified under *ection 1-218h of $A 'o (29", to wit5

*C 1-2 :iterary an Artistic or1s. K 1-21 ;iterary and artistic wor&s, hereinafter referred to as Hwor&s,H are original intellectual creations in the literary and artisticdomain protected from the moment of their creation and shall include in particular5

8h :riginal ornamental designs or models for articles of manufacture, whether or notregistra#le as an industrial design, and other wor&s of applied art

$elated to the provision is *ection 1-11!, which provides that a Hwor& of applied artHis an artistic creation with utilitarian functions or incorporated in a useful article,whether made #y hand or produced on an industrial scale

But, as gleaned from the specifications appended to the application for a copyrightcertificate filed #y the petitioner, the said ;eaf *pring ye Bushing for Automo#ile ismerely a utility model descri#ed as comprising a generally cylindrical #ody having aco.a?ial #ore that is centrally located and provided with a perpendicular flange onone of its ends and a cylindrical metal @ac&et surrounding the peripheral walls of said#ody, with the #ushing made of plastic that is either polyvinyl chloride or polypropylene"1 ;i&ewise, the 7ehicle Bearing Cushion is illustrated as a #earingcushion comprising a generally semi.circular #ody having a central hole to secure aconventional #earing and a plurality of ridges provided therefore, with said cushion





























2/

#earing #eing made of the same plastic materials"2lainly, these are not literary or artistic wor&s %hey are not intellectual creations in the literary and artistic domain, or wor&s of applied art %hey are certainly not ornamental designs or one havingdecorative )uality or value

4t #ears stressing that the focus of copyright is the usefulness of the artistic design,and not its mar&eta#ility %he central in)uiry is whether the article is a wor& of art"" +or&s for applied art include all original pictorials, graphics, and sculpturalwor&s that are intended to #e or have #een em#odied in useful article regardless of factors such as mass production, commercial e?ploitation, and the potentialavaila#ility of design patent protection"0

As gleaned from the description of the models and their o#@ectives, these articles areuseful articles which are defined as one having an intrinsic utilitarian function that isnot merely to portray the appearance of the article or to convey information 4ndeed,while wor&s of applied art, original intellectual, literary and artistic wor&s arecopyrighta#le, useful articles and wor&s of industrial design are not "/ A useful article

may #e copyrighta#le only if and only to the e?tent that such design incorporatespictorial, graphic, or sculptural features that can #e identified separately from, andare capa#le of e?isting independently of the utilitarian aspects of the article

+e agree with the contention of the petitioner 8citing *ection 1-11! of $A 'o(29", that the authorLs intellectual creation, regardless of whether it is a creationwith utilitarian functions or incorporated in a useful article produced on an industrialscale, is protected #y copyright law 6owever, the law refers to a Hwor& of applied artwhich is an artistic creationH 4t #ears stressing that there is no copyright protectionfor wor&s of applied art or industrial design which have aesthetic or artistic featuresthat cannot #e identified separately from the utilitarian aspects of thearticle" unctional components of useful articles, no matter how artistically

designed, have generally #een denied copyright protection unless they are separa#lefrom the useful article"-

4n this case, the petitionerLs models are not wor&s of applied art, nor artistic wor&s%hey are utility models, useful articles, al#eit with no artistic design or value %hus,the petitioner descri#ed the utility model as follows5

;A *$4'G I B*64'G :$ A%::B4;

Fnown #ushings inserted to leaf.spring eye to hold leaf.springs of automo#ile aremade of hard ru##er %hese ru##er #ushings after a time, upon su#@ecting them to somuch or intermittent pressure would eventually wore 8sic out that would cause the

wo##ling of the leaf spring

%he primary o#@ect of this utility model, therefore, is to provide a leaf.spring eye#ushing for automo#ile that is made up of plastic

Another o#@ect of this utility model is to provide a leaf.spring eye #ushing for automo#iles made of polyvinyl chloride, an oil resistant soft te?ture plastic or

polypropylene, a hard plastic, yet #oth causes cushion to the leaf spring, yet strongenough to endure pressure #rought a#out #y the up and down movement of said leaf spring

Iet, an o#@ect of this utility model is to provide a leaf.spring eye #ushing for automo#iles that has a much longer life span than the ru##er #ushings

*till an o#@ect of this utility model is to provide a leaf.spring eye #ushing for automo#iles that has a very simple construction and can #e made using simple andordinary molding e)uipment

A further o#@ect of this utility model is to provide a leaf.spring eye #ushing for

automo#ile that is supplied with a metal @ac&et to reinforce the plastic eye #ushingwhen in engaged with the steel material of the leaf spring

%hese and other o#@ects and advantages will come to view and #e understood upona reading of the detailed description when ta&en in con@unction with theaccompanying drawings

igure 1 is an e?ploded perspective of a leaf.spring eye #ushing according to thepresent utility model=

igure 2 is a sectional view ta&en along line 2.2 of ig 1=

igure " is a longitudinal sectional view of another em#odiment of this utility model=

igure 0 is a perspective view of a third em#odiment= and

igure / is a sectional view thereof

$eferring now to the several views of the drawings wherein li&e reference numeralsdesignated same parts throughout, there is shown a utility model for a leaf.spring eye#ushing for automo#ile generally designated as reference numeral 1!

*aid leaf.spring eye #ushing 1! comprises a generally cylindrical #ody 11 having aco.a?ial #ore 12 centrally provided thereof

As shown in igs 1 and 2, said leaf.spring eye #ushing 1! is provided with aperpendicular flange 1" on one of its ends and a cylindrical metal @ac&et 10



















21

surrounding the peripheral walls 1/ of said #ody 11 +hen said leaf.spring #ushing1! is installed, the metal @ac&et 10 acts with the leaf.spring eye 8not shown, which isalso made of steel or cast steel 4n effect, the #ushing 1! will not #e directly in contactwith steel, #ut rather the metal @ac&et, ma&ing the life of the #ushing 1! longer thanthose without the metal @ac&et

4n igure 2, the #ushing 1! as shown is made of plastic, prefera#ly polyvinyl chloride,an oil resistant soft te?ture plastic or a hard polypropylene plastic, #oth are capa#leto endure the pressure applied thereto, and, in effect, would lengthen the life andreplacement therefor

igure ", on the other hand, shows the walls 1 of the co.a?ial #ore 12 of said#ushing 1! is inserta#ly provided with a steel tu#e 1- to reinforce the inner portionthereof %his steel tu#e 1- accommodates or engages with the leaf.spring #olt 8notshown connecting the leaf spring and the automo#ileLs chassis

igures 0 and / show another em#odiment wherein the leaf eye #ushing 1! is

elongated and cylindrical as to its construction *aid another em#odiment is alsomade of polypropylene or polyvinyl chloride plastic material %he steel tu#e 1- andmetal @ac&et 10 may also #e applied to this em#odiment as an option thereof "(

764C; BA$4'G C*64:'

Fnown #earing cushions inserted to #earing housings for vehicle propeller shafts aremade of hard ru##er %hese ru##er #ushings after a time, upon su#@ecting them to somuch or intermittent pressure would eventually #e worn out that would cause thewo##ling of the center #earing

%he primary o#@ect of this utility model therefore is to provide a vehicle.#earing

cushion that is made up of plastic

Another o#@ect of this uti lity model is to provide a vehicle #earing cushion made of polyvinyl chloride, an oil resistant soft te?ture plastic material which causes cushionto the propellerLs center #earing, yet strong enough to endure pressure #roughta#out #y the vi#ration of the center #earing

Iet, an o#@ect of this utility model is to provide a vehicle.#earing cushion that has amuch longer life span than ru##er #ushings

*till an o#@ect of this utility model is to provide a vehicle #earing cushion that has avery simple construction and can #e made using simple and ordinary moldinge)uipment

%hese and other o#@ects and advantages will come to view and #e understood upona reading of the detailed description when ta&en in con@unction with theaccompanying drawings

igure 1 is a perspective view of the present utility model for a vehicle.#earing

cushion= and

igure 2 is a sectional view thereof

$eferring now to the several views of the drawing, wherein li&e reference numeraldesignate same parts throughout, there is shown a utility model for a vehicle.#earingcushion generally designated as reference numeral 1!

*aid #earing cushion 1! comprises of a generally semi.circular #ody 11, havingcentral hole 12 to house a conventional #earing 8not shown As shown in igure 1,said #ody 11 is provided with a plurality of ridges 1" which serves reinforcing meansthereof

%he su#@ect #earing cushion 1! is made of polyvinyl chloride, a soft te?ture oil andchemical resistant plastic material which is strong, dura#le and capa#le of enduringsevere pressure from the center #earing #rought a#out #y the rotating movement of the propeller shaft of the vehicle"9

A utility model is a technical solution to a pro#lem in any field of human activity whichis new and industrially applica#le 4t may #e, or may relate to, a product, or process,or an improvement of any of the aforesaid0!ssentially, a utility model refers to aninvention in the mechanical field %his is the reason why its o#@ect is sometimesdescri#ed as a device or useful o#@ect01 A utility model varies from an invention, for which a patent for invention is, li&ewise, availa#le, on at least three aspects5 first, the

re)uisite of Hinventive stepH

02

in a patent for invention is not re)uired= second, thema?imum term of protection is only seven years0" compared to a patent which istwenty years,00 #oth rec&oned from the date of the application= and third, theprovisions on utility model dispense with its su#stantive e?amination 0/ and prefer for a less complicated system

Being plain automotive spare parts that must conform to the original structural designof the components they see& to replace, the ;eaf *pring ye Bushing and 7ehicleBearing Cushion are not ornamental %hey lac& the decorative )uality or value thatmust characteri<e authentic wor&s of applied art %hey are not even artistic creationswith incidental utilitarian functions or wor&s incorporated in a useful article 4nactuality, the personal properties descri#ed in the search warrants are mechanical

wor&s, the principal function of which is utility sans any aesthetic em#ellishment























22

'either are we to regard the ;eaf *pring ye Bushing and 7ehicle Bearing Cushionas included in the catch.all phrase Hother literary, scholarly, scientific and artisticwor&sH in *ection 1-218a of $A 'o (29" Applying the principle of e$usem

generis which states that Hwhere a statute descri#es things of a particular class or &ind accompanied #y words of a generic character, the generic word will usually #e

limited to things of a similar nature with those particularly enumerated, unless there#e something in the conte?t of the state which would repel such inference,H0 the ;eaf *pring ye Bushing and 7ehicle Bearing Cushion are not copyrighta#le, #eing not of the same &ind and nature as the wor&s enumerated in *ection 1-2 of $A 'o (29"

'o copyright granted #y law can #e said to arise in favor of the petitioner despite theissuance of the certificates of copyright registration and the deposit of the ;eaf *pring ye Bushing and 7ehicle Bearing Cushion 4ndeed, in%oaquin, %r. v.

Drilon0- and !earl ? Dean 3!hil.5, /ncorporate v. #hoemart, /ncorporate ,0( the Courtruled that5

Copyright, in the strict sense of the term, is purely a statutory right 4t is a new or

independent right granted #y the statute, and not simply a pre.e?isting right regulated#y it Being a statutory grant, the rights are only such as the statute confers, and may#e o#tained and en@oyed only with respect to the su#@ects and #y the persons, andon terms and conditions specified in the statute Accordingly, it can cover only thewor&s falling within the statutory enumeration or description

%hat the wor&s of the petitioner may #e the proper su#@ect of a patent does not entitlehim to the issuance of a search warrant for violation of copyright laws 4n =ho v.

Court of Appeals09 and !earl ? Dean 3!hil.5, /ncorporate v. #hoemart,

/ncorporate ,/! the Court ruled that Hthese copyright and patent rights are completelydistinct and separate from one another, and the protection afforded #y one cannot #eused interchangea#ly to cover items or wor&s that exclusively pertain to the othersH

%he Court e?pounded further, thus5

%rademar&, copyright and patents are different intellectual property rights that cannot#e interchanged with one another A trademar& is any visi#le sign capa#le of distinguishing the goods 8trademar& or services 8service mar& of an enterprise andshall include a stamped or mar&ed container of goods 4n relation thereto, a tradename means the name or designation identifying or distinguishing an enterpriseeanwhile, the scope of a copyright is confined to literary and artistic wor&s whichare original intellectual creations in the literary and artistic domain protected from themoment of their creation atenta#le inventions, on the other hand, refer to anytechnical solution of a pro#lem in any field of human activity which is new, involvesan inventive step and is industrially applica#le

%he petitioner cannot find solace in the ruling of the nited *tates *upreme Courtin ;a&er v. #tein/1 to #uttress his petition 4n that case, the artifacts involved in thatcase were statuettes of dancing male and female figures made of semi.vitreouschina %he controversy therein centered on the fact that although copyrighted asHwor&s of art,H the statuettes were intended for use and used as #ases for ta#le

lamps, with electric wiring, soc&ets and lampshades attached %he issue raised waswhether the statuettes were copyright protected in the nited *tates, considering thatthe copyright applicant intended primarily to use them as lamp #ases to #e made andsold in )uantity, and carried such intentions into effect At that time, the Copyright:ffice interpreted the 19!9 Copyright Act to cover wor&s of artistic craftsmanshipinsofar as their form, #ut not the utilitarian aspects, were concerned After reviewingthe history and intent of the * Congress on its copyright legislation and theinterpretation of the copyright office, the * *upreme Court declared that thestatuettes were held copyrighta#le wor&s of art or models or designs for wor&s of art%he 6igh Court ruled that5

H+or&s of art 8Class G K 8a K /n @eneral. %his class includes wor&s of artistic

craftsmanship, in so far as their form #ut not their mechanical or utilitarian aspectsare concerned, such as artistic @ewelry, enamels, glassware, and tapestries, as wellas all wor&s #elonging to the fine arts, such as paintings, drawings and sculpture MH

*o we have a contemporaneous and long.continued construction of the statutes #ythe agency charged to administer them that would allow the registration of such astatuette as is in )uestion here/2

%he 6igh Court went on to state that H[t]he dichotomy of protection for the aesthetic isnot #eauty and utility #ut art for the copyright and the invention of original andornamental design for design patentsH *ignificantly, the copyright office promulgateda rule to implement a<er to wit5

M [4]f Hthe sole intrinsic function of an article is its utility, the fact that the wor& isuni)ue and attractively shaped will not )ualify it as a wor& of artH

4n this case, the #ushing and cushion are not wor&s of art %hey are, as the petitioner himself admitted, utility models which may #e the su#@ect of a patent

IN LIG"T O$ ALL T"E $OREGOING, the instant petition is here#y 3'43 for lac&of merit %he assailed 3ecision and $esolution of the Court of Appeals in CA.G$* 'o -!011 are A4$3 *earch +arrant 'os !1.20!1 and !1.20!2 issued on:cto#er 1/, 2!!1 are A'';;3 A'3 *% A*43 Costs against the petitioner

*: :$3$3










2%

uno, 8Chairman, Austria.artine<, %inga, and Chico.'a<ario, JJ, concur

Laktaw v. Paglinawan


anila

' BA'C



24

G.R. No. L51193 A7 1, 1918

PE&RO ERRANO LATA!, plaintiff.appellant,vsMAMERTO PAGLINA!AN, defendant.appellee

!erfecto @abriel for appellant.

Felix Ferrer an Crossfiel an B"rien for appellee.

ARAULLO, J.+

4n the complaint presented in the Court of irst 4nstance of the City of anila one#ruary 2!, 191/, it was alleged5 81 %hat the plaintiff was, according to the lawsregulating literary properties, the registered owner and author of a literary wor&entitled Diccionario 'ispano9agalog 8*panish.%agalog 3ictionary pu#lished in theCity of anila in 1((9 #y the printing esta#lishment :a pinion, and a copy of whichwas attached to the complaint, as ?hi#it A= 82 that the defendant, without theconsent of the plaintiff, reproduced said literary wor&, improperly copied the greater part thereof in the wor& pu#lished #y him and entitled Diccionariong =astila9

agalog 8*panish.%agalog 3ictionary, a copy of which was also attached to thecomplaint as ?hi#it B= 8" that said act of the defendant, which is a violation of article - of the ;aw of January 1!, 1(-9, on 4ntellectual roperty, caused irrepara#lein@uries to the plaintiff, who was surprised when, on pu#lishing his new wor&entitled Diccionario agalog9'ispano8%agalog.*panish 3ictionary he learned of thefact, and 80 that the damages occasioned to the plaintiff #y the pu#lication of defendantEs wor& amounted to N1!,!!! %he plaintiff therefore prayed the court toorder the defendant to withdraw from sale all stoc& of the wor& herein identified as?hi#it B and to pay the plaintiff the sum of N1!,!!!, with costs

%he defendant in his answer denied generally each and every allegation of thecomplaint and prayed the court to a#solve him from the complaint After trial and theintroduction of evidence #y #oth parties, the court on August 2!, 191/, rendered @udgment, a#solving the defendant from the complaint, #ut without ma&ing anyspecial pronouncement as to costs %he plaintiff moved for a new trial on the groundthat the @udgment was against the law and the weight of the evidence *aid motionhaving #een overruled, plaintiff e?cepted to the order overruling it, and appealed thecase to the *upreme Court upon a #ill of e?ceptions

%he ground of the decision appealed from is that a comparison of the plaintiffEsdictionary with that of the defendant does not show that the latter is an improper copyof the former, which has #een pu#lished and offered for sale #y the plaintiff for a#out

twenty.five years or more or this reason the court held that the plaintiff had no rightof action and that the remedy sought #y him could not #e granted

%he appellant contends that court #elow erred in not declaring that the defendant hadreproduced the plaintiffEs wor& and that the defendant had violated article - of the;aw of January 1!, 1(-9, on 4ntellectual roperty

*aid article provides5

'o#ody may reproduce another personEs wor& without the ownerEs consent, evenmerely to annotate or add anything to it, or improve any edition thereof

%herefore, in order that said article may #e violated, it is not necessary, as the court#elow seems to have understood, that a wor& should #e an improper copy of another wor& previously pu#lished 4t is enough that anotherEs wor& has #een reproducedwithout the consent of the owner, even though it #e only to annotate, add somethingto it, or improve any edition thereof

pon ma&ing a careful and minute comparison of ?hi#it A, the dictionary written andpu#lished #y the plaintiff, and ?hi#it B, written and pu#lished #y the defendant, and,ta&ing into account the memorandum 8fols // to /9 presented #y the defendant, inwhich he enumerates the words and terms which, according to him, are in hisdictionary #ut not in that of that of the plaintiff, and viceversa, and the e)uivalents or definitions given #y the plaintiff, as well as the new %agalog words which are in thedictionary of the defendant #ut not in that of the plaintiff= and considering the notes,?hi#it C, first series, presented #y the plaintiff, in which the terms copied #y thedefendant from the plaintiffEs dictionary are enumerated in detail and in relation toeach letter of the alpha#et and which the plaintiffEs own words and terms are setforth, with a summary, at the foot of each group of letters, which shows the num#er of initial *panish words contained in the defendantEs dictionary, the words that are hisown and the fact that the remaining ones are truly copied from the plaintiffEsdictionary O considering all of these facts, we come to a conclusion completely

different and contrary to that of the trial court, for said evidence clearly shows5

1 %hat, of the *panish words in the defendantEs dictionary, ?hi#it B, whichcorrespond to each letter of the alpha#et, those that are enumerated #elow have#een copied and reproduced from the plaintiffEs dictionary, with the e?ception of thosethat are stated to #e defendantEs own

;etter +ords 3efendantEs own

HAH 1,1(0 2"1

HBH "0 2(

HCH ! 21



2,

HC6H - 1!

H3H (-0 2"1

HH ((! "!1

HH "(" 1/2

HGH "!2 111

H6H /- 0

H4H (10 "2(

HJH 11" 2/

HFH 11 11

H;H /!2 90

H;;H " 2

HH 990 22/

H'H 2/9 /"

HPH 2

H:H "1- -

HH (!" "/(

HQH (0 11

H$H (0- 10!

