Republic of the Philippines Defendant-appellee, in his answer, countered that the complaint states no cause of action.
While
SUPREME COURT
Manila
G.R. No. L-36402 March 16, 1987
FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, INC., plaintiff-appellant,
vs.
BENJAMIN TAN, defendant-appellee.
Lichauco, Picazo & Agcaoili Law Office for plaintiff-appellant.
Ramon A. Nieves for defendant-appellee.
PARAS, J.:
An appeal was made to the Court of Appeals docketed as CA-G.R. No. 46373-R * entitled Filipino
Society of Composers, Authors, Publishers, Inc., Plaintiff-Appellant v. Benjamin Tan, Defendant-
Appellee, from the decision of the Court of First Instance of Manila, Branch VII in Civil Case No.
71222 ** "Filipino Society of Composers, Authors and Publishers, Inc., Plaintiff v. Benjamin Tan,
Defendant," which had dismissed plaintiffs' complaint without special pronouncement as to costs.
The Court of Appeals, finding that the case involves pure questions of law, certified the same to
the Supreme Court for final determination (Resolution, CA-G.R. No. 46373-R, Rollo, p. 36;
Resolution of the Supreme Court of February 16, 1973 in L-36402, Rollo, p. 38).
The undisputed facts of this case are as follows:
Plaintiff-appellant is a non-profit association of authors, composers and publishers duly organized
under the Corporation Law of the Philippines and registered with the Securities and Exchange
Commission. Said association is the owner of certain musical compositions among which are the
songs entitled: "Dahil Sa Iyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao Lamang" and
"The Nearness Of You."
On the other hand, defendant-appellee is the operator of a restaurant known as "Alex Soda
Foundation and Restaurant" where a combo with professional singers, hired to play and sing
musical compositions to entertain and amuse customers therein, were playing and singing the
above-mentioned compositions without any license or permission from the appellant to play or
sing the same. Accordingly, appellant demanded from the appellee payment of the necessary
license fee for the playing and singing of aforesaid compositions but the demand was ignored.
Hence, on November 7, 1967, appellant filed a complaint with the lower court for infringement of
copyright against defendant-appellee for allowing the playing in defendant-appellee's restaurant of
said songs copyrighted in the name of the former.
not denying the playing of said copyrighted compositions in his establishment, appellee maintains
that the mere singing and playing of songs and popular tunes even if they are copyrighted do not
constitute an infringement (Record on Appeal, p. 11; Resolution, CA-G.R. NO. 46373-R, Rollo, pp.
32-36) under the provisions of Section 3 of the Copyright Law (Act 3134 of the Philippine
Legislature).
The lower court, finding for the defendant, dismissed the complaint (Record on Appeal, p. 25).
Plaintiff appealed to the Court of Appeals which as already stated certified the case to the
Supreme Court for adjudication on the legal question involved. (Resolution, Court of Appeals,
Rollo, p. 36; Resolution of the Supreme Court of February 18, 1973, Rollo, p. 38).
In its brief in the Court of Appeals, appellant raised the following Assignment of Errors:
I
THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL COMPOSITIONS OF THE
APPELLANT WERE IN THE NATURE OF PUBLIC PROPERTY WHEN THEY WERE
COPYRIGHTED OR REGISTERED.
II
THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL COMPOSITIONS OF THE
APPELLANT WERE PLAYED AND SUNG IN THE SODA FOUNTAIN AND RESTAURANT OF
THE APPELLEE BY INDEPENDENT CONTRACTORS AND ONLY UPON THE REQUEST OF
CUSTOMERS.
III
THE LOWER COURT ERRED IN HOLDING THAT THE PLAYING AND SINGING OF
COPYRIGHTED MUSICAL COMPOSITIONS IN THE SODA FOUNTAIN AND RESTAURANT OF
THE APPELLEE ARE NOT PUBLIC PERFORMANCES FOR PROFIT OF THE SAID
COMPOSITIONS WITHIN THE MEANING AND CONTEMPLATION OF THE COPYRIGHT LAW.
IV
THE LOWER COURT ERRED IN NOT HOLDING THAT THE APPELLEE IS LIABLE TO THE
APPELLANT FOR FOUR (4) SEPARATE INFRINGEMENTS. (Brief for Appellant, pp. A and B).
The petition is devoid of merit.
The principal issues in this case are whether or not the playing and signing of musical
compositions which have been copyrighted under the provisions of the Copyright Law (Act 3134)
inside the establishment of the defendant-appellee constitute a public performance for profit within
the meaning and contemplation of the Copyright Law of the Philippines; and assuming that there
were indeed public performances for profit, whether or not appellee can be held liable therefor.
Appellant anchors its claim on Section 3(c) of the Copyright Law which provides:
SEC. 3. The proprietor of a copyright or his heirs or assigns shall have the
exclusive right:
xxx xxx xxx
(c) To exhibit, perform, represent, produce, or reproduce the copyrighted work in
any manner or by any method whatever for profit or otherwise; if not reproduced
in copies for sale, to sell any manuscripts or any record whatsoever thereof;
xxx xxx xxx
It maintains that playing or singing a musical composition is universally accepted as performing
the musical composition and that playing and singing of copyrighted music in the soda fountain
and restaurant of the appellee for the entertainment of the customers although the latter do not
pay for the music but only for the food and drink constitute performance for profit under the
Copyright Law (Brief for the Appellant, pp. 19-25).
We concede that indeed there were "public performances for profit. "
The word "perform" as used in the Act has been applied to "One who plays a musical composition
on a piano, thereby producing in the air sound waves which are heard as music ... and if the
instrument he plays on is a piano plus a broadcasting apparatus, so that waves are thrown out,
not only upon the air, but upon the other, then also he is performing the musical composition."
(Buck, et al. v. Duncan, et al.; Same Jewell La Salle Realty Co., 32F. 2d. Series 367).
In relation thereto, it has been held that "The playing of music in dine and dance establishment
which was paid for by the public in purchases of food and drink constituted "performance for profit"
within a Copyright Law." (Buck, et al. v. Russon No. 4489 25 F. Supp. 317). Thus, it has been
explained that while it is possible in such establishments for the patrons to purchase their food and
drinks and at the same time dance to the music of the orchestra, the music is furnished and used
by the orchestra for the purpose of inducing the public to patronize the establishment and pay for
the entertainment in the purchase of food and drinks. The defendant conducts his place of
business for profit, and it is public; and the music is performed for profit (Ibid, p. 319). In a similar
case, the Court ruled that "The Performance in a restaurant or hotel dining room, by persons
employed by the proprietor, of a copyrighted musical composition, for the entertainment of
patrons, without charge for admission to hear it, infringes the exclusive right of the owner of the
copyright." (Herbert v. Shanley Co.; John Church Co. v. Hillard Hotel Co., et al., 242 U.S. 590-
591). In delivering the opinion of the Court in said two cases, Justice Holmes elaborated thus:
If the rights under the copyright are infringed only by a performance where
money is taken at the door, they are very imperfectly protected. Performances
not different in kind from those of the defendants could be given that might
compete with and even destroy the success of the monopoly that the law intends
the plaintiffs to have. It is enough to say that there is no need to construe the
statute so narrowly. The defendants' performances are not eleemosynary. They
are part of a total for which the public pays, and the fact that the price of the
whole is attributed to a particular item which those present are expected to order
is not important. It is true that the music is not the sole object, but neither is the
food, which probably could be got cheaper elsewhere. The object is a repast in
surroundings that to people having limited power of conversation or disliking the
rival noise, give a luxurious pleasure not to be had from eating a silent meal. If
music did not pay, it would be given up. If it pays, it pays out of the public's
pocket. Whether it pays or not, the purpose of employing it is profit, and that is
enough. (Ibid., p. 594).
In the case at bar, it is admitted that the patrons of the restaurant in question pay only for the food
and drinks and apparently not for listening to the music. As found by the trial court, the music
provided is for the purpose of entertaining and amusing the customers in order to make the
establishment more attractive and desirable (Record on Appeal, p. 21). It will be noted that for the
playing and singing the musical compositions involved, the combo was paid as independent
contractors by the appellant (Record on Appeal, p. 24). It is therefore obvious that the expenses
entailed thereby are added to the overhead of the restaurant which are either eventually charged
in the price of the food and drinks or to the overall total of additional income produced by the
bigger volume of business which the entertainment was programmed to attract. Consequently, it is
beyond question that the playing and singing of the combo in defendant-appellee's restaurant
constituted performance for profit contemplated by the Copyright Law. (Act 3134 amended by P.D.
No. 49, as amended).
Nevertheless, appellee cannot be said to have infringed upon the Copyright Law. Appellee's
allegation that the composers of the contested musical compositions waived their right in favor of
the general public when they allowed their intellectual creations to become property of the public
domain before applying for the corresponding copyrights for the same (Brief for Defendant-
Appellee, pp. 14-15) is correct.
The Supreme Court has ruled that "Paragraph 33 of Patent Office Administrative Order No. 3 (as
amended, dated September 18, 1947) entitled 'Rules of Practice in the Philippines Patent Office
relating to the Registration of Copyright Claims' promulgated pursuant to Republic Act 165,
provides among other things that an intellectual creation should be copyrighted thirty (30) days
after its publication, if made in Manila, or within the (60) days if made elsewhere, failure of which
renders such creation public property." (Santos v. McCullough Printing Company, 12 SCRA 324-
325 [1964]. Indeed, if the general public has made use of the object sought to be copyrighted for
thirty (30) days prior to the copyright application the law deems the object to have been donated to
the public domain and the same can no longer be copyrighted.
A careful study of the records reveals that the song "Dahil Sa Iyo" which was registered on April
20, 1956 (Brief for Appellant, p. 10) became popular in radios, juke boxes, etc. long before
registration (TSN, May 28, 1968, pp. 3-5; 25) while the song "The Nearness Of You" registered on
January 14, 1955 (Brief for Appellant, p. 10) had become popular twenty five (25) years prior to
1968, (the year of the hearing) or from 1943 (TSN, May 28, 1968, p. 27) and the songs "Sapagkat
Ikaw Ay Akin" and "Sapagkat Kami Ay Tao Lamang" both registered on July 10, 1966, appear to
have been known and sang by the witnesses as early as 1965 or three years before the hearing in
1968. The testimonies of the witnesses at the hearing of this case on this subject were unrebutted
by the appellant. (Ibid, pp. 28; 29 and 30).

Under the circumstances, it is clear that the musical compositions in question had long become
public property, and are therefore beyond the protection of the Copyright Law.

PREMISES CONSIDERED, the appealed decision of the Court of First Instance of Manila in Civil
Case No. 71222 is hereby AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-30774 January 29, 1929
PHILIPPINE EDUCATION COMPANY, INC., plaintiff-appellee,
vs.
VICENTE SOTTO and V. R. ALINDADA defendants.
V. R. ALINDADA, appellant.
Vicente Sotto for appellant.
Gibbs, and McDonough and Roman Ozaeta for appellee.
