CASES

ABS-CBN v. PHILIPPINE MULTI-MEDIA SYSTEM

FACTS: PMSI was granted a legislative franchise and was given a Provisional
Authority by the National Telecommunications Commission to install, operate
and maintain a nationwide DTH satellite service. When it commenced
operations, it o ered as part of its program line-up programs aired over
Channels 2 and 23 are either produced by ABS-CBN or purchased from or
licensed by other producers.

ABS-CBN demanded for PMSI to cease and desist from rebroadcasting

Channels 2 and 23. PMSI posits that the rebroadcasting was in accordance with
the NTC memorandum to carry television signals of authorized television
broadcast stations, which includes petitioner’s programs.

Negotiations ensued but did not come to fruition. Thereafter, ABS-CBN led a
complaint with the IPO against PMSI alleging that the latter’s unauthorized
rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and
copyright.

PMSI led with the BLA a Manifestation reiterating that it is subject to the must-
carry rule. The Bureau of Legal A airs found PMSI to have infringed petitioner’s
broadcasting rights and ordered it to permanently desist from rebroadcasting.
On appeal, the IPO Director General rendered a decision in favor of PMSI. CA
a rmed.

ISSUE: Whether the retransmission of Channels 2 and 23 by PMSI violated the

intellectual property rights of ABS-CBN?

HELD: NO. PMSI is not engaged in rebroadcasting and thus cannot be

considered to have infringed ABS-CBN’s broadcasting rights and copyright,

In arriving at this decision the SC di erentiated “rebroadcasting” from

“retransmission” of broadcast signals.

Rebroadcasting is de ned in the Rome Convention of which the Philippines is a

signatory, as “the simultaneous broadcasting by one broadcasting organization
of the broadcast of another broadcasting organization.” It presupposes that
rebroadcasted programs have been altered so as to be attributed to the
rebroadcaster as the origin of the broadcast. This, the Court said, is di erent
from retransmission, which is both simultaneous and unaltered. While the Rome
Convention gives broadcasting organizations the right to authorize or prohibit
the rebroadcasting of its broadcast, however, this protection does not extend to
cable retransmission.

In this case, ABS-CBN creates and transmits its own signals; PMSI merely
carries such signals which the viewers receive in its unaltered form and in
accordance with Memorandum Circular. The retransmission of ABS-CBN’s
signals by PMSI which functions essentially as a cable television – does not
therefore constitute rebroadcasting in violation of the former’s intellectual
property rights under the IP Code.

Moreover, the Supreme Court held that both ABS-CBN and PMSI operate by
virtue of a legislative franchise and are thus subject to reasonable burdens of
public service, such as the “Must-Carry Rule.” Just as PMSI has the obligation

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to retransmit ABS-CBN’s signals, ABS-CBN has the obligation to allow PMSI to
retransmit its signals under the rule.

The Court pointed out that the rule is one such limitation on copyright under the
Intellectual Property Code, which states that the use made of a work by or under
the direction or control of the Government, by the National Library or by
educational, scienti c or professional institutions where such use is in the public
interest and is compatible with fair use shall NOT constitute infringement of
copyright.

The carriage of ABS-CBN’s signals by virtue of the must-carry rule in

Memorandum Circular is under the direction and control of the government
though the NTC which is vested with exclusive jurisdiction to supervise, regulate
and control telecommunications and broadcast services/facilities in the
Philippines.

The imposition of the must-carry rule is within the NTC’s power to promulgate
rules and regulations, as public safety and interest may require, to encourage a
larger and more e ective use of communications, radio and television
broadcasting facilities, and to maintain e ective competition among private
entities in these activities whenever the Commission nds it reasonably feasible.

The Supreme Court, however, found no need to pass upon the constitutionality
of the “Must Carry Rule” itself as such was belatedly raised in the proceedings
and the High Court could resolve the case without having to do so.

MUST-CARRY RULE
The rule mandates the compulsory carriage by cable service providers of
television signals being broadcast within a cable company’s area of coverage.
This rule prevents cable television companies from excluding broadcasting
organization especially in those places not reached by signal. Also, the rule
prevents cable television companies from depriving viewers in far- ung areas
the enjoyment of programs available to city viewers.

The “Must-Carry Rule” favors both broadcasting organizations and the public. It
prevents cable television companies from excluding broadcasting organization
especially in those places not reached by signal. Also, the rule prevents cable
television companies from depriving viewers in far- ung areas the enjoyment of
programs available to city viewers.