H*H -0 11(

H%H /91 10-

HH 1!- 1/

H7H "02 9

HRH

HIH 20 0

HSH -" 1-

TTTTTT TTTTT

2",/! ",1!(

%herefore, of the 2",/! *panish words in the defendantEs dictionary, after deducting1- words corresponding to the letters F and R 8for the plaintiff has no wordscorresponding to them, only ",1!( words are the defendantEs own, or, what is thesame thing, the defendant has added only this num#er of words to those that are inthe plaintiffEs dictionary, he having reproduced or copied the remaining 2!,0/2 words2 %hat the defendant also literally reproduced and copied for the *panish words inhis dictionary, the e)uivalents, definitions and different meanings in %agalog, given inplaintiffEs dictionary, having reproduced, as to some words, everything that appears inthe plaintiffEs dictionary for similar *panish words, although as to some he madesome additions of his own *aid copies and reproductions are numerous as may #eseen, #y comparing #oth dictionaries and using as a guide or inde? the defendantEsmemorandum and notes, first series, ?hi#it C, in which, as to each word, thesimilarities and differences #etween them are set forth in detail

" %hat the printerEs errors in the plaintiffEs dictionary as to the e?pression of somewords in *panish as well as their e)uivalents in %agalog are also reproduced, a factwhich shows that the defendant, in preparing his dictionary, literally copied those*panish words and their meanings and e)uivalents in %agalog from the plaintiffEsdictionary

%he trial court has chosen at random, as is stated in the @udgment appealed from,some words from said dictionaries in ma&ing the comparison on which its conclusionis #ased, and conse)uently the conclusion reached #y it must #e inaccurate and notwell founded, #ecause said comparison was not complete

4n said @udgment some words of the defendantEs dictionary are transcri#ed, thee)uivalents and meanings of which in %agalog are e?actly the same as those that aregiven in the plaintiffEs dictionary, with the e?ception, as to some of them, of only oneacceptation, which is the defendantEs own production And with respect to thee?amples used #y the defendant in his dictionary, which, according to the @udgment,are not copied from the plaintiffEs O the @udgment referring to the preposition a 8to, in%agalog sa O it must #e noted that the defendant, in giving in his dictionary ane?ample of said preposition, uses the e?pression Hvoy a %aya#asH 84 am going to%aya#as instead of Hvoy a BulacanH 84 am going to Bulacan, as the plaintiff does inhis dictionary, or what is the same thing, that one spea&s of Bulacan while the other spea&s of %aya#as %his does not show that there was no reproduction or copying #y



26

the defendant of the plaintiffs wor&, #ut @ust the opposite, for he who intends toimitate the wor& of another, tries to ma&e it appear in some manner that there issome difference #etween the original and the imitation= and in the e?ample referredto, with respect to the preposition a 8to, that dissimilarity as to the provincedesignated seems to effect the same purpose

4n the @udgment appealed from, the court gives one to understand that thereproduction of anotherEs dictionary without the ownerEs consent does not constitute aviolation of the ;aw of 4ntellectual roperty for the courtEs idea of a dictionary isstated in the decision itself, as follows5

3ictionaries have to #e made with the aid of others, and they are improved #y theincrease of words +hat may #e said of a pasture ground may #e said also of adictionary, i e, that it should #e common property for all who may desire to write anew dictionary, and the defendant has come to this pasture ground and ta&enwhatever he needed from it in the e?ercise of a perfect right

*uch idea is very erroneous, especially in relation to the ;aw of 4ntellectual roperty3anvilla y Collado the author of the ;aw of January 1!, 1(-9, on 4ntellectualroperty, which was discussed and approved in the *panish Cortes, in his wor&entitled :a !ropiea /ntelectual 8page "2, 1st ed states with respect todictionaries and in relation to article - of said law5

%he protection of the law cannot #e denied to the author of a dictionary, for althoughwords are not the property of any#ody, their definitions, the e?ample that e?plain their sense, and the manner of e?pressing their different meanings, may constitute aspecial wor& :n this point, the correctional court of the *eine held, on August 1,1(0, that a dictionary constitutes property, although some of the words therein aree?plained #y mere definitions e?pressed in a few lines and sanctioned #y usage,

provided that the greater part of the other words contain new meanings= newmeanings which evidently may only #elonged to the first person who pu#lished them

%herefore, the plaintiff, edro *errano, cannot #e denied the legal protection whichhe see&s, and which is #ased on the fact that the dictionary pu#lished #y him in 1((9is his property O said property right #eing recogni<ed and having #een granted #yarticle -, in connection with article 2, of said law O and on the further fact that saidwor& was reproduced #y the defendant without his permission

%his law was pu#lished in the Gaceta de adrid on January 12, 1(-9 4t too& effect inthese 4slands si? months after its promulgation or pu#lication, as provided in article/ thereof %he #ody of rules for the e?ecution of said law having #een approved #y

royal decree of *eptem#er ", 1((!, and pu#lished in the Gaceta de adrid on*eptem#er , 1((! and e?tended to the hilippine 4slands #y royal decree of ay /,

1((-, it was in turn pu#lished in the Gaceta de anila, with the approval of theGovernor.General of the 4slands, on June 1/, 1((- *aid law of January 1!, 1(-9,and the rules for its application, were therefore in force in these 4slands when theplaintiffEs dictionary was edited and pu#lished in 1((9

4t appears from the evidence that although the plaintiff did not introduce at the trialthe certificate of registration of his property rights to said wor& which, according tosaid rules, was &ept in the Central Government of these 4slands, and was issued tohim in 1(9!, the same having #een lost during the revolution against *pain, and notrace relative to the issuance of said certificate #eing o#taina#le in the 3ivision of Archives of the ?ecutive Bureau on account of the loss of the correspondingrecords, yet as in the first page of said dictionary the property right of the plaintiff wasreserved #y means of the words Hs propiedad del autorH 8All rights reserved, ta&enin connection with the permission granted him #y the Governor.General on'ovem#er 20, 1((9, to print and pu#lish said dictionary, after an e?amination thereof #y the permanent committee of censors, which e?amination was made, and thenecessary license granted to him, these facts constitute sufficient proof, under the

circumstances of the case, as they have not #een overcome #y any evidence on thepart of the defendant, showing that said plaintiff did not comply with the re)uirementsof article " of said law, which was the prere)uisite to the en@oyment of the #enefitsthereof according to the preceding articles, among which is article -, which is allegedin the complaint to have #een violated #y the defendant

ven considering that said ;aw of January 1!, 1(-9, ceased to operate in these4slands, upon the termination of *panish sovereignty and the su#stitution thereof #ythat of the nited *tates of America, the right of the plaintiff to invo&e said law insupport of the action instituted #y him in the present case cannot #e disputed 6isproperty right to the wor& Diccionario 'ispano9agalog 8*panish.%agalog 3ictionary,pu#lished #y him and edited in 1((9, is recogni<ed and sanctioned #y said law, and

#y virtue thereof, he had ac)uired a right of which he cannot #e deprived merely#ecause the law is not in force now or is of no actual application %his conclusion isnecessary to protect intellectual property rights vested after the sovereignty of *painwas superseded #y that of the nited *tates 4t was so held superseded #y that of the nited *tates 4t was so held in the %reaty of aris of 3ecem#er 1!, 1(9(,#etween *pain and the nited *tates, when it declared in article 1" thereof that therights to literary, artistic, and industrial properties ac)uired #y the su#@ect of *pain inthe 4sland of Cu#a and in uerto $ico and the hilippines and other ceded territories,at the time of the e?change of the ratification of said %reaty, shall continue to #erespect

4n addition to what has #een said, according to article 02( of the Civil Code, the

author of a literary, scientific, or artistic wor&, has the right to e?ploit it and dispose



2-

thereof at will 4n relation to this right, there e?ists the e?clusive right of the author,who is the a#solute owner of his own wor&, to produce it, according to article 2 of the;aw of January 1!, 1(-9, and conse)uently, no#ody may reproduce it, without hispermission, not even to annotate or add something to it, or to improve any editionthereof, according to article - of said law anresa, in his commentaries on article

029 of the Civil Code 8vol ", p "", "d ed says that the concrete statement of theright to literary properties is found in the legal doctrine according to which no#odymay reproduce another personEs wor&, without the consent of his owner, or even toannotate or add something to it or to improve any edition thereof And on page 1 of said volume, anresa says the following5

6e who writes a #oo&, or carves a statue, or ma&es an invention, has the a#soluteright to reproduce or sell it, @ust as the owner of land has the a#solute right to sell it or its fruits But while the owner of land, #y selling it and its fruits, perhaps fully reali<esall its economic value, #y receiving its #enefits and utilities, which are presented, for e?ample, #y the price, on the other hand the author of a #oo&, statue or invention,does not reap all the #enefits and advantages of his own property #y disposing of it,

for the most important form of reali<ing the economic advantages of a #oo&, statue or invention, consists in the right to reproduce it in similar or li&e copies, everyone of which serves to give to the person reproducing them all the conditions which theoriginal re)uires in order to give the author the full en@oyment thereof 4f the author of a #oo&, after its pu#lication, cannot prevent its reproduction #y any person who maywant to reproduce it, then the property right granted him is reduced to a veryinsignificant thing and the effort made in the production of the #oo& is no wayrewarded

4ndeed the property right recogni<ed and protected #y the ;aw of January 1!, 1(-9,on 4ntellectual roperty, would #e illusory if, #y reason of the fact that said law is nolonger in force as a conse)uence of the change of sovereignty in these 4slands, the

author of a wor&, who has the e?clusive right to reproduce it, could not preventanother person from so doing without his consent, and could not enforce this rightthrough the courts of @ustice in order to prosecute the violator of this legal provisionand the defrauder or usurper of his right, for he could not o#tain the full en@oyment of the #oo& or other wor&, and his property right thereto, which is recogni<ed #y law,would #e reduced, as anresa says, to an insignificant thing, if he should have nomore right than that of selling his wor&

%he reproduction #y the defendant without the plaintiffEs consent of the Diccionario

'ispano9agalog 8*panish.%agalog 3ictionary, pu#lished and edited in the City of anila in 1((9, #y the pu#lication of the Diccionariong =astila9agalog 8*panish.%agalog 3ictionary, pu#lished in the same city and edited in the press 7l !rogreso in

191", as appears from ?hi#it B, which is attached to the complaint, has caused the

plaintiff, according to the latter, damages in the sum of N1!,!!! 4t is true that itcannot #e denied that the reproduction of the plaintiffEs #oo& #y the defendant hascaused damages to the former, #ut the amount thereof has not #een determined atthe trial, for the statement of the plaintiff as to the proceeds he would have reali<ed if he had printed in 191" the num#er of copies of his wor& which he stated in his

declaration O a fact which he did not do #ecause the defendant had reproduced it Owas not corro#orated in any way at the trial and is #ased upon mere calculationsmade #y the plaintiff himself= for which reason no pronouncement can #e made inthis decision as to the indemnification for damages which the plaintiff see&s torecover

%he plaintiff having prayed, not for a permanent in@unction against the defendant, asthe plaintiff himself in his #rief erroneously states, #ut for a @udgment ordering thedefendant to withdraw from sale all stoc& of his wor&Diccionariong =astila9

agalog 8*panish.%agalog 3ictionary, of which ?hi#it B is a copy, and the suitinstituted #y said plaintiff #eing proper, we reverse the @udgment appealed from andorder the defendant to withdraw from sale, as prayed for in the complaint, all stoc& of

his wor& a#ove.mentioned, and to pay the costs of first instance +e ma&e no specialpronouncement as to the costs of this instance *o ordered

Arellano, C. %., orres, an #treet, %%., concurCarson, an ;alcolm, %%., concur in the result

oa!uin" r. v. #rilon


anila

*C:'3 3474*4:'

G.R. No. 1089:6 -()u(; 28, 1999

$RANCICO G. -OA<UIN, -R., ()* B- PRO&UCTION, INC.,petitioners,vs



2"

"ONORABLE $RANLIN &RILON, GABRIEL =OA, !ILLIAM EPOO, $ELIPE

ME&INA, -R., ()* CAE# $RANCICO, respondents

MEN&O=A, J.:

%his is a petition for certiorari etitioners see& to annul the resolution of the3epartment of Justice, dated August 12, 1992, in Criminal Case 'o Q.92.2-(/0,entitled HGa#riel Sosa, et al v City rosecutor of Que<on City and ranciscoJoa)uin, Jr,H and its resolution, dated 3ecem#er ", 1992, denying petitioner Joa)uinEs motion for reconsideration

etitioner BJ roductions, 4nc 8BJ4 is the holder>grantee of Certificate of Copyright'o 922, dated January 2(, 19-1, of -hoa an ;e, a dating game show airedfrom 19-! to 19--

:n June 2(, 19-", petitioner BJ4 su#mitted to the 'ational ;i#rary an addendum to

its certificate of copyright specifying the showEs format and style of presentation

:n July 10, 1991, while watching television, petitioner rancisco Joa)uin, Jr,president of BJ4, saw on $' Channel 9 an episode of /tBs a Date, which wasproduced #y 4R; roductions, 4nc 84R; :n July 1(, 1991, he wrote a letter to privaterespondent Ga#riel Sosa, president and general manager of 4R;, informing Sosathat BJ4 had a copyright to -hoa an ;e and demanding that 4R; discontinueairing /tBs a Date

4n a letter, dated July 19, 1991, private respondent Sosa apologi<ed to petitioner Joa)uin and re)uested a meeting to discuss a possi#le settlement 4R;, however,continued airing 4tEs a 3ate, prompting petitioner Joa)uin to send a second letter on

July 2/, 1991 in which he reiterated his demand and warned that, if 4R; did notcomply, he would endorse the matter to his attorneys for proper legal action

eanwhile, private respondent Sosa sought to register 4R;Es copyright to the firstepisode of 4tEs a 3ate for which it was issued #y the 'ational ;i#rary a certificate of copyright August 10, 1991

pon complaint of petitioners, an information for violation of 3 'o 09 was filedagainst private respondent Sosa together with certain officers of $' Channel 9,namely, +illiam sposo, elipe edina, and Casey rancisco, in the $egional %rialCourt of Que<on City where it was doc&eted as Criminal Case 'o 92.2-(/0 andassigned to Branch 1!0 thereof 6owever, private respondent Sosa sought a review

of the resolution of the Assistant City rosecutor #efore the 3epartment of Justice

:n August 12, 1992, respondent *ecretary of Justice ran&lin 3rilon reversed the Assistant City rosecutorEs findings and directed him to move for the dismissal of thecase against private respondents 1

etitioner Joa)uin filed a motion for reconsideration, #ut his motion denied #y

respondent *ecretary of Justice on 3ecem#er ", 1992 6ence, this petitionetitioners contend that5

1 %he pu#lic respondent gravely a#used his discretion amounting to lac& of @urisdiction O when he invo&ed non.presentation of the master tape as #eing fatal tothe e?istence of pro#a#le cause to prove infringement, despite the fact that privaterespondents never raised the same as a controverted issue

2 %he pu#lic respondent gravely a#used his discretion amounting to lac& of @urisdiction when he arrogated unto himself the determination of what iscopyrighta#le O an issue which is e?clusively within the @urisdiction of the regionaltrial court to assess in a proper proceeding

Both pu#lic and private respondents maintain that petitioners failed to esta#lish thee?istence of pro#a#le cause due to their failure to present the copyrighted master videotape of -hoa an ;e %hey contend that petitioner BJ4Es copyright coversonly a specific episode of -hoa an ;e and that the formats or concepts of datinggame shows are not covered #y copyright protection under 3 'o 09

'on.Assignment of rror

etitioners claim that their failure to su#mit the copyrighted master videotape of thetelevision show $hoda and e was not raised in issue #y private respondents duringthe preliminary investigation and, therefore, it was error for the *ecretary of Justice toreverse the investigating prosecutorEs finding of pro#a#le cause on this ground

A preliminary investigation falls under the authority of the state prosecutor who isgiven #y law the power to direct and control criminalactions 2 6e is, however, su#@ect to the control of the *ecretary of Justice %hus,$ule 112, U0 of the $evised $ules of Criminal rocedure, provides5

*ec 0 Duty of investigating fiscal O 4f the investigating fiscal finds cause to hold therespondent for trial, he shall prepare the resolution and corresponding information6e shall certify under oath that he, or as shown #y the record, an authori<ed officer,has personally e?amined the complainant and his witnesses, that there is reasona#leground to #elieve that a crime has #een committed and that the accused is pro#a#lyguilty thereof, that the accused was informed of the complaint and of the evidence



2

su#mitted against him and that he was given an opportunity to su#mit controvertingevidence :therwise, he shall recommend dismissal of the complaint

4n either case, he shall forward the records of the case to the provincial or city fiscalor chief state prosecutor within five 8/ days from his resolution %he latter shall ta&e

appropriate action thereon ten 81! days from receipt thereof, immediately informingthe parties of said action

'o complaint or information may #e filed or dismissed #y an investigating fiscalwithout the prior written authority or approval of the provincial or city fiscal or chief state prosecutor

+here the investigating assistant fiscal recommends the dismissal of the case #uthis findings are reversed #y the provincial or city fiscal or chief state prosecutor onthe ground that a pro#a#le cause e?ists, the latter may, #y himself, file thecorresponding information against the respondent or direct any other assistant fiscalor state prosecutor to do so, without conducting another preliminary investigation

4f upon petition #y a proper party, the *ecretary of Justice reverses the resolution of the provincial or city fiscal or chief state prosecutor, he shall direct the fiscalconcerned to file the corresponding information without conducting another preliminary investigation or to dismiss or move for dismissal of the complaint or information

4n reviewing resolutions of prosecutors, the *ecretary of Justice is not precluded fromconsidering errors, although unassigned, for the purpose of determining whether there is pro#a#le cause for filing cases in court 6e must ma&e his own finding, of pro#a#le cause and is not confined to the issues raised #y the parties duringpreliminary investigation oreover, his findings are not su#@ect to review unless

shown to have #een made with grave a#use

:pinion of the *ecretary of Justice

etitioners contend, however, that the determination of the )uestion whether theformat or mechanics of a show is entitled to copyright protection is for the court, andnot the *ecretary of Justice, to ma&e %hey assail the following portion of theresolution of the respondent *ecretary of Justice5

[%]he essence of copyright infringement is the copying, in whole or in part, of copyrighta#le materials as defined and enumerated in *ection 2 of 3 'o 09 Apart

from the manner in which it is actually expresse, however, the iea of a ating

game show is, in the opinion of this ffice, a non9copyrightable material. /eas,

concepts, formats, or schemes in their abstract form clearly o not fall within the

class of wor1s or materials susceptible of copyright registration as provie in !D.

o. 6) 38mphasis added

4t is indeed true that the )uestion whether the format or mechanics of petitionerstelevision show is entitled to copyright protection is a legal )uestion for the court to

ma&e %his does not, however, preclude respondent *ecretary of Justice fromma&ing a preliminary determination of this )uestion in resolving whether there ispro#a#le cause for filing the case in court 4n doing so in this case, he did not commitany grave error

resentation of aster %ape

etitioners claim that respondent *ecretary of Justice gravely a#used his discretionin ruling that the master videotape should have #een predented in order to determinewhether there was pro#a#le cause for copyright infringement %hey contend that 20th

Century Fox Film Corporation v. Court of Appeals, : on which respondent *ecretaryof Justice relied in reversing the resolution of the investigating prosecutor, is

inapplica#le to the case at #ar #ecause in the present case, the parties presentedsufficient evidence which clearly esta#lish Hlin&age #etween the copyright showH$hoda and eH and the infringing %7 show H4tEs a 3ateH

%he case of 2!th Century o? ilm Corporation involved raids conducted on variousvideotape outlets allegedlly selling or renting out HpiratedH videotapes %he trial courtfound that the affidavits of 'B4 agents, given in support of the application for thesearch warrant, were insufficient without the master tape Accordingly, the trial courtlifted the search warrants it had previously issued against the defendants :n petitionfor review, this Court sustained the action of the trial court and ruled5 6

%he 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 againstthose who have in their possession the pirated films %he petitionerEs argument to theeffect that the presentation of the master tapes at the time of application may not #enecessary as these would #e merely evidentiary in nature and not determinative of whether or not a pro#a#le cause e?ists to @ustify the issuance of the search warrantsis not meritorious %he court cannot presume that duplicate or copied tapes werenecessarily reproduced from master tapes that it owns

%he application for search warrants was directed against video tape outlets whichallegedly were engaged in the unauthori<ed sale and renting out of copyrighted films#elonging to the petitioner pursuant to 3 09

