CASES

SISON OLAÑO V. LIM ENG CO.

FACTS: In this case, respondent Lim Eng Co. (LEC) submitted, as they were
invited to submit, design/drawings and speci cations for interior and exterior
hatch doors for the Manansala Project.

The designs were copied and transferred to the project’s contractor and was
approved. LEC was thereafter subcontracted to manufacture and install hatch
doors for some oors of Project. Then LEC learned that Metrotech was also
subcontracted to install hatch doors based on the drawings.

LEC demanded Metrotech to cease from infringing its intellectual property

rights. Metrotech, however, insisted that there is no copyright infringement.
Because of this, LEC sought the assistance of NBI where it was able to
con scate nished and un nished hatch doors from the premises of Metrotech.
Then in 2004, LEC led a complaint for copyright infringement against
petitioners, the directors of Metrotech.

LEC claimed copyright over “hatch doors” based on Certi cate of Copyright
Registration issued by and Deposits made to the National Library. Metrotech’s
directors admitted the manufacturing of hatch doors but denied the commission
of copyright infringement. Metrotech contended that the manufacturing of hatch
doors per se is not copyright infringement because LEC’s copyright protection
did not extend to the objects depicted in the illustrations and plans. Further, the
directors argued that there is no artistic or ornamental expression in hatch doors
which would make it copyrightable.

The DOJ ultimately ruled in favor of the petitioners stating that there is no
probable cause. The CA then ruled in favor of the respondent. Hence, this
petition for review.

ISSUE: Whether or not Metrotech committed copyright infringement.

HELD: NO. The Supreme Court found that Metrotech’s directors are not guilty of
copyright infringement by stating the following points:
1. Ownership is one of the essential elements of copyright infringement. Valid
copyrighted material must be shown by proof of originality and
copyrightability. In this case, the hinges are already existing articles of
manufacture sourced from di erent suppliers.
2. A hatch door, by its nature is an object of utility. Useful articles may be
copyrightable only if their aesthetic or artistic features can be independently
identi ed from their utilitarian aspects. In this case, LEC contend that they
have a distinct set of hinges and jamb, the court said that were related and
necessary hence, not physically or conceptually separable from the hatch
door's utilitarian function as an apparatus
3. LEC’s Certi cate of Registration cover only the hatch door sketches/
drawings and not the actual hatch door they depict. Moreover, the
registration only gives a rebuttable presumption of ownership.
4. For a claim of copyright infringement to prevail, the evidence on record must
demonstrate: (1) ownership of a validly copyrighted material by the
complainant; and (2) infringement of the copyright by the respondent. In this
case, the raid conducted by the NBI on Metrotech's premises yielded no
copies or reproduction of LEC's copyrighted sketches/drawings of hatch
doors. What were discovered instead were nished and un nished hatch
doors.

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 FRANCISCO JOAQUIN V. FRANKLIN DRILON

FACTS: Petitioner BJ Productions, Inc. (BJPI) holder/grantee of a copyright of

“Rhoda and Me”, a dating game show aired from 1970 to 1977. Subsequently,
however, RPN aired the game show “It’s a Date”, which was produced by IXL
Productions, Inc. (IXL). As such, an information for copyright infringement was
led against RPN. The DOJ Secretary directed the prosecutor to dismiss the
case for lack of probable cause invoking the non-presentation of the master
tape as being fatal to the existence of probable cause to prove infringement.
Petitioner Joaquin led a motion for reconsideration, but his motion was denied
by respondent. Hence, this petition.

ISSUES:
1. Whether the public respondent gravely abused his discretion amounting to
lack of jurisdiction when he arrogated unto himself the determination of what
is copyrightable.
2. Whether copying the format of a gameshow constitutes copyright
infringement.

HELD:
1. NO. It is indeed true that the question whether the format or mechanics of
petitioners’ television show is entitled to copyright protection is a legal
question for the court to make. This does not, however, preclude respondent
Secretary of Justice from making a preliminary determination of this question
in resolving whether there is probable cause for ling the case in court. In
doing so in this case, he did not commit any grave error.
2. NO. The format of a show is not copyrightable. Copyright, being a statutory
grant, the rights are only such as the statute confers. The copyright law
enumerates the classes of work entitled to copyright protection. The law, in
enumerating what are subject to copyright, refers to nished works and not
to concepts. The copyright does not extend to an idea, procedure, process,
system, method of operation, concept, principle, or discovery, regardless of
the form in which it is described, explained, illustrated, or embodied in such
work. For this reason, the protection a orded by the law cannot be extended
to cover them.

MERE DESCRIPTION NOT ENOUGH

Mere description by words of the general format of the two dating game shows
is insu cient; the presentation of the master videotape in evidence was
indispensable to the determination of the existence of probable cause. As aptly
observed by respondent Secretary of Justice: A television show includes more
than mere words can describe because it involves a whole spectrum of visuals
and e ects, video and audio, such that no similarity or dissimilarity may be
found by merely describing the general copyright/format of both dating game
shows.

