Habana vs. Robles G.R. No.

131522, July 19, 1999

Facts
Habana is the author of the copyrighted book entitled College English for Today (CET). Robles and
GoodWill is the author and publisher of the book entitled Developing English Proficiency (DEP).
When Habana et al. try to revise their work they encountered by chance that the work of Robles (DEP) is
similar of the contents, scheme of presentation, illustrations and illustrative examples in their own book.
After an itemized examination and comparison of the two books (CET and DEP), Habana found that
several pages of the Robles book are similar, if not all together a copy of Habanas book, which is a case
of plagiarism and copyright infringement.
Habana then made demands for damages against respondents and also demanded that they cease and
desist from further selling and distributing to the general public the infringed copies of Robles works.
However, Robles ignored the demands, hence, Habana et al. filed with the Regional Trial Court, Makati, a
complaint for Infringement and/or unfair competition with damages against private respondents.
Issues
Whether or not, despite the apparent textual, thematic and sequential similarity between DEP and CET,
Robles committed no copyright infringement?
Held
No, Robles still committed copyright infringement.
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.
In cases of infringement, copying alone is not what is prohibited. The copying must produce an injurious
effect. Here, the injury consists in that Robles lifted from Habanas book materials that were the result of
the latters research work and compilation and misrepresented them as her own. She circulated the book
DEP for commercial use and did not acknowledge Habana as her source.
Hence, there is a clear case of appropriation of copyrighted work for her benefit that Robles committed.
Habanas work as authors is the product of their long and assiduous research and for another to
represent it as her own is injury enough. In copyrighting books the purpose is to give protection to the
intellectual product of an author. This is precisely what the law on copyright protected, under Section
184.1 (b). Quotations from a published work if they are compatible with fair use and only to the extent
justified by the purpose, including quotations from newspaper articles and periodicals in the form of press
summaries are allowed provided that the source and the name of the author, if appearing on the work, are
mentioned.
Notes
When is there a substantial reproduction of a book?
It does not necessarily require that the entire copyrighted work, or even a large portion of it, be copied. If
so much is taken that the value of the original work is substantially diminished, there is an infringement of
copyright and to an injurious extent, the work is appropriated.
In determining the question of infringement, the amount of matter copied from the copyrighted work is an
important consideration. To constitute infringement, it is not necessary that the whole or even a large
portion of the work shall have been copied. If so much is taken that the value of the original is sensibly
diminished, or the labors of the original author are substantially and to an injurious extent appropriated by
another, that is sufficient in point of law to constitute piracy.
The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its
gravity by an appropriate understanding thereof. Infringement of a copyright is a trespass on a private
domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and
infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the doing
by any person, without the consent of the owner of the copyright, of anything the sole right to do which is
conferred by statute on the owner of the copyright.
Piracy
A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such cases, did
not know whether or not he was infringing any copyright; he at least knew that what he was copying was
not his, and he copied at his peril.

Facts
Habana is the author of the copyrighted book entitled College English for Today (CET). Robles and
GoodWill is the author and publisher of the book entitled Developing English Proficiency (DEP).
When Habana et al. try to revise their work they encountered by chance that the work of Robles (DEP) is
similar of the contents, scheme of presentation, illustrations and illustrative examples in their own book.
After an itemized examination and comparison of the two books (CET and DEP), Habana found that
several pages of the Robles book are similar, if not all together a copy of Habanas book, which is a case
of plagiarism and copyright infringement.
Habana then made demands for damages against respondents and also demanded that they cease and
desist from further selling and distributing to the general public the infringed copies of Robles works.
However, Robles ignored the demands, hence, Habana et al. filed with the Regional Trial Court, Makati, a
complaint for Infringement and/or unfair competition with damages against private respondents.
Issues
Whether or not, despite the apparent textual, thematic and sequential similarity between DEP and CET,
Robles committed no copyright infringement?
Held
No, Robles still committed copyright infringement.
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.
In cases of infringement, copying alone is not what is prohibited. The copying must produce an injurious
effect. Here, the injury consists in that Robles lifted from Habanas book materials that were the result of
the latters research work and compilation and misrepresented them as her own. She circulated the book
DEP for commercial use and did not acknowledge Habana as her source.
Hence, there is a clear case of appropriation of copyrighted work for her benefit that Robles committed.
Habanas work as authors is the product of their long and assiduous research and for another to
represent it as her own is injury enough. In copyrighting books the purpose is to give protection to the
intellectual product of an author. This is precisely what the law on copyright protected, under Section
184.1 (b). Quotations from a published work if they are compatible with fair use and only to the extent
justified by the purpose, including quotations from newspaper articles and periodicals in the form of press
summaries are allowed provided that the source and the name of the author, if appearing on the work, are
mentioned.