STATEMENT
Plaintiff alleges that it is a domestic corporation, with its principal office in the City of Manila, of
which the defendants are also residents and of legal age; that it is the proprietor and publisher of
the monthly magazine Philippine Education Magazine, which is published in the City of Manila and
of general circulation in the Philippine Islands; that the defendant, Vicente Sotto, is the proprietor
and publisher, and the defendant, V. R. Alindada, is the editor of a weekly newspaper known
as The Independent, which is also published in the City of Manila and also of such general
circulation; that in December, 1927, plaintiff contracted with Austin Craig for the preparation and
publication of an original article to be written by him concerning Mrs. Jose Rizal, to be published
exclusively in the Philippine Education Magazine, and that by virtue thereof, the said Craig
prepared and wrote an original article entitled "The True Story of Mrs. Rizal," and delivered it to
the plaintiff which paid him for it, and thereby became the exclusive owner of the article; that it
printed and published the article in its issue of December, 1927, and that it was on the market for
sale in the early part of that month; that as such owner the plaintiff has the exclusive right to print
and publish the article in its magazine, and that it gave notice in that issue "that all rights thereto
were reserved;" that the defendants unlawfully and without the knowledge or consent of the
plaintiff appropriated, copied and reproduced and published the article in the weekly issues of The
Independent of December 24th and December 31, 1927, without citing the source of its
defendants; that upon such discovery, the plaintiff to the fact that the article in question was
published "without permission or even the courtesy of an ordinary credit line," and requested that
in his next issue that "you state in some prominent place that this article was taken from our
magazine, and I request further that you refrain from similar thefts in the future," Also calling his
attention to the fact that we have stated plainly "on the title page of our magazine that we reserve
all rights, and you infringe on them at your peril." In answer to that latter, the editor protested
against the use of the word "thefts," and advised the plaintiff in substance that it had not registered
such right under the Copyright Law, and that "any newspaper can reprint the article of Professor
Craig without permission from anybody. Will you appreciate this free lesson of law?" And the
article as continued was again published in the next issue of The Independent. Plaintiff alleges
that by reason of defendants' acts, it was damaged in the sum of P5,000; that the defendants
threaten to, and will continue appropriating and reproducing the article owned by the plaintiff, in
voilation of its rights, unless restrained by the court, and plaintiff prays for judgment against the
defendants for P5,000, and that they be perpetually enjoined from the publication of any further
articles without the knowledge or consent of the plaintiff, and for such other and further relief as
the court may deem just and equitable.
To this complaint, the defendants filed a general demurrer upon the ground that it did not state
facts sufficient to constitute a cause of action, which was overruled. The defendants then
answered in which they made a general and specific denial of all of the material allegations of the
complaint, and as a special defense allege:
(a) That the defendant Vicente Sotto is not the owner of the magazine The Independent,
nor has he any intervention in the publication of said magazine.
(b) That the plaintiff is not the owner of the article entitled "The True Story of Mrs. Rizal,"
because it is not registered in its name in the proper registry under Act No. 3134 and the
regulation concerning the registration of intellectual property made by the Chief of the
Philippine Library and Museum.
(c) That the defendant V. R. Alindada, as the editor of The Independent, published in said
magazine the article entitled "The True Story of Mrs. Rizal," written by Austin Craig, in
good faith and in the belief that such an interesting historical passage of the Philippines
was published by the magazine Philippine Education Magazine for the information and
propaganda of the ideas and patriotic feelings of the wife of the apostle of our country's
liberties, without any intention to prejudice anybody in his property rights.
Wherefore, the defendants pray the court that the complaint be dismissed and
the defendants absolved therefrom, with costs against the plaintiff.
The case was tried and submitted upon the following admitted facts:
(1) That the Philippine Education Co., Inc., is the corporation that contracted with Austin
Craig for the preparation of the article "The True Story of Mrs. Rizal," for its exclusive
publication in said magazine.
(2) That said article which was prepared by Mr. Austin Craig and published in the
"Philippine Education Magazine" is not found registered in the Copyright Office, although
in the same magazine, under letter A, on the third page containing the index, there may
be read a note "All Rights Reserved."
(3) That the Philippine Education Co., Inc., paid Mr. Austin Craig a certain sum for the
preparation of said article.
(4) That The Independent, which is edited under the management of Mr. V. R. Alindada,
published the said article written by Austin Craig on December 24, 1927 and December
31st of the same year, making it appear in the heading of the article the name of the
author, the first publication of which is marked as Exhibit B.
 (5) That on December 23d when The Independent published it, the editor of The
Philippine Education Magazine wrote to Mr. V. R. Alindada, editor of The Independent,
the letter marked with letter C.
(6) That notwithstanding the letter Exhibit C, the publication of the said article was
continued in the issue of The Independent of December 31st, marked Exhibit E, without
citing the source of the article but making it appear therein the name of the author.
(7) That the purposes of the judgment that may be rendered in this case, in the event of
adverse judgment, Mr. V. R. Alindada, one of the defendants, admits to be solely
responsible civilly.
(8) That in relation to the admission just mentioned, the document, Exhibit F, is
presented.
Mr. SOTTO. Before presenting our evidence, I request that the defendant
Vicente Sotto be excluded from the complaint.
Mr. OZAETA. Without objection.
COURT. According to the petition of the defendant Mr. Vicente Sotto, which is
concurred in by counsel for the plaintiff, the case is dismissed with respect to
him, without costs.
Upon such issues the lower court rendered judgment against the defendant, V. R. Alindada, for
P500, without costs, from which he appeals, contending, first, that the lower court erred in
overruling the demurrer to the complaint, and second, in sentencing him to pay P500 to the
plaintiff.
JOHNS, J.:
The question presented involves the legal construction of Act No. 3134 of the Philippine
Legislature, which is entitled "An Act to protect intellectual property," and which is known as the
Copyright Law of the Philippine Islands.
Section 2 of the Act defines and enumerates what may be copyrighted which, among other things,
includes books, composite and cyclopedic works, manuscripts, commentaries and critical studies.
Section 4 provides:
For the purpose of this Act articles and other writings published without the names of the
authors or under pseudonyms are considered as the property of the publishers.
And section 5 says:
Lines, passages, or paragraphs in a book or other copyrighted works may be qouted or
cited or reproduced for comment, dissertation, or criticism.
News items, editorial paragraphs, and articles in periodicals may also be reproduced
unless they contain a notice that their publication is reserved or a notice of copyright, but
the source of the reproduction or original reproduced shall be cited. In case of musical
works part of little extent may also be reproduced.
Hence, the real question involved is the construction which should be placed upon the second
paragraph of section 5.
It is conceded that neither Professor Craig nor the palintiff applied for or obtained a copyright of
the article in question under the terms and provisions of this Act. The defendants contends taht
after the article was once published without a copyright in plaintiff's magazine, it then became
public property, and that he had a legal right to publish it in his magazine, without giving "the
source of the reproduction."
It must be conceded that after the Copyright Law of the United States, he would have that legal
right. That is the construction which has been place upon that law by numerous decisions both
state and federal of that nation. Be that as it may, we have carefully read and reread the Copyright
Law of the United States, and the provisions contained in the second paragraph of section 5 of the
Act No. 3134 are removed to be found in the Copyright Law of the United States. Neither does it
contain any similar provision, and for want thereof, the decisions of those courts are not in point on
the question involved here, and, as appellant says, the legal question presented on this appeal is
one of first impression in this court, and the case is submitted without the citation of the decision of
any court under the same or similar statute.
Section 4 specifically provides:
For the purpose of this Act articles and other writings published without the names of the
authors or under pseudonyms are conidered as the property of the publishers.
The first paragraph of section 5 says:
Lines, passages, or paragraphs in book or other copyrighted works may be qouted or
cited or reproduced for comment, dissertion, or criticism.
It is very apparent that this paragraph is confined and limited to a book or other copyrighted works,
and, hence, that it does not apply to the publication of the article now in question. The second
paragraph of this question is confined to news items, editorial paragraphs and articles in
periodicals which may also be reproduced, "unless they contain a notice that their publication is
reserved or a notice of copyright, but the source of the reproduction or original reproduce shall be
cited." It is admitted that the plaintiff notified the defendant "that we reserve all rights and you
infringe on them at your peril," and that after receipt of the notice, the defendant published the
article in question, without giving "the source of the reproduction."

If it had been the purpose and intent of the Legislature to limit the reproduction of "news items,
editorial paragraphs, and articles in periodicals," to those which have a notice or copyright only, it
never would have said if "they contain a notice that their publication is reserved."

Analyzing the language used, it says, first, that such news items, editorial paragraphs, and articles
in periodicals may be reproduced, unless they contain a notice that their publication is reserved,
or, second, that may also be reproduced, unless they contain a notice of copyright. But in either
event, the law specifically provides that "the source of the reproduction or original reproduced shall
be cited," and is not confined or limited to case in which there is "a notice of copyright," and
specifically says that in either event "the source of the reproduction or original reproduced shall be
cited." To give this section any other construction would be to nullify, eliminate and take from the
paragraph the words "they contain a notice that their publication is reserved," and to say that the
Legislature never intended to say what it did say. This court must construe the language found in
the act. The language is plain, clear, define and certain, and this court has no legal right to say
that the Legislature did not mean what it said when it used those words, which is all the more
apparent by the use of the word "or" after the word "reserved." In the instant case, the plaintiff did
not give notice of its copyright, for the simple reason that it did not have a copyright, but it did
notify the defendant that in the publication of the article "we reserved all rights," which was legally
equivalent to a notice "that their publication is reserved." To give that paragraph any other
construction would eliminate, take from it, and wipe out, the words "that their publication is
reserved," and this court has no legal right to do that. It was contended that this construction
would nullify the use and value of the whole Copyright Law, but it will bbe notted that this
exception is specifically confined and limited to "news items editorial paragraphs, and articles in
periodicals," and hence could not be made to apply to any other provisions of the Copyright Law. It
will also be noted that in the instant case, the defendant had the legal right to publish the article in
question by giving "the source of the reproduction." The plaintiff bought and paid for the article and
published it with the notice that "we reserve all rights," and the defendant published the article in
question without citing "the source of the reproduction," and for aught that appeared in his paper,
the article was purchase and paid for by the defendant.

We are clearly of the opinon that the language in question in the Copyright Law of the Philippine
Islands, which is not found in the Copyright Law of the United States, was inserted for a specific
purpose, and it was intended to prohibit the doing of the very thing which the defendant did in this
case; otherwise, the use of all of those words is a nullity. This construction does not least impair
the Copyright Law, except as to "news items, editorial paragraphs, and articles in periodicals," and
it protects an enterprising newspaper or magazine that invests its money and pays for the right to
publish an original article, and that was the reason why the Legislature saw fit to use the language
in question.

Above and beyond all this, it would seem that upon the undisputed facts in this case, common
courtesy among newspaper men would suggest that the defendant would give "the source of the
reproduction." It would have been a very simple and an easy thing to do.

All things considered, we are clearly of the opinion that the judgment of the lower court should be
affirmed, with costs. So ordered.
 Republic of the Philippines
SUPREME COURT
Manila
First Division
EN BANC
G.R. No. 175769-70 January 19, 2009
ABS-CBN BROADCASTING CORPORATION, Petitioners,
vs.
PHILIPPINE MULTI-MEDIA SYSTEM, INC., CESAR G. REYES, FRANCIS CHUA (ANG BIAO),
MANUEL F. ABELLADA, RAUL B. DE MESA, AND ALOYSIUS M. COLAYCO, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari1 assails the July 12, 2006 Decision2 of the Court of Appeals in
CA-G.R. SP Nos. 88092 and 90762, which affirmed the December 20, 2004 Decision of the
Director-General of the Intellectual Property Office (IPO) in Appeal No. 10-2004-0002. Also
assailed is the December 11, 2006 Resolution3 denying the motion for reconsideration.
Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is licensed under the laws of the
Republic of the Philippines to engage in television and radio broadcasting. 4 It broadcasts television
programs by wireless means to Metro Manila and nearby provinces, and by satellite to provincial
stations through Channel 2 on Very High Frequency (VHF) and Channel 23 on Ultra High
Frequency (UHF). The programs aired over Channels 2 and 23 are either produced by ABS-CBN
or purchased from or licensed by other producers.