ABS-CBN V FELIPE GOZON

FACTS: Angelo del Cruz was kidnapped by Iraqi militants. His homecoming and
the press conference set up for him was broadcasted live by ABS-CBN. ABS-
CBN allowed Reuters to air the footages it had taken earlier under a special
embargo agreement. Under the special embargo agreement, no other Philippine
subscriber of Reuters would be allowed to use ABS-CBN footage without the
latter’s consent.

GMA-7 subscribes to both Reuters and Cable News Network (CNN). It received
a live video feed of the coverage of Angelo dela Cruz’s arrival from Reuters.

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 GMA-7 immediately carried the live newsfeed in its program “Flash Report,”
together with its live broadcast. Allegedly, GMA-7 was not aware that Reuters
was airing footages of ABS-CBN.

Consequently, the Information for violation of the Intellectual Property Code was
led stating among other things that the respondent bosses, Head of News
Operations (Reyes) and Program Manager (Manalastas) for the News and Public
A airs Department of GMA Network, Inc., conspiring together, did then and
there, willfully, unlawfully and feloniously use and broadcast the footage without
rst obtaining the consent or authority of said copyright owner, to their damage
and prejudice.

DOJ Secretary dismissed the case and held that good faith may be raised as a
defense in the case. Both parties moved for reconsideration of the Gonzalez
Resolution. Secretary Agra reversed rst resolution and found probable cause to
charge Dela Peña-Reyes and Manalastas stating that while good faith may be a
defense in copyright infringement, the same is a disputable presumption.
However, the CA reinstated the rst resolution.

ISSUES:
1. Whether news footage is copyrightable under the law;
2. Whether there was fair use of the broadcast material;
3. Whether lack of knowledge that a material is copyrighted is a defense
against copyright infringement;
4. Whether good faith is a defense in a criminal prosecution for violation of the
Intellectual Property Code; and

HELD:
1. YES. any footage created from the event itself, in this case the arrival of
Angelo dela Cruz, are intellectual creations which are copyrightable.
Television "involves a whole spectrum of visuals and e ects, video and
audio.” News coverage in television involves framing shots, using images,
graphics, and sound e ects. It involves creative process and originality.
Television news footage is an expression of the news.
2. Did not rule. Given the insu ciency of available evidence, determination of
whether the Angelo dela Cruz footage is subject to fair use is better left to
the trial court where the proceedings are currently pending. GMA-7’s
rebroadcast of ABS-CBN’s news footage without the latter’s consent is not
an issue. The mere act of rebroadcasting without authority from the owner of
the broadcast gives rise to the probability that a crime was committed under
the Intellectual Property Code.
3. NO. In the case, GMA argued that copyright infringement is malum in se
thus, lack of knowledge that a material is copyrighted is a defense. The
Court said that one does not need to know that he or she is copying a work
without consent to violate copyright law. Notice of fact of the embargo from
Reuters or CNN is not material to nd probable cause that respondents
committed infringement. Knowledge of infringement is only material when
the person is charged of aiding and abetting a copyright infringement under
Section 217 of the Intellectual Property Code.
4. NO. Good faith or lack of criminal intent is not a defense. The court said that
infringement under the Intellectual Property Code is malum prohibitum where
good faith, lack of knowledge of the copyright, or lack of intent to infringe is
completely immaterial. It is the act of infringement, not the intent, which
causes the damage. To require or assume the need to prove intent defeats
the purpose of intellectual property protection.

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Why did the SC dismiss the case against the bossings of GMA?
Complainant failed to present clear and convincing evidence that the said
respondents conspired with their subordinates. No evidence was adduced to
prove that these respondents had an active participation in the actual
commission of the copyright infringement or they exercised their moral
ascendancy over Reyes and Manalastas in airing the said footage.

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 BAR Qs

I.

Under the IPC, lecture, sermons, addresses or dissertations prepared for

oral delivery, whether or not reduced in writhing or other material forms are
regarded as?
A. Non-Original Works
B. Original Works
C. Derivative Works
D. Not Subject To Protection

SEC. 172.1.c
II.

X's painting of Madonna and Child was used by her mother to print some
personalized gift wrapper. As part of her mother's e orts to raise funds for
Bantay Bata, the mother of X sold the wrapper to friends. Y, an
entrepreneur, liked the painting in the wrapper and made many copies and
sold the same through National Bookstore. Which statement is most
accurate?
a. Y can use the painting for his use because this is not a copyrightable
material.
b. X can sue Y for infringement because artistic works are protected from
moment of creation.
c. Works of art need to be copyrighted also to get protection under the law.
d. Y can use the drawing even though not copyrighted because it is already a
public property having been published already.

III.

Juan Xavier wrote and published a story similar to an unpublished

copyrighted story of Manoling Santiago. It was, however, conclusively
proven that Juan Xavier was not aware that the story of Manoling Santiago
was protected by copyright. Manoling Santiago sued Juan Xavier for
infringement of copyright. Is Juan Xavier liable?

Yes. Juan Xavier is liable for infringement of copyright. It is not necessary that
Juan Xavier is aware that the story of Manoling Santiago was protected by
copyright. The work of Manoling Santiago is protected at the time of its creation.