%he essence of a copyright infringement is the similarity or at least su#stantialsimilarity of the purported pirated wor&s to the copyrighted wor& 6ence, the



%/

applicant must present to the court the copyrighted films to compare them with thepurchased evidence of the video tapes allegedly pirated to determine whether thelatter is an unauthori<ed reproduction of the former %his lin&age of the copyrightedfilms to the pirated films must #e esta#lished to satisfy the re)uirements of pro#a#lecause ere allegations as to the e?istence of the copyrighted films cannot serve as

#asis for the issuance of a search warrant

%his ruling was )ualified in the later case of Columbia !ictures, /nc. v. Court of

Appeals in which it was held5

4n fine, the supposed pronunciamento in said case regarding the necessity for thepresentation of the master tapes of the copyrighted films for the validity of searchwarrants should at most #e understood to merely serve as a guidepost indetermining the e?istence of pro#a#le cause in copyright infringement cases where

there is oubt as to the true nexus between the master tape an the printe copies An o#@ective and careful reading of the decision in said case could lead to no other conclusion than that said directive was hardly intended to #e a sweeping and

infle?i#le re)uirement in all or similar copyright infringement cases 8

4n the case at #ar during the preliminary investigation, petitioners and privaterespondents presented written descriptions of the formats of their respectivetelevisions shows, on the #asis of which the investigating prosecutor ruled5

As may [#e] gleaned f rom the evidence on record, the su#stance of the televisionproductions complainantEs H$6:3A A'3 H and SosaEs H4%E* A 3A%H is that twomatches are made #etween a male and a female, #oth single, and the two couplesare treated to a night or two of dining and>or dancing at the e?pense of the show %hema@or concepts of #oth shows is the same Any difference appear mere variations of the ma@or concepts

%hat there is an infringement on the copyright of the show H$6:3A A'3 H #oth incontent and in the e?ecution of the video presentation are esta#lished #ecauserespondentEs H4%E* A 3A%H is practically an e?act copy of complainantEs H$6:3A A'3 H #ecause of su#stantial similarities as follows, to wit5

H4%E* A 3A%H

*et 1

a nmarried participant of one gender8searcher appears on one side of a

divider, while three 8" unmarriedparticipants of the other gender are on

a same

the other side of the divider %hisarrangement is done to ensure that thesearcher does not see the searchees

# *earcher as&s a )uestion to #e

answered #y each of the searchees%he purpose is to determine whoamong the searchees is the mostcompati#le with the searcher

# same

c *earcher speculates on the matchto the searchee

c same

d *election is made #y the use ofcompute 8sic methods, or #y the way)uestions are answered, or similarmethods

d *election is #ased on the answer of the*earchees

*et 2

*ame as a#ove with the genders ofthe searcher and searcheesinterchanged 9

same

etitioners assert that the format of -hoa an ;e is a product of ingenuity and s&illand is thus entitled to copyright protection 4t is their position that the presentation of a point.#y.point comparison of the formats of the two shows clearly demonstrates thene?us #etween the shows and hence esta#lishes the e?istence of pro#a#le cause for copyright infringement *uch #eing the case, they did not have to produce the master

tape

%o #egin with the format of a show is not copyrighta#le *ection 2 of 3 'o09, 10 otherwise &nown as the 3C$ :' 4'%;;C%A; $:$%I,enumerates the classes of wor& entitled to copyright protection, to wit5

*ec 2 %he rights granted #y this 3ecree shall, from the moment of creation, su#sistwith respect to any of the following classes of wor&s5

8A Boo&s, including composite and cyclopedic wor&s, manuscripts, directories, andga<etteers5

8B eriodicals, including pamphlets and newspapers=



%1

8C ;ectures, sermons, addresses, dissertations prepared for oral delivery=

83 ;etters=

8 3ramatic or dramatico.musical compositions= choreographic wor&s andentertainments in dum# shows, the acting form of which is fi?ed in writing or otherwise=

8 usical compositions, with or without words=

8G +or&s of drawing, painting, architecture, sculpture, engraving, lithography, andother wor&s of art= models or designs for wor&s of art=

86 $eproductions of a wor& of art=

84 :riginal ornamental designs or models for articles of manufacture, whether or notpatenta#le, and other wor&s of applied art=

8J aps, plans, s&etches, and charts=

8F 3rawings or plastic wor&s of a scientific or technical character=

84 hotographic wor&s and wor&s produced #y a process analogous to photographylantern slides=

8 Cinematographic wor&s and wor&s produced #y a process analogous tocinematography or any process for ma&ing audio.visual recordings=

8' Computer programs=

8: rints, pictorial illustrations advertising copies, la#els tags, and #o? wraps=

8 3ramati<ations, translations, adaptations, a#ridgements, arrangements and other alterations of literary, musical or artistic wor&s or of wor&s of the hilippinegovernment as herein defined, which shall #e protected as provided in *ection ( of this 3ecree

8Q Collections of literary, scholarly, or artistic wor&s or of wor&s referred to in *ection9 of this 3ecree which #y reason of the selection and arrangement of their contentsconstitute intellectual creations, the same to #e protected as such in accordance with*ection ( of this 3ecree

8$ :ther literary, scholarly, scientific and artistic wor&s

%his provision is su#stantially the same as U1-2 of the 4'%;;C%A; $:$%IC:3 : 64;44'* 8$A 'o (29" 11 %he format or mechanics of a televisionshow is not included in the list of protected wor&s in U2 of 3 'o 09 or thisreason, the protection afforded #y the law cannot #e e?tended to cover them

Copyright, in the strict sense of the term, is purely a statutory right 4t is a new or independent right granted #y the statute, and not simply a pre.e?isting right regulated#y the statute Being a statutory grant, the rights are only such as the statute confers,and may #e o#tained and en@oyed only with respect to the su#@ects and #y thepersons and on terms and conditions specified in the statute 12

*ince copyright in pu#lished wor&s is purely a statutory creation, a copyright may#e o#tained only for a wor& falling within the statutory enumeration or description 13

$egardless of the historical viewpoint, it is authoritatively settled in the nited *tatesthat there is no copyright e?cept that which is #oth created and secured #y act of Congress 1:

3 'o 09, U2, in enumerating what are su#@ect to copyright, refers to finished wor&sand not to concepts %he copyright does not e?tend to an idea, procedure, process,system, method of operation, concept, principle, or discovery, regardless of the formin which it is descri#ed, e?plained, illustrated, or em#odied in such wor& 1 %hus, thenew 4'%;;C%A; $:$%I C:3 : %6 64;44'* provides5

*ec 1-/ nprotecte #ub$ect ;atter O 'otwithstanding the provisions of *ections1-2 and 1-", no protection shall e?tend, under this law, to any idea, procedure,system, method or operation, concept, principle, discovery or mere data as such,even if they are e?pressed, e?plained, illustrated or em#odied in a wor&= news of theday and other miscellaneous facts having the character of mere items of press

information= or any official te?t of a legislative, administrative or legal nature, as wellas any official translation thereof

+hat then is the su#@ect matter of petitionersE copyrightD %his Court is of the opinionthat petitioner BJ4Es copyright covers audio.visual recordings of each episodeof -hoa an ;e, as falling within the class of wor&s mentioned in 3 09, U28, towit5

Cinematographic wor&s and wor&s produced #y a process analogous tocinematography or any process for ma&ing audio.visual recordings=

%he copyright does not e?tend to the general concept or format of its dating gameshow Accordingly, #y the very nature of the su#@ect of petitioner BJ4Es copyright, the



%2

investigating prosecutor should have the opportunity to compare the videotapes of the two shows

ere description #y words of the general format of the two dating game shows isinsufficient= the presentation of the master videotape in evidence was indispensa#le

to the determination of the e?istence of pro#a#le cause As aptly o#served #yrespondent *ecretary of Justice5

A television show includes more than mere words can descri#e #ecause it involves awhole spectrum of visuals and effects, video and audio, such that no similarity or dissimilarity may #e found #y merely descri#ing the general copyright>format of #othdating game shows

+6$:$, the petition is here#y 34*4**3

*: :$3$3(wphi(.nEt

!uno, >uisumbing an "uena, %%., concur.

"ellosillo, %., too1 no part.

Pearl $ #ean Inc. v. Shoemart Inc.


anila

%64$3 3474*4:'

G.R. No. 1:8222 August 1, 2003

PEARL > &EAN /P"IL.4, INCORPORATE&, etitioner,vs

"OEMART, INCORPORATE&, ()* NORT" E&A MARETING,INCORPORATE&, $espondents



%%

3 C 4 * 4 : '

CORONA, J.:

4n the instant petition for review on certiorari under $ule 0/ of the $ules of Court,petitioner earl V 3ean 8hil 4nc 8 V 3 assails the ay 22, 2!!1 decision 1 of theCourt of Appeals reversing the :cto#er "1, 199 decision2 of the $egional %rial Courtof a&ati, Branch 1"", in Civil Case 'o 92./1 which declared private respondents*hoemart 4nc 8*4 and 'orth dsa ar&eting 4nc 8'4 lia#le for infringement of trademar& and copyright, and unfair competition

AC%A; A'%C3'%*

%he ay 22, 2!!1 decision of the Court of Appeals " contained a summary of thisdispute5

Hlaintiff.appellant earl and 3ean 8hil, 4nc is a corporation engaged in themanufacture of advertising display units simply referred to as light #o?es %hese units

utili<e specially printed posters sandwiched #etween plastic sheets and illuminatedwith #ac& lights earl and 3ean was a#le to secure a Certificate of Copyright$egistration dated January 2!, 19(1 over these illuminated display units %headvertising light #o?es were mar&eted under the trademar& Hoster AdsH %heapplication for registration of the trademar& was filed with the Bureau of atents,%rademar&s and %echnology %ransfer on June 2!, 19(", #ut was approved only on*eptem#er 12, 19((, per $egistration 'o 011/ rom 19(1 to a#out 19((, earland 3ean employed the services of etro 4ndustrial *ervices to manufacture itsadvertising displays

*ometime in 19(/, earl and 3ean negotiated with defendant.appellant *hoemart,4nc 8*4 for the lease and installation of the light #o?es in * City 'orth dsa*ince * City 'orth dsa was under construction at that time, *4 offered as analternative, * a&ati and * Cu#ao, to which earl and 3ean agreed :n*eptem#er 11, 19(/, earl and 3eanLs General anager, $odolfo 7ergara,su#mitted for signature the contracts covering * Cu#ao and * a&ati to *4Ls Advertising romotions and u#licity 3ivision anager, $amonlito A#ano :nly thecontract for * a&ati, however, was returned signed :n :cto#er 0, 19(/, 7ergarawrote A#ano in)uiring a#out the other contract and reminding him that their agreement for installation of light #o?es was not only for its * a&ati #ranch, #utalso for * Cu#ao *4 did not #other to reply

4nstead, in a letter dated January 10, 19(, *4Ls house counsel informed earl and3ean that it was rescinding the contract for * a&ati due to non.performance of theterms thereof 4n his reply dated e#ruary 1-, 19(, 7ergara protested the unilateral

action of *4, saying it was without #asis 4n the same letter, he pushed for thesigning of the contract for * Cu#ao

%wo years later, etro 4ndustrial *ervices, the company formerly contracted #y earland 3ean to fa#ricate its display units, offered to construct light #o?es for *hoemartLs

chain of stores *4 approved the proposal and ten 81! light #o?es weresu#se)uently fa#ricated #y etro 4ndustrial for *4 After its contract with etro4ndustrial was terminated, *4 engaged the services of I3 $ain#ow AdvertisingCorporation to ma&e the light #o?es *ome "!! units were fa#ricated in 1991 %hesewere delivered on a staggered #asis and installed at * egamall and * City

*ometime in 19(9, earl and 3ean, received reports that e?act copies of its light#o?es were installed at * City and in the fastfood section of * Cu#ao poninvestigation, earl and 3ean found out that aside from the two 82 reported *#ranches, light #o?es similar to those it manufactures were also installed in two 82other * stores 4t further discovered that defendant.appellant 'orth dsa ar&eting4nc 8'4, through its mar&eting arm, rime *pots ar&eting *ervices, was set up

primarily to sell advertising space in lighted display units located in *4Ls different#ranches earl and 3ean noted that '4 is a sister company of *4

4n the light of its discoveries, earl and 3ean sent a letter dated 3ecem#er 11, 1991to #oth *4 and '4 en@oining them to cease using the su#@ect light #o?es and toremove the same from *4Ls esta#lishments 4t also demanded the discontinued useof the trademar& Hoster Ads,H and the payment to earl and 3ean of compensatorydamages in the amount of %wenty illion esos 82!,!!!,!!!!!

pon receipt of the demand letter, *4 suspended the leasing of two hundredtwenty.four 8220 light #o?es and '4 too& down its advertisements for Hoster AdsH from the lighted display units in *4Ls stores Claiming that #oth *4 and '4

failed to meet all its demands, earl and 3ean filed this instant case for infringementof trademar& and copyright, unfair competition and damages

4n denying the charges hurled against it, *4 maintained that it independentlydeveloped its poster panels using commonly &nown techni)ues and availa#letechnology, without notice of or reference to earl and 3eanLs copyright *4 notedthat the registration of the mar& Hoster AdsH was only for stationeries such asletterheads, envelopes, and the li&e Besides, according to *4, the word Hoster AdsH is a generic term which cannot #e appropriated as a trademar&, and, as such,registration of such mar& is invalid 4t also stressed that earl and 3ean is not entitledto the reliefs prayed for in its complaint since its advertising display units containedno copyright notice, in violation of *ection 2- of 3 09 *4 alleged that earl and

3ean had no cause of action against it and that the suit was purely intended tomalign *4Ls good name :n this #asis, *4, aside from praying for the dismissal of

http://www.lawphil.net/judjuris/juri2003/aug2003/gr_148222_2003.html#fnt1











%4

the case, also counterclaimed for moral, actual and e?emplary damages and for thecancellation of earl and 3eanLs Certification of Copyright $egistration 'o 3.$.2//( dated January 2!, 19(1 and Certificate of %rademar& $egistration 'o 01/dated *eptem#er 12, 19((

'4, for its part, denied having manufactured, installed or used any advertisingdisplay units, nor having engaged in the #usiness of advertising 4t repleaded *4Lsaverments, admissions and denials and prayed for similar reliefs and counterclaimsas *4H

%he $%C of a&ati City decided in favor of V 35

+herefore, defendants *4 and '4 are found @ointly and severally lia#le for infringement of copyright under *ection 2 of 3 09, as amended, and infringement of trademar& under *ection 22 of $A 'o 1, as amended, and are here#y penali<edunder *ection 2( of 3 09, as amended, and *ections 2" and 20 of $A 1, asamended Accordingly, defendants are here#y directed5

81 to pay plaintiff the following damages5

8a actual damages . 1,!!,!!!!!,representing profitsderived #y defendantsas a result of infringe.ment of plaintiffLs copyrightfrom 1991 to 1992

8# moral damages . 1,!!!!!!!!

8c e?emplary damages . 1,!!!,!!!!!

8d attorneyLs fees . 1,!!!,!!!!!

plus

8e costs of suit=

82 to deliver, under oath, for impounding in the 'ational ;i#rary, all light #o?es of *4which were fa#ricated #y etro 4ndustrial *ervices and I3 $ain#ow AdvertisingCorporation=

8" to deliver, under oath, to the 'ational ;i#rary, all filler.posters using the trademar&

Hoster AdsH, for destruction= and

80 to permanently refrain from infringing the copyright on plaintiffLs light #o?es and itstrademar& Hoster AdsH

3efendantsL counterclaims are here#y ordered dismissed for lac& of merit

*: :$3$30

:n appeal, however, the Court of Appeals reversed the trial court5

*ince the light #o?es cannot, #y any stretch of the imagination, #e considered aseither prints, pictorial illustrations, advertising copies, la#els, tags or #o? wraps, to #eproperly classified as a copyrighta#le class H:H wor&, we have to agree with *4when it posited that what was copyrighted were the technical drawings only, and notthe light #o?es themselves, thus5

02 +hen a drawing is technical and depicts a utilitarian o#@ect, a copyright over thedrawings li&e plaintiff.appellantLs will not e?tend to the actual o#@ect 4t has so #eenheld under @urisprudence, of which the leading case is Ba&er vs *elden 81!1 *

(01 81(-9 4n that case, *elden had o#tained a copyright protection for a #oo&entitled H*eldenLs Condensed ;edger or Boo&&eeping *implifiedH which purported toe?plain a new system of #oo&&eeping 4ncluded as part of the #oo& were #lan& formsand illustrations consisting of ruled lines and headings, specially designed for use inconnection with the system e?plained in the wor& %hese forms showed the entireoperation of a day or a wee& or a month on a single page, or on two pages followingeach other %he defendant Ba&er then produced forms which were similar to theforms illustrated in *eldenLs copyrighted #oo&s %he Court held that e?clusivity to theactual forms is not e?tended #y a copyright %he reason was that Hto grant amonopoly in the underlying art when no e?amination of its novelty has ever #eenmade would #e a surprise and a fraud upon the pu#lic= that is the province of letterspatent, not of copyrightH And that is precisely the point 'o dou#t aware that itsalleged original design would never pass the rigorous e?amination of a patentapplication, plaintiff.appellant fought to foist a fraudulent monopoly on the pu#lic #yconveniently resorting to a copyright registration which merely employs a recordalsystem without the #enefit of an in.depth e?amination of novelty

%he principle in "a1er vs. #elen was li&ewise applied in ;uller vs. riborough

"rige Authority [0" *upp 29( 8*3'I 1902] 4n this case, uller had o#taineda copyright over an unpu#lished drawing entitled HBridge Approach K the drawingshowed a novel #ridge approach to unsnarl traffic congestionH %he defendantconstructed a #ridge approach which was alleged to #e an infringement of the newdesign illustrated in plaintiffLs drawings 4n this case it was held that protection of the

drawing does not e?tend to the unauthori<ed duplication of the o#@ect drawn #ecausecopyright e?tends only to the description or e?pression of the o#@ect and not to the





%,

o#@ect itself 4t does not prevent one from using the drawings to construct the o#@ectportrayed in the drawing

4n two other cases, /mperial 'omes Corp. v. :amont , 0/( 2d (9/ and #cholt&

'omes, /nc. v. ;aox , "-9 2d (0, it was held that there is no copyrightinfringement when one who, without #eing authori<ed, uses a copyrightedarchitectural plan to construct a structure %his is #ecause the copyright does note?tend to the structures themselves

4n fine, we cannot find *4 lia#le for infringing earl and 3eanLs copyright over thetechnical drawings of the latterLs advertising display units

??? ??? ???

%he *upreme Court trenchantly held in Faberge, /ncorporate vs. /ntermeiate

Appellate Court that the protective mantle of the %rademar& ;aw e?tends only to thegoods used #y the first user as specified in the certificate of registration, following theclear mandate conveyed #y *ection 2! of $epu#lic Act 1, as amended, otherwise&nown as the %rademar& ;aw, which reads5

*C 2! Certification of registration prima facie evience of valiity . A certificate of registration of a mar& or trade.name shall #e prima facie evidence of the validity of the registration, the registrantLs ownership of the mar& or trade.name, and of theregistrantLs e?clusive right to use the same in connection with the goods, #usiness or services specified in the certificate, su#@ect to any conditions and limitations statedthereinH 8unerscoring supplie

%he records show that on June 2!, 19(", earl and 3ean applied for the registrationof the trademar& Hoster AdsH with the Bureau of atents, %rademar&s, and%echnology %ransfer *aid trademar& was recorded in the rincipal $egister on*eptem#er 12, 19(( under $egistration 'o 011/ covering the following products5stationeries such as letterheads, envelopes and calling cards and newsletters

+ith this as factual #ac&drop, we see no legal #asis to the finding of lia#ility on thepart of the defendants.appellants for their use of the words Hoster AdsH, in theadvertising display units in suit Jurisprudence has interpreted *ection 2! of the%rademar& ;aw as Han implicit permission to a manufacturer to venture into theproduction of goods and allow that producer to appropriate the #rand name of thesenior registrant on goods other than those stated in the certificate of registrationH%he *upreme Court further emphasi<ed the restrictive meaning of *ection 2! when itstated, through Justice Conrado 7 *anche<, that5

$eally, if the certificate of registration were to #e deemed as including goods notspecified therein, then a situation may arise where#y an applicant may #e tempted toregister a trademar& on any and all goods which his mind may conceive even if hehad never intended to use the trademar& for the said goods +e #elieve that suchomni#us registration is not contemplated #y our %rademar& ;aw

+hile we do not discount the stri&ing similarity #etween earl and 3eanLs registeredtrademar& and defendants.appellantsL Hoster AdsH design, as well as the paralleluse #y which said words were used in the partiesL respective advertising copies, wecannot find defendants.appellants lia#le for infringement of trademar& Hoster AdsHwas registered #y earl and 3ean for specific use in its stationeries, in contrast todefendants.appellants who used the same words in their advertising display units+hy earl and 3ean limited the use of its trademar& to stationeries is simply #eyondus But, having already done so, i t must stand #y the conse)uence of the registrationwhich it had caused

??? ??? ???

