FERNANDO U. JUAN, Petitioner, v. ROBERTO U.
JUAN  Respondent’s contention: appeal should be
(SUBSTITUTED BY HIS SON JEFFREY C. JUAN) AND
LAUNDROMATIC CORPORATION, Respondents.
FACTS:
 July 4, 1994 - Roberto Juan claimed that he
began to use the name “Lavandera ko” in his
laundry business.
 March 17, 1997 - the National Library issued to
him a certificate of copyright over said name and
mark.
 1997 - Roberto then formed a corporation
Laundromatic Corporation (Laundromatic) was
incorporated in 1997,
 November 13, 1998 -- "Lavandera Ko" was
registered as a business name on with the
Department of Trade and Industry (DTI).
 October 18, 2001 – Fernando Juan registered the
mark “Lavandera Ko” with the Intellectual
Property office.
 As a result: Respondent Roberto filed a petition
for injunction, unfair competition, infringement
of copyright, cancellation of trademark and
name with/and prayer for TRO and Preliminary
Injunction with the Regional Trial Court (RTC) –
RTC granted.
 RTC: decided that neither of the parties had the
right to use the mark because it was created by
“Suarez” in 1942. (a musical composition)
 Petitioner’s contention: contended that a mark
is different from a copyright. Petitioner
Fernando insisted that he is the owner of the
service mark in question as he was able to
register the same with the IPO pursuant to
Section 122 of R.A. No. 8293. Furthermore,
petitioner Fernando argued that the RTC erred in
giving credence to the article of information it
obtained from the internet stating that the
Filipino folk song "Lavandera Ko" was a
composition of Suarez in 1942 rather than the
actual pieces of evidence presented by the
parties. As such, according to petitioner, such
information acquired by the RTC is hearsay
because no one was presented to testify on the
veracity of such article.
dismissed on the grounds that it is a mere
question of law. Furthermore, petitioner cannot
acquire exclusive right and use over the mark
“Lavandera ko” because it has prior owner.
 CA dismissed appeal based on technical grounds.
ISSUE:
Whether, under the law, a trademark is the same as
copyright
RULING:
No.
The law on trademarks, service marks and trade names
are found under Part III of Republic Act (R.A.) No. 8293,
or the Intellectual Code of the Philippines, while Part IV
of the same law governs copyrights.
Under Section 121.1 of R.A. No. 8293, "mark" is defined
as any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise
and shall include a stamped or marked container of
goods. Trade name is any designation which (a) is
adopted and used by person to denominate goods which
he markets, or services which he renders, or business
which he conducts, or has come to be so used by other,
and (b) through its association with such goods, services
or business, has acquired a special significance as the
name thereof, and (c) the use of which for the purpose
stated in (a) is prohibited neither by legislative
enactment nor by otherwise defined public policy.
Copyright is the right of literary property as recognized
and sanctioned by positive law. An intangible,
incorporeal right granted by statute to the author or
originator of certain literary or artistic productions,
whereby he is invested, for a limited period, with the sole
and exclusive privilege of multiplying copies of the same
and publishing and selling them.
Section 172.1 of R.A. 8293 enumerates the following
original intellectual creations in the literary and artistic
domain that are protected from the moment of their
creation.
As such, "Lavandera Ko," being a musical composition
with words is protected under the copyright law (Part IV,
R.A. No. 8293) and not under the trademarks, service
marks and trade names law (Part III, R.A. No. 8293).
WHEREFORE, the Petition for Review on Certiorari under
RULING:
Rule 45 of the Rules of Court dated January 25, 2016, of
petitioner Fernando U. Juan is GRANTED. Consequently,
the Decision dated May 7, 2015 and Resolution dated
December 4, 2015 of the Court of Appeals are REVERSED
and SET ASIDE. This Court, however, ORDERS the
REMAND of this case to the RTC for its prompt
disposition.
_____________________________________________
STAR ATHLETICA, L.L.C. v. VARSITY BRANDS, INC.,
ET AL.
FACTS:
 The Copyright Act of 1976 makes “pictorial,
graphic, or sculptural features” of the “design of
a useful article” eligible for copyright protection
as artistic works if those features “can be
identified separately from, and are capable of
existing independently of, the utilitarian aspects
of the article.”
 Respondents have more than 200 copyright
registrations for two dimensional designs—
consisting of various lines, chevrons, and colorful
shapes—appearing on the surface of the
cheerleading uniforms that they design, make,
and sell. They sued petitioner, who also markets
cheerleading uniforms, for copyright
infringement.