PMSI NOT A BROADCASTING ORG.

it does not pass itself o as the origin or author of such programs. Insofar as
Channels 2 and 23 are concerned, PMSI merely retransmits the same in
accordance with Memorandum Circular 04-08-88. With regard to its premium
channels, it buys the channels from content providers and transmits on an as-is
basis to its viewers. Clearly, PMSI does not perform the functions of a
broadcasting organization; thus, it cannot be said that it is engaged in
rebroadcasting Channels 2 and 23.

BROADCASTING
“Broadcasting” means the transmission by wireless means for the public
reception of sounds or of images or of representations thereof; such
transmission by satellite is also “broadcasting” where the means for decrypting
are provided to the public by the broadcasting organization or with its consent;

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2 INSTANCES BROADCASTING
Section 202.7 of the IP Code, thus, provides two instances wherein there is
broadcasting, to wit:
1. The transmission by wireless means for the public reception of sounds or of
images or of representations thereof; and
2. The transmission by satellite for the public reception of sounds or of images
or of representations thereof where the means for decrypting are provided to
the public by the broadcasting organization or with its consent.
a. There is transmission of sounds or images or of representations thereof;
b. The transmission is through satellite;
c. The transmission is for public reception; and
d. The means for decrypting are provided to the public by the broadcasting
organization or with its consent.

FRANCHISE
In truth, radio and television broadcasting companies, which are given
franchises, do not own the airwaves and frequencies through which they
transmit broadcast signals and images. They are merely given the temporary
privilege of using them. Since a franchise is a mere privilege, the exercise of the
privilege may reasonably be burdened with the performance by the grantee of
some form of public service.

BURDEN / ADVANTAGE
TO ABS-CBN - PMSI’s carriage of Channels 2 and 23 is material in arriving at
the ratings and audience share of ABS-CBN and its programs. These ratings
help commercial advertisers and producers decide whether to buy airtime from
the network. Thus, the must-carry rule is actually advantageous to the
broadcasting networks because it provides them with increased viewership
which attracts commercial advertisers and producers.
TO PMSI - The carriage of free-to-air signals imposes a burden to cable and
DTH television providers such as PMSI. PMSI uses none of ABS-CBN’s
resources or equipment and carries the signals and shoulders the costs without
any recourse of charging.44 Moreover, such carriage of signals takes up channel
space which can otherwise be utilized for other premium paid channels.

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 HABANA v. ROBLES

FACTS: Pacita Habana et al., are authors and copyright owners of duly issued of
copyright registration covering their published works. which includes the College
English For Today (CET) book.

Respondent Felicidad Robles was the author of the book Developing English
Pro ciency (DEP). Petitioners found that several pages of the respondent's book
are similar, if not all together a copy of petitioners' book. Habana et al. led an
action for damages and injunction, alleging respondent’s infringement of
copyrights, in violation of P.D. 49. They allege respondent Felicidad C. Robles
being substantially familiar with the contents of petitioners' works, and without
securing their permission, lifted, copied, plagiarized and/or transposed certain
portions of their book CET.

On the other hand, Robles contends that the book DEP is the product of her
own intellectual and independent creation; that it was not a copy of any existing
valid copyrighted book; that their similarity in style can be attributed to the fact
that both of them were exposed to the APCAS syllabus and their respective
academic and teaching experience

The trial court ruled in favor of the respondents, absolving them of any liability.
Later, the Court of Appeals rendered judgment in favor of respondents Robles
and Goodwill Trading Co., Inc. In this appeal, petitioners submit that the
appellate court erred in a rming the trial court's decision.

ISSUE:
(1) Whether or not respondents committed copyright infringement; and
(2) Whether or not respondent Robles abused a writer’s right to fair use.

HELD: YES. While it may be true that the books being grammar books may
contain materials similar as to some technical contents with other grammar
books and it is a fact that the law provides that the making of quotations from a
published work if such inclusion is made by way of illustration for teaching
purposes and compatible with fair use shall not constitute infringement of
copyright: Provided, That the source and the name of the author is mentioned.

In this case, similarity in the style and the manner the books were presented and
the identical examples can not pass as similarities merely because of technical
consideration.

However, copying alone is not what is prohibited. The copying must produce an
"injurious e ect." Here, the injury consists in that respondent Robles lifted from
petitioners’ book materials that were the result of the latter’s research work and
compilation and misrepresented them as her own. She circulated the book DEP
for commercial use and did not acknowledge petitioners as her source.