+e are constrained to adopt the view of defendants.appellants that the wordsHoster AdsH are a simple contraction of the generic term poster advertising 4n thea#sence of any convincing proof that Hoster AdsH has ac)uired a secondarymeaning in this @urisdiction, we find that earl and 3eanLs e?clusive right to the use of Hoster AdsH is limited to what is written in its certificate of registration, namely,stationeries

3efendants.appellants cannot thus #e held lia#le for infringement of the trademar&Hoster AdsH

%here #eing no finding of either copyright or trademar& infringement on the part of *4 and '4, the monetary award granted #y the lower court to earl and 3eanhas no leg to stand on

??? ??? ???

+6$:$, premises considered, the assailed decision is $7$*3 and *% A*43, and another is rendered 34*4**4'G the complaint and counterclaims in thea#ove.entitled case for lac& of merit/

3issatisfied with the a#ove decision, petitioner V 3 filed the instant petitionassigning the following errors for the CourtLs consideration5






%6

A %6 6:':$AB; C:$% : AA;* $$3 4' $;4'G %6A% ':C:I$4G6% 4'$4'G'% +A* C:4%%3 BI $*:'3'%* * A'3'4=

B %6 6:':$AB; C:$% : AA;* $$3 4' $;4'G %6A% ':4'$4'G'% : A$; V 3A'L* %$A3A$F H:*%$ A3*H +A*C:4%%3 BI $*:'3'%* * A'3 '4=

C %6 6:':$AB; C:$% : AA;* $$3 4' 34*4**4'G %6 A+A$3: %6 %$4A; C:$%, 3*4% %6 ;A%%$L* 4'34'G, ':% 34*%3 BI%6 6:':$AB; C:$% : AA;*, %6A% * +A* G4;%I : BA3 A4%64' 4%* 'G:%4A%4:' : A37$%4*4'G C:'%$AC%* +4%6 A$; V 3A'

3 %6 6:':$AB; C:$% : AA;* $$3 4' ':% 6:;34'G$*:'3'%* * A'3 '4 ;4AB; %: A$; V 3A' :$ AC%A;,:$A; V R;A$I 3AAG*, A%%:$'IL* * A'3 C:*%* : *4%

4***

4n resolving this very interesting case, we are challenged once again to put intoproper perspective four main concerns of intellectual property law O patents,copyrights, trademar&s and unfair competition arising from infringement of any of thefirst three +e shall focus then on the following issues5

81 if the engineering or technical drawings of an advertising display unit 8light #o?are granted copyright protection 8copyright certificate of registration #y the 'ational;i#rary, is the light #o? depicted in such engineering drawings ipso facto alsoprotected #y such copyrightD

82 or should the light #o? #e registered separately and protected #y a patent issued

#y the Bureau of atents %rademar&s and %echnology %ransfer 8now 4ntellectualroperty :ffice O in addition to the copyright of the engineering drawingsD

8" can the owner of a registered trademar& legally prevent others from using suchtrademar& if it is a mere a##reviation of a term descriptive of his goods, services or #usinessD

:' %6 4** : C:I$4G6% 4'$4'G'%

etitioner V 3Ls complaint was that *4 infringed on its copyright over the light#o?es when *4 had the units manufactured #y etro and I3 $ain#ow Advertisingfor its own account :#viously, petitionerLs position was premised on its #elief that its

copyright over the engineering drawings e?tended ipso facto to the light #o?esdepicted or illustrated in said drawings 4n ruling that there was no copyright

infringement, the Court of Appeals held that the copyright was limited to the drawingsalone and not to the light #o? itself +e agree with the appellate court

irst, petitionerLs application for a copyright certificate O as well as CopyrightCertificate 'o 3.$2/(( issued #y the 'ational ;i#rary on January 2!, 19(1 Oclearly stated that it was for a class H:H wor& under *ection 2 8: of 3 09 8%he4ntellectual roperty 3ecree which was the statute then prevailing *aid *ection 2e?pressly enumerated the wor&s su#@ect to copyright5

*C 2 %he rights granted #y this 3ecree shall, from the moment of creation, su#sistwith respect to any of the following wor&s5

? ? ? ? ? ? ? ? ?

8: rints, pictorial illustrations, advertising copies, la#els, tags, and #o? wraps=

? ? ? ? ? ? ? ? ?

Although petitionerLs copyright certificate was entitled HAdvertising 3isplay nitsH8which depicted the #o?.type electrical devices, its claim of copyright infringementcannot #e sustained

Copyright, in the strict sense of the term, is purely a statutory right Being a merestatutory grant, the rights are limited to what the statute confers 4t may #e o#tainedand en@oyed only with respect to the su#@ects and #y the persons, and on terms andconditions specified in the statute- Accoringly, it can cover only the wor1s falling

within the statutory enumeration or escription.(

V 3 secured its copyright under the classification class wor1. %his #eing so,petitionerLs copyright protection e?tended only to the technical drawings and not to

the light #o? itself #ecause the latter was not at all in the category of Hprints, pictorialillustrations, advertising copies, la#els, tags and #o? wrapsH *tated otherwise, evenas we find that V 3 indeed owned a valid copyright, the same could have referredonly to the technical drawings within the category of Hpictorial illustrationsH 4t couldnot have possi#ly stretched out to include the underlying light #o? %he strictapplication9 of the lawLs enumeration in *ection 2 prevents us from giving petitioner even a little leeway, that is, even if its copyright certificate was entitled HAdvertising3isplay nitsH +hat the law does not include, it e?cludes, and for the good reason5the light #o? was not a literary or artistic piece which could #e copyrighted under thecopyright law And no less clearly, neither could the lac& of statutory authority toma&e the light #o? copyrighta#le #e remedied #y the simplistic act of entitling thecopyright certificate issued #y the 'ational ;i#rary as HAdvertising 3isplay nitsH















%-

4n fine, if *4 and '4 reprinted V 3Ls technical drawings for sale to the pu#licwithout license from V 3, then no dou#t they would have #een guilty of copyrightinfringement But this was not the case *4Ls and '4Ls acts complained of #y V3 were to have units similar or identical to the light #o? illustrated in the technicaldrawings manufactured #y etro and I3 $ain#ow Advertising, for leasing out to

different advertisers +as this an infringement of petitionerLs copyright over thetechnical drawingsD +e do not thin& so

3uring the trial, the president of V 3 himself admitted that the light #o? was neither a literary not an artistic wor& #ut an Hengineering or mar&eting inventionH1! :#viously,there appeared to #e some confusion regarding what ought or ought not to #e theproper su#@ects of copyrights, patents and trademar&s 4n the leading case of Fho vsCourt of Appeals,11 we ruled that these three legal rights are completely distinct andseparate from one another, and the protection afforded #y one cannot #e usedinterchangea#ly to cover items or wor&s that e?clusively pertain to the others5

%rademar&, copyright and patents are different intellectual property rights that cannot

#e interchanged with one another A traemar1 is any visible sign capable of istinguishing the goos 3traemar15 or services 3service mar15 of an enterprise an

shall inclue a stampe or mar1e container of goos 4n relation thereto, a tradename means the name or designation identifying or distinguishing an enterpriseeanwhile, the scope of a copyright is confine to literary an artistic wor1s whichare original intellectual creations in the literary and artistic domain protected from themoment of their creation !atentable inventions, on the other han, refer to any

technical solution of a problem in any fiel of human activity which is new, involvesan inventive step and is industrially applica#le

:' %6 4** : A%'% 4'$4'G'%

%his #rings us to the ne?t point5 if, despite its manufacture and commercial use of the light boxes without license from petitioner, private respondents cannot #e heldlegally lia#le for infringement of V 3Ls copyright over itstechnical rawings of the

sai light boxes, should they #e lia#le instead for infringement of patentD +e do notthin& so either

or some reason or another, petitioner never secured a patent for the light #o?es 4ttherefore ac)uired no patent rights which could have protected its invention, if in factit really was And #ecause it had no patent, petitioner could not legally preventanyone from manufacturing or commercially using the contraption 4n Creser recision *ystems, 4nc vs Court of Appeals,12 we held that Hthere can #e noinfringement of a patent until a patent has #een issued, since whatever right one has

to the invention covered #y the patent arises alone from the grant of patent ? ? ?8An inventor has no common law right to a monopoly of his invention 6e has the

right to ma&e use of and vend his invention, #ut if he voluntarily discloses it, such as#y offering it for sale, the world is free to copy and use it with impunity A patent,however, gives the inventor the right to e?clude all others As a patentee, he has thee?clusive right of ma&ing, selling or using the invention 1" :n the assumption thatpetitionerLs advertising units were patenta#le inventions, petitioner revealed them

fully to the pu#lic #y su#mitting the engineering drawings thereof to the 'ational;i#rary

%o #e a#le to effectively and legally preclude others from copying and profiting fromthe invention, a patent is a primordial re)uirement 'o patent, no protection %heultimate goal of a patent system is to #ring new designs and technologies into thepu#lic domain through disclosure10 4deas, once disclosed to the pu#lic without theprotection of a valid patent, are su#@ect to appropriation without significant restraint1/

:n one side of the coin is the pu#lic which will #enefit from new ideas= on the other are the inventors who must #e protected As held in "auer ? Cie vs. GDonnel ,1 H%heact secured to the inventor the e?clusive right to ma&e use, and vend the thing

patented, and conse)uently to prevent others from e?ercising li&e privileges withoutthe consent of the patentee 4t was passed for the purpose of encouraging usefulinvention and promoting new and useful inventions #y the protection and stimulationgiven to inventive genius, and was intended to secure to the pu#lic, after the lapse of the e?clusive privileges granted the #enefit of such inventions and improvementsH

%he law attempts to stri&e an ideal #alance #etween the two interests5

H8%he patent system thus em#odies a carefully crafted #argain for encouraging thecreation and disclosure of new useful and non.o#vious advances in technology anddesign, in return for the e?clusive right to practice the invention for a num#er of years %he inventor may &eep his invention secret and reap its fruits indefinitely 4n

consideration of its disclosure and the conse)uent #enefit to the community, thepatent is granted An e?clusive en@oyment is guaranteed him for 1- years, #ut uponthe e?piration of that period, the &nowledge of the invention inures to the people, whoare thus ena#led to practice it and profit #y its useH1-

%he patent law has a three.fold purpose5 Hfirst, patent law see&s to foster and rewardinvention= second, it promotes disclosures of inventions to stimulate further innovation and to permit the pu#lic to practice the invention once the patent e?pires=third, the stringent re)uirements for patent protection see& to ensure that ideas in thepu#lic domain remain there for the free use of the pu#licH1(

4t is only after an e?haustive e?amination #y the patent office that a patent is issued

*uch an in.depth investigation is re)uired #ecause Hin rewarding a useful invention,the rights and welfare of the community must #e fairly dealt with and effectively

























%"

guarded %o that end, the prere)uisites to o#taining a patent are strictly o#served andwhen a patent is issued, the limitations on its e?ercise are e)ually strictly enforced%o #egin with, a genuine invention or discovery must #e demonstrated lest in theconstant demand for new appliances, the heavy hand of tri#ute #e laid on each slighttechnological advance in artH19

%here is no such scrutiny in the case of copyrights nor any notice pu#lished #efore itsgrant to the effect that a person is claiming the creation of a wor& %he law confersthe copyright from the moment of creation2! and the copyright certificate is issuedupon registration with the 'ational ;i#rary of a sworn e?.parte claim of creation

%herefore, not having gone through the arduous e?amination for patents, thepetitioner cannot e?clude others from the manufacture, sale or commercial use of thelight #o?es on the sole #asis of its copyright certificate over the technical drawings

*tated otherwise, what petitioner see&s is e?clusivity without any opportunity for thepatent office 84: to scrutini<e the light #o?Ls eligi#ility as a patenta#le invention%he irony here is that, had petitioner secured a patent instead, its e?clusivity wouldhave #een for 1- years only But through the simplified procedure of copyright.registration with the 'ational ;i#rary O without undergoing the rigor of defending thepatenta#ility of its invention #efore the 4: and the pu#lic O the petitioner would #eprotected for /! years %his situation could not have #een the intention of the law

4n the oft.cited case of Ba&er vs *elden21, the nited *tates *upreme Court heldthat only the expression of an iea is protecte by copyright, not the iea itself 4nthat case, the plaintiff held the copyright of a #oo& which e?pounded on a newaccounting system he had developed %he pu#lication illustrated #lan& forms of ledgers utili<ed in such a system %he defendant reproduced forms similar to thoseillustrated in the plaintiffLs copyrighted #oo& %he * *upreme Court ruled that5

H%here is no dou#t that a wor& on the su#@ect of #oo&.&eeping, though onlye?planatory of well &nown systems, may #e the su#@ect of a copyright= #ut, then, it isclaimed only as a #oo& ? ? ? But there is a clear distinction #etween the #oo&s, assuch, and the art, which it is, intended to illustrate %he mere statement of theproposition is so evident that it re)uires hardly any argument to support it %he samedistinction may #e predicated of every other art as well as that of #oo&&eeping Atreatise on the composition and use of medicines, #e they old or new= on theconstruction and use of ploughs or watches or churns= or on the mi?ture andapplication of colors for painting or dyeing= or on the mode of drawing lines toproduce the effect of perspective, would #e the su#@ect of copyright= #ut no onewould contend that the copyright of the treatise would give the e?clusive right to the

art or manufacture descri#ed therein %he copyright of the #oo&, if not pirated fromother wor&s, would #e valid without regard to the novelty or want of novelty of its

su#@ect matter %he novelty of the art or thing descri#ed or e?plained has nothing todo with the validity of the copyright To g? to t@ (ut@o o t@ oo () us?

7o7t; ) t@ (t *s* t@), D@) )o ()(to) o ts )o?t; @(s

? ) o(; (*, Dou* ( su7s ()* ( (u* u7o) t@ 7u.

T@(t s t@ 7o?) o tts 7(t)t, )ot o o7;g@t. T@ ( to ()

)?)to) o *so?; o () (t o ()u(tu ust suFt* to t@()(to) o t@ P(t)t O o () us? g@t t@) ()

ot()* ()* ( 7(t)t o t@ go?))t () o); su t.

%he difference #etween the two things, letters patent and copyright, may #eillustrated #y reference to the su#@ects @ust enumerated %a&e the case of medicinesCertain mi?tures are found to #e of great value in the healing art I t@ *so?

Dts ()* 7us@s ( oo o) t@ suFt /(s gu( 7@;s()s g)(;

*o4, @ g()s )o us? g@t to t@ ()u(tu ()* s( o t@ *)

@ g?s t@(t to t@ 7u. I @ *ss to (Hu su@ us? g@t, @

ust ot() ( 7(t)t o t@ tu (s ( )D (t, ()u(tu o o7osto)

o (tt. " (; o7;g@t @s oo, @ 7(ss ut t@(t o); sus to

@ t@ us? g@t o 7)t)g ()* 7us@)g @s oo. o o ( ot@ )?)to)s o *so?s.

%he copyright of a #oo& on perspective, no matter how many drawings andillustrations it may contain, gives no e?clusive right to the modes of drawingdescri#ed, though they may never have #een &nown or used #efore By pu#lishingthe #oo& without getting a patent for the art, the latter is given to the pu#lic

? ? ?

'ow, whilst no one has a right to print or pu#lish his #oo&, or any material partthereof, as a #oo& intended to convey instruction in the art, any person may practice

and use the art itself which he has descri#ed and illustrated therein T@ us o t@(t s ( tot(; *)t t@)g o ( 7u(to) o t@ oo 7())g t. %hecopyright of a #oo& on #oo&&eeping cannot secure the e?clusive right to ma&e, selland use account #oo&s prepared upon the plan set forth in such #oo& +hether theart might or might not have #een patented, is a )uestion, which is not #efore us 4twas not patented, and is open and free to the use of the pu#lic And, of course, inusing the art, the ruled lines and headings of accounts must necessarily #e used asincident to it

%he plausi#ility of the claim put forward #y the complainant in this case arises from aconfusion of ideas produced #y the peculiar nature of the art descri#ed in the #oo&s,which have #een made the su#@ect of copyright 4n descri#ing the art, the illustrations

and diagrams employed happened to correspond more closely than usual with theactual wor& performed #y the operator who uses the art ? ? ? T@ *s7to) o










%

t@ (t ) ( oo, t@oug@ )tt* to t@ )t o o7;g@t, (;s )o ou)*(to)

o () us? ( to t@ (t ts. T@ oFt o t@ o) s 7()(to) t@

oFt o t@ ot@ s us. T@ o (; su* ; o7;g@t. T@ (tt

() o); su*, t () su* (t (, ; tts 7(t)t.8underscoringsupplied

:' %6 4** : %$A3A$F 4'$4'G'%

%his issue concerns the use #y respondents of the mar& Hoster AdsH whichpetitionerLs president said was a contraction of Hposter advertisingH V 3 was a#leto secure a trademar& certificate for it, #ut one where the goods specified wereHstationeries such as letterheads, envelopes, calling cards andnewslettersH22 etitioner admitted it did not commercially engage in or mar&et thesegoods :n the contrary, it dealt in electrically operated #ac&lit advertising units andthe sale of advertising spaces thereon, which, however, were not at all specified inthe trademar& certificate

nder the circumstances, the Court of Appeals correctly cited Faberge /nc. vs.

/ntermeiate Appellate Court ,2"where we, invo&ing *ection 2! of the old %rademar&;aw, ruled that Hthe certificate of registration issued #y the 3irector of atents canconfer 8upon petitioner the e?clusive right to use its own sym#ol only to those goos

specifie in the certificate, su#@ect to any conditions and limitations specified in thecertificate ? ? ? :ne who has adopted and used a trademar& on his goods oes not

prevent the aoption an use of the same traemar1 by others for proucts which

are of a ifferent escriptionH20 Faberge, /nc. was correct and was in fact recentlyreiterated in Canon =abushi1i =aisha vs. Court of Appeals2/

Assuming argueno that Hoster AdsH could validly )ualify as a trademar&, the failureof V 3 to secure a trademar& registration for specific use on the light #o?es meant

that there could not have #een any trademar& infringement since registration was anessential element thereof(wphi(

:' %6 4** : 'A4$ C:%4%4:'

4f at all, the cause of action should have #een for unfair competition, a situation whichwas possi#le even if V 3 had no registration2 6owever, while the petitionerLscomplaint in the $%C also cited unfair competition, the trial court did not find privaterespondents lia#le therefor etitioner did not appeal this particular point= hence, itcannot now revive its claim of unfair competition

But even disregarding procedural issues, we nevertheless cannot hold respondentsguilty of unfair competition

By the nature of things, there can #e no unfair competition under the law oncopyrights although it is applica#le to disputes over the use of trademar&s ven aname or phrase incapa#le of appropriation as a trademar& or tradename may, #ylong and e?clusive use #y a #usiness 8such that the name or phrase #ecomesassociated with the #usiness or product in the mind of the purchasing pu#lic, #e

entitled to protection against unfair competition

2-

4n this case, there was no evidencethat V 3Ls use of Hoster AdsH was distinctive or well.&nown As noted #y the Courtof Appeals, petitionerLs e?pert witnesses himself had testified that H Woster AdsL wastoo generic a name *o it was difficult to identify it with any company, honestlyspea&ingH2( %his crucial admission #y its own e?pert witness that Hoster AdsH couldnot #e associated with V 3 showed that, in the mind of the pu#lic, the goods andservices carrying the trademar& Hoster AdsH could not #e distinguished from thegoods and services of other entities

%his fact also prevented the application of the doctrine of secondary meaningHoster AdsH was generic and incapa#le of #eing used as a trademar& #ecause itwas used in the field of poster advertising, the very #usiness engaged in #y

petitioner H*econdary meaningH means that a word or phrase originally incapa#le of e?clusive appropriation with reference to an article in the mar&et 8#ecause it isgeographically or otherwise descriptive might nevertheless have #een used for solong and so e?clusively #y one producer with reference to his article that, in the tradeand to that #ranch of the purchasing pu#lic, the word or phrase has come to meanthat the article was his property29 %he admission #y petitionerLs own e?pert witnessthat he himself could not associate Hoster AdsH with petitioner V 3 #ecause it wasHtoo genericH definitely precluded the application of this e?ception

6aving discussed the most important and critical issues, we see no need to #ela#or the rest

All told, the Court finds no reversi#le error committed #y the Court of Appeals when itreversed the $egional %rial Court of a&ati Ci ty

!"ERE$ORE, the petition is here#y 3'43 and the decision of the Court of Appeals dated ay 22, 2!!1 is A4$3 in toto

*: :$3$3

uno, 8Chairman, angani#an, *andoval.Gutierre<, and Carpio.orales, JJ,concur
























4/

%ili&ino Societ' o( Com&osers v. )an


anila

G.R. No. L536:02 M(@ 16, 198

$ILIPINO OCIET# O$ COMPOER, AUT"OR AN& PUBLI"ER,

INC., plaintiff.appellant,vsBEN-AMIN TAN, defendant.appellee

:ichauco, !ica&o ? Agcaoili :aw ffice for plaintiff9appellant.