 District court: The District Court granted
petitioner summary judgment, holding that the
designs could not be conceptually or physically
separated from the uniforms and were therefore
ineligible for copyright protection.
 Six Circuit: reversed the decision of the district
court. The Sixth Circuit concluded that the
graphics could be “identified separately” and
were “capable of existing independently” of the
uniforms under
ISSUE:
Whether, under the law, the pictorial, graphic, or
sculptural features subject herein can be identified
separately and are eligible for copy right protection.
 A feature incorporated into the design of a useful
article is eligible for copyright protection only if
the feature (1) can be perceived as a two- or
three-dimensional work of art separate from the
useful article, and (2) would qualify as a
protectable pictorial, graphic, or sculptural
work—either on its own or fixed in some other
tangible medium of expression—if it were
imagined separately from the useful article into
which it is incorporated.
 Section 101’s separate-identification
requirement is met if the decision maker is able
to look at the useful article and spot some two or
three-dimensional element that appears to have
pictorial, graphic, or sculptural qualities.
 Applying the proper test here, the surface
decorations on the
 Cheerleading uniforms are separable and
therefore eligible for copyright protection. First,
the decorations can be identified as features
having pictorial, graphic, or sculptural qualities.
Second, if those decorations were separated
from the uniforms and applied in another
medium, they would qualify as two-dimensional
works of art under §101. Imaginatively removing
the decorations from the uniforms and applying
them in another medium also would not
replicate the uniform itself.
__________________________________________
SISON OLAÑO, SERGIO T. ONG, MARILYN O. GO,
AND JAP FUK HAI, Petitioners, v. LIM ENG CO,
Respondent.
FACTS:
 Parties involved: petitioners are directors of
metrotech industry. Lim eng co is the
chairman of Lec steel manufacturing corp.
 This case is all about the case of copyright
infringement against petitioners.
Accordingly, respondent was contracted and
subcontracted to submit a design for interior
 and exterior hatch doors. This designs were
registered in the national library and were
issued copyright registration.
 Petitioners, however, were subcontracted to
install the same interior and exterior hatch
doors for the projects.
 With the foregoing, respondent asked
petitioners to cease from infringing its
intellectual property.
 Petitioners contend that the installment of
the interior and exterior hatch doors are not
covered under the protection of copyright
law. They argued that the subjects at hand
are functional inventions that are not
copyrightable.
 DOJ: the investigating prosecutor dismissed
the respondent's complaint based on
inadequate evidence showing that: (1) the
petitioners committed the prohibited acts
under Section 177 of R.A. No. 8293; and (2)
the interior and exterior hatch doors of the
petitioners among the classes of
copyrightable work enumerated in Sections
172 and 173 of the same law. Respondent
filed a petition for review before the DOJ but
it was also denied.
 Motion for reconsideration by the
respondent was granted. However, it was
later denied and granted the motion for
reconsideration by petitioner.
 CA granted the petition of respondent.
ISSUE:
Whether, under the law, the installation of the hatch
doors which were similar to the designs of
respondent constitute copyright infringement
against petitioner.
RULING:
NO.
Section 172 of R.A. No. 8293 which covers
"illustrations, maps, plans, sketches, charts and
three-dimensional works relative to geography,
topography, architecture or science." Moreover, A
"useful article" defined as an article "having an
intrinsic utilitarian function that is not merely to
portray the appearance of the article or to convey
information" is excluded from copyright eligibility.
The only instance when a useful article may be the
subject of copyright protection is when it
incorporates a design element that is physically or
conceptually separable from the underlying product.
This means that the utilitarian article can function
without the design element. In such an instance, the
design element is eligible for copyright protection.
Since the hatch doors cannot be considered as either
illustrations, maps, plans, sketches, charts and three-
dimensional works relative to geography,
topography, architecture or science, to be properly
classified as a copyrightable class "I" work, what was
copyrighted were their sketches/drawings only, and
not the actual hatch doors themselves.
TN: 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.
__________________________________________
UNILEVER PHILIPPINES (PRC), INC., Petitioner,
vs.
THE HONORABLE COURT OF APPEALS and PROCTER
AND GAMBLE PHILIPPINES, INC., Respondents.