ABS-CBN also owns regional television stations which pattern their programming in accordance
with perceived demands of the region. Thus, television programs shown in Metro Manila and
nearby provinces are not necessarily shown in other provinces.
Respondent Philippine Multi-Media System, Inc. (PMSI) is the operator of Dream Broadcasting
System. It delivers digital direct-to-home (DTH) television via satellite to its subscribers all over the
Philippines. Herein individual respondents, Cesar G. Reyes, Francis Chua, Manuel F. Abellada,
Raul B. De Mesa, and Aloysius M. Colayco, are members of PMSI’s Board of Directors.
PMSI was granted a legislative franchise under Republic Act No. 8630 5 on May 7, 1998 and was
given a Provisional Authority by the National Telecommunications Commission (NTC) on February
1, 2000 to install, operate and maintain a nationwide DTH satellite service. When it commenced
operations, it offered as part of its program line-up ABS-CBN Channels 2 and 23, NBN, Channel 4,
ABC Channel 5, GMA Channel 7, RPN Channel 9, and IBC Channel 13, together with other paid
premium program channels.
However, on April 25, 2001,6 ABS-CBN demanded for PMSI to cease and desist from
rebroadcasting Channels 2 and 23. On April 27, 2001,7 PMSI replied that the rebroadcasting was
in accordance with the authority granted it by NTC and its obligation under NTC Memorandum
Circular No. 4-08-88,8 Section 6.2 of which requires all cable television system operators operating
in a community within Grade “A” or “B” contours to carry the television signals of the authorized
television broadcast stations.9
Thereafter, negotiations ensued between the parties in an effort to reach a settlement; however,
the negotiations were terminated on April 4, 2002 by ABS-CBN allegedly due to PMSI’s inability to
ensure the prevention of illegal retransmission and further rebroadcast of its signals, as well as the
adverse effect of the rebroadcasts on the business operations of its regional television stations. 10
On May 13, 2002, ABS-CBN filed with the IPO a complaint for “Violation of Laws Involving
Property Rights, with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction,” which was docketed as IPV No. 10-2002-0004. It alleged that PMSI’s
unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and
copyright.
On July 2, 2002, the Bureau of Legal Affairs (BLA) of the IPO granted ABS-CBN’s application for a
temporary restraining order. On July 12, 2002, PMSI suspended its retransmission of Channels 2
and 23 and likewise filed a petition for certiorari with the Court of Appeals, which was docketed as
CA-G.R. SP No. 71597.
Subsequently, PMSI filed with the BLA a Manifestation reiterating that it is subject to the must-
carry rule under Memorandum Circular No. 04-08-88. It also submitted a letter dated December
20, 2002 of then NTC Commissioner Armi Jane R. Borje to PMSI stating as follows:
This refers to your letter dated December 16, 2002 requesting for regulatory guidance from this
Commission in connection with the application and coverage of NTC Memorandum Circular No. 4-
08-88, particularly Section 6 thereof, on mandatory carriage of television broadcast signals, to the
direct-to-home (DTH) pay television services of Philippine Multi-Media System, Inc. (PMSI).
Preliminarily, both DTH pay television and cable television services are broadcast services, the
only difference being the medium of delivering such services (i.e. the former by satellite and the
latter by cable). Both can carry broadcast signals to the remote areas, thus enriching the lives of
the residents thereof through the dissemination of social, economic, educational information and
cultural programs.
The DTH pay television services of PMSI is equipped to provide nationwide DTH satellite services.
Concededly, PMSI’s DTH pay television services covers very much wider areas in terms of
carriage of broadcast signals, including areas not reachable by cable television services thereby
providing a better medium of dissemination of information to the public.
In view of the foregoing and the spirit and intent of NTC memorandum Circular No. 4-08-88,
particularly section 6 thereof, on mandatory carriage of television broadcast signals, DTH
pay television services should be deemed covered by such NTC Memorandum Circular.
For your guidance. (Emphasis added)11
On August 26, 2003, PMSI filed another Manifestation with the BLA that it received a letter dated
July 24, 2003 from the NTC enjoining strict and immediate compliance with the must-carry rule
under Memorandum Circular No. 04-08-88, to wit:
Dear Mr. Abellada:
Last July 22, 2003, the National Telecommunications Commission (NTC) received a letter dated
July 17, 2003 from President/COO Rene Q. Bello of the International Broadcasting Corporation
(IBC-Channel 13) complaining that your company, Dream Broadcasting System, Inc., has cut-off,
without any notice or explanation whatsoever, to air the programs of IBC-13, a free-to-air
television, to the detriment of the public.
We were told that, until now, this has been going on.
Please be advised that as a direct broadcast satellite operator, operating a direct-to-home
(DTH) broadcasting system, with a provisional authority (PA) from the NTC, your company,
along with cable television operators, are mandated to strictly comply with the existing
policy of NTC on mandatory carriage of television broadcast signals as provided under
Memorandum Circular No. 04-08-88, also known as the Revised Rules and Regulations
Governing Cable Television System in the Philippines.
This mandatory coverage provision under Section 6.2 of said Memorandum Circular,
requires all cable television system operators, operating in a community within the Grade
“A” or “B” contours to “must-carry” the television signals of the authorized television
broadcast stations, one of which is IBC-13. Said directive equally applies to your company
as the circular was issued to give consumers and the public a wider access to more
sources of news, information, entertainment and other programs/contents.
This Commission, as the governing agency vested by laws with the jurisdiction, supervision and
control over all public services, which includes direct broadcast satellite operators, and taking into
consideration the paramount interest of the public in general, hereby directs you to immediately
restore the signal of IBC-13 in your network programs, pursuant to existing circulars and
regulations of the Commission.
For strict compliance. (Emphasis added) 12
Meanwhile, on October 10, 2003, the NTC issued Memorandum Circular No. 10-10-2003, entitled
“Implementing Rules and Regulations Governing Community Antenna/Cable Television (CATV)
and Direct Broadcast Satellite (DBS) Services to Promote Competition in the Sector.” Article 6,
Section 8 thereof states:
As a general rule, the reception, distribution and/or transmission by any CATV/DBS operator of
any television signals without any agreement with or authorization from program/content providers
are prohibited.
On whether Memorandum Circular No. 10-10-2003 amended Memorandum Circular No. 04-08-88,
the NTC explained to PMSI in a letter dated November 3, 2003 that:
To address your query on whether or not the provisions of MC 10-10-2003 would have the effect
of amending the provisions of MC 4-08-88 on mandatory carriage of television signals, the answer
is in the negative.
xxxx
The Commission maintains that, MC 4-08-88 remains valid, subsisting and enforceable.
Please be advised, therefore, that as duly licensed direct-to-home satellite television service
provider authorized by this Commission, your company continues to be bound by the
guidelines provided for under MC 04-08-88, specifically your obligation under its mandatory
carriage provisions, in addition to your obligations under MC 10-10-2003. (Emphasis added)
Please be guided accordingly.13
On December 22, 2003, the BLA rendered a decision14 finding that PMSI infringed the
broadcasting rights and copyright of ABS-CBN and ordering it to permanently cease and desist
from rebroadcasting Channels 2 and 23.
On February 6, 2004, PMSI filed an appeal with the Office of the Director-General of the IPO
which was docketed as Appeal No. 10-2004-0002. On December 23, 2004, it also filed with the
Court of Appeals a “Motion to Withdraw Petition; Alternatively, Memorandum of the Petition for
Certiorari” in CA-G.R. SP No. 71597, which was granted in a resolution dated February 17, 2005.
On December 20, 2004, the Director-General of the IPO rendered a decision15 in favor of PMSI,
the dispositive portion of which states:
WHEREFORE, premises considered, the instant appeal is hereby GRANTED. Accordingly,
Decision No. 2003-01 dated 22 December 2003 of the Director of Bureau of Legal Affairs is
hereby REVERSED and SET ASIDE.
Let a copy of this Decision be furnished the Director of the Bureau of Legal Affairs for appropriate
action, and the records be returned to her for proper disposition. The Documentation, Information
and Technology Transfer Bureau is also given a copy for library and reference purposes.
SO ORDERED.16
Thus, ABS-CBN filed a petition for review with prayer for issuance of a temporary restraining order
and writ of preliminary injunction with the Court of Appeals, which was docketed as CA-G.R. SP
No. 88092.
On July 18, 2005, the Court of Appeals issued a temporary restraining order. Thereafter, ABS-
CBN filed a petition for contempt against PMSI for continuing to rebroadcast Channels 2 and 23
despite the restraining order. The case was docketed as CA- G.R. SP No. 90762.
On November 14, 2005, the Court of Appeals ordered the consolidation of CA-G.R. SP Nos.
88092 and 90762.
In the assailed Decision dated July 12, 2006, the Court of Appeals sustained the findings of the
Director-General of the IPO and dismissed both petitions filed by ABS-CBN.17
ABS-CBN’s motion for reconsideration was denied, hence, this petition.
ABS-CBN contends that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 is an
infringement of its broadcasting rights and copyright under the Intellectual Property Code (IP
Code);18that Memorandum Circular No. 04-08-88 excludes DTH satellite television operators; that
the Court of Appeals’ interpretation of the must-carry rule violates Section 9 of Article III19 of the
Constitution because it allows the taking of property for public use without payment of just
compensation; that the Court of Appeals erred in dismissing the petition for contempt docketed as
CA-G.R. SP No. 90762 without requiring respondents to file comment.
Respondents, on the other hand, argue that PMSI’s rebroadcasting of Channels 2 and 23 is
sanctioned by Memorandum Circular No. 04-08-88; that the must-carry rule under the
Memorandum Circular is a valid exercise of police power; and that the Court of Appeals correctly
dismissed CA-G.R. SP No. 90762 since it found no need to exercise its power of contempt.
After a careful review of the facts and records of this case, we affirm the findings of the Director-
General of the IPO and the Court of Appeals.
There is no merit in ABS-CBN’s contention that PMSI violated its broadcaster’s rights under
Section 211 of the IP Code which provides in part:
Chapter XIV
BROADCASTING ORGANIZATIONS
Sec. 211. Scope of Right. - Subject to the provisions of Section 212, broadcasting organizations
shall enjoy the exclusive right to carry out, authorize or prevent any of the following acts:
211.1. The rebroadcasting of their broadcasts;
xxxx
Neither is PMSI guilty of infringement of ABS-CBN’s copyright under Section 177 of the IP Code
which states that copyright or economic rights shall consist of the exclusive right to carry out,
authorize or prevent the public performance of the work (Section 177.6), and other communication
to the public of the work (Section 177.7).20
Section 202.7 of the IP Code defines broadcasting as “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.”
On the other hand, rebroadcasting as defined in Article 3(g) of the International Convention for
the Protection of Performers, Producers of Phonograms and Broadcasting Organizations,
otherwise known as the 1961 Rome Convention, of which the Republic of the Philippines is a
signatory, 21 is “the simultaneous broadcasting by one broadcasting organization of the broadcast
of another broadcasting organization.”
The Director-General of the IPO correctly found that PMSI is not engaged in rebroadcasting and
thus cannot be considered to have infringed ABS-CBN’s broadcasting rights and copyright, thus:
That the Appellant’s [herein respondent PMSI] subscribers are able to view Appellee’s [herein
petitioner ABS-CBN] programs (Channels 2 and 23) at the same time that the latter is
broadcasting the same is undisputed. The question however is, would the Appellant in doing so be
considered engaged in broadcasting. Section 202.7 of the IP Code states that 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.”
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.