-amon A. ieves for efenant9appellee.

PARA, J.:



41

An appeal was made to the Court of Appeals doc&eted as CA.G$ 'o 0"-".$ J entitled Filipino #ociety of Composers, Authors, !ublishers, /nc., !laintiff9

Appellant v. "en$amin an, Defenant9Appellee, from the decision of the Court of irst 4nstance of anila, Branch 744 in Civil Case 'o -1222 JJ Filipino #ociety of

Composers, Authors an !ublishers, /nc., !laintiff v. "en$amin an,

Defenant, which had dismissed plaintiffsE complaint without special pronouncementas to costs

%he Court of Appeals, finding that the case involves pure )uestions of law, certifiedthe same to the *upreme Court for final determination 8$esolution, CA.G$ 'o0"-".$, $ollo, p "= $esolution of the *upreme Court of e#ruary 1, 19-" in ;."0!2, $ollo, p "(

%he undisputed facts of this case are as follows5

laintiff.appellant is a non.profit association of authors, composers and pu#lishersduly organi<ed under the Corporation ;aw of the hilippines and registered with the*ecurities and ?change Commission *aid association is the owner of certainmusical compositions among which are the songs entitled5 H3ahil *a 4yoH, H*apag&at4&aw Ay A&in,H H*apag&at Fami Ay %ao ;amangH and H%he 'earness :f IouH

:n the other hand, defendant.appellee is the operator of a restaurant &nown as HAle?*oda oundation and $estaurantH where a com#o with professional singers, hired toplay and sing musical compositions to entertain and amuse customers therein, wereplaying and singing the a#ove.mentioned compositions without any license or permission from the appellant to play or sing the same Accordingly, appellantdemanded from the appellee payment of the necessary license fee for the playingand singing of aforesaid compositions #ut the demand was ignored

6ence, on 'ovem#er -, 19-, appellant filed a complaint with the lower court for infringement of copyright against defendant.appellee for allowing the playing indefendant.appelleeEs restaurant of said songs copyrighted in the name of the former

3efendant.appellee, in his answer, countered that the complaint states no cause of action +hile not denying the playing of said copyrighted compositions in hisesta#lishment, appellee maintains that the mere singing and playing of songs andpopular tunes even if they are copyrighted do not constitute an infringement 8$ecordon Appeal, p 11= $esolution, CA.G$ ': 0"-".$, $ollo, pp "2." under theprovisions of *ection " of the Copyright ;aw 8Act "1"0 of the hilippine ;egislature

%he lower court, finding for the defendant, dismissed the complaint 8$ecord on Appeal, p 2/

laintiff appealed to the Court of Appeals which as already stated certified the caseto the *upreme Court for ad@udication on the legal )uestion involved 8$esolution,Court of Appeals, $ollo, p "= $esolution of the *upreme Court of e#ruary 1(,19-", $ollo, p "(

4n its #rief in the Court of Appeals, appellant raised the following Assignment of rrors5

4

%6 ;:+$ C:$% $$3 4' 6:;34'G %6A% %6 *4CA; C::*4%4:'*: %6 A;;A'% +$ 4' %6 'A%$ : B;4C $:$%I +6'%6I +$ C:I$4G6%3 :$ $G4*%$3

44

%6 ;:+$ C:$% $$3 4' 6:;34'G %6A% %6 *4CA; C::*4%4:'*: %6 A;;A'% +$ ;AI3 A'3 *'G 4' %6 *:3A :'%A4' A'3

$*%A$A'% : %6 A;; BI 4'3'3'% C:'%$AC%:$* A'3:';I :' %6 $Q*% : C*%:$*

444

%6 ;:+$ C:$% $$3 4' 6:;34'G %6A% %6 ;AI4'G A'3 *4'G4'G :C:I$4G6%3 *4CA; C::*4%4:'* 4' %6 *:3A :'%A4' A'3$*%A$A'% : %6 A;; A$ ':% B;4C $:$A'C* :$$:4% : %6 *A43 C::*4%4:'* +4%64' %6 A'4'G A'3C:'%;A%4:' : %6 C:I$4G6% ;A+

47

%6 ;:+$ C:$% $$3 4' ':% 6:;34'G %6A% %6 A;; 4* ;4AB;%: %6 A;;A'% :$ :$ 80 *A$A% 4'$4'G'%* 8Brief for Appellant, pp A and B

%he petition is devoid of merit

%he principal issues in this case are whether or not the playing and signing of musical compositions which have #een copyrighted under the provisions of theCopyright ;aw 8Act "1"0 inside the esta#lishment of the defendant.appelleeconstitute a pu#lic performance for profit within the meaning and contemplation of theCopyright ;aw of the hilippines= and assuming that there were indeed pu#lic

performances for profit, whether or not appellee can #e held lia#le therefor



42

Appellant anchors its claim on *ection "8c of the Copyright ;aw which provides5

*C " %he proprietor of a copyright or his heirs or assigns shall have the e?clusiveright5

??? ??? ???

8c %o e?hi#it, perform, represent, produce, or reproduce the copyrighted wor& in anymanner or #y any method whatever for profit or otherwise= if not reproduced in copiesfor sale, to sell any manuscripts or any record whatsoever thereof=

??? ??? ???

4t maintains that playing or singing a musical composition is universally accepted asperforming the musical composition and that playing and singing of copyrightedmusic in the soda fountain and restaurant of the appellee for the entertainment of thecustomers although the latter do not pay for the music #ut only for the food and drin&constitute performance for profit under the Copyright ;aw 8Brief for the Appellant, pp

19.2/

+e concede that indeed there were Hpu#lic performances for profit H

%he word HperformH as used in the Act has #een applied to H:ne who plays a musicalcomposition on a piano, there#y producing in the air sound waves which are heardas music and if the instrument he plays on is a piano plus a #roadcastingapparatus, so that waves are thrown out, not only upon the air, #ut upon the other,then also he is performing the musical compositionH 8Buc&, et al v 3uncan, et al=*ame Jewell ;a *alle $ealty Co, "2 2d *eries "-

4n relation thereto, it has #een held that H%he playing of music in dine and dance

esta#lishment which was paid for #y the pu#lic in purchases of food and drin&constituted Hperformance for profitH within a Copyright ;awH 8Buc&, et al v $usson'o 00(9 2/ *upp "1- %hus, it has #een e?plained that while it is possi#le insuch esta#lishments for the patrons to purchase their food and drin&s and at thesame time dance to the music of the orchestra, the music is furnished and used #ythe orchestra for the purpose of inducing the pu#lic to patroni<e the esta#lishmentand pay for the entertainment in the purchase of food and drin&s %he defendantconducts his place of #usiness for profit, and it is pu#lic= and the music is performedfor profit 8/bi , p "19 4n a similar case, the Court ruled that H%he erformance in arestaurant or hotel dining room, #y persons employed #y the proprietor, of acopyrighted musical composition, for the entertainment of patrons, without charge for admission to hear it, infringes the e?clusive right of the owner of the copyrightH

86er#ert v *hanley Co= John Church Co v 6illard 6otel Co, et al, 202 * /9!.

/91 4n delivering the opinion of the Court in said two cases, Justice 6olmesela#orated thus5

4f the rights under the copyright are infringed only #y a performance where money ista&en at the door, they are very imperfectly protected erformances not different in&ind from those of the defendants could #e given that might compete with and evendestroy the success of the monopoly that the law intends the plaintiffs to have 4t isenough to say that there is no need to construe the statute so narrowly %hedefendantsE performances are not eleemosynary %hey are part of a total for whichthe pu#lic pays, and the fact that the price of the whole is attri#uted to a particular item which those present are e?pected to order is not important 4t is true that themusic is not the sole o#@ect, #ut neither is the food, which pro#a#ly could #e gotcheaper elsewhere %he o#@ect is a repast in surroundings that to people havinglimited power of conversation or disli&ing the rival noise, give a lu?urious pleasure notto #e had from eating a silent meal 4f music did not pay, it would #e given up 4f itpays, it pays out of the pu#licEs poc&et +hether it pays or not, the purpose of employing it is profit, and that is enough 8/bi , p /90

4n the case at #ar, it is admitted that the patrons of the restaurant in )uestion payonly for the food and drin&s and apparently not for listening to the music As found #ythe trial court, the music provided is for the purpose of entertaining and amusing thecustomers in order to ma&e the esta#lishment more attractive and desira#le 8$ecordon Appeal, p 21 4t will #e noted that for the playing and singing the musicalcompositions involved, the com#o was paid as independent contractors #y theappellant 8$ecord on Appeal, p 20 4t is therefore o#vious that the e?pensesentailed there#y are added to the overhead of the restaurant which are either eventually charged in the price of the food and drin&s or to the overall total of additional income produced #y the #igger volume of #usiness which theentertainment was programmed to attract Conse)uently, it is #eyond )uestion that

the playing and singing of the com#o in defendant.appelleeEs restaurant constitutedperformance for profit contemplated #y the Copyright ;aw 8Act "1"0 amended #y3 'o 09, as amended

'evertheless, appellee cannot #e said to have infringed upon the Copyright ;aw AppelleeEs allegation that the composers of the contested musicalcompositions waive their right in favor of the general pu#lic when they allowed their intellectual creations to #ecome property of the pu#lic domain #efore applying for thecorresponding copyrights for the same 8Brief for 3efendant.Appellee, pp 10.1/ iscorrect

%he *upreme Court has ruled that Haragraph "" of atent :ffice Administrative

:rder 'o " 8as amended, dated *eptem#er 1(, 190- entitled E$ules of ractice inthe hilippines atent :ffice relating to the $egistration of Copyright ClaimsE



4%

promulgated pursuant to $epu#lic Act 1/, provides among other things that anintellectual creation should #e copyrighted thirty 8"! days after its pu#lication, if made in anila, or within the 8! days if made elsewhere, failure of which renderssuch creation pu#lic propertyH 8*antos v cCullough rinting Company, 12 *C$A"20."2/ [190] 4ndeed, if the general pu#lic has made use of the o#@ect sought to #e

copyrighted for thirty 8"! days prior to the copyright application the law deems theo#@ect to have #een donated to the pu#lic domain and the same can no longer #ecopyrighted

A careful study of the records reveals that the song H3ahil *a 4yoH which wasregistered on April 2!, 19/ 8Brief for Appellant, p 1! #ecame popular in radios, @u&e #o?es, etc long #efore registration 8%*', ay 2(, 19(, pp "./= 2/ while thesong H%he 'earness :f IouH registered on January 10, 19// 8Brief for Appellant, p1! had #ecome popular twenty five 82/ years prior to 19(, 8the year of thehearing or from 190" 8%*', ay 2(, 19(, p 2- and the songs H*apag&at 4&aw Ay A&inH and H*apag&at Fami Ay %ao ;amangH #oth registered on July 1!, 19, appear to have #een &nown and sang #y the witnesses as early as 19/ or three years

#efore the hearing in 19( %he testimonies of the witnesses at the hearing of thiscase on this su#@ect were unre#utted #y the appellant 8/bi, pp 2(= 29 and "!

nder the circumstances, it is clear that the musical compositions in )uestion hadlong #ecome pu#lic property, and are therefore #eyond the protection of theCopyright ;aw

$4** C:'*43$3, the appealed decision of the Court of irst 4nstance of anila in Civil Case 'o -1222 is here#y A4$3

*: :$3$3

Fernan 3Chairman5, @utierre&, %r., !ailla, "iin an Cortes, %%., concur.

Alampay, %., too1 no part.

*aglalang Santos v. *cCullough Printing


anila

' BA'C

G.R. No. L519:39 Oto 31, 196:

MAURO MALANG ANTO, plaintiff.appellant,vsMCCULLOUG" PRINTING COMPAN#, defendant.appellee

aHaa eehan1ee ? Carreon for plaintiff9appellant.

7sposo ? sison for efenant9appellee.

PARE&E, J.:

%his is an action for damages #ased on the provisions of Articles -21 and -22 of theCivil Code of the hilippines, allegedly on the unauthori<ed use, adoption andappropriation #y the defendant company of plaintiffEs intellectual creation or artistic

design for a Christmas Card %he design depicts Ha hilippine rural Christmas time



44

scene consisting of a woman and a child in a nipa hut adorned with a star.shapedlantern and a man astride a cara#ao, #eside a tree, underneath which appears theplaintiffEs pen name, alangH

%he complaint alleges that plaintiff auro alang *antos designed for former Am#assador elino 'eri, for his personal Christmas Card greetings for the year 19/9, the artistic motif in )uestion %he following year the defendant cCulloughrinting Company, without the &nowledge and authority of plaintiff, displayed the verydesign in its al#um of Christmas cards and offered it for sale, for a price or suchunauthori<ed act of defendant, plaintiff suffered moral damages to the tune of 1,!!!!!, #ecause it has placed plaintiffEs professional integrity and ethics under serious )uestion and caused him grave em#arrassment #efore Am#assador 'eri 6efurther prayed for the additional sum of ",!!!!! #y way of attorneyEs fee

3efendant in answer to the complaint, after some denials and admissions, moved for a dismissal of the action claiming that O

81 %he design claimed does not contain a clear notice that it #elonged to him andthat he prohi#ited its use #y others=

82 %he design in )uestion has #een pu#lished #ut does not contain a notice of copyright, as in fact it had never #een copyrighted #y the plaintiff, for which reasonthis action is #arred #y the Copyright ;aw=

8" %he complaint does not state a cause of action

%he documentary evidence su#mitted were the Christmas cards, as originallydesigned #y plaintiff, the design as printed for Am#assador 'eri, and the su#se)uentreprints ordered #y other parties %he case was su#mitted an a H*tipulation of actHthe pertinent portions of which are hereunder reproduced5

1 %hat the plaintiff was the artist who created the design shown in ?hi#it A,

2 %hat the design carries the pen name of plaintiff, A;A'G, on its face andindicated in ?hi#it A,

" %hat said design was created #y plaintiff in the latter part of 19/9 for the personaluse of former Am#assador elino 'eri=

0 %hat former Am#assador 'eri had (!! such cards printed #y the defendantcompany in 19/9, which he distri#uted to his friends in 3ecem#er, 19/9=

/ %hat defendant company utili<ed plaintiffEs design in the year 19! in its al#um of Christmas card samples displayed to its customers

%hat the *ampaguita ictures, 4nc, placed an order with defendant company for -!! of said cards while $aul rra V Co ordered 2!! , which cards were sent out#y them to their respective correspondent, clients and friends during the Christmasseason of 19!=

- %hat defendant companyEs use of plaintiffEs design was without &nowledge,authority or consent of plaintiff=

( %hat said design has not #een copyrighted=

9 %hat plaintiff is an artist of esta#lished name, good.will and reputation

pon the #asis of the facts stipulated, the lower court rendered @udgment on3ecem#er 1, 191, the pertinent portions of which are recited #elow5

As a general proposition, there can #e no dispute that the artist ac)uires ownershipof the product of his art At the time of its creation, he has the a#solute dominion over it %o help the author protect his rights the copyright law was enacted

4n intellectual creations, a distinction must #e made #etween two classes of propertyrights= the fact of authorship and the right to pu#lish and>or distri#ute copies of thecreation +ith regard to the first, ie the fact of authorship, the artist cannot #edivested of the same 4n other words, he may sell the right to print hundred of hiswor& yet the purchaser of said right can never #e the author of the creation

4t is the second right, ie, the right to pu#lish, repu#lish, multiply and>or distri#utecopies of the intellectual creation which the state, through the enactment of thecopyright law, see&s to protect %he author or his assigns or heirs may have the wor&copyrighted and once this is legally accomplished any infringement of the copyrightwill render the infringer lia#le to the owner of the copyright

??? ??? ???

%he plaintiff in this case did not choose to protect his intellectual creation #y acopyright %he fact that the design was used in the Christmas card of Am#assador 'eri who distri#uted eight hundred copies thereof among his friends during theChristmas season of 19/9, shows that the, same was pu#lished

nless satisfactorily e?plained a delay in applying for a copyright, of more than thirtydays from the date of its pu#lication, converts the property to one of pu#lic domain

*ince the name of the author appears in each of the alleged infringing copies of the

intellectual creation, the defendant may not #e said to have pirated the wor& nor



4,

guilty of plagiarism Conse)uently, the complaint does not state a cause of actionagainst the defendant

??? ??? =???