FACTS:
 August 24, 1994, private respondent Procter
and Gamble Phils., Inc. filed a complaint for
injunction with damages and a prayer for
temporary restraining order and/or writ of
preliminary injunction against petitioner
Unilever, alleging that:
 As early as 1982, a P&G subsidiary in Italy
used a key visual in the advertisement of its
laundry detergent and bleaching products.
This key visual known as the "double-tug" or
"tac-tac" demonstration shows the fabric
being held by both hands and stretched
sideways.
  Unilever on 24 July 1993 started airing a 60
second television commercial "TVC" of its
"Breeze Powerwhite" laundry product called
"Porky." The said TVC included a stretching
visual presentation and sound effects almost
[identical] or substantially similar to P&GP’s
"tac-tac" key visual.
 On July 15, 1994, P&GP aired in the
Philippines, the same "Kite" television
advertisement it used in Italy in 1986, merely
dubbing the Italian language with Filipino for
the same produce "Ace" bleaching liquid
which P&GP now markets in the Philippines.
 On August 1, 1994, Unilever filed a
Complaint with the Advertising Board of the
Philippines to prevent P&GP from airing the
"Kite" television advertisement.
 RTC granted the petition of respondent. CA
affirmed the decision.
 Petitioner’s contention: Petitioner does not
deny that the questioned TV advertisements
are substantially similar to P&GP’s "double
tug" or "tac-tac" key visual. However, it
submits that P&GP is not entitled to the
relief demanded, which is to enjoin
petitioner from airing said TV
advertisements, for the reason that
petitioner has Certificates of Copyright
Registration for which advertisements while
P&GP has none with respect to its "double-
tug" or "tac-tac" key visual. In other words,
it is petitioner’s contention that P&GP is not
entitled to any protection because it has not
registered with the National Library the very
TV commercials which it claims have been
infringed by petitioner.
ISSUE:
Whether, under the law, the key visual used by
respondent, which was not registered in the national
library, is covered under copyright protection.
RULING:
Yes.
Section 2 of PD 49 stipulates that the copyright for a
work or intellectual creation subsists from the
moment of its creation. Accordingly, the creator
acquires copyright for his work right upon its
creation.
Contrary to petitioner’s contention, the intellectual
creator’s exercise and enjoyment of copyright for his
work and the protection given by law to him is not
contingent or dependent on any formality or
registration. Therefore, taking the material
allegations of paragraphs 1.3 to 1.5 of P&GP’s
verified Complaint in the context of PD 49, it cannot
be seriously doubted that at least, for purposes of
determining whether preliminary injunction should
issue during the pendency of the case, P&GP is
entitled to the injunctive relief prayed for in its
Complaint.
__________________________________________
VENANCIO SAMBAR, doing business under the name
and style of CVS Garment Enterprise, Petitioner, v.
LEVI STRAUSS & CO., and LEVI STRAUSS (PHIL.), INC.,
Respondents.
Facts:
 private respondents, through a letter from
their legal officer, demanded that CVS
Garment Enterprises (CVSGE) desist from
using their stitched arcuate design on the
Europress jeans which CVSGE advertised in
the Manila Bulletin.
 Atty. Benjamin Gruba, counsel of CVSGE,
replied that the arcuate design on the back
pockets of Europress jeans was different
from the design on the back pockets of Levi’s
jeans. He further asserted that his client had
a copyright on the design it was using.
 Private respondent filed a complaint. It
alleged that Private respondents alleged in
their complaint that Levi Strauss and Co.
(LS&Co.), an internationally known clothing
manufacturer, owns the arcuate design
trademark which was registered under U.S.
Trademark Registration and in the Principal
Register of trademarks with the Philippine
Patent Office.
 Petitioner claims that he did not infringe on
private respondents’ arcuate design because
there was no colorable imitation which
 deceived or confused the public. Petitioner
maintains that although the back pocket
designs had similarities, the public was not
confused because Levi’s jeans had other
marks not found in Europress jeans.
Petitioner denied that there was
infringement or unfair competition because
the display rooms of department stores
where Levi’s and Europress jeans were sold,
were distinctively segregated by billboards
and other modes of advertisement. CVSGIC
avers that the public would not be confused
on the ownership of such known trademark
as Levi’s, Jag, Europress, etc.. Also, CVSGIC
claimed that it had its own original arcuate
design, as evidenced by Copyright
Registration No. 1-1998, which was very
different and distinct from Levi’s design.