It is under the second category that Appellant’s DTH satellite television service must be examined
since it is satellite-based. The elements of such category are as follows:
1. There is transmission of sounds or images or of representations thereof;
2. The transmission is through satellite;
3. The transmission is for public reception; and
4. The means for decrypting are provided to the public by the broadcasting organization
or with its consent.
It is only the presence of all the above elements can a determination that the DTH is broadcasting
and consequently, rebroadcasting Appellee’s signals in violation of Sections 211 and 177 of the IP
Code, may be arrived at.
Accordingly, this Office is of the view that the transmission contemplated under Section 202.7 of
the IP Code presupposes that the origin of the signals is the broadcaster. Hence, a program that is
broadcasted is attributed to the broadcaster. In the same manner, the rebroadcasted program is
attributed to the rebroadcaster.
In the case at hand, Appellant is not the origin nor does it claim to be the origin of the programs
broadcasted by the Appellee. Appellant did not make and transmit on its own but merely carried
the existing signals of the Appellee. When Appellant’s subscribers view Appellee’s programs in
Channels 2 and 23, they know that the origin thereof was the Appellee.
Aptly, it is imperative to discern the nature of broadcasting. When a broadcaster transmits, the
signals are scattered or dispersed in the air. Anybody may pick-up these signals. There is no
restriction as to its number, type or class of recipients. To receive the signals, one is not required
to subscribe or to pay any fee. One only has to have a receiver, and in case of television signals, a
television set, and to tune-in to the right channel/frequency. The definition of broadcasting,
wherein it is required that the transmission is wireless, all the more supports this discussion.
Apparently, the undiscriminating dispersal of signals in the air is possible only through wireless
means. The use of wire in transmitting signals, such as cable television, limits the recipients to
those who are connected. Unlike wireless transmissions, in wire-based transmissions, it is not
enough that one wants to be connected and possesses the equipment. The service provider, such
as cable television companies may choose its subscribers.
The only limitation to such dispersal of signals in the air is the technical capacity of the transmitters
and other equipment employed by the broadcaster. While the broadcaster may use a less
powerful transmitter to limit its coverage, this is merely a business strategy or decision and not an
inherent limitation when transmission is through cable.
Accordingly, the nature of broadcasting is to scatter the signals in its widest area of coverage as
possible. On this score, it may be said that making public means that accessibility is
undiscriminating as long as it [is] within the range of the transmitter and equipment of the
broadcaster. That the medium through which the Appellant carries the Appellee’s signal, that is via
satellite, does not diminish the fact that it operates and functions as a cable television. It remains
that the Appellant’s transmission of signals via its DTH satellite television service cannot be
considered within the purview of broadcasting. x x x
xxxx
This Office also finds no evidence on record showing that the Appellant has provided decrypting
means to the public indiscriminately. Considering the nature of this case, which is punitive in fact,
the burden of proving the existence of the elements constituting the acts punishable rests on the
shoulder of the complainant.
Accordingly, this Office finds that there is no rebroadcasting on the part of the Appellant of the
Appellee’s programs on Channels 2 and 23, as defined under the Rome Convention.22
Under the Rome Convention, rebroadcasting is “the simultaneous broadcasting by one
broadcasting organization of the broadcast of another broadcasting organization.” The Working
Paper23 prepared by the Secretariat of the Standing Committee on Copyright and Related Rights
defines broadcasting organizations as “entities that take the financial and editorial responsibility for
the selection and arrangement of, and investment in, the transmitted content.”24 Evidently, PMSI
would not qualify as a broadcasting organization because it does not have the aforementioned
responsibilities imposed upon broadcasting organizations, such as ABS-CBN.
ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the
viewers receive in its unaltered form. PMSI does not produce, select, or determine the programs to
be shown in Channels 2 and 23. Likewise, it does not pass itself off 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.
The Director-General of the IPO and the Court of Appeals also correctly found that PMSI’s
services are similar to a cable television system because the services it renders fall under cable
“retransmission,” as described in the Working Paper, to wit:
(G) Cable Retransmission
47. When a radio or television program is being broadcast, it can be retransmitted to new
audiences by means of cable or wire. In the early days of cable television, it was mainly used to
improve signal reception, particularly in so-called “shadow zones,” or to distribute the signals in
large buildings or building complexes. With improvements in technology, cable operators now
often receive signals from satellites before retransmitting them in an unaltered form to their
subscribers through cable.
48. In principle, cable retransmission can be either simultaneous with the broadcast over-the-air or
delayed (deferred transmission) on the basis of a fixation or a reproduction of a fixation.
Furthermore, they might be unaltered or altered, for example through replacement of commercials,
etc. In general, however, the term “retransmission” seems to be reserved for such
transmissions which are both simultaneous and unaltered.
49. The Rome Convention does not grant rights against unauthorized cable retransmission.
Without such a right, cable operators can retransmit both domestic and foreign over the air
broadcasts simultaneously to their subscribers without permission from the broadcasting
organizations or other rightholders and without obligation to pay remuneration. 25 (Emphasis
added)
Thus, 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. 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.
It must be emphasized that the law on copyright is not absolute. The IP Code provides that:
Sec. 184. Limitations on Copyright. -
184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute
infringement of copyright:
xxxx
(h) The use made of a work by or under the direction or control of the Government, by the National
Library or by educational, scientific or professional institutions where such use is in the public
interest and is compatible with fair use;
The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No.
04-08-88 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.26 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 effective use of communications, radio and television broadcasting
facilities, and to maintain effective competition among private entities in these activities whenever
the Commission finds it reasonably feasible.27 As correctly observed by the Director-General of the
IPO:
Accordingly, the “Must-Carry Rule” under NTC Circular No. 4-08-88 falls under the foregoing
category of limitations on copyright. This Office agrees with the Appellant [herein respondent
PMSI] that the “Must-Carry Rule” is in consonance with the principles and objectives underlying
Executive Order No. 436,28 to wit:
The Filipino people must be given wider access to more sources of news, information, education,
sports event and entertainment programs other than those provided for by mass media and
afforded television programs to attain a well informed, well-versed and culturally refined citizenry
and enhance their socio-economic growth:
WHEREAS, cable television (CATV) systems could support or supplement the services provided
by television broadcast facilities, local and overseas, as the national information highway to the
countryside.29
The Court of Appeals likewise correctly observed that:
[T]he very intent and spirit of the NTC Circular will prevent a situation whereby station owners and
a few networks would have unfettered power to make time available only to the highest bidders, to
communicate only their own views on public issues, people, and to permit on the air only those
with whom they agreed – contrary to the state policy that the (franchise) grantee like the petitioner,
private respondent and other TV station owners, shall provide at all times sound and balanced
programming and assist in the functions of public information and education.
This is for the first time that we have a structure that works to accomplish explicit state policy
goals.30
Indeed, intellectual property protection is merely a means towards the end of making society
benefit from the creation of its men and women of talent and genius. This is the essence of
intellectual property laws, and it explains why certain products of ingenuity that are concealed from
the public are outside the pale of protection afforded by the law. It also explains why the author or
the creator enjoys no more rights than are consistent with public welfare.31
Further, as correctly observed by the Court of Appeals, the must-carry rule as well as the
legislative franchises granted to both ABS-CBN and PMSI are in consonance with state policies
enshrined in the Constitution, specifically Sections 9,32 17,33 and 2434 of Article II on the
Declaration of Principles and State Policies.35
ABS-CBN was granted a legislative franchise under Republic Act No. 7966, Section 1 of which
authorizes it “to construct, operate and maintain, for commercial purposes and in the public
interest, television and radio broadcasting in and throughout the Philippines x x x.” Section 4
thereof mandates that it “shall provide adequate public service time to enable the government,
through the said broadcasting stations, to reach the population on important public issues; provide
at all times sound and balanced programming; promote public participation such as in community
programming; assist in the functions of public information and education x x x.”
PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which
similarly states that it “shall provide adequate public service time to enable the government,
through the said broadcasting stations, to reach the population on important public issues; provide
at all times sound and balanced programming; promote public participation such as in community
programming; assist in the functions of public information and education x x x.” Section 5,
paragraph 2 of the same law provides that “the radio spectrum is a finite resource that is a part of
the national patrimony and the use thereof is a privilege conferred upon the grantee by the State
and may be withdrawn anytime, after due process.”
In Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC,36 the Court held that a franchise is
a mere privilege which may be reasonably burdened with some form of public service. Thus:
All broadcasting, whether by radio or by television stations, is licensed by the government.
Airwave frequencies have to be allocated as there are more individuals who want to broadcast
than there are frequencies to assign. A franchise is thus a privilege subject, among other things, to
amendment by Congress in accordance with the constitutional provision that “any such franchise
or right granted . . . shall be subject to amendment, alteration or repeal by the Congress when the
common good so requires.”
xxxx
Indeed, provisions for COMELEC Time have been made by amendment of the franchises of radio
and television broadcast stations and, until the present case was brought, such provisions had not
been thought of as taking property without just compensation. Art. XII, §11 of the Constitution
authorizes the amendment of franchises for “the common good.” What better measure can be
conceived for the common good than one for free air time for the benefit not only of candidates but
even more of the public, particularly the voters, so that they will be fully informed of the issues in
an election? “[I]t is the right of the viewers and listeners, not the right of the broadcasters, which is
paramount.”
Nor indeed can there be any constitutional objection to the requirement that broadcast stations
give free air time. Even in the United States, there are responsible scholars who believe that
government controls on broadcast media can constitutionally be instituted to ensure diversity of
views and attention to public affairs to further the system of free expression. For this purpose,
broadcast stations may be required to give free air time to candidates in an election. Thus,
Professor Cass R. Sunstein of the University of Chicago Law School, in urging reforms in
regulations affecting the broadcast industry, writes:
xxxx
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. x x x37
There is likewise no merit to ABS-CBN’s claim that PMSI’s carriage of its signals is for a
commercial purpose; that its being the country’s top broadcasting company, the availability of its
signals allegedly enhances PMSI’s attractiveness to potential customers;38 or that the
unauthorized carriage of its signals by PMSI has created competition between its Metro Manila
and regional stations.
ABS-CBN presented no substantial evidence to prove that PMSI carried its signals for profit; or
that such carriage adversely affected the business operations of its regional stations. Except for
the testimonies of its witnesses,[39] no studies, statistical data or information have been submitted
in evidence.
Administrative charges cannot be based on mere speculation or conjecture. The complainant has
the burden of proving by substantial evidence the allegations in the complaint. 40 Mere allegation is
not evidence, and is not equivalent to proof.41
Anyone in the country who owns a television set and antenna can receive ABS-CBN’s signals for
free. Other broadcasting organizations with free-to-air signals such as GMA-7, RPN-9, ABC-5, and
IBC-13 can likewise be accessed for free. No payment is required to view the said
channels42 because these broadcasting networks do not generate revenue from subscription from
their viewers but from airtime revenue from contracts with commercial advertisers and producers,
as well as from direct sales.
In contrast, cable and DTH television earn revenues from viewer subscription. In the case of
PMSI, it offers its customers premium paid channels from content providers like Star Movies, Star
World, Jack TV, and AXN, among others, thus allowing its customers to go beyond the limits of
“Free TV and Cable TV.”43 It does not advertise itself as a local channel carrier because these
local channels can be viewed with or without DTH television.
Relevantly, 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.
On the other hand, 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.
There is no merit to ABS-CBN’s argument that PMSI’s carriage of Channels 2 and 23 resulted in
competition between its Metro Manila and regional stations. ABS-CBN is free to decide to pattern
its regional programming in accordance with perceived demands of the region; however, it cannot
impose this kind of programming on the regional viewers who are also entitled to the free-to-air
channels. It must be emphasized that, as a national broadcasting organization, one of ABS-CBN’s
responsibilities is to scatter its signals to the widest area of coverage as possible. That it should
limit its signal reach for the sole purpose of gaining profit for its regional stations undermines
public interest and deprives the viewers of their right to access to information.