G.R. Nos. L-76649-51. August 19, 1988.]

20TH CENTURY FOX FILM CORPORATION, petitioner, vs. COURT OF APPEALS, EDUARDO M.
BARRETO, RAUL SAGULLO and FORTUNE LEDESMA, respondents.

Petitioners claim:
The petitioner maintains that the lower court issued the questioned search warrants after finding the
existence of a probable cause justifying their issuance. According to the petitioner, the lower court arrived
at this conclusion on the basis of the depositions of applicant NBI's two witnesses which were taken
through searching questions and answers by the lower court.
Respondents claim:
The respondent posits that the three questioned search warrants against the private respondents should
be lifeted on the ground that it acted on the application for the issuance of the said search warrants and
granted it on the misrepresentations of applicant NBI and its witnesses that infringement of copyright or a
piracy of a particular film have been committed.
They also maintained that the presentation of the master tapes of the copyrighted films from which the
pirated films were allegedly copied, was necessary for the validity of search warrants against those who
have in their possession the pirated films. The petitioner's argument to the effect that the presentation of
the master tapes at the time of application may not be necessary as these would be merely evidentiary in

nature and not determinative of whether or not a probable cause exists to justify the issuance of the
search warrants is not meritorious.
S.C. Ruling:
The presentation of the master tapes of the copyrighted films from which the pirated films were allegedly
copied, was necessary for the validity of search warrants against those who have in their possession the
pirated films. The petitioner's argument to the effect that the presentation of the master tapes at the time
of application may not be necessary as these would be merely evidentiary in nature and not determinative
of whether or not a probable cause exists to justify the issuance of the search warrants is not meritorious.
The court cannot presume that duplicate or copied tapes were necessarily reproduced from master tapes
that it owns.
The application for search warrants was directed against video tape outlets which allegedly were engaged
in the unauthorized sale and renting out of copyrighted films belonging to the petitioner pursuant to P.D.
49. The essence of a copyright infringement is the similarity or at least substantial similarity of the
purported pirated works to the copyrighted work. Hence, the applicant must present to the court the
copyrighted films to compare them with the purchased evidence of the video tapes allegedly pirated to
determine whether the latter is an unauthorized reproduction of the former. This linkage of the copyrighted
films to the pirated films must be established to satisfy the requirements of probable cause. Mere
allegations as to the existence of the copyrighted films cannot serve as basis for the issuance of a search
warrant.
Columbia Pictures vs. CA, 261 SCRA 144 (1996)
Facts
Columbia Pictures lodged a formal complaint with the National Bureau of Investigation for violation of PD
No. 49, as amended, and sought its assistance in their anti-film piracy drive. Agents of the NBI and private
researchers made discreet surveillance on various video establishments in Metro Manila including
Sunshine Home Video Inc. owned and operated by Danilo A. Pelindario.
On November 14, 1987, NBI Senior Agent Lauro C. Reyes applied for a search warrant with the court a
quo against Sunshine seeking the seizure, among others, of pirated video tapes of copyrighted films all of
which were enumerated in a list attached to the application; and, television sets, video cassettes and/or
laser disc recordings equipment and other machines and paraphernalia used or intended to be used in
the unlawful exhibition, showing, reproduction, sale, lease or disposition of videograms tapes in the
premises above described. In the hearing of the application, NBI Senior Agent Lauro C. Reyes, upon
questions by the court a quo, reiterated in substance his averments in his affidavit. His testimony was
corroborated by another witness, Mr. Rene C. Baltazar. Atty. Rico V. Domingos deposition was also
taken. On the basis of the affidavits and depositions of NBI Senior Agent Lauro C. Reyes, Rene C.
Baltazar and Atty. Rico V. Domingo, Search Warrant No 87-053 for violation of Section 56 of PD No. 49,
as amended, was issued by the court a quo.
NBI Agents found and seized various video tapes of duly copyrighted motion pictures/films owned or
exclusively distributed by private complainants, and machines, equipment, television sets, paraphernalia,
materials, accessories all of which were included in the receipt for properties accomplished by the raiding
team. Copy of the receipt was furnished and/or tendered to Mr. Danilo A. Pelindario, registered ownerproprietor of Sunshine Home Video.
Issues
Whether or not absence such registration, as in this case, there was no right created, hence, no
infringement under PD 49 as amended?
Held
As correctly pointed out by private complainants-oppositors, the Department of Justice has resolved this
legal question as far back as December 12, 1978 in its Opinion No. 191 of the then Secretary of Justice
Vicente Abad Santos which stated that Sections 26 and 50 do not apply to cinematographic works and
PD No. 49 had done away with the registration and deposit of cinematographic works and that even
without prior registration and deposit of a work which may be entitled to protection under the Decree, the
creator can file action for infringement of its rights. He cannot demand, however, payment of damages
arising from infringement. The same opinion stressed that the requirements of registration and deposit
are thus retained under the Decree, not as conditions for the acquisition of copyright and other rights, but
as prerequisites to a suit for damages. The statutory interpretation of the Executive Branch being correct,
is entitled (to) weight and respect.