IV.

While vacationing in Boracay, Valentino surreptitiously took photographs of

his girlfriend Monaliza in her skimpy bikini. Two weeks later, her
photographs appeared in the Internet and in a national celebrity magazine.
Monaliza found out that Valentino had sold the photographs to the
magazine, adding insult to injury, uploaded them to his personal blog on
the Internet.

Monaliza led a complaint against Valentino damages based on, among

other grounds, violation of her intellectual property rights. Does she have
any cause of action? Explain. (2%)
Monaliza cannot sue Valentino for violation of her intellectual property rights,
because she was not the one who took the pictures

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 Valentino’s friend Francesco stole the photographs and duplicated them
and sold them to a magazine publication. Valentino sued Francisco for
infringement and damages. Does Valentino have any cause of action?
Explain. (2%)
Yes, as the author of the photographs, Valentino has exclusive economic rights
thereto, which include the rights to reproduce, to distribute, to perform, to
display, and to prepare derivative works based upon the copyrighted work. He
sold only the photographs to the magazine; however, he still retained some
economic rights thereto. Thus, he has a cause of action against infringement
against Francesco.

Does Monaliza have any cause of action against Francesco? Explain. (2%)
She may sue Francesco for violation of her right to privacy.

V.

Rudy is a ne arts student in a university. He stays in a boarding house with

Bernie as his roommate. During his free time, Rudy would paint and leave
his nished works lying around the boarding house. One day, Rudy saw one
of his works – an abstract painting entitled Manila Tra c Jam –on display
at the university cafeteria. The cafeteria operator said he purchased the
painting from Bernie who represented himself as its painter and owner
Rudy and the cafeteria operator immediately confronted Bernie. While
admitting that he did not do the painting, Bernie claimed ownership of its
copyright since he had already registered it in his name with the National
Library as provided in the Intellectual Property Code. Who owns the
copyright to the painting? Explain (8%).

Rudy owns the copyright to the painting because he was the one who actually
created it. His rights existed from the moment of its creation.

The issuance of the certi cates of registration and deposit as provided by the IP
Code are purely for recording the date of registration and deposit of the work,
and are not conclusive as to copyright ownership nor does it determine the time
when copyright vests.

VI.

Diana and Piolo are famous personalities in show business who kept their
love a air secret. They use a special instant messaging service which
allows them to see one another's typing on their own screen as each letter
key is pressed. When Greg, the controller of the service facility, found out
their identities, he kept a copy of all the messages Diana and Piolo sent
each other and published them. Is Greg liable for copyright infringement?
Reason brie y.

Yes, Greg is guilty of copyright infringement.

To qualify for copyright protection, the work must be “ xed in a tangible

medium,” meaning it must have some de nite, perceptible form. The “tangible
xation” element requires only that the work be stored in any means “from which
they can be perceived, reproduced, or otherwise communicated, either directly
or with the aid of a machine or device or service.”

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In this case, the messages were exchanged through an instant messaging
service. The instant messages of Diana and Piolo are deemed to constitute
“letters” and under the Electronic Commerce Act they are in digital form or
constitute electronic documents.

VII.

In 1999, Mocha Warm, an American musician, had a bit rap single called
Warm Warm Honey which he himself composed and performed. The single
was produced by a California record company, Galactic Records. Many
notice that some passages from Warm Warm Honey sounded eerily similar
to parts of Under Hassle, a 1978 hit song by the British rock and Majesty. A
copyright infringement suit was led in the United States against Mocha
Warm by Majesty. It was later settled out of court, with Majesty receiving
attribution as co-author of Warm Warm Honey as well as a share in the
royalties. By 2002, Mocha Warm was nearing bankruptcy and he sold his
economic rights over Warm Warm Honey to Galactic Records for $10,000.
In 2008, Planet Films, a Filipino movie producing company, commissioned
DJ Chef Jean, a Filipino musician, to produce an original re-mix of Warm
Warm Honey for use in one of its latest lms, Astig!. DJ Chef Jean remixed
Warm Warm Honey with a salsa beat, and interspersed as well a recital of
poetic stanza by John Blake, century Scottish poet. DJ Chef Jean died
shortly after submitting the remixed Warm Warm Honey to Planet Films.
Prior to the release of Astig!. Mocha Warm learns of the remixed Warm
Warm Honey and demands that he be publicly identi ed as the author of
the remixed song is all the CD covers and publicity releases of Planet
Films.

Who are the parties or entities entitled to be credited as author of the

remixed Warm Warm Honey? Reason out your answers. (3%)

The parties entitled to be credited as authors of the remixed Warm Warm Honey
are Mocha Warm, Majesty, DJ Chef Jean and John Blake:
• Majesty. As the co-author of the original mix he retains his moral rights to the
copyrighted rap as one of the original creator.
• Mocha Warm. Under the law, moral rights and economic rights are
independent of each other and among the two rights, only the economic rights
may be subjected to assignment or transfer. Hence, despite the fact that
Mocha Warm sold his economic rights to Galactic Records, he retains his right
to be credited as author.
• DJ Chef Jean because R.A. No.10372 expressly provides that the moral rights
shall not be assignable or subject to license. Therefore, despite the fact it is a
commissioned work the right to be credited thereto shall remain with the
creator.
• John Blake. Under R.A. No.10372, the right of an author to be credited shall
last during the lifetime of the author and in perpetuity after his death.
Therefore, the inclusion of a stanza of the poem he wrote gives him the right to
be named as an author.

