019. 20th Century Fox v.

Court of Appeals
G.R. Nos. 76649-51/19 August 1988/Third Division/Petition for Review on Certiorari
20th Century Fox Film Corporation petitioner
Court of Appeals, Eduardo M. Barreto, Raul Sagullo, and Fortune Ledesma respondents
Decision by J. Gutierrez, Jr., Digest by Pip

Short Version: Fox complained to the NBI about video stores allegedly pirating their films. The NBI
obtained search warrants from the RTC of Makati and conducted a raid. The RTC later lifted the warrants
and ordered the items seized returned, since it found that the NBI had misrepresented having personal
knowledge of the violation of anti-piracy laws and had failed to present the master tapes to establish
copyright infringement. The Supreme Court affirmed the RTCs order, ruling that the presentation of the
master tapes of the copyrighted films from which the pirated films are allegedly copied is necessary for
the validity of search warrants against those who have in their possession the pirated films.

Facts: On 26 August 1985, 20th Century Fox Film Corporation (Fox for the purposes of this digest)
wrote a letter-complaint to the National Bureau of Investigation (NBI) seeking assistance in the conduct
of searches and seizures in connection with NBIs anti-film piracy campaign. Fox alleged that certain
videotape outlets all over Metro Manila were engaged in the unauthorized sale and renting out of
copyrighted films in videotape form, in violation of P.D. 49 (Decree on the Protection of Intellectual
Property).

The NBI conducted surveillance and investigation of the outlets listed by Fox and then filed three
applications for search warrants against the video outlets owned by Eduardo Barreto (Junction Video),
Raul Sagullo (South Video Bug Center), and Fortune Ledesma (Sonix Video Services). The applications
were consolidated and heard by the RTC of Makati, which later issued the search warrants on 5
September 1985. Armed with the search warrants, the NBI (in the company of Foxs agents) raided the
video outlets and seized the items described therein. An inventory of the items seized was made and left
with Eduardo, Raul, and Fortune.

Eduardo, Raul, and Fortune then filed a motion with the RTC to lift the search warrants and release
the seized properties. The RTC of Makati lifted the warrants and ordered the seized properties returned
because they could not be the basis for any criminal prosecution. Foxs motion for reconsideration was
denied. Fox filed a petition for certiorari with the Court of Appeals, but the petition was dismissed.

Issue: Was there probable cause to issue the search warrants against the videotape outlets in this case?
NO.

Ruling: Petition dismissed.

Ratio: Fox argued that the RTC correctly issued the search warrants after finding that there was probable
cause justifying their issuance, pursuant to Section 2, Article III of the 1987 Constitution. 1 This
conclusion by the RTC was reached on account of the depositions of the NBIs two witnesses, taken
through searching questions and answers by the RTC.

1
For the non-Justice-Leonen-babies: The right of the people to be secure in their persons, houses, papers, and effects
against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search
warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after
examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched and the persons or things to be seized.
 Probable cause for the issuance of a search warrant has been defined as such facts and circumstances
which would lead a reasonably discreet and prudent man to believe that an offense has been committed
and that the objects sought in connection with the offense are in the place sought to be searched.
(Burgos, Sr. v. Chief of Staff) The Constitution demands no less than personal knowledge by the
complainant or his witnesses of the facts upon which the issuance of a search warrant may be justified in
order to convince the judge to issue a search warrant.

In this case, the RTC of Makati lifted the three questioned warrants because it later determined
that the NBI and its witnesses had misrepresented that infringement of copyright or a piracy of a
particular film had been committed. In the RTCs order lifting the warrants, the court took note of the
fact that while the NBI witnesses made statements about having personal knowledge about the copyright
infringement committed, the same witnesses referred to the knowledge of Fox agents. Moreover, the
master tapes or at least the film reels of the allegedly pirated material were never shown to the court,
leading the court to doubt the bare statements of the NBI agents. The court also noted that Cocoon,
the first video tape mentioned in the search warrants, was not even duly registered or copyrighted
in the Philippines. Lacking the requisite presentation to the court of an alleged master tape for purposes
of comparison with the purchased evidence of the video tapes allegedly pirated and those seized, there
was no way to determine whether there really was piracy, or copying of the film of Fox.

The presentation of the master tapes of the copyrighted films from which the pirated films are
allegedly copied is necessary for the validity of search warrants against those who have in their
possession the pirated films. The court cannot presume that duplicate or copied tapes were necessarily
reproduced from master tapes that it owns. 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.

The Supreme Court also noted that the warrants in this case were in the nature of general warrants, as
they authorized the seizing of television sets, video cassettes, recorders, rewinders, tape head cleaners,
accessories, and other equipment. The Court noted that television sets, video cassette recorders, reminders
and tape cleaners are articles which can be found in a video tape store engaged in the legitimate business
of lending or renting out betamax tapes. In short, these articles and appliances are generally connected
with, or related to a legitimate business not necessarily involving piracy of intellectual property or
infringement of copyright laws. The inclusion of these articles without specifying how they contributed to
the violation of anti-piracy laws made the warrants so general that they could amount to the confiscation
of all items found in the storewhich is actually what happened in this case.

In all, there was no grave abuse of discretion on the part of the RTC when it sought to rectify the error
it made in issuing the questioned search warrants.

Voting: C.J. Fernan, Feliciano, Bidin and Cortes, JJ., concur.