Furthermore, a closer review of Presidential Decree No. 49 reveals that even with respect to works which
are required under Section 26 thereof to be registered and with copies to be deposited with the National
Library, such as books, including composite and cyclopedic works, manuscripts, directories and
gazetteers; and periodicals, including pamphlets and newspapers; lectures, sermons, addresses,
dissertations prepared for oral delivery; and letters, the failure to comply with said requirements does not
deprive the copyright owner of the right to sue for infringement. Such non-compliance merely limits the
remedies available to him and subjects him to the corresponding sanction.
The reason for this is expressed in Section 2 of the decree which prefaces its enumeration of
copyrightable works with the explicit statement that the rights granted under this Decree shall, from the
moment of creation, subsist with respect to any of the following classes of works. This means that under
the present state of the law, the copyright for a work is acquired by an intellectual creator from the
moment of creation even in the absence of registration and deposit. As has been authoritatively clarified:
The registration and deposit of two complete copies or reproductions of the work with the National Library
within three weeks after the first public dissemination or performance of the work, as provided for in
Section 26 (P.D. No. 49, as amended), is not for the purpose of securing a copyright of the work, but
rather to avoid the penalty for non-compliance of the deposit of said two copies and in order to recover
damages in an infringement suit.
S.C. Ruling:
There is merit in petitioners' impassioned and well-founded argumentation. In fine, the supposed
pronunciamento in said case regarding the necessity for the presentation of the master tapes of the
copyrighted films for the validity of search warrants should at most be understood to merely serve as a
guidepost in determining the existence of probable cause in copyright infringement cases where there is
doubt as to the true nexus between the master tape and the pirated copies. An objective and careful
reading of the decision in said case could lead to no other conclusion than that said directive was hardly
intended to be a sweeping and inflexible requirement in all or similar copyright infringement cases.
Judicial dicta should always be construed within the factual matrix of their parturition, otherwise a careless
interpretation thereof could unfairly fault the writer with the vice of overstatement and the reader with the
fallacy of undue generalization.
It is evidently incorrect to suggest, as the ruling in 20th Century Fox may appear to do, that in copyright
infringement cases, the presentation of master tapes of the copyrighted films is always necessary to meet
the requirement of probable cause and that, in the absence thereof, there can be no finding of probable
cause for the issuance of a search warrant.