Therefore, respondent Robles' act of lifting from the book of petitioners

substantial portions of discussions and examples, and her failure to
acknowledge the same in her book is an infringement of petitioners' copyrights.

SUBSTANTIAL REPRODUCTION
It does not necessarily require that the entire copyrighted work, or even a large
portion of it, be copied. If so much is taken that the value of the original work is
substantially diminished, there is an infringement of copyright and to an injurious
extent, the work is appropriated.

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INFRINGEMENT
If so much is taken that the value of the original is sensibly diminished, or the
labors of the original author are substantially and to an injurious extent
appropriated by another, that is su cient in point of law to constitute piracy.

The complaint for copyright infringement was led at the time that Presidential
Decree No. 49 was in force. At present, all laws dealing with the protection of
intellectual property rights have been consolidated and as the law now stands,
the protection of copyrights is governed by Republic Act No. 8293.
Notwithstanding the change in the law, the same principles are reiterated in the
new law under Section 177.

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 NBI-MICROSOFT CORP v. HWANG

FACTS: Petitioner, Microsoft Corporations, a foreign corporation who owns the

copyright and trademark to several software, entered into a Licensing
Agreement with Beltron, a domestic corporation, for a fee, to reproduce and
install no more than one copy of software on each Customer System hard disk
in object code form to end users.

However, Microsoft terminated the agreement for non-payment of royalties.

Then, Microsoft learned that respondents were illegally copying and selling
Microsoft software. For this reason, they bought computer hardware and
software from respondents in the guise of computer shop owners. The CPU
contained pre-installed Microsoft softwares, 12 CD-ROMs, encased in plastic
containers with Microsoft packaging, also contained Microsoft software. They
were not given the Microsoft end-user license agreements, users manuals, and
the receipt issued bore the heading "T.M.T.C. (PHILS.) INC. BELTRON
COMPUTER.

Then, Microsoft applied for search warrants against respondents. After approval,
the NBI searched the premises of Beltron and TMTC and seized several
computer-related hardware, software, accessories, and paraphernalia.

Microsoft and a certain Lotus Corporation charged respondents before the DOJ
with copyright infringement and with unfair competition under the Revised Penal
Code. The respondents denied the charges against them. Nevertheless, DOJ
State Prosecutor Ong recommended the dismissal of the complaint for lack of
merit and insu ciency of evidence.

Microsoft led a petition for certiorari for the resolution of Department of Justice,
dismissing the case for lack of merit against respondents for copyright
infringement and unfair competition.

ISSUE: Whether the DOJ acted with grave abuse of discretion in not nding
probable cause to charge respondents with copyright infringement and unfair
competition.

HELD: YES.

PILAPIL v. SANDIGANBAYAN
The term probable cause is merely based on opinion and reasonable belief.
Thus, a nding of probable cause does not require an inquiry into whether there
is su cient evidence to procure a conviction. It is enough that it is believed that
the act or omission complained of constitutes the o ense charged. Precisely,
there is a trial for the reception of evidence of the prosecution in support of the
charge.

PD 49
Section 5 of PD 49 ("Section 5") enumerates the rights vested exclusively on the
copyright owner. Contrary to the DOJ’s ruling, the gravamen of copyright
infringement is not merely the unauthorized "manufacturing" of intellectual
works but rather the unauthorized performance of any of the acts covered by
Section 5. Hence, any person who performs any of the acts under Section 5
without obtaining the copyright owner’s prior consent renders himself civilly and
criminally liable for copyright infringement.
Under Section 5(A), a copyright owner is vested with the exclusive right to
"copy, distribute, multiply, [and] sell" his intellectual works.

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 189(1) RPC
The elements of unfair competition under Article 189(1) of the Revised Penal
Code are:
(a) That the o ender gives his goods the general appearance of the goods of
another manufacturer or dealer;
(b) That the general appearance is shown in the (1) goods themselves, or in the
(2) wrapping of their packages, or in the (3) device or words therein, or in (4)
any other feature of their appearance;
(c) That the o ender o ers to sell or sells those goods or gives other persons a
chance or opportunity to do the same with a like purpose; and
(d) That there is actual intent to deceive the public or defraud a competitor.
The element of intent to deceive may be inferred from the similarity of the goods
or their appearance.