Who are the particular parties or entities who exercise copyright over their
remixed Warm Warm Honey? Explain. (3%)
• Galactic Records. Since the company bought the economic rights of Mocha
Warm, the rights of Mocha Warm including, but not limited to, the right on
derivative works is transferred unto it.

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 • Majesty. He has a share on the royalties over the original Warm Warm Honey
which means that he has an economic right on any derivative work based on
the song.
• DJ Chef Jean. The IP Code provides that unless there is a written stipulation to
the contrary the copyright shall remain with the author of the commissioned
work. Moreover, the same law provides that derivative works or those
creations based on an existing work shall be protected as new works provided
that such new work shall not a ect the force of any subsisting copyright upon
the original works employed or any part thereof, or be construed to imply any
right to such use of the original works, or to secure or extend copyright in such
original works. Additionally, the term of protection of works under copyright
covers the lifetime of the author and fty (50) years after the author's death.
Since there is no stipulation that copyright shall pass to Planet Films,
copyright remains with DJ Chef Jean. His copyright would extend only to to
those aspects which are original to the remix. DJ Chef Jean retains his
copyright despite his death and Planet Films will only have a license to use the
work for the purposes for which it was commissioned.

VIII.

X came up with a new way of presenting a telephone directory in a mobile

phone, which he dubbed as the “iTel” and which uses lesser time for
locating names and telephone numbers. May X have his “iTel” copyrighted
in his name?
a. No, because it is a mere system or method.
b. Yes, because it is an original creation.
c. Yes, because it entailed the application of X's intellect.
d. No, because it did not entail any application of X's intellect.

IX.

X, an amateur astronomer, stumbled upon what appeared to be a massive

volcanic eruption in Jupiter while peering at the planet through his
telescope. The following week, X, without notes, presented a lecture on his
ndings before the Association of Astronomers of the Philippines. To his
dismay, he later read an article in a science journal written by Y, a
professional astronomer, repeating exactly what X discovered without any
attribution to him. Has Y infringed on X's copyright, if any?
a. No, since X did not reduce his lecture in writing or other material form.
b. Yes, since the lecture is considered X’s original work.
c. No, since no protection extends to any discovery, even if expressed,
explained, illustrated, or embodied in a work.
d. Yes, since Y’s article failed to make any attribution to X.

X.

Felix copyrighted the oil painting showing the oath taking of Pres. C.
Aquino and Vice-President S. Laurel after the EDSA revolution. Val engaged
an artist to paint the same scene for use as picture postcards. Val then
started sending the picture postcards to his friends abroad. Is there a
violation of Felix’s copyright? Reasons.
NO. While Felix can have a copyright on his own painting which is expressive of
his own artistic interpretation of the event he has portrayed, the scene or the
event itself however, is not susceptible to exclusive ownership. Accordingly,
there would be no violation of Felix’s copyright if another painter were to do the
similar work.

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 XI.

Solid Investment House (SOLID) commissioned Mon Blanco and his son
Steve, both noted artist, to paint a mural for the Main Lobby of the new
building of SOLID for a contract price of P2 M.

Who owns the mural?

SOLID owns the mural. Under the law, in the case of a work commissioned by a
person other than an employer of the author and who pays for it and the work is
made in pursuance of the commission, the person who so commissioned the
work shall have ownership of the work.

Therefore, SOLID owns the mural.

Who owns the copyright of the mural?

Mon Blanco and Steve owns the copyright to the mural.

Under the IP Code, if a work is jointly made, in the absence of any agreement,
their rights shall be governed by the rules on co-ownership. Moreover, the IP
Code states that in case of a commissioned work, the person who so
commissioned the work shall have ownership of the work, but the copyright
thereto shall remain with the creator, unless there is a written stipulation to the
contrary.

Therefore, Mon Blanco and Steve owns the copyright of the mural.

XII.

T, an associate attorney in XYZ Law O ce, wrote a newspaper publisher a letter

disputing a columnist’s claim about an incident in the attorney’s family. T used
the law rm’s letterhead and its computer in preparing the letter. T also
requested the rm’s messenger to deliver the letter to the publisher. Who owns
the copyright to the letter?
a. T, since he is the original creator of the contents of the letter.
b. Both T and the publisher, one wrote the letter to the other who has
possession of it.
c. The law o ce since it was an employee and he wrote it on the rm’s
letterhead.
d. The publisher to whom the letter was sent.

Letters and other private communications in writing are owned by the

person to whom they are addressed and delivered, but the same cannot be
published or disseminated without the consent of the writer or his heirs.

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 - Failing to credit and cite someone else's thoughts or ideas when
paraphrasing.