 RTC: the trial court issued a writ of
preliminary injunction enjoining CVSGIC and
petitioner from manufacturing, advertising
and selling pants with the arcuate design on
their back pockets.
 CA affirmed the decision.
Issue:
Whether, under the law, the manufacturing,
advertising and selling pants with the arcuate design
on their back pockets which have the same design as
private respondent’s, constitute a ground for
copyright infringement.
Ruling:
Yes.
private respondents aver that the Court of Appeals
did not err in ruling that there was infringement in
this case. The backpocket design of Europress jeans,
a double arc intersecting in the middle was the same
as Levi’s’ mark, also a double arc intersecting at the
center. Although the trial court found differences in
the two designs, these differences were not
noticeable. Further, private respondents said,
infringement of trademark did not require exact
similarity. Colorable imitation enough to cause
confusion among the public, was sufficient for a
trademark to be infringed. Private respondents
explained that in a market research they conducted
with 600 respondents, the result showed that the
public was confused by Europress trademark vis the
Levi’s trademark.
__________________________________________
GR 166337; March 7, 2005
Bayanihan Music v BMG Records and Jose Mari Chan
Facts:
Chan entered into a contract with Bayanihan,
assigning all his rights, interests and participation to
Bayanihan for his song “Can We Just Stop and Talk a
While” and after that, for the song “Afraid for Love
to Fade.” On the basis of such assignment, Bayanihan
applied for and was granted by the National Library
a Certificate of Copyright Registration for each of the
2 musical compositions. Chan authorized BMG
Records to record and distribute both compositions
in a then recently released album of Lea Salonga
without the knowledge of Bayanihan. Bayanihan
informed Chan and BMG of its existing copyrights
over the songs and the alleged violation of such
rights by the respondents, demanding to settle the
matter but no settlement was made.
Bayanihan filed before the Quezon City RTC a
complaint against Chan and BMG for violation of Sec.
216, RA 8293parying for the issuance of a TRO
and/or writ of preliminary injunction enjoining BMG
from further recording an distributing the subject
musical compositions in whatever form or musical
products, and Chan from further granting any
authority to record and distribute the same musical
compositions.
BMG countered that the acts of recording and
publication has been done and a TRO or injunction
would be moot and that there is no clear showing
that Bayanihan will be greatly damaged by the
refusal of the prayer for TRO/injunction. BMG also
pleaded a cross-claim against Chan for violation of
his warranty that his compositions are free from
claims of third persons and counterclaim for
damages against Bayanihan.
Chan alleged that he never intended to divest
himself of all his rights and interest over the musical
composition; that the contracts entered into with
Bayanihan were mere music publications giving
Bayanihan as Assignees, the power to administer his
copyright over his 2 songs and act as the exclusive
publisher; that he was not cognizant of application
and grant of copyright certification over his 2 songs
to Bayanihan; and that Bayanihan was remiss of its
obligations under the contract because it failed to
effectively advertise the songs for almost 20 years.
Hence, the rescission of the contracts in 1997. Chan
also filed a counterclaim for damages against
Bayanihan. RTC denied the TRO as well as the
injunction. CA affirmed RTC ruling.
Issue: When is the creator entitled to copyright
protection?
Ruling:
Unquestionably, Chan being the composer and
author of the lyrics of the 2 songs is protected by the
mere fact alone that he is the creator thereof,
conformably with RA 8293, Sec. 172.2: Works are
protected by the sole fact of their creation,
irrespective of their mode or form of expression, as
well as of their content and quality and purpose.
Also, as provided in the contracts Chan entered into
with Bayanihan was the agreement that in the event
the publisher fails to use in any manner within 2
years any of the compositions covered by the
contract, the composition may be released in favor
of the writer and excluded from the contract. The
publisher shall execute the necessary release in
writing in favor of the writer upon the request of the
writer. It appears that the 2 contracts already
expired, there being no allegation or proof that
Bayanihan ever made use of the compositions within
the 20year period agreed upon.
Anent the copyrights obtained on the basis of the
contracts, suffice it to say that such purported
copyrights are not presumed to subsist in
accordance with Sec. 218, RA 8293 because Chan
had put in issue the existence thereof.
SONY CORP. v. UNIVERSAL CITY STUDIOS, INC.(1984)
No. 81-1687
Argued: January 18, 1983Decided: January 17, 1984
Petitioner Sony Corp. manufactures home video tape
recorders (VTR's), and markets them through retail
establishments, some of which are also petitioners.