Laktaw vs. Paglinawan, 44 Phil. 855 (1918)

Facts
Laktaw is the registered owner and author of a literary work entitled Diccionario Hispano-Tagalog
(Spanish-Tagalog Dictionary) published in the City of Manila in 1889 by the printing establishment La
Opinion.
Paglinawan without the consent of Laktaw, reproduced said literary work, improperly copied the greater
part thereof in the work published by him and entitled Diccionariong Kastila-Tagalog (Spanish-Tagalog
Dictionary).
The act of Pagliwanan is a violation of article 7 of the Law of January 10, 1879, on Intellectual Property,
caused irreparable injuries to Laktaw who was surprised when, on publishing his new work entitled
Diccionario Tagalog-Hispano (Tagalog-Spanish Dictionary) he learned of the fact, and (4) that the
damages occasioned to him by the publication of Paglinawan's work amounted to $10,000. Laktaw
prayed the court to order the Paglinawan to withdraw from sale all stock of the work of Paglinawan to pay
him the sum of $10,000, with costs.
Paglinawan in his answer denied generally each and every allegation of the complaint and prayed the
court to absolve him from the complaint.
Law
Article 7 of the Law of January 10, 1879, on Intellectual Property:
Nobody may reproduce another person's work without the owner's consent, even merely to annotate or
add anything to it, or improve any edition thereof.
Issue
Whether or not Paglinawan violated Article 7 of the Intellectual Property Law (1879)?

Held
Yes, Paglinawan violated Article 7 of Intellectual Property Law.
It is not necessary that a work should be an improper copy of another work previously published. It is
enough that another's work has been reproduced without the consent of the owner, even though it be only
to annotate, add something to it, or improve any edition thereof.
As early as 1918, the Supreme Court enunciated that a person who published a Spanish-Tagalog
dictionary and copied the equivalents, definitions and different meanings given in another authors
Spanish-Tagalog dictionary, although making some additions of his own and some unimportant changes
in the examples to illustrate the meanings of the words, has violated the intellectual property rights of
other author. The Supreme Court reasoned that although words are not the property of anybody, their
definitions, the example that explain their sense and the manner of expressing their different meanings,
may constitute special work.
Sony Music Entertainment (Phils.), Inc. vs Judge Dolores Espaol
453 SCRA 360 Mercantile Law Intellectual Property Law on Copyright Probable Cause
In 2000, Sony Music Entertainment (Phils.), Inc. sought the assistance of the National Bureau of
Investigation (NBI) agent Lavin as they complained that Solid Laguna Corporation, together with its
officers were engaged in the replication, reproduction and distribution of Sony videograms without license
and authority from the Video Regulatory Board (violation of P.D. 1987); that Solid Laguna was
manufacturing, selling, and distributing various titles of CDs in violation of Sony Musics copyrights (and a
violation of RA 8293). Agent Lavin, in applying for a search warrant, stated before Judge Dolores Espaol
that an unnamed person provided them information as to the presence of pirated CDs in the premises of
Solid Laguna; that Lavin and other witnesses were accompanied by unnamed persons to enter the
premise and conduct further investigation. 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 on the
strength of the two warrants.
Solid Laguna thereafter presented a certification that they are actually authorized to manufacture and sell
CDs by the VRB at the same time it asked the court to quash the search warrants and return the items
seized. Judge Espaol then quashed the search warrant issued for probable violation of PD 1987.
Judge Espaol later quashed the other warrant because of the fact that the items seized as a result of the
two warrants were commingled hence they cannot be examined properly. Judge Espaol also ruled that
the issuance of the warrant stemmed from the intimation made by petitioners that Solid Laguna was not
authorized to manufacture and sell CDs but in fact they were authorized by the VRB. This being, the
warrants are of no force and effect because of the lack of probable cause.
ISSUE: Whether or not Judge Espaol is correct.
HELD: Yes. The issuance of the search warrant in question did not meet the requirements of probable
cause. Judge Espaol did not accordingly err in quashing the same, let alone gravely abuse her
discretion. It is also within her authority to quash the said warrants based on her findings which were
found to be valid by the Supreme Court. Further, it cannot be overemphasized that not one of the
applicants of the warrants testified seeing the pirated discs being manufactured at Solid Lagunas
premises, they merely relied on unnamed persons which is at best are hearsays.
The Supreme Court also noted that the lack of supporting evidence and documents in applying for the
search warrants on this infringement case does not mean that the master tapes of the alleged copies
being pirated should have been produced. It is true that the Supreme Court, in 20th Century Fox
Case, underscored the necessity, in determining the existence of probable cause in copyright
infringement cases, of presenting the master tapes of the copyrighted work. But, as emphatically clarified