BAR Qs

I.

Eloise, an accomplished writer, was hired by Petong to write a bimonthly

newspaper column for Diario de Manila, a newly-established newspaper of
which Petong was the editor-in-chief. Eloise was to be paid P1,000 for each
column that was published. In the course of two months, Eloise submitted
three columns which, after some slight editing, were printed in the
newspaper. However, Diario de Manila proved unpro table and closed only
after two months. Due to the minimal amounts involved, Eloise chose not
to pursue any claim for payment from the newspaper, which was owned by
New Media Enterprises. Three years later, Eloise was planning to publish an
anthology of her works, and wanted to include the three columns that
appeared in the Diario de Manila in her anthology. She asks for your legal
advice:

1. Does Eloise have to secure authorization from New Media Enterprises

to be able to publish her Diario de Manila columns in her own
anthology? Explain fully.

ANSWER 1 - YES. She’s an employee.

YES. Eloise has to secure authorization from New Media Enterprise.

In case of a work by an author during and in the course of his employment,

employer is the owner of the copyright, if the work created is the result of
the performance of employee’s regularly-assigned duties, unless otherwise
agreed upon.

The facts reveal that Eloise created the works in question during the course
of her employment with New Media Enterprises. Anent the fact that she
was speci cally hired by Petong to write a bimonthly column, the said
works are the result of her regular duties.

Hence, being a mere employee, Eloise is not the owner of the copyright and
must therefore secure the authority of the real owner before she can publish
the works in her own anthology.

ANSWER 2 - NO. Commissioned work

NO. Eloise does not have to secure authorization from New Media
Enterprise.

Under the law, in the case of a work-commissioned by a person other than

an employer of the author and who pays for it and the work is made in
pursuance of the commission, the person who so commissioned the work
shall have ownership of work, but the copyright thereto shall remain with
the creator, unless there is a written stipulation to the contrary.

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 Based on the facts and using the four-fold test to ascertain the existence of
an employer-employee relationship, we can say that Eloise is a not an
employee but only a freelance writer who was commissioned to write
columns bimonthly for the newspaper.

Hence, Eloise is the owner of the copyright and needs no authorization

before she can publish her works,

2. Assume that New Media Enterprises plans to publish Eloise's columns

in its own anthology entitled, "The Best of Diaro de Manila.” Eloise
wants to prevent the publication of her columns in that anthology since
she was never paid by the newspaper. Name one irrefutable legal
arguments Eloise could cite to enjoin New Media Enterprises from
including her columns in its anthology.

The law provides that the submission of a literary, photographic or artistic

work to a newspaper, magazine or periodical for publication shall constitute
only a license to make a single publication unless a greater right is
expressly granted.Therefore, before New Media Enterprises may use the
three columns submitted by Eloise, they must ask for her permission.

II.

In a written legal opinion for a client on the di erence between

apprenticeship and learnership, Liza quoted without permission a Labor
Law expert's comment appearing in his book "Annotations On Labor Code"

Can the Labor Law expert hold Liza liable for infringement of copyright for
quoting a portion of his book without his permission?

NO. Liza cannot be held liable for infringement of copyright since under the
Intellectual Property Code, one of the limitations on the copyright is the making
of quotations from a published work for purpose of any judicial proceedings or
for giving of professional advise by legal practitioner, provided that the source,
and name of the author are identi ed.

In this case, the purpose of the quotation is to give a legal opinion. Therefore,
Liza is not liable for infringement.

III.

Virtucio was a composer of Ilocano songs who has been quite popular in
the Ilocos Region. Pascuala is a professor of music in a local university
with special focus on indigenous music. When she heard the musical works
of Virtucio, she purchased a CD of his works. She copied the CD and sent
the second copy to her Music class with instructions for the class to listen
to the CD and analyze the works of Virtucio.

Did Pascuala thereby infringe Virtucio’s copyright? Explain your answer.

NO. Pascuala did not infringe on the rights of Virtucio.

The IP Code provides that the fair use of a copyrighted work for teaching
including limited number of copies for classroom use, scholarship, research and
similar purposes is not an infringement of copyright. But the law also provided

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 some factors to be considered in determining whether the use made of a work in
any particular case is fair use. These are:
(a) The purpose and character of the use, including whether such use is of a
commercial nature or is for non-pro t education purposes;
(b) The nature of the copyrighted work;
(c) The amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
(d) The e ect of the use upon the potential market for or value of the
copyrighted work.

In this case, Pascuala’s reproduction of the limited number of CD of Virtucio’s

work was for an educational purpose and it was only one other copy, thus,
negating copyright infringement

IV.

May a person have photocopies of some pages of the book of Professor

Rosario made without violating the copyright law?

Yes. Under the IP Code, the private reproduction of a published work in a single
copy, where the reproduction is made by a natural person exclusively for
research and private study, is permitted without the authorization of the owner of
the owner of the copyright in the work. One of the limitations set therein is that
the reproduction by reprographic means must not be an entire book, or a
substantial part thereof.

Therefore, a person may have photocopies provided the one who photocopied
is a natural person and such photocopy is not an entire book, or a substantial
part thereof.