Respondents own the copyrights on some of the
television programs that are broadcast on the public
airwaves. Respondents brought an action against
petitioners in Federal District Court, alleging that VTR
consumers had been recording some of
respondents' copy-righted works that had been
exhibited on commercially sponsored television and
thereby infringed respondents' copyrights, and
further that petitioners were liable for such
copyright infringement because of their marketing of
the VTR's. Respondents sought money damages, an
equitable accounting of profits, and an injunction
against the manufacture and marketing of the VTR's.
The District Court denied respondents all relief,
holding that noncommercial home use recording of
material broadcast over the public airwaves was a
fair use of copyrighted works and did not constitute
copyright infringement, and that petitioners could
not be held liable as contributory infringers even if
the home use of a VTR was considered an infringing
use. The Court of Appeals reversed, holding
petitioners liable for contributory infringement and
ordering the District Court to fashion appropriate
relief.
Held:
The sale of the VTR's to the general public does not
constitute contributory infringement of
respondents' copyrights. Pp. 428-456.
(a) The protection given to copyrights is wholly
statutory, and, in a case like this, in which Congress
has not plainly marked the course to be followed by
the judiciary, this Court must be circumspect in
construing the scope of rights created by a statute
that never contemplated such a calculus of interests.
Any individual may reproduce a copyrighted work for
a "fair use"; the copyright owner does not possess
the exclusive right to such a use. Pp. 428-434.
(b) Kalem Co. v. Harper Brothers, 222 U.S. 55 , does
not support respondents' novel theory that
supplying the "means" to accomplish an infringing
activity and encouraging that activity through
advertisement are sufficient to establish liability for
copyright infringement. This case does not fall in the
category of those in which it is manifestly just to [464
U.S. 417, 418] impose vicarious liability because the
"contributory" infringer was in a position to control
the use of copyrighted works by others and had
authorized the use without permission from the
copyright owner. Here, the only contact between
petitioners and the users of the VTR's occurred at the
moment of sale. And there is no precedent for
imposing vicarious liability on the theory that
petitioners sold the VTR's with constructive
knowledge that their customers might use the
equipment to make unauthorized copies of
copyrighted material. The sale of copying
equipment, like the sale of other articles of
commerce, does not constitute contributory
infringement if the product is widely used for
legitimate, unobjectionable purposes, or, indeed, is
merely capable of substantial noninfringing uses. Pp.
434-442.
(c) The record and the District Court's findings show
(1) that there is a significant likelihood that
substantial numbers of copyright holders who
license their works for broadcast on free television
would not object to having their broadcast time-
shifted by private viewers (i. e., recorded at a time
when the VTR owner cannot view the broadcast so
that it can be watched at a later time); and (2) that
there is no likelihood that time-shifting would cause
nonminimal harm to the potential market for, or the
value of, respondents' copyrighted works. The VTR's
are therefore capable of substantial noninfringing
uses. Private, noncommercial time-shifting in the
home satisfies this standard of noninfringing uses
both because respondents have no right to prevent
other copyright holders from authorizing such time-
shifting for their programs, and because the District
Court's findings reveal that even the unauthorized
home time-shifting of respondents' programs is
legitimate fair use. Pp. 442-456.
CAMPBELL v. ACUFF-ROSE MUSIC, INC.(1994)
No. 92-1292
Argued: November 9, 1993Decided: March 7, 1994
Respondent Acuff-Rose Music, Inc., filed suit against
petitioners, the members of the rap music group 2
Live Crew and their record company, claiming that 2
Live Crew's song, "Pretty Woman," infringed Acuff-
Rose's copyright in Roy Orbison's rock ballad, "Oh
Pretty Woman." The District Court granted summary
judgment for 2 Live Crew, holding that its song was a
parody that made fair use of the original song. See
Copyright Act of 1976, 17 U.S.C. 107. The Court of
Appeals reversed and remanded, holding that the
commercial nature of the parody rendered it
presumptively unfair under the first of four factors
relevant under 107; that, by taking the "heart" of the
original and making it the "heart" of a new work, 2
Live Crew had, qualitatively, taken too much under
the third 107 factor; and that market harm for
purposes of the fourth 107 factor had been
established by a presumption attaching to
commercial uses.
Held:
2 Live Crew's commercial parody may be a fair use
within the meaning of 107. Pp. 4-25.