in Columbia Pictures vs CA such auxiliary procedure, however, does not rule out the use of testimonial
or documentary evidence, depositions, admissions or other classes of evidence xxx especially where the
production in court of object evidence would result in delay, inconvenience or expenses out of proportion
to its evidentiary value. What the Supreme Court is saying is that any evidence presented in lieu of the
master tapes, if not readily available, in similar application proceedings must be reliable, and, if
testimonial, it must, at the very least, be based on the witness personal knowledge.

People of the Philippines v. Christopher Choi, G.R. No. 152950, August 3, 2006
Microsoft Corporation v. Best Deal Computer Center Corporation, et.al., G.R. No. 148029,
September 24, 2002

Wilson Ong Ching Kian Chung vs China National Cereals Oil and Foodstuffs Import and Export
Corp.
333 SCRA 390 Mercantile Law Intellectual Property Law on Copyright Forum Shopping Litis
Pendentia
Wilson Ong Ching Kian Chung is selling vermicelli (sotanghon) using his copyrighted cellophane wrapper
with the two-dragons designed label. In 1993, Wilson Ong sued Lorenzo Tan for infringing upon his
copyrighted cellophanes. Wilson Ong alleged that Tan was importing sotanghon from China National
Cereals Oils and Foodstuffs Import and Export Corporation and then Tan would use Wilson Ongs
copyrighted cellophanes to sell the sotanghon.
While the case was pending before the Quezon City RTC, China National Cereals filed another complaint
to cancel the copyright of Wilson Ong before the Manila RTC. Judge Palattao of the Manila RTC issued a
temporary restraining order enjoining Wilson Ong from using his copyrighted cellophanes.
Eventually, Wilson Ong appealed before the Court of Appeals questioning the TRO. The Court of Appeals
in the body of its decision cited that the case before the Manila RTC should have been dismissed
because of litis pendentia and forum shopping, there being an existing case before the QC RTC which is
a co-equal court of the Manila RTC. But in the dispositive portion of the CA decision, it said that the
Manila RTC has the discretion to dismiss the case. Manila RTC did not dismiss the case but rather it
ordered the cancellation of Wilson Ongs copyright. The Manila RTC invoked that though the CA cited
forum shopping and litis pendentia as grounds for dismissing the case the CA did not order Manila RTC to
actually dismiss the case but rather it gave the Manila RTC the discretion to continue hearing the case.
ISSUE: Whether or not the Manila RTC is correct.
HELD: No. The general rule states that the dispositive portion of a Judgment becomes the subject of
execution. However, there are exceptions to this rule and one of the exceptions is that if the dispositive
portion differs with the discussion in the body of the decision such as in the case at bar. This is because
the dispositive portion finds support from the decisions ratio decidendi.
The Quezon City court and the Manila court have concurrent jurisdiction over the case. However, when
the Quezon City court acquired jurisdiction over the case, it excluded all other courts of concurrent
jurisdiction from acquiring jurisdiction over the same. The Manila court is, therefore, devoid of jurisdiction
over the complaint filed resulting in the assailed decision which must perforce be declared null and void.
To hold otherwise would be to risk instances where courts of concurrent jurisdiction might have conflicting
orders.