V.

KK is from Bangkok, Thailand. She studies medicine in the Ponti cal

University of Santo Tomas (UST). She learned that the same foreign books
prescribed in UST are 40-50% cheaper in Bangkok. So she ordered 50
copies of each book for herself and her classmates and sold the books at
20% less than the price in the Philippines. XX, the exclusive licensed
publisher of the books in the Philippines, sued KK for copyright
infringement. Decide. (4%)

NO. KK is not liable for copyright infringement.

The amendments to the Intellectual Property Code have removed the original
limitation of three copies when bringing legitimately acquired copies of
copyrighted material into the country. Only the importation of pirated or infringed
material is illegal.

Under the same law, when it comes to distribution rights, copyright only
prohibits others from selling, leasing or licensing unauthorized copies of the
work. Moreover, when it comes to licensing, that a licensee only has the rights
and remedies that the licensor has with respect to the copyright (Sec. 180, IPC).

The Intellectual Property O ce of the Philippines says there is an ‘exhaustion of

copyright’ - the copyright owner has exhausted his right to control copies of his

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work upon the rst sale of his work to a buyer: Provided the buyer obtained his
copy legitimately. Simply put, a physical copy of a copyrighted work, once
purchased, is the property of the purchaser and, thus, that purchaser may sell
that copy without the permission of the holder of the copyright without fear of
infringing on copyright.

In this case, the number of copies imported by KK is not prohibited so she can
bring as many copies as she wants, subject to Customs regulations. Moreover,
the books were genuine copies and were legally purchased. Additionally, the
copyright has already been exhausted and such exhaustion extends to XX, the
exclusive publisher here in the Philippines.

Therefore, she can resell the genuine copies of the books.

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 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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 CASES

SAMSON v. HON. DAWAY

FACTS: In this case, Manolo P. Samson, the registered owner of ITTI Shoes,
sold products which are closely identical to and/or colorable imitations of the
authentic Caterpillar products.

Petitioner led a motion to suspend arraignment and other proceedings in view

of the existence of an alleged prejudicial question involved in the criminal and
civil cases pending with the same branch and the pending Petition for Review
led with the Secretary of Justice assailing the Chief State Prosecutors
resolution nding probable cause to charge petitioner with unfair competition.

The motion was denied. Subsequently, petitioner led a twin motion to quash
the informations and motion for reconsideration of the order denying motion to
suspend, this time challenging the jurisdiction of the trial court over the o ense
charged. He contended that since under Section 170 of the IPC, the penalty of
imprisonment for unfair competition does not exceed six years, the o ense is
cognizable by the Municipal Trial Courts and not by the Regional Trial Court, per
the Judiciary Reorganization Act of 1980..

The trial court denied the petitioners’ twin motions. A motion for reconsideration
thereof was likewise denied.

Hence, the instant petition alleging that respondent Judge gravely abused its
discretion in issuing the assailed orders.

ISSUES:
(1) Which court has jurisdiction over criminal and civil cases for violation of
intellectual property rights?
(2) Did the respondent Judge gravely abuse his discretion in refusing to
suspend the arraignment and other proceedings in Criminal Case Nos.
Q-02-108043-44 on the ground of the existence of a prejudicial question;
and
(3) Did the respondent Judge gravely abuse his discretion in refusing to
suspend the arraignment and other proceedings on the ground the
pendency of a Petition for Review with the Secretary of Justice on the
nding of probable cause for unfair competition?

HELD:
(1) NO. The Court stated that the penalty stated in the IP law is not to be
considered in the determination of the court that has jurisdiction over the
case because the same provides that action, including that which was led
against him, shall be brought before the proper courts with appropriate
jurisdiction under existing laws. At the time, the existing law was The
Trademark Law which provides that jurisdiction over cases for infringement
of registered marks, unfair competition, false designation of origin and false
description or representation, is lodged with the RTC. Manalo, also
contended that The Trademark Law was expressly repealed by the IPC, to
which the court said that the phrase used in the repealing clause of the IPC
was “All Acts and parts of Acts inconsistent herewith” which only means that
the repeal pertains only to provisions which are repugnant or not susceptible
of harmonization with the IPC. Moreover, jurisdiction conferred by a special
law to Regional Trial Courts must prevail over that granted by a general law
to Municipal Trial Courts.

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 (2) NO. Here there are 2 arguments stated by the SC: a) He made no discussion
in support his allegation that there was a prejudicial question; and b) There is
no prejudicial question if the civil and the criminal action can, according to
law, proceed independently of each other. Here, the civil case was anchored
on Article 33 of the Civil Code which, although related to case of Unfair
Competition, is speci cally stated in the Revised Rules on Criminal
Procedure, among others, as an independent civil action that may be
brought by the o ended party which shall proceed independently of the
criminal action
(3) On the third issue, the court said that while the pendency of a Petition for
Review is a ground for suspension of the arraignment, the Revised Rules on
Criminal Procedure limits the deferment of the arraignment to a period of 60
days reckoned from the ling of the petition with the reviewing o ce. In the
instant case, petitioner failed to establish that respondent Judge abused his
discretion in denying his motion to suspend. His pleadings and annexes
submitted before the Court do not show the date of ling of the Petition for
Review with the Secretary of Justice.