(a) Section 107, which provides that "the fair use of
a copyrighted work . . . for purposes such as criticism
[or] comment . . . is not an infringement . . .,"
continues the common law tradition of fair use
adjudication, and requires case-by-case analysis,
rather than bright-line rules. The statutory examples
of permissible uses provide only general guidance.
The four statutory factors are to be explored and
weighed together in light of copyright's purpose of
promoting science and the arts. Pp. 4-8.
(b) Parody, like other comment and criticism, may
claim fair use. Under the first of the four 107 factors,
"the purpose and Page II character of the use,
including whether such use is of a commercial nature
. . .," the enquiry focuses on whether the new work
merely supersedes the objects of the original
creation, or whether and to what extent it is
"transformative," altering the original with new
expression, meaning, or message. The more
transformative the new work, the less will be the
significance of other factors, like commercialism,
that may weigh against a finding of fair use. The
heart of any parodist's claim to quote from existing
material is the use of some elements of a prior
author's composition to create a new one that, at
least in part, comments on that author's work. But
that tells courts little about where to draw the line.
Thus, like other uses, parody has to work its way
through the relevant factors. Pp. 8-12.
(c) The Court of Appeals properly assumed that 2 Live
Crew's song contains parody commenting on and
criticizing the original work, but erred in giving
virtually dispositive weight to the commercial nature
of that parody by way of a presumption, ostensibly
culled from Sony Corp. of America v. Universal City
Studios, Inc., 464 U.S. 417, 451 , that "every
commercial use of copyrighted material is
presumptively . . . unfair. . . ." The statute makes clear
that a work's commercial nature is only one element
of the first factor enquiry into its purpose and
character, and Sony itself called for no hard
evidentiary presumption. The Court of Appeals' rule
runs counter to Sony and to the long common law
tradition of fair use adjudication. Pp. 12-16.
(d) The second 107 factor, "the nature of the
copyrighted work," is not much help in resolving this
and other parody cases, since parodies almost
invariably copy publicly known, expressive works,
like the Orbison song here. Pp. 16-17.
(e) The Court of Appeals erred in holding that, as a
matter of law, 2 Live Crew copied excessively from
the Orbison original under the third 107 factor,
which asks whether "the amount and substantiality
of the portion used in relation to the copyrighted
work as a whole" are reasonable in relation to the
copying's purpose. Even if 2 Live Crew's copying of
the original's first line of lyrics and characteristic
opening bass riff may be said to go to the original's
"heart," that heart is what most readily conjures up
the song for parody, and it is the heart at which
parody takes aim. Moreover, 2 Live Crew thereafter
departed markedly from the Orbison lyrics and
produced otherwise distinctive music. As to the
lyrics, the copying was not excessive in relation to
the song's parodic purpose. As to the music, this
Court expresses no opinion whether repetition of the
bass riff is excessive copying, but remands to permit
evaluation of the amount taken, in light of the Page
III song's parodic purpose and character, its
transformative elements, and considerations of the
potential for market substitution. Pp. 17-20.
(f) The Court of Appeals erred in resolving the fourth
107 factor, "the effect of the use upon the potential
market for or value of the copyrighted work," by
presuming, in reliance on Sony, supra, at 451, the
likelihood of significant market harm based on 2 Live
Crew's use for commercial gain. No "presumption"
or inference of market harm that might find support
in Sony is applicable to a case involving something
beyond mere duplication for commercial purposes.
The cognizable harm is market substitution, not any
harm from criticism. As to parody pure and simple, it
is unlikely that the work will act as a substitute for
the original, since the two works usually serve
different market functions. The fourth factor
requires courts also to consider the potential market
for derivative works. See, e. g., Harper & Row, supra,
at 568. If the later work has cognizable substitution
effects in protectable markets for derivative works,
the law will look beyond the criticism to the work's
other elements. 2 Live Crew's song comprises not
only parody, but also rap music. The absence of
evidence or affidavits addressing the effect of 2 Live
Crew's song on the derivative market for a
nonparody, rap version of "Oh, Pretty Woman"
disentitled 2 Live Crew, as the proponent of the
affirmative defense of fair use, to summary
judgment. Pp. 20-25.
__________________________________________
ABS-CBN CORPORATION v. FELIPE GOZON, GR No.
195956, 2015-03-11
Facts:
ABS-CBN allowed Reuters Television Service
(Reuters) to air the... footages it had taken earlier
under a special embargo agreement.