In this case, the DOJ ruled that Microsoft failed to present evidence proving that
what were obtained from respondents were counterfeit Microsoft products. They
refused to pass upon the relevance of the pieces of evidence seized by virtue of
the search warrants stating that the "obligations between the parties is civil and
not criminal” and that he validity of Microsoft’s termination of the Agreement
must rst be resolved by the "proper court.”

The SC stated that that constitutes grave abuse of discretion because:

1. Microsoft acted well within its rights in ling the complaint based on the
incriminating evidence obtained from respondents.
2. There is no basis for the DOJ to rule that Microsoft must await a prior
"resolution from the proper court because Microsoft cannot be compelled to
wait until Beltron decides to sue before Microsoft can seek remedies for
violation of its intellectual property rights.
3. Some of the CD-ROMs bought from respondents were "installer" CD-ROMs
containing Microsoft software only or both Microsoft and non-Microsoft
software. These articles are counterfeit per se even if the copier or distributor
is a Microsoft licensee.
4. The Agreement provides that Microsoft’s "rights and remedies" under the
contract are not exclusive. Thus, even if the Agreement still subsists,
Microsoft is not precluded from seeking remedies under PD 49 and the RPC

The Court nds that the 12 CD-ROMs ("installer" and "non-installer") and the
CPU with pre-installed Microsoft software bought from respondents and the
2,831 Microsoft CD-ROMs seized from respondents su ce to support a nding
of probable cause to indict respondents for copyright infringement under
Section 5(A) in relation to Section 29 of PD 49 for unauthorized copying and
selling of protected intellectual works.

From the pictures of the CD-ROMs’ packaging, one cannot distinguish them
from the packaging of CD-ROMs containing genuine Microsoft software. Such
replication, coupled with the similarity of content of these fake CD-ROMs and
the CD-ROMs with genuine Microsoft software, implies intent to deceive.

INFRINGEMENT
Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law,
and infringement of copyright, or piracy, which is a synonymous term in this
connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by
statute on the owner of the copyright.

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 MANLY SPORTSWEAR v. DADODETTE ENTERPRISES

FACTS: A search warrant was issued against Dadodette Enterprises for having
in their possession goods, copyright of which allegedly belonged to Manly
Sportswear.

Dadodette Enterprises moved to quash and annul the search warrant insisting
that the sporting goods manufactured by and/or registered in the name of
MANLY are ordinary and common hence, not among the classes of work
protected under Section 172 of RA 8293.

The trial court granted the motion to quash and the search warrant null and void
based on its nding that the copyrighted products of MANLY do not appear to
be original creations and were being manufactured and distributed by di erent
companies locally and abroad under various brands, and therefore unquali ed
for protection under Section 172 of RA 8293. The lower court also denied
Petitioner’s Motion for Reconsideration.

Thereafter, Petitioner led a petition for certiorari before the Court of Appeals
which was denied for lack of merit. The appellate court found that the trial court
correctly granted the motion to quash and that its ruling in the ancillary
proceeding did not preempt the ndings of the intellectual property court as it
did not resolve with nality the status or character of the seized items.

After denial of its motion for reconsideration on September 15, 2004, MANLY
led the instant Petition for Review on Certiorari raising the sole issue of whether
or not the Court of Appeals erred in nding that the trial court did not gravely
abuse its discretion in declaring in the hearing for the quashal of the search
warrant that the copyrighted products of MANLY are not original creations
subject to the protection of RA 8293.

ISSUE: Whether the copyright registration of Manly can sustain the action
against the respondents.

HELD: NO. The copyright certi cates issued in favor of MANLY constitute a
prima facie evidence of validity and ownership. However, presumption of validity
is not created when a su cient proof or evidence exist that may cast a doubt on
the copyright validity. In the case at bar, validity and originality will not be
presumed since the copyrighted products of MANLY are not original creations
considering that these products are readily available in the market under various
brands. Moreover, no copyright accrues in favor of MANLY despite the issuance
of the copyright certi cate this purely serves as a notice of recording and
registration of the work and is not a conclusive proof of copyright ownership as
provided in Sec. 2, Rule 7 of the Copyrights Safeguards and Regulations.

At most, the certi cates of registration and deposit issued by the National
Library and the Supreme Court Library serve merely as a notice of recording and
registration of the work but do not confer any right or title upon the registered
copyright owner or automatically put his work under the protective mantle of the
copyright law. It is not a conclusive proof of copyright ownership. As it is, non-
registration and deposit of the work within the prescribed period only makes the
copyright owner liable to pay a ne.

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