Dastar Corporation v. Twentieth Century Fox Film Corporation

539 U.S. 23, 123 S.Ct. 2041
Facts: Dastar used video footage from a television series that was in the public domain to create a slightly
different video of their own, and then sold it commercially without giving credit to Fox, who was the
originator of the video. Foxs copyright in the original video expired in 1977. Fox sued for copyright and
Lanham Act violations. SCOTUS reviewed the Lanham Act claim, specifically 43(a) of the Lanham Act,
15 U.S.C. 1125(a), in which Fox alleged that Dastar had made a false designation of origin, false or
misleading description of fact, or false or misleading representation of fact, which is likely to cause
confusion as to the origin of its goods. Fox claims that Dastar should be found liable for reverse
passing off, which is when a producer misrepresents someone elses goods or services as their own,
which is forbidden by the Lanham Act.
Procedural History: Summary judgment was granted to the plaintiff by the District Court. Appeal was
taken, and the Lanham Act claim was affirmed by the Ninth Circuit. SCOTUS granted Certiorari regarding
the Lanham Act claim.
Holding: Section 43(a) of the Lanham Act does not prevent the unaccredited copying of an uncopyrighted
work. Section 43(a) should not be stretched to cover matters that are of no consequence to purchasers,
because giving Lanham Act protection to such products would cause it to conflict with copyright law.
Analysis: The Court determined that Dastar was the origin of the physical product that it sold. Dastar
took material from the public domain, modified it, and sold the resulting product as its own. Fox claimed
that these actions by Dastar constituted false misrepresentation as to the origin of its goods, and
constituted reverse passing off. However, the Court reasoned that the meaning of the word origin in
the statute here rested solely on the manufacturer of the goods, and did not extend to the creator of the
underlying work. Copyright law allows copying without attribution once a copyright has expired, similarly
to the right to make an article whose patent has expired, including the right to make it in precisely the
shape it carried when patented.
Here, Fox had tried to make money from its creative work after the copyright had expired by trying to
shoehorn Dastar into a Lanham Act violation. Although the facts in the case do not show whether there
might have been any pre-litigation attempts by Fox to try to coerce Dastar into licensing the original video
from Fox, ultimately this ruling shows that Dastar did not have to pay Fox anything to use the video
anyway, since once a creative work passes into the public domain, anybody may freely copy or transform
the work in any way they please.

Microsoft Corporation vs Maxicorp, Inc.

438 SCRA 224 Mercantile Law Intellectual Property Law on Copyright Probable Cause in Issuing
Search Warrant
In 1996, Dominador Samiano, Jr., an agent of the National Bureau of Investigation (NBI) conducted a
surveillance against Maxicorp, Inc. He observed that Microsoft Softwares (Windows Operating Systems)
were being produced and packaged within the premises of Maxicorp. Samiano, together with a civilian
witness (John Benedict Sacriz) then bought a computer unit from Maxicorp. The unit was preinstalled with a pirated copy of Windows. For their purchase, they were issued a receipt, however, the
receipt was in the name of a certain Joel Diaz. Subsequently, Samiano applied for a search warrant
before the RTC. He brought with him Sacriz as witness. He also brought the computer unit they bought as
evidence as well as the receipt. He even added an additional witness (Felixberto Pante), a computer
technician, who showed the judge that the software in the computer unit bought by Samiano from
Maxicorp was pirated. The RTC judge, convinced that there is a probable cause for a case of copyright
infringement and unfair competition committed by Maxicorp, issued the corresponding warrant. Maxicorp
assailed the legality of the warrant before the Court of Appeals. The Court of Appeals ruled in favor of

Maxicorp and in its decision it highlighted the fact that the receipt issued was not in Samianos or Sacriz
name hence the proceeding in the trial court was infirm from the onset.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. The testimonies of the two witnesses, coupled with the object and documentary evidence they
presented, are sufficient to establish the existence of probable cause. From what they have witnessed,
there is reason to believe that Maxicorp engaged in copyright infringement and unfair competition to the
prejudice of Microsoft. Both NBI Agent Samiano and Sacriz were clear and insistent that the counterfeit
software were not only displayed and sold within Maxicorps premises, they were also produced,
packaged and in some cases, installed there.
The fact that the receipt issued was not in Samianos name nor was it in Sacriz name does not render the
issuance of the warrant void. No law or rule states that probable cause requires a specific kind of
evidence. No formula or fixed rule for its determination exists. Probable cause is determined in the light of
conditions obtaining in a given situation.Thus, it was improper for the Court of Appeals to reverse the
RTCs findings simply because the sales receipt evidencing NBI Agent Samianos purchase of counterfeit
goods is not in his name.