 He ruled that:

ABS-CBN alleged that under the special embargo

agreement, any of the footages it took would be for
Court of Appeals rendered the Decision granting the
the "use of Renter's international subscribers only,
Petition and reversing and setting aside the Agra
and shall be considered and treated by Reuters
Resolution.
under 'embargo' against use by other subscribers in
the Philippines. . . . [N]o... other Philippine subscriber
of Reuters would be allowed to use ABS-CBN footage
without the latter's consent." Court of Appeals said:

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.
GMA-7 immediately carried the live newsfeed in its
program "Flash Report," together with its live
broadcast.[13] Allegedly, GMA-7 did not receive any
notice or was not aware that Reuters was airing
footages of ABS-CBN.[14] GMA-7's news... control
room staff saw neither the "No Access Philippines"
notice nor a notice that the video feed was under
embargo in favor of ABS-CBN.
ABS-CBN filed the Complaint for copyright
infringement under Sections 177[16] and 211[17] of
the Intellectual Property Code.
Assistant City Prosecutor Dindo Venturanza issued
the Resolution[19] finding probable cause to indict
Dela Peña-Reyes and Manalastas.
However, it is an admitted fact that petitioner GMA
had only aired a five (5) second footage of the
disputed live video feed that it had received from
Reuters and CNN as a subscriber. Indeed, petitioners
had no notice of the right of ownership of private
respondent over the... same. Without notice of the
"No Access Philippines" restriction of the live video
feed, petitioner cannot he faulted for airing a live
video feed from Reuters and CNN.
Verily, as aptly opined by Secretary Gonzalez in his
earlier Resolution, the act of petitioners in airing the
five (5) second footage was undeniably attended by
good faith and it thus serves to exculpate them from
criminal liability under the Code. While the
Intellectual Properly Code is a special law, and thus
generally categorized as malum prohibitum, it bears
to stress that the provisions of the Code itself do not
ipso facto penalize a person or entity for copyright
infringement by the mere fact that one had used a...
copyrighted work or material.

Department of Justice Secretary Raul M. Gonzalez

Certainly so, in the exercise of one's moral and
(Secretary Gonzalez) ruled in favor of... respondents
economic or copyrights, the very provisions of Part
and held that good faith may be raised as a defense
IV of the Intellectual Property Code provide for the
in the case.
scope and limitations on copyright protection under
Section 184 and in fact permit fair use of copyrighted
work under Section
Department of Justice Acting Secretary Alberto C.
Agra (Secretary Agra) issued the Resolution (Agra
Resolution) that reversed the Gonzalez Resolution
With the aforesaid statutory limitations on one's
and found probable cause
economic and copyrights and the allowable
instances where the other persons can legally use a
copyrighted work, criminal culpability clearly
attaches only when the infringement had been
knowingly and intentionally... committed.
Issues:
whether there is probable cause to charge
respondents with infringement under Republic Act
No. 8293, otherwise known as the Intellectual
Property Code
Third, whether there was fair use of the broadcast
material;
Fourth, whether lack of knowledge that a material is
copyrighted is a defense against copyright
infringement;
Fifth, whether good faith is a defense in a criminal
prosecution for violation of the Intellectual Property
Code
Ruling:
V reports.
ABS-CBN claims that news footage is subject to
copyright and prohibited use of copyrighted material
is punishable under the Intellectual Property Code. It
argues that the new footage is not a "newsworthy
event" but "merely an account of the arrival of
Angelo dela Cruz in the
Philippines — the latter being the newsworthy
event":
On the other hand, respondents argue that ABS-
CBN's news footage of Angelo dela Cruz's arrival is
not copyrightable or subject to protection
Certainly, the arrival of Angelo [d]ela Cruz, which
aroused public attention and the consciousness of
the Filipino people with regard to their countrymen,
OFWs working in foreign countries and how the
Philippine government responds to the issues
concerning them,... is "news". There is no ingenuity
or inventiveness added in the said news footage.
The news footage is copyrightable.
News or the event itself is not copyrightable.
However, an event can be captured and presented in
a specific medium. As recognized by this court in
Joaquin, television "involves a whole spectrum of
visuals and effects, video and audio."[95] News...
coverage in television involves framing shots, using
images, graphics, and sound effects. It involves
creative process and originality. Television news
footage is an expression of the news.