Indeed, television is a business; however, the welfare of the people must not be sacrificed in the
pursuit of profit. The right of the viewers and listeners to the most diverse choice of programs
available is paramount.45 The Director-General correctly observed, thus:
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-flung areas the enjoyment of programs available to city viewers. In fact, this Office finds the
rule more burdensome on the part of the cable television companies. The latter carries the
television signals and shoulders the costs without any recourse of charging. On the other hand,
the signals that are carried by cable television companies are dispersed and scattered by the
television stations and anybody with a television set is free to pick them up.
With its enormous resources and vaunted technological capabilities, Appellee’s [herein petitioner
ABS-CBN] broadcast signals can reach almost every corner of the archipelago. That in spite of
such capacity, it chooses to maintain regional stations, is a business decision. That the “Must-
Carry Rule” adversely affects the profitability of maintaining such regional stations since there will
be competition between them and its Metro Manila station is speculative and an attempt to
extrapolate the effects of the rule. As discussed above, Appellant’s DTH satellite television
services is of limited subscription. There was not even a showing on part of the Appellee the
number of Appellant’s subscribers in one region as compared to non-subscribing television
owners. In any event, if this Office is to engage in conjecture, such competition between the
regional stations and the Metro Manila station will benefit the public as such competition will most
likely result in the production of better television programs.”46
All told, we find that the Court of Appeals correctly upheld the decision of the IPO Director-General
that PMSI did not infringe on ABS-CBN’s intellectual property rights under the IP Code. The
findings of facts of administrative bodies charged with their specific field of expertise, are afforded
great weight by the courts, and in the absence of substantial showing that such findings are made
from an erroneous estimation of the evidence presented, they are conclusive, and in the interest of
stability of the governmental structure, should not be disturbed.47
Moreover, the factual findings of the Court of Appeals are conclusive on the parties and are not
reviewable by the Supreme Court. They carry even more weight when the Court of Appeals
affirms the factual findings of a lower fact-finding body,48 as in the instant case.
There is likewise no merit to ABS-CBN’s contention that the Memorandum Circular excludes from
its coverage DTH television services such as those provided by PMSI. Section 6.2 of the
Memorandum Circular requires all cable television system operators operating in a community
within Grade “A” or “B” contours to carry the television signals of the authorized television
broadcast stations.49 The rationale behind its issuance can be found in the whereas clauses which
state:
Whereas, Cable Television Systems or Community Antenna Television (CATV) have shown their
ability to offer additional programming and to carry much improved broadcast signals in the remote
areas, thereby enriching the lives of the rest of the population through the dissemination of social,
economic, educational information and cultural programs;
Whereas, the national government supports the promotes the orderly growth of the Cable
Television industry within the framework of a regulated fee enterprise, which is a hallmark of a
democratic society;
Whereas, public interest so requires that monopolies in commercial mass media shall be regulated
or prohibited, hence, to achieve the same, the cable TV industry is made part of the broadcast
media;
Whereas, pursuant to Act 3846 as amended and Executive Order 205 granting the National
Telecommunications Commission the authority to set down rules and regulations in order to
protect the public and promote the general welfare, the National Telecommunications Commission
hereby promulgates the following rules and regulations on Cable Television Systems;
The policy of the Memorandum Circular is to carry improved signals in remote areas for the good
of the general public and to promote dissemination of information. In line with this policy, it is clear
that DTH television should be deemed covered by the Memorandum Circular. Notwithstanding the
different technologies employed, both DTH and cable television have the ability to carry improved
signals and promote dissemination of information because they operate and function in the same
way.
In its December 20, 2002 letter,50 the NTC explained that both DTH and cable television services
are of a similar nature, the only difference being the medium of delivering such services. They can
carry broadcast signals to the remote areas and possess the capability to enrich the lives of the
residents thereof through the dissemination of social, economic, educational information and
cultural programs. Consequently, while the Memorandum Circular refers to cable television, it
should be understood as to include DTH television which provides essentially the same services.
In Eastern Telecommunications Philippines, Inc. v. International Communication Corporation, 51 we
held:
The NTC, being the government agency entrusted with the regulation of activities coming under its
special and technical forte, and possessing the necessary rule-making power to implement its
objectives, is in the best position to interpret its own rules, regulations and guidelines. The Court
has consistently yielded and accorded great respect to the interpretation by administrative
agencies of their own rules unless there is an error of law, abuse of power, lack of jurisdiction or
grave abuse of discretion clearly conflicting with the letter and spirit of the law. 52
With regard to the issue of the constitutionality of the must-carry rule, the Court finds that its
resolution is not necessary in the disposition of the instant case. One of the essential requisites for
a successful judicial inquiry into constitutional questions is that the resolution of the constitutional
question must be necessary in deciding the case.53 In Spouses Mirasol v. Court of Appeals,54 we
held:
As a rule, the courts will not resolve the constitutionality of a law, if the controversy can be settled
on other grounds. The policy of the courts is to avoid ruling on constitutional questions and to
presume that the acts of the political departments are valid, absent a clear and unmistakable
showing to the contrary. To doubt is to sustain. This presumption is based on the doctrine of
separation of powers. This means that the measure had first been carefully studied by the
legislative and executive departments and found to be in accord with the Constitution before it was
finally enacted and approved.55
The instant case was instituted for violation of the IP Code and infringement of ABS-CBN’s
broadcasting rights and copyright, which can be resolved without going into the constitutionality of
Memorandum Circular No. 04-08-88. As held by the Court of Appeals, the only relevance of the
circular in this case is whether or not compliance therewith should be considered manifestation of
lack of intent to commit infringement, and if it is, whether such lack of intent is a valid defense
against the complaint of petitioner.56
The records show that petitioner assailed the constitutionality of Memorandum Circular No. 04-08-
88 by way of a collateral attack before the Court of Appeals. In Philippine National Bank v.
Palma,57 we ruled that for reasons of public policy, the constitutionality of a law cannot be
collaterally attacked. A law is deemed valid unless declared null and void by a competent court;
more so when the issue has not been duly pleaded in the trial court.58
As a general rule, the question of constitutionality must be raised at the earliest opportunity so that
if not raised in the pleadings, ordinarily it may not be raised in the trial, and if not raised in the trial
court, it will not be considered on appeal.59 In Philippine Veterans Bank v. Court of Appeals,60 we
held:

We decline to rule on the issue of constitutionality as all the requisites for the exercise of judicial
review are not present herein. Specifically, the question of constitutionality will not be
passed upon by the Court unless, at the first opportunity, it is properly raised and
presented in an appropriate case, adequately argued, and is necessary to a determination
of the case, particularly where the issue of constitutionality is the very lis mota presented.x
x x61

Finally, we find that the dismissal of the petition for contempt filed by ABS-CBN is in order.

Indirect contempt may either be initiated (1) motu proprio by the court by issuing an order or any
other formal charge requiring the respondent to show cause why he should not be punished for
contempt or (2) by the filing of a verified petition, complying with the requirements for filing
initiatory pleadings.62

ABS-CBN filed a verified petition before the Court of Appeals, which was docketed CA G.R. SP
No. 90762, for PMSI’s alleged disobedience to the Resolution and Temporary Restraining Order,
both dated July 18, 2005, issued in CA-G.R. SP No. 88092. However, after the cases were
consolidated, the Court of Appeals did not require PMSI to comment on the petition for contempt.
It ruled on the merits of CA-G.R. SP No. 88092 and ordered the dismissal of both petitions.

ABS-CBN argues that the Court of Appeals erred in dismissing the petition for contempt without
having ordered respondents to comment on the same. Consequently, it would have us reinstate
CA-G.R. No. 90762 and order respondents to show cause why they should not be held in
contempt.

It bears stressing that the proceedings for punishment of indirect contempt are criminal in nature.
The modes of procedure and rules of evidence adopted in contempt proceedings are similar in
nature to those used in criminal prosecutions. 63 While it may be argued that the Court of Appeals
should have ordered respondents to comment, the issue has been rendered moot in light of our
ruling on the merits. To order respondents to comment and have the Court of Appeals conduct a
hearing on the contempt charge when the main case has already been disposed of in favor of
PMSI would be circuitous. Where the issues have become moot, there is no justiciable
controversy, thereby rendering the resolution of the same of no practical use or value.64

WHEREFORE, the petition is DENIED. The July 12, 2006 Decision of the Court of Appeals in CA-
G.R. SP Nos. 88092 and 90762, sustaining the findings of the Director-General of the Intellectual
Property Office and dismissing the petitions filed by ABS-CBN Broadcasting Corporation, and the
December 11, 2006 Resolution denying the motion for reconsideration, are AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 195956 March 11, 2015
ABS-CBN CORPORATION, Petitioner,
vs.
FELIPE GOZON, GILBERTO R. DUAVIT, JR., MARISSA L. FLORES, JESSICA A. SORO,
GRACE DELA PENA-REYES, JOHN OLIVER T. MANALASTAS, JOHN DOES AND JANE
DOES, Respondents.
DECISION
LEONEN, J.:
The main issue in this case is whether there is probable cause to charge respondents with
infringement under Republic Act No. 8293, otherwise known as the Intellectual Property Code.
The resolution of this issue requires clarification of the concept of "copyrightable material" in
relation to material that is rebroadcast live as a news story. We are also asked to rule on whether
criminal prosecution for infringement of copyrightable material, such as live rebroadcast, can be
negated by good faith.
ABS-CBN Corporation (ABS-CBN) filed the Petition for Review on Certiorari1 to assail the
November 9, 2010 Decision2 and the March 3, 2011 Resolution3 of the Court of Appeals. The
Court of Appeals reinstated the Department of Justice Resolution dated August 1, 2005 that
ordered the withdrawal of the Information finding probable cause for respondents’ violation of
Sections 1774 and 2115 of the Intellectual Property Code.6 Respondents are officers and
employees of GMA Network, Inc. (GMA-7). They are: Felipe Gozon (Gozon), GMA-7 President;
Gilberto R. Duavit, Jr. (Duavit, Jr.), Executive Vice-President; Marissa L. Flores (Flores), Vice-
President for New and Public Affairs; Jessica A. Soho (Soho), Director for News; Grace Dela
Peña-Reyes (Dela Peña-Reyes), Head of News and Public Affairs; John Oliver Manalastas
(Manalastas), Program Manager; and others.