NBI, Microsoft Corporation vs Judy Hwang

460 SCRA 428 Mercantile Law Intellectual Property Law on Copyright Copyright Infringement
In May 1993, Microsoft Corporation and Beltron Computer Philippines, Inc. entered into a Licensing
Agreement. Under Section 2(a) of the Agreement, Microsoft authorized Beltron, for a fee, to:
1. Reproduce and install no more than one copy of Windows on each Customer System hard disk;
2. Distribute directly or indirectly and license copies of Windows (reproduced as per Section 2 of the
Agreement and/or acquired from an Authorized Replicator or Authorized Distributor.
Their agreement allowed either party to terminate if one fails to comply with their respective obligations.
Microsoft terminated the Agreement in June 1995 by reason of Beltrons non-payment of royalties. Later,
Microsoft learned that Beltron was illegally copying and selling copies of Windows. Microsoft then sought
the assistance of the National Bureau of Investigation. NBI agents made some purchase from Beltron
where they acquired a computer unit pre-installed with Windows, 12 windowsinstaller CDs packed as
Microsoft products. The agents were not given the end-user license agreements, user manuals, and
certificates of authenticity for the products purchased. They were given a receipt which has a header of
T.M.T.C. (Phils) Inc. BELTRON COMPUTER. TMTC stands for Taiwan Machinery Display and Trade
Center.
A search warrant was subsequently issued where 2,831 CDs of Windows installers, among others, were
seized. Based on the items seized from Beltron, Microsoft filed a case of copyright infringement against
Beltron and TMTC as well as their officers (Judy Hwang et al) before the Department of Justice (DOJ).
Beltron, in its counter-affidavit, argued the following:
1. That Microsofts issue with Beltron was really just to have leverage in forcing Beltron to pay the unpaid
royalties; and that Microsoft should have filed a collection suit.
2. That the computer unit allegedly purchased by the NBI agents from them cannot be decisively traced
as coming from Beltron because the receipt issued to the agents did not list the computer unit as one of
the items bought.

3. That the 12 installers purchased by the agents which are actually listed in the receipt were not
manufactured by Beltron but rather they were genuine copies purchased by TMTC from an authorized
Microsoft seller in Singapore.
4. That the 2,831 installers seized from them were not a property of Beltron but rather they were left to
them by someone for safekeeping.
The DOJ secretary agreed with Beltron and dismissed the case. The Secretary ruled that the issue of the
authority of Beltron to copy and sell Microsoft products should first be resolved in a civil suit. Microsoft
appealed the decision of the DOJ secretary before the Supreme Court. Meanwhile, Beltron filed a motion
to quash the search warrant before the RTC that issued the same. The RTC partially granted the quashal.
The Court of Appeals reversed the RTC. Hwang et al did not appeal the CA decision.
ISSUE: Whether or not the DOJ Secretary is correct.
HELD: No. Section 5 of Presidential Decree 49 enumerates the rights vested exclusively on the copyright
owner. Contrary to the DOJs 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 owners prior consent renders himself civilly and criminally liable for copyright
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.
Being the copyright and trademark owner of Microsoft software, Microsoft acted well within its rights in
filing the complaint before DOJ on the incriminating evidence obtained from Beltron. Hence, it was highly
irregular for the DOJ to hold that Microsoft sought the issuance of the search warrants and the filing of
the complaint merely to pressure Beltron to pay its overdue royalties to Microsoft.
There is no basis for the DOJ to rule that Microsoft must await a prior resolution from the proper court of
whether or not the Agreement is still binding between the parties. Beltron has not filed any suit to
question Microsofts termination of the Agreement. Microsoft can neither be expected nor compelled to
wait until Beltron decides to sue before Microsoft can seek remedies for violation of its intellectual
property rights.
Furthermore, the articles seized from Beltron are counterfeit per se because Microsoft does not (and
could not have authorized anyone to) produce such CD installers The copying of the genuine Microsoft
software to produce these fake CDs and their distribution are illegal even if the copier or distributor is a
Microsoft licensee. As far as these installer CD-ROMs are concerned, the Agreement (and the alleged
question on the validity of its termination) is immaterial to the determination of Beltrons liability for
copyright infringement and unfair competition. Beltrons defense that the box of CD installers found in
their possession was only left to them for safekeeping is not tenable.

Microsoft & Adobe Systems vs. Farajallah et. al (New Fields) SC GR No. 205800 (2014)