ANDRE TAN, et al. v BAUSCH & LOMB

FACTS: In this case, an information for violation ofArticle 189 of the Revised
Penal Code (RPC) was led before Branch 21, RTC, Cebu City against
petitioners for distributing and selling counterfeit RAY BAN sunglasses.

Respondent led a motion to transfer the case to Branch 9, RTC, Cebu City.
pursuant to Administrative Order No. 113-958 designating the said branch as
the special intellectual property court in Region VII. Petitioners, on the other
hand, led a motion to quash the information on the ground that the RTC had no
jurisdiction over the o ense charged against them. In opposing the motion, the
respondent cited another AO withdrawing the designation of branches of the
MTC and MTCC as special intellectual property courts.

The RTC ruled that since the penalty for the violation of Art. 189 of Revised
Penal Code is prision correccional in its minimum period or a ne ranging
from P500.00 to P2,000.00, or both, it is within the jurisdiction of the
metropolitan and municipal trial courts pursuant to Sec. 32(2) of B.P. Blg. 129.
Further stating that Administrative Orders cannot prevail over BP. 129, as
jurisdiction of courts is a matter of substantive law.

The respondent led a petition for certiorari in the Court of Appeals one (1) day
beyond the period allowed in the Rules of Court. But the appellate court gave
due course to the petition and set aside the trial court order. Hence, the present
Petition for Review

ISSUES:
(1) Whether the CA erred dismissing the petition; and
(2) Whether the CA erred in reversing the trial court ruling that the RTC has no
jurisdiction over the o ense of unfair competition under Article 189 of the
RPC?

HELD:
(1) NO. Citing Yao v. Court of Appeals, the SC stated that in the interest of
substantial justice, procedural rules of the most mandatory character in
terms of compliance may be relaxed.
(2) NO. The AOs are valid pursuant to the power vested by the Constitution to
the Supreme Court to promulgate rules in all courts. The SC in this case

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 discussed the limitations to the rule-making power of the SC, which, if met,
negates the contention that the Supreme Court transgressed on the power
of the Congress to legislate.
(a) It must provide a simpli ed and inexpensive procedure for the
speedy disposition of cases: In this case, both AOs promote the
e cient administration of justice and to ensure the speedy disposition of
intellectual property cases.
(b) It must be uniform for all courts of the same grade: Here, the transfer
of the jurisdiction to RTC was applicable to all MTC and MTCC; and
(c) It must not diminish, increase or modify substantive rights: In this
case, the transfer of jurisdiction did not a ect the substantive rights
because the AOs did not change the de nition or scope of the crime of
unfair competition with which petitioners were charged.
Hence, the appellate court correctly found that the court a quo committed grave
abuse of discretion. However, the transfer can no longer be made because the
issuance of a new AM consolidated the intellectual property courts and
commercial SEC courts in one RTC branch called the Special Commercial
Court. In Region VII, the designated special commercial court is Branch 11,
RTC, Cebu City - with that said, the criminal case was transferred to Branch 11.

SONY MUSIC ENTERTAINMENT v. HON. JUDGE ESPANOL

FACTS: There are two complaints and two search warrants in this case.

The rst complaint was led by the VRB to the DOJ, charging the respondents
with violation of PD No. 1987. The second case was petitioners’ own complaint
for copyright infringement.

On account of the two complaints, NBI agent Lavin applied for search warrants
against private respondents and Solid Laguna Corporation. In applying for a
search warrant, he presented himself and his two witnesses. In their sworn
statements, the three stated that petitioners sought their assistance; that acting
on the complaint, Agent Lavin and the witnesses conducted an investigation, in
the course of which unnamed persons provided them information as to the
presence of pirated CDs in the premises of Solid Laguna; that they were
accompanied by unnamed persons to enter the premise and conduct further
investigation; and that they were told by their anonymous source that the discs
were being manufactured in the same premises.

The judge then issued two corresponding search warrants; one for probable
violation of PD 1987 and the other for probable violation of RA 8293.

The search warrants were subsequently enforced and items were seized from
Solid Laguna. However, Solid Laguna thereafter presented a certi cation that
they are actually authorized to manufacture and sell CDs by the VRB. The
latter’s complaint was then dismissed. Judge Español then quashed the search
warrant issued for probable violation of PD 1987.

Petitioners then led with the DOJ an a davit-complaint charging individual

private respondents with copyright infringement. Subsequently, the Judge also
quashed the other warrant because of the fact that the items seized were
commingled hence they cannot be examined properly. Hence, petitioners’
present recourse.

ISSUE: Whether Search Warrant No. 219-00 was properly quashed?

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 HELD: YES. The issuance of the search warrant in question did not meet the
requirements of probable cause.

The law provides that probable cause is the existence of such facts and
circumstances which would lead a reasonably discreet and prudent man to
believe that an o ense has been committed and that the objects sought in
connection with the o ense are in the place to be searched.