+6$:$, the Court dismisses the complaint without pronouncement as to

costs

4n his appeal to this Court, plaintiff.appellant pointed five 8/ errors allegedlycommitted #y the trial court, all of which #ring to the fore, the following propositions581 whether plaintiff is entitled to protection, notwithstanding the, fact that he has notcopyrighted his design= 82 whether the pu#lication is limited, so as to prohi#it its use#y others, or it is general pu#lication, and 8" whether the provisions of the Civil Codeor the Copyright ;aw should apply in the case +e will underta&e a collectivediscussion of these propositions

nder the esta#lished facts, +e find that plaintiff is not entitled to a protection, theprovision of the Civil Code, notwithstanding aragraph "" of atent :ffice

Administrative :rder 'o " 8as amended dated *eptem#er 1(, 190- entitled H$ulesof ractice in the hilippines atent :ffice relating to the $egistration of CopyrightClaimsH promulgated pursuant to $epu#lic Act 1/, provides, among others, that anintellectual creation should #e copyrighted thirty 8"! days after its pu#lication, if made in anila, or within si?ty 8! dayEs if made elsewhere, failure of which renderssuch creation pu#lic property 4n the case at #ar, even as of this moment, there is nocopyright for the design in )uestion +e are not also prepared to accept thecontention of appellant that the pu#lication of the design was a limited one, or thatthere was an understanding that only Am#assador 'eri should, have a#solute right touse the same 4n the first place, if such were the condition then Am#assador 'eriwould #e the aggrieved party, and not the appellant 4n the second place, if there wassuch a limited pu#lication or prohi#ition, the same was not shown on the face of thedesign +hen the purpose is a limited pu#lication, #ut the effect is generalpu#lication, irrevoca#le rights thereupon #ecome vested in the pu#lic, inconse)uence of which enforcement of the restriction #ecomes impossi#le 8'utt vs'ational 4nstitute, "1 [2d] 2" 4t has #een held that the effect of offering for sale adress, for e?ample manufactured in accordance with an original design which is notprotected #y either a copyright or a patent, is to divest the owner of his common lawrights therein #y virtue of the pu#lication of a EcopyE and thereafter anyone is free tocopy the design or the dress 8ashion :riginators Guild of America v ederal %radeCommission, 110 [2d] (! +hen Am#assador 'eri distri#uted (!! copies of thedesign in controversy, the plaintiff lost control of his design and the necessaryimplication was that there had #een a general pu#lication, there having #een no

showing of a clear indication that a limited pu#lication was intended %he author of aliterary composition has a light to the first pu#lication thereof 6e has a right to

determine whether it shall #e pu#lished at all, and if pu#lished, when, where, #ywhom, and in what form %his e?clusive right is confined to the first pu#lication +henonce pu#lished, it is dedicated to the pu#lic, and the author loses the e?clusive rightto control su#se)uent pu#lication #y others, unless the wor& is placed under theprotection of the copyright law 8*ee 44 %olentinoEs Comments on the Civil Code, p0"", citing +right v isle (" 'I *upp ((-

C:':$AB;I +4%6 A;; %6 :$G:4'G, +e find that the errors assignedhave not #een committed #y the lower court %he decision appealed from, therefore,should #e, as it is here#y affirmed Costs ta?ed against plaintiff.appellant

"eng&on, C.%., "autista Angelo, Concepcion, -eyes, %.".:., "arrera, Di&on,

;a1alintal, "eng&on, %. !., an Ialivar %%., concur-egala, %., too& no part

+abana v. ,obles


anila

4$*% 3474*4:'

G.R. No. 13122 -u; 19, 1999

PACITA I. "ABANA, ALICIA L. CINCO ()* -O'ITA N. $ERNAN&O,petitioners,vs$ELICI&A& C. ROBLE ()* GOO&!ILL TRA&ING CO., INC.,respondents

PAR&O, J.:

%he case #efore us is a petition for review on certiorari 1 to set aside the 8a decisionor the Court of Appeals 2, and 8# the resolution denying petitionersE motion for reconsideration, 3 in which the appellate court affirmed the trial courtEs dismissal of the complaint for infringement and>or unfair competition and damages #ut deleted the

award for attorneyEs fees(wphi(.nEt



46

%he facts are as follows5

etitioners are authors and copyright owners of duly issued certificates of copyrightregistration covering their pu#lished wor&s, produced through their com#inedresources and efforts, entitled C:;;G 'G;4*6 :$ %:3AI 8C% for #revity,Boo&s 1 and 2, and +:$FB::F :$ C:;;G $*6A' 'G;4*6, *eries 1

$espondent elicidad $o#les and Goodwill %rading Co, 4nc are the author>pu#lisher and distri#utor>seller of another pu#lished wor& entitled H37;:4'G 'G;4*6$:4C4'CIH 83 for #revity, Boo&s 1 and 2 819(/ edition which #oo& wascovered #y copyrights issued to them

4n the course of revising their pu#lished wor&s, petitioners scouted and loo&edaround various #oo&stores to chec& on other te?t#oo&s dealing with the same su#@ectmatter By chance they came upon the #oo& of respondent $o#les and upon perusalof said #oo& they were surprised to see that the #oo& was stri&ingly similar to thecontents, scheme of presentation, illustrations and illustrative e?amples in their own#oo&, C%

After an itemi<ed e?amination and comparison of the two #oo&s 8C% and 3,petitioners found that several pages of the respondentEs #oo& are similar, if not alltogether a copy of petitionersE #oo&, which is a case of plagiarism and copyrightinfringement

etitioners then made demands for damages against respondents and alsodemanded that they cease and desist from further selling and distri#uting to thegeneral pu#lic the infringed copies of respondent $o#lesE wor&s

6owever, respondents ignored the demands, hence, on July -, 19((= petitioners filedwith the $egional %rial Court, a&ati, a complaint for H4nfringement and>or unfair

competition with damagesH : against private respondents

4n the complaint, petitioners alleged that in 19(/, respondent elicidad C $o#les#eing su#stantially familiar with the contents of petitionersE wor&s, and withoutsecuring their permission, lifted, copied, plagiari<ed and>or transposed certainportions of their #oo& C% %he te?tual contents and illustrations of C% were literallyreproduced in the #oo& 3 %he plagiarism, incorporation and reproduction of particular portions of the #oo& C% in the #oo& 3, without the authority or consentof petitioners, and the misrepresentations of respondent $o#les that the same washer original wor& and concept adversely affected and su#stantially diminished thesale of the petitionersE #oo& and caused them actual damages #y way of unreali<edincome

3espite the demands of the petitioners for respondents to desist from committingfurther acts of infringement and for respondent to recall 3 from the mar&et,respondents refused etitioners as&ed the court to order the su#mission of allcopies of the #oo& 3, together with the molds, plates and films and other materialsused in its printing destroyed, and for respondents to render an accounting of theproceeds of all sales and profits since the time of its pu#lication and sale

$espondent $o#les was impleaded in the suit #ecause she authored and directlycommitted the acts of infringement complained of, while respondent Goodwill %radingCo, 4nc was impleaded as the pu#lisher and @oint co.owner of the copyrightcertificates of registration covering the two #oo&s authored and caused to #epu#lished #y respondent $o#les with o#vious connivance with one another

:n July 2-, 19((, respondent $o#les filed a motion for a #ill of particulars 6 which thetrial court approved on August 1-, 19(( etitioners complied with the desiredparticulari<ation, and furnished respondent $o#les the specific portions, inclusive of pages and lines, of the pu#lished and copyrighted #oo&s of the petitioners whichwere transposed, lifted, copied and plagiari<ed and>or otherwise found their way intorespondentEs #oo&

:n August 1, 19((, respondent Goodwill %rading Co, 4nc filed its answer to thecomplaint and alleged that petitioners had no cause of action against Goodwill%rading Co, 4nc since it was not privy to the misrepresentation, plagiarism,incorporation and reproduction of the portions of the #oo& of petitioners= that therewas an agreement #etween Goodwill and the respondent $o#les that $o#lesguaranteed Goodwill that the materials utili<ed in the manuscript were her own or that she had secured the necessary permission from contri#utors and sources= thatthe author assumed sole responsi#ility and held the pu#lisher without any lia#ility

:n 'ovem#er 2(, 19((, respondent $o#les filed her answer 8, and denied theallegations of plagiarism and copying that petitioners claimed $espondent stressedthat 81 the #oo& 3 is the product of her independent researches, studies ande?periences, and was not a copy of any e?isting valid copyrighted #oo&= 82 3followed the scope and se)uence or sylla#us which are common to all nglishgrammar writers as recommended #y the Association of hilippine Colleges of Artsand *ciences 8ACA*, so any similarity #etween the respondents #oo& and that of the petitioners was due to the orientation of the authors to #oth wor&s and standardsand sylla#us= and 8" the similarities may #e due to the authorsE e?ercise of the Hrightto fair use of copyrigthed materials, as guidesH

$espondent interposed a counterclaim for damages on the ground that #ad faith and

malice attended the filing of the complaint, #ecause petitioner 6a#ana was



4-

professionally @ealous and the #oo& 3 replaced C% as the official te?t#oo& of thegraduate studies department of the ar astern niversity 9

3uring 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 #eforedisposing of the claim for damages

After the trial on the merits, on April 2", 199", the trial court rendered its @udgmentfinding thus5

+6$:$, premises considered, the court here#y orders that the complaint filedagainst defendants elicidad $o#les and Goodwill %rading Co, 4nc shall #e34*4**3= that said plaintiffs solidarily reim#urse defendant $o#les for 2!,!!!!!attorneyEs fees and defendant Goodwill for /,!!!!! attorneyEs fees laintiffs arelia#le for cost of suit

4% 4* *: :$3$3

3one in the City of anila this 2"rd day of April, 199"

8s>t A$74 $ AB$A6A *4'G*:'

Assisting Judge

* C Adm :rder 'o 120.92 11

:n ay 10, 199", petitioners filed their notice of appeal with the trial court 12, and onJuly 19, 199", the court directed its #ranch cler& of court to forward all the records of the case to the Court of Appeals 13

4n the appeal, petitioners argued that the trial court completely disregarded their evidence and fully su#scri#ed to the arguments of respondent $o#les that the #oo&sin issue were purely the product of her researches and studies and that the copiedportions were inspired #y foreign authors and as such not su#@ect to copyrightetitioners also assailed the findings of the trial court that they were animated #y #adfaith in instituting the complaint 1:

:n June 2-, 199-, the Court of Appeals rendered @udgment in favor of respondents$o#les and Goodwill %rading Co, 4nc %he relevant portions of the decision state5

4t must #e noted, however, that similarity of the allegedly infringed wor& to theauthorEs or proprietorEs copyrighted wor& does not of itself esta#lish copyrightinfringement, especially if the similarity results from the fact that #oth wor&s deal withthe same su#@ect or have the same common source, as in this case

Appellee $o#les has fully e?plained that the portion or material of the #oo& claimed#y appellants to have #een copied or lifted from foreign #oo&s *he has duly proventhat most of the topics or materials contained in her #oo&, with particular reference tothose matters claimed #y appellants to have #een plagiari<ed were topics or mattersappearing not only in appellants and her #oo&s #ut also in earlier #oo&s on Collegenglish, including foreign #oo&s, ei dmund Bur&eEs H*peech on ConciliationH,BoerigsE HCompetence in nglishH and BroughtonEs, Hdmund Bur&eEs CollectionH

??? ??? ???

AppellantEs reliance on the last paragraph on *ection 44 is misplaced 4t must #eemphasi<ed that they failed to prove that their #oo&s were made sources #yappellee 1

%he Court of Appeals was of the view that the award of attorneysE fees was notproper, since there was no #ad faith on the part of petitioners 6a#ana et al ininstituting the action against respondents

:n July 12, 199-, petitioners filed a motion for reconsideration, 16 however, the Courtof Appeals denied the same in a $esolution 1 dated 'ovem#er 2/, 199-

6ence, this petition

4n this appeal, petitioners su#mit that the appellate court erred in affirming the trialcourtEs decision

etitioners raised the following issues5 81 whether or not, despite the apparentte?tual, thematic and se)uential similarity #etween 3 and C%, respondentscommitted no copyright infringement= 82 whether or not there was animus furani onthe part of respondent when they refused to withdraw the copies of C% from the

mar&et despite notice to withdraw the same= and 8" whether or not respondent$o#les a#used a writerEs right to fair use, in violation of *ection 11 of residential3ecree 'o 09 18

+e find the petition impressed with merit

%he complaint for copyright infringement was filed at the time that residential3ecree 'o 09 was in force At present, all laws dealing with the protection of intellectual property rights have #een consolidated and as the law now stands, theprotection of copyrights is governed #y $epu#lic Act 'o (29" 'otwithstanding thechange in the law, the same principles are reiterated in the new law under *ection1-- 4t provides for the copy or economic rights of an owner of a copyright as follows5



4"

*ec 1-- Copy or 7conomic rights O *u#@ect to the provisions of chapter 7444,copyright or economic rights shall consist of the e?clusive right to carry out, authori<eor prevent the following acts5

1--1 $eproduction of the wor& or substanlial portion of the wor&=

1--2 3ramati<ation, translation, adaptation, a#ridgement, arrangement or other transformation of the wor&=

1--" %he first pu#lic distri#ution of the original and each copy of the wor& #y sale or other forms of transfer of ownership=

1--0 $ental of the original or a copy of an audiovisual or cinematographic wor&, awor& em#odied in a sound recording, a computer program, a compilation of data andother materials or a musical wor& in graphic form, irrespective of the ownership of theoriginal or the copy which is the su#@ect of the rental= 8n

1--/ u#lic display of the original or copy of the wor&=

1-- u#lic performance of the wor&= and

1--- :ther communication to the pu#lic of the wor& 19

%he law also provided for the limitations on copyright, thus5

*ec 1(01 :imitations on copyright O 'otwithstanding the provisions of Chapter 7,the following acts shall not constitute infringement of copyright5

8a the recitation or performance of a wor&, once it has #een lawfully madeaccessi#le to the pu#lic, if done privately and free of charge or if made strictly for acharita#le or religious institution or society= [*ec 1!81, 3 'o 09]

8# %he ma&ing of )uotations from a pu#lished wor& if they are compati#le with fair use and only to the e?tent @ustified for the purpose, including )uotations fromnewspaper articles and periodicals in the form of press summaries= !rovie , thatthe source and the name of the author, if appearing on the wor& are mentioned= 8*ec11 third par 3 09

??? ??? ???

8e he inclusion of a wor1 in a publication, #roadcast, or other communication to thepu#lic, sound recording of film, if such inclusion is made #y way of illustration for teaching purposes and is compati#le with fair use5 !rovie , hat the source an the

name of the author, if appearing in the wor1 is mentione = 20

4n the a#ove )uoted provisions, Hwor&H has reference to literary and artistic creationsand this includes #oo&s and other li terary, scholarly and scientific wor&s 21

A perusal of the records yields several pages of the #oo& 3 that are similar if notidentical with the te?t of C%

:n page 0!0 of petitionersE Boo& 1 of College nglish for %oday, the authors wrote5

/tems in ates an aresses5

6e died on onday, April 1/, 19-/

iss $eyes lives in 210 %aft Avenue,

anila 22

:n page -" of respondents Boo& 1 3eveloping nglish %oday, they wrote5

6e died on onday, April 2/, 19-/

iss $eyes address is 210 %aft Avenue anila 23

:n age 2/! of C%, there is this e?ample on parallelism or repetition of sentencestructures, thus5

%he proposition is peace 'ot peace through the medium of war= not peace to #ehunted through the la#yrinth of intricate and endless negotiations= not peace to ariseout of universal discord, fomented from principle, in all parts of the empire= not peaceto depend on the @uridical determination of perple?ing )uestions, or the precisemar&ing of the #oundary of a comple? government 4t is simple peace= sought in itsnatural course, and in its ordinary haunts 4t is peace sought in the spirit of peace,and laid in principles purely pacific

O dmund Bur&e, H*peech on CriticismH 2:

:n page 1!! of the #oo& 3 2, also in the topic of parallel structure and repetition,the same e?ample is found in toto %he only difference is that petitionersac&nowledged the author dmund Bur&e, and respondents did not

4n several other pages 26 the treatment and manner of presentation of the topics of 3 are similar if not a rehash of that contained in C%



4

+e #elieve that respondent $o#lesE act of lifting from the #oo& of petitionerssu#stantial portions of discussions and e?amples, and her failure to ac&nowledge thesame in her #oo& is an infringement of petitionersE copyrights

+hen is there a su#stantial reproduction of a #oo&D 4t does not necessarily re)uirethat the entire copyrighted wor&, or even a large portion of it, #e copied 4f so much is

ta&en that the value of the original wor& is su#stantially diminished, there is aninfringement of copyright and to an in@urious e?tent, the wor& is appropriated 2

4n determining the )uestion of infringement, the amount of matter copied from thecopyrighted wor& is an important consideration %o constitute infringement, it is notnecessary that the whole or even a large portion of the wor& shall have #een copied4f so much is ta&en that the value of the original is sensi#ly diminished, or the la#orsof the original author are su#stantially and to an in@urious e?tent appropriated #yanother, that is sufficient in point of law to constitute piracy 28

%he essence of intellectual piracy should #e essayed in conceptual terms in order tounderscore its gravity #y an appropriate understanding thereof 4nfringement of a

copyright is a trespass on a private domain owned and occupied #y the owner of thecopyright, and, therefore, protected #y law, and infringement of copyright, or piracy,which is a synonymous term in this connection, consists in the doing #y any person,without the consent of the owner of the copyright, of anything the sole right to dowhich is conferred #y statute on the owner of the copyright29

%he respondentsE claim that the copied portions of the #oo& C% are also found inforeign #oo&s and other grammar #oo&s, and that the similarity #etween her styleand that of petitioners can not #e avoided since they come from the same#ac&ground and orientation may #e true 6owever, in this @urisdiction under *ec 1(0of $epu#lic Act (29" it is provided that5

;imitations on Copyright 'otwithstanding the provisions of Chapter 7, the followingshall not constitute infringement of copyright5

??? ??? ???

8c %he ma&ing of )uotations from a pu#lished wor& if they are compati#le with fair use and only to the e?tent @ustified for the purpose, including )uotations fromnewspaper articles and periodicals in the form of press summaries5 !rovie , %hatthe source and the name of the author, if appearing on the wor&, are mentioned

A copy of a piracy is an infringement of the original, and it is no defense that thepirate, in such cases, did not &now whether or not he was infringing any copyright= he

at least &new that what he was copying was not his, and he copied at his peril 30

%he ne?t )uestion to resolve is to what e?tent can copying #e in@urious to the author of the #oo& #eing copied 4s it enough that there are similarities in some sections of the #oo&s or large segments of the #oo&s are the sameD

4n the case at #ar, there is no )uestion that petitioners presented several pages of the #oo&s C% and 3 that more or less had the same contents 4t may #e correct

that the #oo&s #eing grammar #oo&s may contain materials similar as to sometechnical contents with other grammar #oo&s, such as the segment a#out the HAuthor CardH 6owever, the numerous pages that the petitioners presented showingsimilarity in the style and the manner the #oo&s were presented and the identicale?amples can not pass as similarities merely #ecause of technical consideration

%he respondents claim that their similarity in style can #e attri#uted to the fact that#oth of them were e?posed to the ACA* sylla#us and their respective academice?perience, teaching approach and methodology are almost identical #ecause theywere of the same #ac&ground

6owever, we #elieve that even if petitioners and respondent $o#les were of the

same #ac&ground in terms of teaching e?perience and orientation, it is not an e?cusefor them to #e identical even in e?amples contained in their #oo&s %he similarities ine?amples and material contents are so o#viously present in this case 6ow cansimilar>identical e?amples not #e considered as a mar& of copyingD

+e consider as an inicia of guilt or wrongdoing the act of respondent $o#les of pulling out from Goodwill #oo&stores the #oo& 3 upon learning of petitionersEcomplaint while pharisaically denying petitionersE demand 4t was further noted thatwhen the #oo& 3 was re.issued as a revised version, all the pages cited #ypetitioners to contain portion of their #oo& College nglish for %oday were eliminated

4n cases of infringement, copying alone is not what is prohi#ited %he copying must

produce an Hin@urious effectH 6ere, the in@ury consists in that respondent $o#les liftedfrom petitionersE #oo& materials that were the result of the latterEs research wor& andcompilation and misrepresented them as her own *he circulated the #oo& 3 for commercial use did not ac&nowledged petitioners as her source

6ence, there is a clear case of appropriation of copyrighted wor& for her #enefit thatrespondent $o#les committed etitionersE wor& as authors is the product of their long and assiduous research and for another to represent it as her own is in@uryenough 4n copyrighting #oo&s the purpose is to give protection to the intellectualproduct of an author %his is precisely what the law on copyright protected, under *ection 1(01 8# Quotations from a pu#lished wor& if they are compati#le with fair use and only to the e?tent @ustified #y the purpose, including )uotations fromnewspaper 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 wor&, arementioned

4n the case at #ar, the least that respondent $o#les could have done was toac&nowledge petitioners 6a#ana et al as the source of the portions of 3 %he finalproduct of an authorEs toil is her #oo& %o allow another to copy the #oo& without

appropriate ac&nowledgment is in@ury enough

+6$:$, the petition is here#y G$A'%3 %he decision and resolution of theCourt of Appeals in CA.G $ C7 'o 00!/" are *% A*43 %he case is orderedremanded to the trial court for further proceedings to receive evidence of the partiesto ascertain the damages caused and sustained #y petitioners and to render decisionin accordance with the evidence su#mitted to it

*: :$3$3

=apunan an nares9#antiago, %%., concur.

Davie, %r., C.%., / issent, please see issenting opinion.

;elo, %., no part, personal reason.

AS-C v. Phil. *ulti-*e/ia S'stem Inc.


anila

irst 3ivision' BA'C

G.R. No. 16950 -()u(; 19, 2009

AB5CBN BROA&CATING CORPORATION, etitioners,vsP"ILIPPINE MULTI5ME&IA #TEM, INC., CEAR G. RE#E, $RANCI C"UA

/ANG BIAO4, MANUEL $. ABELLA&A, RAUL B. &E MEA, AN& ALO#IU M.