The controversy arose from GMA-7’s news coverage on the homecoming of Filipino overseas
worker and hostage victim Angelo dela Cruz on July 22, 2004. As summarized by the Court of
Appeals:
Overseas Filipino worker Angelo dela Cruz was kidnapped by Iraqi militants and as a condition for
his release, a demand was made for the withdrawal of Filipino troops in Iraq. After negotiations, he
was released by his captors and was scheduled to return to the country in the afternoon of 22 July
2004. Occasioned by said homecoming and the public interest it generated, both . . . GMA
Network, Inc. . . . and [petitioner] made their respective broadcasts and coverage of the live
event.7
ABS-CBN "conducted live audio-video coverage of and broadcasted the arrival of Angelo dela
Cruz at the Ninoy Aquino International Airport (NAIA) and the subsequent press
conference."8 ABS-CBN allowed Reuters Television Service (Reuters) to air the footages it had
taken earlier under a special embargo agreement.9
ABS-CBN alleged that under the special embargo agreement, any of the footages it took would be
for the "use of Reuter’s international subscribers only, and shall be considered and treated by
Reuters 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."10
GMA-7, to which Gozon, Duavit, Jr., Flores, Soho, Dela Peña-Reyes, and Manalastas are
connected, "assigned and stationed news reporters and technical men at the NAIA for its live
broadcast and non-live news coverage of the arrival of dela Cruz."11 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.12
GMA-7 immediately carried the live news feed 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.15
On August 13, 2004, ABS-CBN filed the Complaint for copyright infringement under Sections
17716 and 21117 of the Intellectual Property Code.18
On December 3, 2004, Assistant City Prosecutor Dindo Venturanza issued the
Resolution19 finding probable cause to indict Dela Peña-Reyes and Manalastas.20 Consequently,
the Information21 for violation of the Intellectual Property Code was filed on December 17, 2004. It
reads:
That on or about the 22nd of July 2004, in Quezon City, Philippines, the above-named accused,
conspiring together, confederating with and mutually helping each other, being the Head of News
Operations and the Program Manager, respectively, for the News and Public Affairs Department of
GMA Network, Inc., did then and there, willfully, unlawfully and feloniously use and broadcast the
footage of the arrival of Angelo [d]ela Cruz at the Ninoy Aquino International Airport of which ABS-
CBN holds the exclusive ownership and copyright by then and there using, airing, and
broadcasting the said footage in its news program "FLASH REPORT" without first obtaining the
consent or authority of said copyright owner, to their damage and prejudice.
Contrary to law.22
On January 4, 2005, respondents filed the Petition for Review before the Department of
Justice.23 In the Resolution (Gonzalez Resolution) dated August 1, 2005, Department of Justice
Secretary Raul M. Gonzalez (Secretary Gonzalez) ruled in favor of respondents and held that
good faith may be raised as a defense in the case.24 The dispositive portion of the Resolution
reads:
WHEREFORE, THE PETITION FOR REVIEW FILED BY GMA-7 in I.S. No. 04-10458 is
considered meritorious and is hereby GRANTED. This case is hereby Dismissed, the resolution of
the City Prosecutor of Quezon City is hereby reversed and the same is ordered to withdraw the
information if any and report action taken to this office within ten (10) days. 25 (Emphasis in the
original)
Both parties moved for reconsideration of the Gonzalez Resolution.26
Meanwhile, on January 19, 2005, the trial court granted the Motion to Suspend Proceedings filed
earlier by Dela Peña-Reyes and Manalastas.27 The trial court Order reads:
Perusing the motion, the court finds that a petition for review was filed with the Department of
Justice on January 5, 2005 as confirmed by the public prosecutor. Under Section 11 (c), Rule 116
of the Rules of Criminal Procedure, once a petition for review is filed with the Department of
Justice, a suspension of the criminal proceedings may be allowed by the court.
Accordingly, to allow the Department of Justice the opportunity to act on said petition for review,
let the proceedings on this case be suspended for a period of sixty (60) days counted from
January 5, 2005, the date the petition was filed with the Department of Justice. The arraignment of
the accused on February 1, 2005 is accordingly cancelled. Let the arraignment be rescheduled to
March 8, 2005 at 8:30 a.m. The accused through counsel are notified in open court.
SO ORDERED.28
On June 29, 2010, Department of Justice Acting Secretary Alberto C. Agra (Secretary Agra)
issued the Resolution (Agra Resolution) that reversed the Gonzalez Resolution and found
probable cause to charge Dela Peña-Reyes and Manalastas for violation of the Intellectual
Property Code.29 Secretary Agra also found probable cause to indict Gozon, Duavit, Jr., Flores,
and Soho for the same violation.30 He ruled that:
[w]hile good faith may be a defense in copyright infringement, the same is a disputable
presumption that must be proven in a full-blown trial. Disputable presumptions may be
contradicted and overcome by other evidence. Thus, a full-blown trial is the proper venue where
facts, issues and laws are evaluated and considered. The very purpose of trial is to allow a party
to present evidence to overcome the disputable presumptions involved.31
The dispositive portion of the Agra Resolution provides:
WHEREFORE, premises considered:
(a) The Motion for Reconsideration filed by appellees ABS-CBN Broadcasting
Corporation (ABS-CBN) of our Resolution promulgated on August 1, 2005 (Resolution
No. 364, Series of 2005) and the Petition for Review filed by complainant-appellant ABS-
CBN in I.S. No. 04-10458 on April10, 2006, are GRANTED and the City Prosecutor of
Quezon City is hereby ordered to file the necessary Information for violation of Section
177 and 211 of Republic Act No. 8293 against GMA-7. Felipe L. Gozon, Gilberto R.
Duavit, Jr., Marissa L.Flores, Jessica A. Soho, Grace Dela Pena-Reyes, John Oliver T.
Manalastas[.]
....
SO ORDERED.32 (Emphasis in the original)
Respondents assailed the Agra Resolution through the Petition for Certiorari with prayer for
issuance of a temporary restraining order and/or Writ of Preliminary Injunction on September 2,
2010 before the Court of Appeals. In the Resolution dated September 13, 2010, the Court of
Appeals granted the temporary restraining order preventing the Department of Justice from
enforcing the Agra Resolution.33
On November 9, 2010, the Court of Appeals rendered the Decision granting the Petition and
reversing and setting aside the Agra Resolution.34 The Court of Appeals held that Secretary Agra
committed errors of jurisdiction in issuing the assailed Resolution. Resolving the issue of copyright
infringement, the Court of Appeals said:
Surely, private respondent has a copyright of its news coverage. Seemingly, for airing said video
feed, petitioner GMA is liable under the provisions of the Intellectual Property Code, which was
enacted purposely to protect copyright owners from infringement. 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 be 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 Property 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.
Certainly so, in the exercise of one’s moral and economic or copyrights, the very provisions of Part
IV of the Intellectual Property Code provide for the scope and limitations on copyright protection
under Section 184 and in fact permit fair use of copyrighted work under Section 185. With the
aforesaid statutory limitations on one’s 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. 35 (Emphasis
supplied)
The dispositive portion of the Decision reads:
WHEREFORE, the foregoing considered, the instant petition is hereby GRANTED and the
assailed Resolution dated 29 June 2010 REVERSED and SET ASIDE. Accordingly, the earlier
Resolution dated 1 August 2005, which ordered the withdrawal of the Information filed, if any,
against the petitioners for violation of Sections 177 and 211 of the Intellectual Property Code, is
hereby REINSTATED. No costs.
SO ORDERED.36 (Emphasis in the original)
ABS-CBN’s Motion for Reconsideration was denied.37 It then filed its Petition for Review before
this court assailing the Decision and Resolution of the Court of Appeals.38
The issues for this court’s consideration are:
First, whether Secretary Agra committed errors of jurisdiction in the Resolution dated June 29,
2010 and, therefore, whether a petition for certiorari was the proper remedy in assailing that
Resolution;
Second, whether news footage is copyrightable under the law;
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; and
Lastly, whether the Court of Appeals was correct in overturning Secretary Agra’s finding of
probable cause.
I been brought to Court whatever disposition the fiscal may feel should be proper in the case
The trial court granted respondents’ Motion to Suspend Proceedings and deferred respondents
Dela Peña-Reyes and Manalastas’ arraignment for 60 days in view of the Petition for Review filed
before the Department of Justice.
Rule 116, Section 11 (c) of the Rules of Criminal Procedure allows
the suspension of the accused’s arraignment in certain circumstances only:
SEC. 11. Suspension of arraignment.–Upon motion by the proper party, the arraignment shall be
suspended in the following cases:
(a) The accused appears to be suffering from an unsound mental condition which
effectively renders him unable to fully understand the charge against him and to plead
intelligently thereto. In such case, the court shall order his mental examination and, if
necessary, his confinement for such purpose;
(b) There exists a prejudicial question; and
(c) A petition for review of the resolution of the prosecutor is pending at either the
Department of Justice, or the Office of the President; provided, that the period of
suspension shall not exceed sixty (60) days counted from the filing of the petition with the
reviewing office. (12a) (Emphasis supplied)
In Samson v. Daway,39 this court acknowledged the applicability of Rule 116, Section (c) in a
criminal prosecution for infringement under the Intellectual Property Code. However, this court
emphasized the limits of the order of deferment under the Rule:
While the pendency of a petition for review is a ground for suspension of the arraignment, the . . .
provision limits the deferment of the arraignment to a period of 60 days reckoned from the filing of
the petition with the reviewing office. It follows, therefore, that after the expiration of said period,
the trial court is bound to arraign the accused or to deny the motion to defer arraignment.40
We clarify that the suspension of the arraignment should always be within the limits allowed by
law. In Crespo v. Judge Mogul,41 this court outlined the effects of filing an information before the
trial court, which includes initiating a criminal action and giving this court "authority to hear and
determine the case":42
The preliminary investigation conducted by the fiscal for the purpose of determining whether a
prima facie case exists warranting the prosecution of the accused is terminated upon the filing of
the information in the proper court. In turn, as above stated, the filing of said information sets in
motion the criminal action against the accused in Court. Should the fiscal find it proper to conduct
a reinvestigation of the case, at such stage, the permission of the Court must be secured. After
such reinvestigation the finding and recommendations of the fiscal should be submitted to the
Court for appropriate action. While it is true that the fiscal has the quasi judicial discretion to
determine whether or not a criminal case should be filed in court or not, once the case had already
thereafter should be addressed for the consideration of the Court, the only qualification is that the
action of the Court must not impair the substantial rights of the accused or the right of the People
to due process of law.
Whether the accused had been arraigned or not and whether it was due to a reinvestigation by the
fiscal or a review by the Secretary of Justice whereby a motion to dismiss was submitted to the
Court, the Court in the exercise of its discretion may grant the motion or deny it and require that
the trial on the merits proceed for the proper determination of the case.
However, one may ask, if the trial court refuses to grant the motion to dismiss filed by the fiscal
upon the directive of the Secretary of Justice will there not be a vacuum in the prosecution? A
state prosecutor to handle the case cannot possibly be designated by the Secretary of Justice who
does not believe that there is a basis for prosecution nor can the fiscal be expected to handle the
prosecution of the case thereby defying the superior order of the Secretary of Justice. The answer
is simple. The role of the fiscal or prosecutor as We all know is to see that justice is done and not
necessarily to secure the conviction of the person accused before the Courts. Thus, in spite of his
opinion to the contrary, it is the duty of the fiscal to proceed with the presentation of evidence of
the prosecution to the Court to enable the Court to arrive at its own independent judgment as to
whether the accused should be convicted or acquitted. The fiscal should not shirk from the
responsibility of appearing for the People of the Philippines even under such circumstances much
less should he abandon the prosecution of the case leaving it to the hands of a private prosecutor
for then the entire proceedings will be null and void. The least that the fiscal should do is to
continue to appear for the prosecution although he may turn over the presentation of the evidence
to the private prosecutor but still under his direction and control.