The phrase “facts and circumstances” refer to information personally known to

the applicant and the witnesses he may present. Absent the element of personal
knowledge by the applicant or his witnesses of the facts upon which the
issuance of a search warrant may be justi ed, the warrant is deemed not based
on probable cause and is a nullity.

Here, applicant Agent Lavin and his witnesses, Pedralvez and Baltazar, when
queried during the application hearing how they knew that audio and video
compact discs were infringing or pirated, relied on what unnamed sources told
them and/or on certi cations or lists made by persons who were never
presented as witnesses. In net e ect, they testi ed under oath as to the truth of
facts they had no personal knowledge of.
The issuance of Search Warrant No. 219-00 was, at bottom, predicated on the
sworn testimonies of persons without personal knowledge of facts they were
testifying on and who relied on a false certi cation issued by VRB. Based as it
were on hearsay and false information, its issuance was without probable cause
and, therefore, invalid.

PEOPLE v. CHUA UY
In this case, there was a reliable testimony to corroborate what the applicant
testi ed to, i.e., the testimony of the police poseur-buyer in a buy-bust operation
involving prohibited drugs. The circumstances are di erent in this case wherein
the applicant and his witnesses had no personal knowledge that the discs they
purchased were infringing or pirated copies. It cannot be overemphasized that
not one of them testi ed seeing the pirated discs being manufactured at SLC’s
premises.

COLUMBIA
Unlike their counterparts in Columbia who were found to be personally
knowledgeable about their facts, Agent Lavin and his witnesses, had no
personal knowledge that the discs they saw, purchased or received were, in
fact, pirated or infringing on petitioners’ copyrights. They relied on what alleged
unnamed sources told them and/or on certi cations or lists made by persons
who were never presented as witnesses. Initial hearsay information or tips from
con dential informants could very well serve as basis for the issuance of a
search warrant, if followed up personally by the recipient and validated,46 as
what transpired in Columbia. Unfortunately, the records show that such is not
the case before us.

PEOPLE, et al. v. CHRISTOPHER CHOI

FACTS: Mario P. Nieto, an Intelligence Operative applied for a search warrant

with the RTC against respondent Christopher Choi for storing and selling
counterfeit Marlboro cigarettes which is a violation of the Intellectual Property
Code.

After examination of the applicant and his two witnesses, Judge Lourdes F.
Gatbalite issued Search Warrant.

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Upon the respective denials of the "motion to quash search warrant" and
"supplemental motion to quash,” respondent led a petition for certiorari and
prohibition before the CA alleging probable cause was not su ciently
established as the examination conducted was not probing and exhaustive and
the warrant did not particularly describe the place to be searched.

The CA ruled in favor of the defendant stating that Judge Gatbalite failed to ask
searching and probing questions and committed grave abuse of discretion when
relied on the conclusion of the witness Sealey that the cigarettes were fake.
Citing 20th Century Fox Film Corporation v. Court of Appeals, the court said that
she should have required the witness to present the alleged fake Marlboro
cigarettes and the genuine ones for comparison. Hence, this petition.

ISSUE: Whether Judge Gatbalite complied with the requirement of personally

examining the applicant and his witnesses through searching questions and
answers to determine the existence of probable cause?

HELD: YES. The determination of the existence of probable cause requires the
following:
(1) the judge must examine the complainant and his witnesses personally;
(2) the examination must be under oath and
(3) the examination must be reduced in writing in the form of searching
questions and answers.

The examination, however, must be probing and exhaustive. And contrary to the
contention of the CA, probable cause does not call for standards of proof, it is
only is concerned with probability.

In this case, there were two other witnesses questioned which included Nieto. In
fact, the other witness even accompanied Nieto during the test-buy operation.
The SC stated that testimonies of the witnesses were consistent with each other
and the narration of facts was credible, such constituted adequate bases to
establish probable cause that the alleged o ense had been committed.

In regard to the assertion of the CA that the ruling in the case of 20th Century
Fox Film Corporation is applicable, the SC state that it had already been
superseded by Columbia Pictures, Inc. v. Court of Appeals where the Court
ruled that the presentation of master tapes does not mean the testimonial or
documentary evidence, depositions, admissions or other classes of evidence
are ruled out. There is, to repeat, no law or rule which requires that the existence
of probable cause is or should be determined solely by a speci c kind of
evidence. More importantly, it should not be applied to the present case since
this involves the o ense of unfair competition and not copyright infringement.

RULE 126

Sec. 4. Requisites for issuing search warrant. - A search warrant shall not issue
except upon probable cause in connection with one speci c o ense to be
determined personally by the judge after examination under oath or a rmation
of the complainant and the witnesses he may produce, and particularly
describing the place to be searched and the things to be seized which may be
anywhere in the Philippines.

Sec. 5. Examination of complainant; record. - The judge must, before issuing the
warrant, personally examine in the form of searching questions and answers, in

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writing and under oath, the complainant and the witnesses he may produce on
facts personally known to them and attach to the record their sworn statements,
together with the a davits submitted.

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