COLA#CO, $espondents

3 C 4 * 4 : '

#NARE5ANTIAGO, %.J



,1

%his petition for review on certiorari1 assails the July 12, 2!! 3ecision2 of the Courtof Appeals in CA.G$ * 'os ((!92 and 9!-2, which affirmed the 3ecem#er 2!,2!!0 3ecision of the 3irector.General of the 4ntellectual roperty :ffice 84: in Appeal 'o 1!.2!!0.!!!2 Also assailed is the 3ecem#er 11, 2!!$esolution" denying the motion for reconsideration

etitioner AB*.CB' Broadcasting Corporation 8AB*.CB' is licensed under the lawsof the $epu#lic of the hilippines to engage in television and radio #roadcasting 0 4t#roadcasts television programs #y wireless means to etro anila and near#yprovinces, and #y satellite to provincial stations through Channel 2 on 7ery 6ighre)uency 876 and Channel 2" on ltra 6igh re)uency 86 %he programsaired over Channels 2 and 2" are either produced #y AB*.CB' or purchased from or licensed #y other producers

AB*.CB' also owns regional television stations which pattern their programming inaccordance with perceived demands of the region %hus, television programs shownin etro anila and near#y provinces are not necessarily shown in other provinces

$espondent hilippine ulti.edia *ystem, 4nc 8*4 is the operator of 3reamBroadcasting *ystem 4t delivers digital direct.to.home 83%6 television via satellite toits su#scri#ers all over the hilippines 6erein individual respondents, Cesar G$eyes, rancis Chua, anuel A#ellada, $aul B 3e esa, and Aloysius Colayco, are mem#ers of *4Ls Board of 3irectors

*4 was granted a legislative franchise under $epu#lic Act 'o ("!/ on ay -,199( and was given a rovisional Authority #y the 'ational %elecommunicationsCommission 8'%C on e#ruary 1, 2!!! to install, operate and maintain a nationwide3%6 satellite service +hen it commenced operations, it offered as part of itsprogram line.up AB*.CB' Channels 2 and 2", 'B', Channel 0, ABC Channel /,GA Channel -, $' Channel 9, and 4BC Channel 1", together with other paidpremium program channels

6owever, on April 2/, 2!!1, AB*.CB' demanded for *4 to cease and desist fromre#roadcasting Channels 2 and 2" :n April 2-, 2!!1,- *4 replied that there#roadcasting was in accordance with the authority granted it #y '%C and itso#ligation under '%C emorandum Circular 'o 0.!(.((,( *ection 2 of whichre)uires all ca#le television system operators operating in a community within GradeXAY or XBY contours to carry the television signals of the authori<ed television#roadcast stations9

%hereafter, negotiations ensued #etween the parties in an effort to reach asettlement= however, the negotiations were terminated on April 0, 2!!2 #y AB*.CB'allegedly due to *4Ls ina#ility to ensure the prevention of illegal retransmission

and further re#roadcast of its signals, as well as the adverse effect of there#roadcasts on the #usiness operations of its regional television stations1!

:n ay 1", 2!!2, AB*.CB' filed with the 4: a complaint for X7iolation of ;aws4nvolving roperty $ights, with rayer for the 4ssuance of a %emporary $estraining:rder and>or +rit of reliminary 4n@unction,Y which was doc&eted as 47 'o 1!.

2!!2.!!!0 4t alleged that *4Ls unauthori<ed re#roadcasting of Channels 2 and 2"infringed on its #roadcasting rights and copyright

:n July 2, 2!!2, the Bureau of ;egal Affairs 8B;A of the 4: granted AB*.CB'Lsapplication for a temporary restraining order :n July 12, 2!!2, *4 suspended itsretransmission of Channels 2 and 2" and li&ewise filed a petition for certiorari withthe Court of Appeals, which was doc&eted as CA.G$ * 'o -1/9-

*u#se)uently, *4 filed with the B;A a anifestation reiterating that it is su#@ect tothe must.carry rule under emorandum Circular 'o !0.!(.(( 4t also su#mitted aletter dated 3ecem#er 2!, 2!!2 of then '%C Commissioner Armi Jane $ Bor@e to*4 stating as follows5

%his refers to your letter dated 3ecem#er 1, 2!!2 re)uesting for regulatoryguidance from this Commission in connection with the application and coverage of '%C emorandum Circular 'o 0.!(.((, particularly *ection thereof, on mandatorycarriage of television #roadcast signals, to the direct.to.home 83%6 pay televisionservices of hilippine ulti.edia *ystem, 4nc 8*4

reliminarily, #oth 3%6 pay television and ca#le television services are #roadcastservices, the only difference #eing the medium of delivering such services 8ie theformer #y satellite and the latter #y ca#le Both can carry #roadcast signals to theremote areas, thus enriching the lives of the residents thereof through thedissemination of social, economic, educational information and cultural programs

%he 3%6 pay television services of *4 is e)uipped to provide nationwide 3%6satellite services Concededly, *4Ls 3%6 pay television services covers very muchwider areas in terms of carriage of #roadcast signals, including areas not reacha#le#y ca#le television services there#y providing a #etter medium of dissemination of information to the pu#lic

I) ?D o t@ ogo)g ()* t@ s7t ()* )t)t o NTC o()*u Cu(

No. :508588, 7(tu(; sto) 6 t@o, o) ()*(to; ((g o t?so)

o(*(st sg)(s, &T" 7(; t?so) s?s s@ou* ** o?* ;

su@ NTC Mo()*u Cu(.

or your guidance 8mphasis added11

http://www.lawphil.net/judjuris/juri2009/jan2009/gr_175769_2009.html#fnt1




































,2

:n August 2, 2!!", *4 filed another anifestation with the B;A that it received aletter dated July 20, 2!!" from the '%C en@oining strict and immediate compliancewith the must.carry rule under emorandum Circular 'o !0.!(.((, to wit5

3ear r A#ellada5

;ast July 22, 2!!", the 'ational %elecommunications Commission 8'%C received aletter dated July 1-, 2!!" from resident>C:: $ene Q Bello of the 4nternationalBroadcasting Corporation 84BC.Channel 1" complaining that your company, 3reamBroadcasting *ystem, 4nc, has cut.off, without any notice or e?planation whatsoever,to air the programs of 4BC.1", a free.to.air television, to the detriment of the pu#lic

+e were told that, until now, this has #een going on

P(s (*?s* t@(t (s ( *t o(*(st s(tt o7(to, o7(t)g (

*t5to5@o /&T"4 o(*(st)g s;st, Dt@ ( 7o?so)( (ut@ot; /PA4

o t@ NTC, ;ou o7();, (o)g Dt@ ( t?so) o7(tos, (

()*(t* to stt; o7; Dt@ t@ st)g 7o; o NTC o) ()*(to;

((g o t?so) o(*(st sg)(s (s 7o?** u)* Mo()*uCu( No. 0:508588, (so )oD) (s t@ R?s* Rus ()* Rgu(to)s

Go?))g C( T?so) ;st ) t@ P@77)s.

T@s ()*(to; o?(g 7o?so) u)* to) 6.2 o s(* Mo()*u

Cu(, Hus ( ( t?so) s;st o7(tos, o7(t)g ) (

ou)t; Dt@) t@ G(* KA o KB o)tous to Kust5(; t@ t?so)

sg)(s o t@ (ut@o* t?so) o(*(st st(to)s, o) o D@@ s IBC513.

(* *t? Hu(; (77s to ;ou o7(); (s t@ u( D(s ssu* to

g? o)sus ()* t@ 7u ( D* (ss to o sous o )Ds,

)o(to), )tt())t ()* ot@ 7og(so)t)ts.

%his Commission, as the governing agency vested #y laws with the @urisdiction,supervision and control over all pu#lic services, which includes direct #roadcastsatellite operators, and ta&ing into consideration the paramount interest of the pu#licin general, here#y directs you to immediately restore the signal of 4BC.1" in your networ& programs, pursuant to e?isting circulars and regulations of the Commission

or strict compliance 8mphasis added12

eanwhile, on :cto#er 1!, 2!!", the '%C issued emorandum Circular 'o 1!.1!.2!!", entitled X4mplementing $ules and $egulations Governing Community Antenna>Ca#le %elevision 8CA%7 and 3irect Broadcast *atellite 83B* *ervices toromote Competition in the *ectorY Article , *ection ( thereof states5

As a general rule, the reception, distri#ution and>or transmission #y any CA%7>3B*operator of any television signals without any agreement with or authori<ation fromprogram>content providers are prohi#ited

:n whether emorandum Circular 'o 1!.1!.2!!" amended emorandum Circular 'o !0.!(.((, the '%C e?plained to *4 in a letter dated 'ovem#er ", 2!!" that5

%o address your )uery on whether or not the provisions of C 1!.1!.2!!" wouldhave the effect of amending the provisions of C 0.!(.(( on mandatory carriage of television signals, the answer is in the negative

? ? ? ?

%he Commission maintains that, C 0.!(.(( remains valid, su#sisting andenforcea#le

lease #e advised, therefore, that as *u; )s* *t5to5@o s(tt

t?so) s? 7o?* (ut@o* ; t@s Cosso), ;ou o7();

o)t)us to ou)* ; t@ gu*)s 7o?** o u)* MC 0:508588,s7(; ;ou og(to) u)* ts ()*(to; ((g 7o?so)s, )

(**to) to ;ou og(to)s u)* MC 1051052003. 8mphasis added

lease #e guided accordingly1"

:n 3ecem#er 22, 2!!", the B;A rendered a decision 10 finding that *4 infringedthe #roadcasting rights and copyright of AB*.CB' and ordering it to permanentlycease and desist from re#roadcasting Channels 2 and 2"

:n e#ruary , 2!!0, *4 filed an appeal with the :ffice of the 3irector.General of the 4: which was doc&eted as Appeal 'o 1!.2!!0.!!!2 :n 3ecem#er 2", 2!!0, it

also filed with the Court of Appeals a Xotion to +ithdraw etition= Alternatively,emorandum of the etition for CertiorariY in CA.G$ * 'o -1/9-, which wasgranted in a resolution dated e#ruary 1-, 2!!/

:n 3ecem#er 2!, 2!!0, the 3irector.General of the 4: rendered a decision 1/ infavor of *4, the dispositive portion of which states5

+6$:$, premises considered, the instant appeal is here#y G$A'%3 Accordingly, 3ecision 'o 2!!".!1 dated 22 3ecem#er 2!!" of the 3irector of Bureau of ;egal Affairs is here#y $7$*3 and *% A*43

;et a copy of this 3ecision #e furnished the 3irector of the Bureau of ;egal Affairs for

appropriate action, and the records #e returned to her for proper disposition %he

,%













,%

3ocumentation, 4nformation and %echnology %ransfer Bureau is also given a copy for li#rary and reference purposes

*: :$3$31

%hus, AB*.CB' filed a petition for review with prayer for issuance of a temporary

restraining order and writ of preliminary in@unction with the Court of Appeals, whichwas doc&eted as CA.G$ * 'o ((!92

:n July 1(, 2!!/, the Court of Appeals issued a temporary restraining order%hereafter, AB*.CB' filed a petition for contempt against *4 for continuing tore#roadcast Channels 2 and 2" despite the restraining order %he case was doc&etedas CA. G$ * 'o 9!-2

:n 'ovem#er 10, 2!!/, the Court of Appeals ordered the consolidation of CA.G$* 'os ((!92 and 9!-2

4n the assailed 3ecision dated July 12, 2!!, the Court of Appeals sustained the

findings of the 3irector.General of the 4: and dismissed #oth petitions filed #y AB*.CB'1-

AB*.CB'Ls motion for reconsideration was denied, hence, this petition

AB*.CB' contends that *4Ls unauthori<ed re#roadcasting of Channels 2 and 2"is an infringement of its #roadcasting rights and copyright under the 4ntellectualroperty Code 84 Code=1(that emorandum Circular 'o !0.!(.(( e?cludes 3%6satellite television operators= that the Court of AppealsL interpretation of the must.carry rule violates *ection 9 of Article 444 19 of the Constitution #ecause it allows theta&ing of property for pu#lic use without payment of @ust compensation= that the Courtof Appeals erred in dismissing the petition for contempt doc&eted as CA.G$ * 'o

9!-2 without re)uiring respondents to file comment

$espondents, on the other hand, argue that *4Ls re#roadcasting of Channels 2and 2" is sanctioned #y emorandum Circular 'o !0.!(.((= that the must.carry ruleunder the emorandum Circular is a valid e?ercise of police power= and that theCourt of Appeals correctly dismissed CA.G$ * 'o 9!-2 since it found no needto e?ercise its power of contempt

After a careful review of the facts and records of this case, we affirm the findings of the 3irector.General of the 4: and the Court of Appeals

%here is no merit in AB*.CB'Ls contention that *4 violated its #roadcasterLs rights

under *ection 211 of the 4 Code which provides in part5

Chapter R47B$:A3CA*%4'G :$GA'4SA%4:'*

*ec 211 *cope of $ight . *u#@ect to the provisions of *ection 212, #roadcastingorgani<ations shall en@oy the e?clusive right to carry out, authori<e or prevent any of the following acts5

2111 %he re#roadcasting of their #roadcasts=

? ? ? ?

'either is *4 guilty of infringement of AB*.CB'Ls copyright under *ection 1-- of the 4 Code which states that copyright or economic rights shall consist of thee?clusive right to carry out, authori<e or prevent the pu#lic performance of the wor&8*ection 1--, and other communication to the pu#lic of the wor& 8*ection 1---2!

*ection 2!2- of the 4 Code defines o(*(st)g as Xthe transmission #y wirelessmeans for the pu#lic reception of sounds or of images or of representations thereof=

such transmission #y satellite is also W#roadcastingL where the means for decryptingare provided to the pu#lic #y the #roadcasting organi<ation or with its consentY

:n the other hand, o(*(st)g as defined in Article "8g of the 4nternationalConvention for the rotection of erformers, roducers of honograms andBroadcasting :rgani<ations, otherwise &nown as the 191 $ome Convention, of which the $epu#lic of the hilippines is a signatory, 21 is Xthe simultaneous#roadcasting #y one #roadcasting organi<ation of the #roadcast of another #roadcasting organi<ationY

%he 3irector.General of the 4: correctly found that *4 is not engaged inre#roadcasting and thus cannot #e considered to have infringed AB*.CB'Ls

#roadcasting rights and copyright, thus5

%hat the AppellantLs [herein respondent *4] su#scri#ers are a#le to view AppelleeLs [herein petitioner AB*.CB'] programs 8Channels 2 and 2" at the sametime that the latter is #roadcasting the same is undisputed %he )uestion however is,would the Appellant in doing so #e considered engaged in #roadcasting *ection2!2- of the 4 Code states that #roadcasting means

Xthe transmission #y wireless means for the pu#lic reception of sounds or of imagesor of representations thereof= such transmission #y satellite is also W#roadcastingLwhere the means for decrypting are provided to the pu#lic #y the #roadcastingorgani<ation or with its consentY

,4





















,4

*ection 2!2- of the 4 Code, thus, provides two instances wherein there is#roadcasting, to wit5

1 %he transmission #y wireless means for the pu#lic reception of sounds or of images or of representations thereof= and

2 %he transmission #y satellite for the pu#lic reception of sounds or of images or of representations thereof where the means for decrypting are provided to the pu#lic #ythe #roadcasting organi<ation or with its consent

4t is under the second category that AppellantLs 3%6 satellite television service must#e e?amined since it is satellite.#ased %he elements of such category are as follows5

1 %here is transmission of sounds or images or of representations thereof=

2 %he transmission is through satellite=

" %he transmission is for pu#lic reception= and

0 %he means for decrypting are provided to the pu#lic #y the #roadcastingorgani<ation or with its consent

4t is only the presence of all the a#ove elements can a determination that the 3%6 is#roadcasting and conse)uently, re#roadcasting AppelleeLs signals in violation of *ections 211 and 1-- of the 4 Code, may #e arrived at

Accordingly, this :ffice is of the view that the transmission contemplated under *ection 2!2- of the 4 Code presupposes that the origin of the signals is the#roadcaster 6ence, a program that is #roadcasted is attri#uted to the #roadcaster 4nthe same manner, the re#roadcasted program is attri#uted to the re#roadcaster

4n the case at hand, Appellant is not the origin nor does it claim to #e the origin of theprograms #roadcasted #y the Appellee Appellant did not ma&e and transmit on itsown #ut merely carried the e?isting signals of the Appellee +hen AppellantLssu#scri#ers view AppelleeLs programs in Channels 2 and 2", they &now that theorigin thereof was the Appellee

Aptly, it is imperative to discern the nature of #roadcasting +hen a #roadcaster transmits, the signals are scattered or dispersed in the air Any#ody may pic&.upthese signals %here is no restriction as to its num#er, type or class of recipients %oreceive the signals, one is not re)uired to su#scri#e or to pay any fee :ne only hasto have a receiver, and in case of television signals, a television set, and to tune.in to

the right channel>fre)uency %he definition of #roadcasting, wherein it is re)uired thatthe transmission is wireless, all the more supports this discussion Apparently, the

undiscriminating dispersal of signals in the air is possi#le only through wirelessmeans %he use of wire in transmitting signals, such as ca#le television, limits therecipients to those who are connected nli&e wireless transmissions, in wire.#asedtransmissions, it is not enough that one wants to #e connected and possesses thee)uipment %he service provider, such as ca#le television companies may choose itssu#scri#ers

%he only limitation to such dispersal of signals in the air is the technical capacity of the transmitters and other e)uipment employed #y the #roadcaster +hile the#roadcaster may use a less powerful transmitter to limit its coverage, this is merely a#usiness strategy or decision and not an inherent limitation when transmission isthrough ca#le

Accordingly, the nature of #roadcasting is to scatter the signals in its widest area of coverage as possi#le :n this score, it may #e said that ma&ing pu#lic means thataccessi#ility is undiscriminating as long as it [is] within the range of the transmitter and e)uipment of the #roadcaster %hat the medium through which the Appellantcarries the AppelleeLs signal, that is via satellite, does not diminish the fact that itoperates and functions as a ca#le television 4t remains that the AppellantLstransmission of signals via its 3%6 satellite television service cannot #e consideredwithin the purview of #roadcasting ? ? ?

? ? ? ?

%his :ffice also finds no evidence on record showing that the Appellant has provideddecrypting means to the pu#lic indiscriminately Considering the nature of this case,which is punitive in fact, the #urden of proving the e?istence of the elementsconstituting the acts punisha#le rests on the shoulder of the complainant

Accordingly, this :ffice finds that there is no re#roadcasting on the part of the

Appellant of the AppelleeLs programs on Channels 2 and 2", as defined under the$ome Convention22

nder the $ome Convention, re#roadcasting is Xthe simultaneous #roadcasting #yone #roadcasting organi<ation of the #roadcast of another #roadcastingorgani<ationY %he +or&ing aper 2" prepared #y the *ecretariat of the *tandingCommittee on Copyright and $elated $ights defines #roadcasting organi<ations asXentities that ta&e the financial and editorial responsi#ility for the selection andarrangement of, and investment in, the transmitted contentY 20 vidently, *4 wouldnot )ualify as a #roadcasting organi<ation #ecause it does not have theaforementioned responsi#ilities imposed upon #roadcasting organi<ations, such as AB*.CB'

,,












,,

AB*.CB' creates and transmits its own signals= *4 merely carries such signalswhich the viewers receive in its unaltered form *4 does not produce, select, or determine the programs to #e shown in Channels 2 and 2" ;i&ewise, it does notpass itself off as the origin or author of such programs 4nsofar as Channels 2 and 2"are concerned, *4 merely retransmits the same in accordance with emorandumCircular !0.!(.(( +ith regard to its premium channels, it #uys the channels fromcontent providers and transmits on an as.is #asis to its viewers Clearly, *4 doesnot perform the functions of a #roadcasting organi<ation= thus, it cannot #e said thatit is engaged in re#roadcasting Channels 2 and 2"

%he 3irector.General of the 4: and the Court of Appeals also correctly found that*4Ls services are similar to a ca#le television system #ecause the services itrenders fall under ca#le Xretransmission,Y as descri#ed in the +or&ing aper, to wit5

8G Ca#le $etransmission

0- +hen a radio or television program is #eing #roadcast, it can #e retransmitted tonew audiences #y means of ca#le or wire 4n the early days of ca#le television, it was

mainly used to improve signal reception, particularly in so.called Xshadow <ones,Y or to distri#ute the signals in large #uildings or #uilding comple?es +ith improvementsin technology, ca#le operators now often receive signals from satellites #eforeretransmitting them in an unaltered form to their su#scri#ers through ca#le

0( 4n principle, ca#le retransmission can #e either simultaneous with the #roadcastover.the.air or delayed 8deferred transmission on the #asis of a fi?ation or areproduction of a fi?ation urthermore, they might #e unaltered or altered, for e?ample through replacement of commercials, etc I) g)(, @oD?, t@ t

Kt()ssso) ss to s?* o su@ t()ssso)s D@@ ( ot@

sut()ous ()* u)(t*.