The rule therefore in this jurisdiction is that once a complaint or information is filed in Court any
disposition of the case as to its dismissal or the conviction or acquittal of the accused rests in the
sound discretion of the Court. Although the fiscal retains the direction and control of the
prosecution of criminal cases even while the case is already in Court he cannot impose his opinion
on the trial court. The Court is the best and sole judge on what to do with the case before it. The
determination of the case is within its exclusive jurisdiction and competence. A motion to dismiss
the case filed by the fiscal should be addressed to the Court who has the option to grant or deny
the same. It does not matter if this is done before or after the arraignment of the accused or that
the motion was filed after a reinvestigation or upon instructions of the Secretary of Justice who
reviewed the records of the investigation.43 (Emphasis supplied, citations omitted)
The doctrine in Crespo was reiterated in Mayor Balindong v. Court of Appeals, 44 where this court
reminded the Department of Justice Secretary to refrain from entertaining petitions for review
when the case is already pending with this court:
[I]n order to avoid a situation where the opinion of the Secretary of Justice who reviewed the
action of the fiscal may be disregarded by the trial court, the Secretary of Justice should, as far as
practicable, refrain from entertaining a petition for review or appeal from the action of the fiscal,
when the complaint or information has already been filed in the Court. The matter should be left
entirely for the determination of the Court.45
The trial court should have proceeded with respondents Dela Peña-Reyes and Manalastas’
arraignment after the 60-day period from the filing of the Petition for Review before the
Department of Justice on March 8, 2005. It was only on September 13, 2010 that the temporary
restraining order was issued by the Court of Appeals. The trial court erred when it did not act on
the criminal case during the interim period. It had full control and direction of the case. As Judge
Mogul reasoned in denying the motion to dismiss in Crespo, failure to proceed with the
arraignment "disregards the requirements of due process [and] erodes the Court’s independence
and integrity."46
II
According to ABS-CBN, the Court of Appeals erred in finding that: a motion for reconsideration
was not necessary before a petition for certiorari could be filed; the Department of Justice
Secretary committed errors of jurisdiction since the Agra Resolution was issued within its authority
and in accordance with settled laws and jurisprudence; and respondents were not liable for
copyright infringement.
In its assailed Decision, the Court of Appeals found that respondents committed a procedural error
when they failed to file a motion for reconsideration before filing the Petition for Certiorari.
However, the Court of Appeals held that a motion for reconsideration was unnecessary since the
Agra Resolution was a patent nullity and it would have been useless under the circumstances:
Given that a reading of the assailed Resolution and the instant records readily reveals errors of
jurisdiction on the part of respondent Secretary, direct judicial recourse is warranted under the
circumstances. Aside from the fact that said Resolution is a patent nullity having been issued in
grave abuse of discretion amounting to lack or excess of jurisdiction, the filing of a motion for
reconsideration is evidently useless on account of the fact that the issues and arguments before
this Court have already been duly raised and accordingly delved into by respondent Secretary in
his disposition of the petition a quo.47 (Emphasis in the original)
In Elma v. Jacobi,48 this court ruled that a petition for certiorari under Rule 65 of the Rules of Court
is proper when assailing adverse resolutions of the Department of Justice stemming from the
determination of probable cause.49 However, grave abuse of discretion must be alleged.50
In Sanrio Company Limited v. Lim,51 this court stressed the prosecutor’s role in determining
probable cause. Judicial review will only lie when it is shown that the prosecutor acted with grave
abuse of discretion amounting to lack or excess of jurisdiction:
A prosecutor alone determines the sufficiency of evidence that will establish probable cause
justifying the filing of a criminal information against the respondent. By way of exception, however,
judicial review is allowed where respondent has clearly established that the prosecutor committed
grave abuse of discretion. Otherwise stated, such review is appropriate only when the prosecutor
has exercised his discretion in an arbitrary, capricious, whimsical or despotic manner by reason of
passion or personal hostility, patent and gross enough to amount to an evasion of a positive duty
or virtual refusal to perform a duty enjoined by law.52 (Citations omitted)
Grave abuse of discretion refers to:
such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The
abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility and must be so patent and gross as to amount
to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all
in contemplation of law.53
Resorting to certiorari requires that there be there be "no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law[,]"54 such as a motion for reconsideration.
Generally, "a motion for reconsideration is a condition sine qua non before a petition for certiorari
may lie, its purpose being to grant an opportunity for the [tribunal or officer] to correct any error
attributed to it by a re-examination of the legal and factual circumstances of the case." 55 However,
exceptions to the rule exist:
(a) where the order is a patent nullity, as where the Court a quo had no jurisdiction; (b) where the
questions raised in the certiorari proceeding have been duly raised and passed upon by the lower
court, or are the same as those raised and passed upon in the lower court; (c) where there is an
urgent necessity for the resolution of the question and any further delay would prejudice the
interests of the Government or of the petitioner or the subject matter of the action is perishable; (d)
where, under the circumstances, a motion for reconsideration would be useless; (e) where
petitioner was deprived of due process and there is extreme urgency for relief; (f) where, in a
criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial
Court is improbable; (g) where the proceedings in the lower court are a nullity for lack of due
process; (h) where the proceedings was ex parte or in which the petitioner had no opportunity to
object; and (i) where the issue raised is one purely of law or where public interest is
involved.56 (Emphasis in the original, citations omitted)
As argued by respondents, "[a] second motion for reconsideration would have been useless and
futile since the D[epartment] [of] J[ustice] had already passed upon the same issues
twice."57 Equally pressing under the circumstances was the need to resolve the matter, as the
Information’s filing would lead to respondents’ imminent arrest.58
Moreover, Department of Justice Department Circular No. 70 dated July 3, 2000, or the 2000 NPS
Rules on Appeal, provides that no second motion for reconsideration of the Department of Justice
Secretary’s resolution shall be entertained:
SECTION 13. Motion for reconsideration. The aggrieved party may file a motion for
reconsideration within a non-extendible period of ten (10) days from receipt of the resolution on
appeal, furnishing the adverse party and the Prosecution Office concerned with copies thereof and
submitting proof of such service. No second or further motion for reconsideration shall be
entertained.
The Agra Resolution was the result of respondents’ Motion for Reconsideration assailing the
Gonzalez Resolution. To file a motion for reconsideration of the Agra Resolution would be
superfluous. Respondents were, therefore, correct in filing the Petition for Certiorari of the Agra
Resolution before the Court of Appeals.
III
The Court of Appeals ruled that Secretary Agra committed errors of jurisdiction, which then
required the grant of the writ of certiorari:
So viewed, by ordering the filing of information without proof that probable cause exists to charge
petitioners with a crime, respondent Secretary clearly committed an error of jurisdiction thus
warranting the issuance of the writ of certiorari. Surely, probable cause cannot be had when the
very provisions of the statute exculpates criminal liability in cases classified as fair use of
copyrighted materials. The fact that they admittedly used the Reuters live video feed is not, as a
matter of course, tantamount to copyright infringement that would justify the filing of an information
against the petitioners.59
Error of jurisdiction must be distinguished from error of judgment:
A line must be drawn between errors of judgment and errors of jurisdiction. An error of judgment is
one which the court may commit in the exercise of its jurisdiction. An error of jurisdiction renders
an order or judgment void or voidable. Errors of jurisdiction are reviewable on certiorari; errors of
judgment, only by appeal.60
In People v. Hon. Sandiganbayan61:
An error of judgment is one which the court may commit in the exercise of its jurisdiction. An error
of jurisdictionis one where the act complained of was issued by the court without or in excess of
jurisdiction, or with grave abuse of discretion, which is tantamount to lack or in excess of
jurisdiction and which error is correctible only by the extraordinary writ of certiorari. Certiorari will
not be issued to cure errors of the trial court in its appreciation of the evidence of the parties, or its
conclusions anchored on the said findings and its conclusions of law.62 (Emphasis supplied)
This court has adopted a deferential attitude towards review of the executive’s finding of probable
cause.63 This is based "not only upon the respect for the investigatory and [prosecutorial] powers
granted by the Constitution to the executive department but upon practicality as well." 64 Review of
the Department of Justice Secretary’s decision or resolution will be allowed only when grave
abuse of discretion is alleged:
The full discretionary authority to determine probable cause in a preliminary investigation to
ascertain sufficient ground for the filing of information rests with the executive branch. Hence,
judicial review of the resolution of the Secretary of Justice is limited to a determination whether
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction. Courts
cannot substitute the executive branch’s judgment.
....
It is only where the decision of the Justice Secretary is tainted with grave abuse of discretion
amounting to lack or excess of jurisdiction that the Court of Appeals may take cognizance of the
case in a petition for certiorari under Rule 65 of the Revised Rules of Civil Procedure. The Court of
Appeals decision may then be appealed to this Court by way of a petition for review on
certiorari.65 (Emphasis supplied, citations omitted)
In this case, it must be shown that Secretary Agra exceeded his authority when he reversed the
findings of Secretary Gonzalez. This court must determine whether there is probable cause to file
an information for copyright infringement under the Intellectual Property Code.
IV
Probable cause pertains to "such facts as are sufficient to engender a well-founded belief that a
crime has been committed and that respondent is probably guilty thereof." 66 Preliminary
investigation is the inquiry or proceeding to determine whether there is probable cause.67
In Webb v. De Leon,68 this court ruled that determination of probable cause during preliminary
investigation does not require trial-like evaluation of evidence since existence of probable cause
does not equate to guilt:
It ought to be emphasized that in determining probable cause, the average man weighs facts and
circumstances without resorting to the calibrations of our technical rules of evidence of which his
knowledge is nil. Rather, he relies on the calculus of common sense of which all reasonable men
have an abundance.
....
. . . A finding of probable cause merely binds over the suspect to stand trial. It is not a
pronouncement of guilt.69
In Reyes v. Pearlbank Securities, Inc.,70 finding probable cause is not equivalent to finding with
moral certainty that the accused committed the crime:
A finding of probable cause needs only to rest on evidence showing that more likely than not a
crime has been committed by the suspects. It need not be based on clear and convincing
evidence of guilt, not on evidence establishing guilt beyond reasonable doubt, and definitely not
on evidence establishing absolute certainty of guilt. In determining probable cause, the average
man weighs facts and circumstances without resorting to the calibrations of the rules of evidence
of which he has no technical knowledge. He relies on common sense.71
During preliminary investigation, a public prosecutor does not adjudicate on the parties’ rights,
obligations, or liabilities.72
In the recent case of Estrada v. Office of the Ombudsman, et al., 73 we reiterated Webb on the
determination of probable cause during preliminary investigation and traced the history of probable
cause as borrowed from American jurisprudence:
The purpose in determining probable cause is to make sure that the courts are not clogged with
weak cases that will only be dismissed, as well as to spare a person from the travails of a
needless prosecution.
....
. . . In the United States, from where we borrowed the concept of probable cause, the prevailing
definition of probable cause is this:
In dealing with probable cause, however, as the very name implies, we deal with probabilities.
These are not technical; they are the factual and practical considerations of everyday life on which
reasonable and prudent men, not legal technicians, act. The standard of proof is accordingly
correlative to what must be proved.
"The substance of all the definitions" of probable cause "is a reasonable ground for belief of guilt."
McCarthy v. De Armit, 99 Pa. St. 63, 69, quoted with approval in the Carroll opinion. 267 U. S. at
161. And this "means less than evidence which would justify condemnation" or conviction, as
Marshall, C. J., said for the Court more than a century ago in Locke v. United States, 7 Cranch
339, 348. Since Marshall’s time, at any rate, it has come to mean more than bare suspicion:
Probable cause exists where "the facts and circumstances within their [the officers’] knowledge
and of which they had reasonably trustworthy information [are] sufficient in themselves to warrant
a man of reasonable caution in the belief that" an offense has been or is being committed. Carroll
v. United States, 267 U. S. 132, 162.
These long-prevailing standards seek to safeguard citizens from rash and unreasonable
interferences with privacy and from unfounded charges of crime. They also seek to give fair
leeway for enforcing the law in the community’s protection. Because many situations which
confront officers in the course of executing their duties are more or less ambiguous, room must be
allowed for some mistakes on their part. But the mistakes must be those of reasonable men,
acting on facts leading sensibly to their conclusions of probability. The rule of probable cause is a
practical, non technical conception affording the best compromise that has been found for
accommodating these often opposing interests. Requiring more would unduly hamper law
enforcement. To allow less would be to leave law-abiding citizens at the mercy of the officers’
whim or caprice.