Pacific & Southern Co. v. Duncan,[98] which involves
a News Monitoring Service's videotaping and sale of
WXIA-TVs news broadcasts:... it is equally well-
settled that copyright protection does extend to the
reports themselves, as distinguished from the
substance of... the information contained in the
Copyright protects the manner of expression of news
reports, "the particular form or collocation of words
in which the writer has communicated it"
The idea/expression dichotomy is a complex matter
if one is trying to determine whether a certain
material is a copy of another.101 This dichotomy
would be more relevant in determining, for instance,
whether a stage play was an infringement of an
author's book involving the same... characters and
setting. In this case, however, respondents admitted
that the material under review — which is the
subject of the controversy — is an exact copy of the
original. Respondents did not subject ABS-CBN's
footage to any editing of their own. The news
footage did not... undergo any transformation where
there is a need to track elements of the original.
VI
Respondents point out that upon seeing ABS-CBN's
reporter Dindo Amparo on the footage, GMA-7
immediately shut off the broadcast. Only five (5)
seconds passed before the footage was cut. They
argue that this shows that GMA-7 had no prior
knowledge of ABS-CBN's ownership of the... footage
or was notified of it. They claim that the Angelo dela
Cruz footage is considered a short excerpt of an
event's "news" footage and is covered by fair use.
This court defined fair use as "a privilege to use the
copyrighted material in a reasonable manner
without the consent of the copyright owner or as
copying the theme or ideas rather than their
expression."[115] Fair use is an exception to the
copyright... owner's monopoly of the use of the work
to avoid stifling "the very creativity which that law is
designed to foster."
Determining fair use requires application of the four-
factor test. Section 185 of the Intellectual Property
Code lists four (4) factors to determine if there was
fair use of a copyrighted work:
The purpose and character of the use, including
whether such use is of a commercial nature or is for
non-profit educational purposes;
The nature of the copyrighted work;
The amount and substantiality of the portion used in
relation to the copyrighted work as a whole; and
The effect of the use upon the potential market for
or value of the copyrighted work.
First, the purpose and character of the use of the
copyrighted material must fall under those listed in
Section 185, thus: "criticism, comment, news
reporting, teaching including multiple copies for
classroom use, scholarship, research, and similar
purposes."[117] The purpose and character
requirement is important in view of copyright's goal
to promote creativity and encourage creation of
works. Hence, commercial use of the copyrighted
work can be weighed against fair use.
The "transformative test" is generally used in
reviewing the purpose and character of the usage of
the copyrighted work.[118] This court must look into
whether the copy of the work adds "new expression,
meaning or message" to transform it into
something... else.[119] "Meta-use" can also occur
without necessarily transforming the copyrighted
work used.[120]
Second, the nature of the copyrighted work is
significant in deciding whether its use was fair. If the
nature of the work is more factual than creative,
then fair use will be weighed in favor of the user.
Third, the amount and substantiality of the portion
used is important to determine whether usage falls
under fair use. An exact reproduction of a
copyrighted work, compared to a small portion of it,
can result in the conclusion that its use is not fair.
There may also be cases... where, though the
entirety of the copyrighted work is used without
consent, its purpose determines that the usage is still
fair.121 For example, a parody using a substantial
amount of copyrighted work may be permissible as
fair use as opposed to a copy of a work produced
purely... for economic gain.
Lastly, the effect of the use on the copyrighted
work's market is also weighed for or against the user.
If this court finds that the use had or will have a
negative impact on the copyrighted work's market,
then the use is deemed unfair.
the primary reason for copyrighting newscasts by
broadcasters would seem to be to prevent
competing stations from rebroadcasting current
news from the station with the best... coverage of a
particular news item, thus misappropriating a
portion of the market share.

However, there are also many caveats with these

exceptions. A common exception is that some
stations rebroadcast the news of others. The caveat
is that generally, the two stations are not...
competing for market share. CNN, for example, often
makes news stories available to local broadcasters.

Whether the alleged five-second footage may be

considered fair use is a matter of defense. We
emphasize that the case involves determination of
probable cause at the preliminary investigation
stage. Raising the defense of fair use does not
automatically mean that no infringement... was
committed. The investigating prosecutor has full
discretion to evaluate the facts, allegations, and
evidence during preliminary investigation. Defenses
raised during preliminary investigation are subject to
further proof and evaluation before the trial court.
Given the... insufficiency 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.