09 %he $ome Convention does not grant rights against unauthori<ed ca#leretransmission +ithout such a right, ca#le operators can retransmit #oth domesticand foreign over the air #roadcasts simultaneously to their su#scri#ers withoutpermission from the #roadcasting organi<ations or other rightholders and withouto#ligation to pay remuneration2/ 8mphasis added

%hus, while the $ome Convention gives #roadcasting organi<ations the right toauthori<e or prohi#it the re#roadcasting of its #roadcast, however, this protectiondoes not e?tend to ca#le retransmission %he retransmission of AB*.CB'Ls signals#y *4 K which functions essentially as a ca#le television K does not thereforeconstitute re#roadcasting in violation of the formerLs intellectual property rights under the 4 Code

4t must #e emphasi<ed that the law on copyright is not a#solute %he 4 Codeprovides that5

*ec 1(0 ;imitations on Copyright .

1(01 'otwithstanding the provisions of Chapter 7, the following acts shall not

constitute infringement of copyright5

? ? ? ?

8h %he use made of a wor& #y or under the direction or control of the Government,#y the 'ational ;i#rary or #y educational, scientific or professional institutions wheresuch use is in the pu#lic interest and is compati#le with fair use=

%he carriage of AB*.CB'Ls signals #y virtue of the must.carry rule in emorandumCircular 'o !0.!(.(( is under the direction and control of the government though the'%C which is vested with e?clusive @urisdiction to supervise, regulate and controltelecommunications and #roadcast services>facilities in the hilippines2 %he

imposition of the must.carry rule is within the '%CLs power to promulgate rules andregulations, as pu#lic safety and interest may re)uire, to encourage a larger andmore effective use of communications, radio and television #roadcasting facilities,and to maintain effective competition among private entities in these activitieswhenever the Commission finds it reasona#ly feasi#le2- As correctly o#served #y the3irector.General of the 4:5

Accordingly, the Xust.Carry $uleY under '%C Circular 'o 0.!(.(( falls under theforegoing category of limitations on copyright %his :ffice agrees with the Appellant[herein respondent *4] that the Xust.Carry $uleY is in consonance with theprinciples and o#@ectives underlying ?ecutive :rder 'o 0",2( to wit5

%he ilipino people must #e given wider access to more sources of news,information, education, sports event and entertainment programs other than thoseprovided for #y mass media and afforded television programs to attain a wellinformed, well.versed and culturally refined citi<enry and enhance their socio.economic growth5

+6$A*, ca#le television 8CA%7 systems could support or supplement theservices provided #y television #roadcast facilities, local and overseas, as thenational information highway to the countryside29

%he Court of Appeals li&ewise correctly o#served that5

[%]he very intent and spirit of the '%C Circular will prevent a situation where#y stationowners and a few networ&s would have unfettered power to ma&e time availa#le only

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to the highest #idders, to communicate only their own views on pu#lic issues, people,and to permit on the air only those with whom they agreed K contrary to the statepolicy that the 8franchise grantee li&e the petitioner, private respondent and other %7station owners, shall provide at all times sound and #alanced programming andassist in the functions of pu#lic information and education

%his is for the first time that we have a structure that wor&s to accomplish e?plicitstate policy goals"!

4ndeed, intellectual property protection is merely a means towards the end of ma&ingsociety #enefit from the creation of its men and women of talent and genius %his isthe essence of intellectual property laws, and it e?plains why certain products of ingenuity that are concealed from the pu#lic are outside the pale of protectionafforded #y the law 4t also e?plains why the author or the creator en@oys no morerights than are consistent with pu#lic welfare "1

urther, as correctly o#served #y the Court of Appeals, the must.carry rule as well asthe legislative franchises granted to #oth AB*.CB' and *4 are in consonance

with state policies enshrined in the Constitution, specifically *ections 9,"2 1-,"" and20"0 of Article 44 on the 3eclaration of rinciples and *tate olicies"/

AB*.CB' was granted a legislative franchise under $epu#lic Act 'o -9, *ection1 of which authori<es it Xto construct, operate and maintain, for commercial purposesand in the pu#lic interest, television and radio #roadcasting in and throughout thehilippines ? ? ?Y *ection 0 thereof mandates that it Xshall provide ade)uate pu#licservice time to ena#le the government, through the said #roadcasting stations, toreach the population on important pu#lic issues= provide at all times sound and#alanced programming= promote pu#lic participation such as in communityprogramming= assist in the functions of pu#lic information and education ? ? ?Y

*4 was li&ewise granted a legislative franchise under $epu#lic Act 'o ("!,*ection 0 of which similarly states that it Xshall provide ade)uate pu#lic service timeto ena#le the government, through the said #roadcasting stations, to reach thepopulation on important pu#lic issues= provide at all times sound and #alancedprogramming= promote pu#lic participation such as in community programming=assist in the functions of pu#lic information and education ? ? ?Y *ection /,paragraph 2 of the same law provides that Xthe radio spectrum is a finite resourcethat is a part of the national patrimony and the use thereof is a privilege conferredupon the grantee #y the *tate and may #e withdrawn anytime, after due processY

4n elecom. ? "roacast Attys. of the !hils., /nc. v. C;7:7C," the Court held that afranchise is a mere privilege which may #e reasona#ly #urdened with some form of pu#lic service %hus5

All #roadcasting, whether #y radio or #y television stations, is licensed #y thegovernment Airwave fre)uencies have to #e allocated as there are more individualswho want to #roadcast than there are fre)uencies to assign A franchise is thus aprivilege su#@ect, among other things, to amendment #y Congress in accordance withthe constitutional provision that Xany such franchise or right granted shall #esu#@ect to amendment, alteration or repeal #y the Congress when the common goodso re)uiresY

? ? ? ?

4ndeed, provisions for C:;C %ime have #een made #y amendment of thefranchises of radio and television #roadcast stations and, until the present case was#rought, such provisions had not #een thought of as ta&ing property without @ustcompensation Art R44, U11 of the Constitution authori<es the amendment of franchises for Xthe common goodY +hat #etter measure can #e conceived for thecommon good than one for free air time for the #enefit not only of candidates #uteven more of the pu#lic, particularly the voters, so that they will #e fully informed of the issues in an electionD X[4]t is the right of the viewers and listeners, not the right of the #roadcasters, which is paramountY

'or indeed can there #e any constitutional o#@ection to the re)uirement that#roadcast stations give free air time ven in the nited *tates, there are responsi#lescholars who #elieve that government controls on #roadcast media canconstitutionally #e instituted to ensure diversity of views and attention to pu#lic affairsto further the system of free e?pression or this purpose, #roadcast stations may #ere)uired to give free air time to candidates in an election %hus, rofessor Cass $*unstein of the niversity of Chicago ;aw *chool, in urging reforms in regulationsaffecting the #roadcast industry, writes5

? ? ? ?

4n truth, radio and television #roadcasting companies, which are given franchises, donot own the airwaves and fre)uencies through which they transmit #roadcast signalsand images %hey are merely given the temporary privilege of using them *ince afranchise is a mere privilege, the e?ercise of the privilege may reasona#ly #e#urdened with the performance #y the grantee of some form of pu#lic service ? ? ?"-

%here is li&ewise no merit to AB*.CB'Ls claim that *4Ls carriage of its signals isfor a commercial purpose= that its #eing the countryLs top #roadcasting company, theavaila#ility of its signals allegedly enhances *4Ls attractiveness to potentialcustomers="( or that the unauthori<ed carriage of its signals #y *4 has createdcompetition #etween its etro anila and regional stations

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AB*.CB' presented no su#stantial evidence to prove that *4 carried its signalsfor profit= or that such carriage adversely affected the #usiness operations of itsregional stations ?cept for the testimonies of its witnesses,["9] no studies,statistical data or information have #een su#mitted in evidence

Administrative charges cannot #e #ased on mere speculation or con@ecture %he

complainant has the #urden of proving #y su#stantial evidence the allegations in thecomplaint0! ere allegation is not evidence, and is not e)uivalent to proof 01

Anyone in the country who owns a television set and antenna can receive AB*.CB'Ls signals for free :ther #roadcasting organi<ations with free.to.air signals suchas GA.-, $'.9, ABC./, and 4BC.1" can li&ewise #e accessed for free 'opayment is re)uired to view the said channels02 #ecause these #roadcastingnetwor&s do not generate revenue from su#scription from their viewers #ut fromairtime revenue from contracts with commercial advertisers and producers, as wellas from direct sales

4n contrast, ca#le and 3%6 television earn revenues from viewer su#scription 4n the

case of *4, it offers its customers premium paid channels from content providersli&e *tar ovies, *tar +orld, Jac& %7, and AR', among others, thus allowing itscustomers to go #eyond the limits of Xree %7 and Ca#le %7Y0" 4t does not advertiseitself as a local channel carrier #ecause these local channels can #e viewed with or without 3%6 television

$elevantly, *4Ls carriage of Channels 2 and 2" is material in arriving at the ratingsand audience share of AB*.CB' and its programs %hese ratings help commercialadvertisers and producers decide whether to #uy airtime from the networ& %hus, themust.carry rule is actually advantageous to the #roadcasting networ&s #ecause itprovides them with increased viewership which attracts commercial advertisers andproducers

:n the other hand, the carriage of free.to.air signals imposes a #urden to ca#le and3%6 television providers such as *4 *4 uses none of AB*.CB'Ls resources or e)uipment and carries the signals and shoulders the costs without any recourse of charging00 oreover, such carriage of signals ta&es up channel space which canotherwise #e utili<ed for other premium paid channels

%here is no merit to AB*.CB'Ls argument that *4Ls carriage of Channels 2 and 2"resulted in competition #etween its etro anila and regional stations AB*.CB' isfree to decide to pattern its regional programming in accordance with perceiveddemands of the region= however, it cannot impose this &ind of programming on theregional viewers who are also entitled to the free.to.air channels 4t must #e

emphasi<ed that, as a national #roadcasting organi<ation, one of AB*.CB'Ls

responsi#ilities is to scatter its signals to the widest area of coverage as possi#le%hat it should limit its signal reach for the sole purpose of gaining profit for itsregional stations undermines pu#lic interest and deprives the viewers of their right toaccess to information

4ndeed, television is a #usiness= however, the welfare of the people must not #e

sacrificed in the pursuit of profit %he right of the viewers and listeners to the mostdiverse choice of programs availa#le is paramount0/ %he 3irector.General correctlyo#served, thus5

%he Xust.Carry $uleY favors #oth #roadcasting organi<ations and the pu#lic 4tprevents ca#le television companies from e?cluding #roadcasting organi<ationespecially in those places not reached #y signal Also, the rule prevents ca#letelevision companies from depriving viewers in far.flung areas the en@oyment of programs availa#le to city viewers 4n fact, this :ffice finds the rule more #urdensomeon the part of the ca#le television companies %he latter carries the television signalsand shoulders the costs without any recourse of charging :n the other hand, thesignals that are carried #y ca#le television companies are dispersed and scattered #ythe television stations and any#ody with a television set is free to pic& them up

+ith its enormous resources and vaunted technological capa#ilities, AppelleeLs[herein petitioner AB*.CB'] #roadcast signals can reach almost every corner of thearchipelago %hat in spite of such capacity, it chooses to maintain regional stations, isa #usiness decision %hat the Xust.Carry $uleY adversely affects the profita#ility of maintaining such regional stations since there will #e competition #etween them andits etro anila station is speculative and an attempt to e?trapolate the effects of therule As discussed a#ove, AppellantLs 3%6 satellite television services is of limitedsu#scription %here was not even a showing on part of the Appellee the num#er of AppellantLs su#scri#ers in one region as compared to non.su#scri#ing televisionowners 4n any event, if this :ffice is to engage in con@ecture, such competition#etween the regional stations and the etro anila station will #enefit the pu#lic assuch competition will most li&ely result in the production of #etter televisionprogramsY0

All told, we find that the Court of Appeals correctly upheld the decision of the 4:3irector.General that *4 did not infringe on AB*.CB'Ls intellectual property rightsunder the 4 Code %he findings of facts of administrative #odies charged with their specific field of e?pertise, are afforded great weight #y the courts, and in the a#senceof su#stantial showing that such findings are made from an erroneous estimation of the evidence presented, they are conclusive, and in the interest of sta#ility of thegovernmental structure, should not #e distur#ed0-

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oreover, the factual findings of the Court of Appeals are conclusive on the partiesand are not reviewa#le #y the *upreme Court %hey carry even more weight whenthe Court of Appeals affirms the factual findings of a lower fact.finding #ody,0( as inthe instant case

%here is li&ewise no merit to AB*.CB'Ls contention that the emorandum Circular

e?cludes from its coverage 3%6 television services such as those provided #y *4*ection 2 of the emorandum Circular re)uires all ca#le television systemoperators operating in a community within Grade XAY or XBY contours to carry thetelevision signals of the authori<ed television #roadcast stations09 %he rationale#ehind its issuance can #e found in the whereas clauses which state5

+hereas, Ca#le %elevision *ystems or Community Antenna %elevision 8CA%7 haveshown their a#ility to offer additional programming and to carry much improved#roadcast signals in the remote areas, there#y enriching the lives of the rest of thepopulation through the dissemination of social, economic, educational informationand cultural programs=

+hereas, the national government supports the promotes the orderly growth of theCa#le %elevision industry within the framewor& of a regulated fee enterprise, which isa hallmar& of a democratic society=

+hereas, pu#lic interest so re)uires that monopolies in commercial mass mediashall #e regulated or prohi#ited, hence, to achieve the same, the ca#le %7 industry ismade part of the #roadcast media=

+hereas, pursuant to Act "(0 as amended and ?ecutive :rder 2!/ granting the'ational %elecommunications Commission the authority to set down rules andregulations in order to protect the pu#lic and promote the general welfare, the'ational %elecommunications Commission here#y promulgates the following rules

and regulations on Ca#le %elevision *ystems=

%he policy of the emorandum Circular is to carry improved signals in remote areasfor the good of the general pu#lic and to promote dissemination of information 4n linewith this policy, it is clear that 3%6 television should #e deemed covered #y theemorandum Circular 'otwithstanding the different technologies employed, #oth3%6 and ca#le television have the a#ility to carry improved signals and promotedissemination of information #ecause they operate and function in the same way

4n its 3ecem#er 2!, 2!!2 letter ,/! the '%C e?plained that #oth 3%6 and ca#letelevision services are of a similar nature, the only difference #eing the medium of delivering such services %hey can carry #roadcast signals to the remote areas and

possess the capa#ility to enrich the lives of the residents thereof through the

dissemination of social, economic, educational information and cultural programsConse)uently, while the emorandum Circular refers to ca#le television, it should #eunderstood as to include 3%6 television which provides essentially the sameservices

4n 7astern elecommunications !hilippines, /nc. v. /nternational Communication

Corporation,/1 we held5

%he '%C, #eing the government agency entrusted with the regulation of activitiescoming under its special and technical forte, and possessing the necessary rule.ma&ing power to implement its o#@ectives, is in the #est position to interpret its ownrules, regulations and guidelines %he Court has consistently yielded and accordedgreat respect to the interpretation #y administrative agencies of their own rulesunless there is an error of law, a#use of power, lac& of @urisdiction or grave a#use of discretion clearly conflicting with the letter and spirit of the law/2

+ith regard to the issue of the constitutionality of the must.carry rule, the Court findsthat its resolution is not necessary in the disposition of the instant case :ne of the

essential re)uisites for a successful @udicial in)uiry into constitutional )uestions isthat the resolution of the constitutional )uestion must #e necessary in deciding thecase/" 4n #pouses ;irasol v. Court of Appeals,/0 we held5

As a rule, the courts will not resolve the constitutionality of a law, if the controversycan #e settled on other grounds %he policy of the courts is to avoid ruling onconstitutional )uestions and to presume that the acts of the political departments arevalid, a#sent a clear and unmista&a#le showing to the contrary %o dou#t is tosustain %his presumption is #ased on the doctrine of separation of powers %hismeans that the measure had first #een carefully studied #y the legislative ande?ecutive departments and found to #e in accord with the Constitution #efore it wasfinally enacted and approved//

%he instant case was instituted for violation of the 4 Code and infringement of AB*.CB'Ls #roadcasting rights and copyright, which can #e resolved without going intothe constitutionality of emorandum Circular 'o !0.!(.(( As held #y the Court of Appeals, the only relevance of the circular in this case is whether or not compliancetherewith should #e considered manifestation of lac& of intent to commitinfringement, and if it is, whether such lac& of intent is a valid defense against thecomplaint of petitioner/

%he records show that petitioner assailed the constitutionality of emorandumCircular 'o !0.!(.(( #y way of a collateral attac& #efore the Court of Appeals4n !hilippine ational "an1 v. !alma,/- we ruled that for reasons of pu#lic policy, the

constitutionality of a law cannot #e collaterally attac&ed A law is deemed valid unless

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declared null and void #y a competent court= more so when the issue has not #eenduly pleaded in the trial court/(

As a general rule, the )uestion of constitutionality must #e raised at the earliestopportunity so that if not raised in the pleadings, ordinarily it may not #e raised in thetrial, and if not raised in the trial court, it will not #e considered on appeal /9 4n

hilippine 7eterans Ban& v Court of Appeals,! we held5

+e decline to rule on the issue of constitutionality as all the re)uisites for thee?ercise of @udicial review are not present herein 7(;, t@ Husto) o

o)sttuto)(t; D )ot 7(ss* u7o) ; t@ Cout u)ss, (t t@ st

o77otu)t;, t s 7o7; (s* ()* 7s)t* ) () (77o7(t (s,

(*Hu(t; (gu*, ()* s )ss(; to ( *t)(to) o t@ (s,

7(tu(; D@ t@ ssu o o)sttuto)(t; s t@ ?; s ot( 7s)t*.?? ?1

inally, we find that the dismissal of the petition for contempt filed #y AB*.CB' is inorder

4ndirect contempt may either #e initiated 81 motu proprio #y the court #y issuing anorder or any other formal charge re)uiring the respondent to show cause why heshould not #e punished for contempt or 82 #y the filing of a verified petition,complying with the re)uirements for filing initiatory pleadings2

AB*.CB' filed a verified petition #efore the Court of Appeals, which was doc&etedCA G$ * 'o 9!-2, for *4Ls alleged diso#edience to the $esolution and%emporary $estraining :rder, #oth dated July 1(, 2!!/, issued in CA.G$ * 'o((!92 6owever, after the cases were consolidated, the Court of Appeals did notre)uire *4 to comment on the petition for contempt 4t ruled on the merits of CA.G$ * 'o ((!92 and ordered the dismissal of #oth petitions

AB*.CB' argues that the Court of Appeals erred in dismissing the petition for contempt without having ordered respondents to comment on the sameConse)uently, it would have us reinstate CA.G$ 'o 9!-2 and order respondentsto show cause why they should not #e held in contempt

4t #ears stressing that the proceedings for punishment of indirect contempt are

criminal in nature %he modes of procedure and rules of evidence adopted incontempt proceedings are similar in nature to those used in criminalprosecutions " +hile it may #e argued that the Court of Appeals should haveordered respondents to comment, the issue has #een rendered moot in light of our ruling on the merits %o order respondents to comment and have the Court of Appealsconduct a hearing on the contempt charge when the main case has already #eendisposed of in favor of *4 would #e circuitous +here the issues have #ecomemoot, there is no @usticia#le controversy, there#y rendering the resolution of the sameof no practical use or value0

!"ERE$ORE, the petition is &ENIE& %he July 12, 2!! 3ecision of the Court of Appeals in CA.G$ * 'os ((!92 and 9!-2, sustaining the findings of the

3irector.General of the 4ntellectual roperty :ffice and dismissing the petitions filed#y AB*.CB' Broadcasting Corporation, and the 3ecem#er 11, 2!! $esolutiondenying the motion for reconsideration, are A$$IRME&.

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