In the Philippines, there are four instances in the Revised Rules of Criminal Procedure where
probable cause is needed to be established:
(1) In Sections 1 and 3 of Rule 112: By the investigating officer, to determine whether
there is sufficient ground to engender a well-founded belief that a crime has been
committed and the respondent is probably guilty thereof, and should be held for trial. A
preliminary investigation is required before the filing of a complaint or information for an
offense where the penalty prescribed by law is at least four years, two months and one
day without regard to the fine;
(2) In Sections 6 and 9 of Rule 112: By the judge, to determine whether a warrant of
arrest or a commitment order, if the accused has already been arrested, shall be issued
and that there is a necessity of placing the respondent under immediate custody in order
not to frustrate the ends of justice;
(3) In Section 5(b) of Rule 113:By a peace officer or a private person making a
warrantless arrest when an offense has just been committed, and he has probable cause
to believe based on personal knowledge of facts or circumstances that the person to be
arrested has committed it; and
(4) In Section 4 of Rule 126: By the judge, to determine whether a search warrant shall be
issued, and only upon probable cause in connection with one specific offense 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 things to be seized which may be anywhere in the Philippines.
In all these instances, the evidence necessary to establish probable cause is based only on the
likelihood, or probability, of guilt.74
Estrada also highlighted that a "[p]reliminary investigation is not part of the criminal action. It is
merely preparatory and may even be disposed of in certain situations."75
To determine whether there is probable cause that respondents committed copyright infringement,
a review of the elements of the crime, including the existing facts, is required.
V The word "idea" is derived from a Greek term, meaning "a form, the look or appearance of a thing
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":76
To be clear, it is the event itself or the arrival of Angelo dela Cruz which is not copyrightable
because that is the newsworthy event. However, any footage created from the event itself, in this
case the arrival of Angelo dela Cruz, are intellectual creations which are copyrightable. Thus, the
footage created by ABS-CBN during the arrival of Angelo dela Cruz, which includes the
statements of Dindo Amparo, are copyrightable and protected by the laws on copyright.77
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 video footage of this "news" is not
copyrightable by any legal standard as facts of everyday life depicted in the news and items of
press information is part of the public domain.78 (Emphasis in the original)
The news footage is copyrightable.
The Intellectual Property Code is clear about the rights afforded to authors of various kinds of
work. Under the Code, "works are protected by the sole fact of their creation, irrespective of their
mode or form of expression, as well as of their content, quality and purpose."79 These include
"[a]udiovisual works and cinematographic works and works produced by a process analogous to
cinematography or any process for making audiovisual recordings."80
Contrary to the old copyright law,81 the Intellectual Property Code does not require registration of
the work to fully recover in an infringement suit. Nevertheless, both copyright laws provide that
copyright for a work is acquired by an intellectual creator from the moment of creation.82
It is true that under Section 175 of the Intellectual Property Code, "news of the day and other
miscellaneous facts having the character of mere items of press information" are considered
unprotected subject matter.83 However, the Code does not state that expression of the news of the
day, particularly when it underwent a creative process, is not entitled to protection.
An idea or event must be distinguished from the expression of that idea or event. An idea has
been likened to a ghost in that it "must be spoken to a little before it will explain itself."84 It is a
concept that has eluded exact legal definition.85 To get a better grasp of the idea/expression
dichotomy, the etymology of the term "idea" is traced:
as opposed to its reality, from idein, to see." In the Timaeus, Plato saw ideas as eternal
paradigms, independent objects to which the divine demiurge looks as patterns in forming the
world. This was later modified to the religious conception of ideas as the thoughts of God. "It is not
a very long step to extend the term ‘idea’ to cover patterns, blueprints, or plans in anyone's mind,
not only in God’s." The word entered the French and English vernacular in the 1600s and
possessed two meanings. The first was the Platonic meaning of a perfect exemplar or paradigm.
The second, which probably has its origin with Descartes, is of a mental concept or image or,
more broadly, any object of the mind when it is active. Objects of thought may exist independently.
The sun exists (probably) before and after you think of it. But it is also possible to think of things
that have never existed, such as a unicorn or Pegasus. John Locke defined ideas very
comprehensively, to include: all objects of the mind. Language was a way of translating the
invisible, hidden ideas that make up a person’s thoughts into the external, perceptible world of
articulate sounds and visible written symbols that others can understand. 86 (Citations omitted)
There is no one legal definition of "idea" in this jurisdiction. The term "idea" is mentioned only once
in the Intellectual Property Code.87 In Joaquin, Jr. v. Drilon,88 a television format (i.e., a dating
show format) is not copyrightable under Section 2 of Presidential Decree No. 49; 89 it is a mere
concept:
P.D. No. 49, §2, in enumerating what are subject to copyright, refers to finished 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. Thus, the new INTELLECTUAL PROPERTY
CODE OF THE PHILIPPINES provides:
SEC. 175. Unprotected Subject Matter.—Notwithstanding the provisions of Sections 172 and 173,
no protection shall extend, under this law, to any idea, procedure, system, method or operation,
concept, principle, discovery or mere data as such, even if they are expressed, explained,
illustrated or embodied in a work; news of the day and other miscellaneous facts having the
character of mere items of press information; or any official text of a legislative, administrative or
legal nature, as well as any official translation thereof.
What then is the subject matter of petitioners’ copyright? This Court is of the opinion that petitioner
BJPI’s copyright covers audio-visual recordings of each episode of Rhoda and Me, as falling
within the class of works mentioned in P.D. 49, §2(M),to wit:
Cinematographic works and works produced by a process analogous to cinematography or any
process for making audio-visual recordings;
The copyright does not extend to the general concept or format of its dating game show.
Accordingly, by the very nature of the subject of petitioner BJPI’s copyright, the investigating
prosecutor should have the opportunity to compare the videotapes of the two shows.
Mere description by words of the general format of the two dating game shows is insufficient; 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 effects, video and audio, such that no similarity or dissimilarity may be
found by merely describing the general copyright/format of both dating game shows. 90 (Emphasis
supplied, citations omitted)
Ideas can be either abstract or concrete.91 It is the concrete ideas that are generally referred to as
expression:
The words "abstract" and "concrete" arise in many cases dealing with the idea/expression
distinction. The Nichols court, for example, found that the defendant’s film did not infringe the
plaintiff’s play because it was "too generalized an abstraction from what plaintiff wrote . . . only a
part of her ideas." In Eichel v. Marcin, the court said that authors may exploit facts, experiences,
field of thought, and general ideas found in another’s work, "provided they do not substantially
copy a concrete form, in which the circumstances and ideas have been developed, arranged, and
put into shape." Judge Hand, in National Comics Publications, Inc. v. Fawcett Publications, Inc.
said that "no one infringes, unless he descends so far into what is concrete as to invade. . .
‘expression.’"
These cases seem to be distinguishing "abstract" ideas from "concrete" tangible embodiments of
these abstractions that may be termed expression. However, if the concrete form of a work means
more than the literal expression contained within it, it is difficult to determine what is meant by
"concrete." Webster's New Twentieth Century Dictionary of the English Language provides several
meanings for the word concrete. These include: "having a material, perceptible existence; of,
belonging to, or characterized by things or events that can be perceived by the senses; real;
actual;" and "referring to a particular; specific, not general or abstract."92
In Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,93 this court, citing the American
case of Baker v. Selden, distinguished copyright from patents and illustrated how an idea or
concept is different from the expression of that idea:
In the oft-cited case of Baker vs. Selden, the United States Supreme Court held that only the
expression of an idea is protected by copyright, not the idea itself. In that case, the plaintiff held
the copyright of a book which expounded on a new accounting system he had developed. The
publication illustrated blank forms of ledgers utilized in such a system. The defendant reproduced
forms similar to those illustrated in the plaintiff’s copyrighted book. The US Supreme Court ruled
that:
"There is no doubt that a work on the subject of book-keeping, though only explanatory of well
known systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x But
there is a clear distinction between the books, as such, and the art, which it is, intended to
illustrate. The mere statement of the proposition is so evident that it requires hardly any argument
to support it. The same distinction may be predicated of every other art as well as that of
bookkeeping.
A treatise on the composition and use of medicines, be they old or new; on the construction and
use of ploughs or watches or churns; or on the mixture and application of colors for painting or
dyeing; or on the mode of drawing lines to produce the effect of perspective, would be the subject
of copyright; but no one would contend that the copyright of the treatise would give the exclusive
right to the art or manufacture described therein. The copyright of the book, if not pirated from
other works, would be valid without regard to the novelty or want of novelty of its subject matter.
The novelty of the art or thing described or explained has nothing to do with the validity of the
copyright. To give to the author of the book an exclusive property in the art described therein,
when no examination of its novelty has ever been officially made, would be a surprise and a fraud
upon the public. That is the province of letters patent, not of copyright. The claim to an invention of
discovery of an art or manufacture must be subjected to the examination of the Patent Office
before an exclusive right therein can be obtained; and a patent from the government can only
secure it.
The difference between the two things, letters patent and copyright, may be illustrated by
reference to the subjects just enumerated. Take the case of medicines. Certain mixtures are found
to be of great value in the healing art. If the discoverer writes and publishes a book on the subject
(as regular physicians generally do), he gains no exclusive right to the manufacture and sale of
the medicine; he gives that to the public. If he desires to acquire such exclusive right, he must
obtain a patent for the mixture as a new art, manufacture or composition of matter. He may
copyright his book, if he pleases; but that only secures to him the exclusive right of printing and
publishing his book. So of all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and illustrations it may
contain, gives no exclusive right to the modes of drawing described, though they may never have
been known or used before. By publishing the book without getting a patent for the art, the latter is
given to the public.
....
Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book
intended to convey instruction in the art, any person may practice and use the art itself which he
has described and illustrated therein. The use of the art is a totally different thing from a
publication of the book explaining it. The copyright of a book on bookkeeping cannot secure the
exclusive right to make, sell and use account books prepared upon the plan set forth in such book.
Whether the art might or might not have been patented, is a question, which is not before us. It
was not patented, and is open and free to the use of the public. And, of course, in using the art,
the ruled lines and headings of accounts must necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises from a confusion of
ideas produced by the peculiar nature of the art described in the books, which have been made
the subject of copyright. In describing the art, the illustrations and diagrams employed happened
to correspond more closely than usual with the actual work performed by the operator who uses
the art. x x x The description of the art in a book, though entitled to the benefit of copyright, lays no
foundation for an exclusive claim to the art itself. The object of the one is explanation; the object of
the other is use. The former may be secured by copyright. The latter can only be secured, if it can
be secured at all, by letters patent."94 (Emphasis supplied)
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.96 It involves creative process and originality. Television
news footage is an expression of the news.
In the United States, a line of cases dwelt on the possibility of television newscasts to be
copyrighted.97 Most of these cases focused on private individuals’ sale or resale of tapes of news
broadcasts. Conflicting decisions were rendered by its courts. Noteworthy, however, is the District
Court’s pronouncement in Pacific & Southern Co. v. Duncan,98 which involves a News Monitoring
Service’s videotaping and sale of WXIA-TV’s news broadcasts:
It is axiomatic that copyright protection does not extend to news "events" or the facts or ideas
which are the subject of news reports. Miller v. Universal City Studios, Inc., 650 F.2d 1365, 1368
(5th Cir. 1981); Wainwright Securities, Inc. v. Wall Street Transcript Corp., 558 F.2d 91, 95 (2d Cir.
1977), cert. denied, 434 U.S. 1014, 98 S.Ct. 730, 54 L.Ed.2d 759 (1978). But 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 reports. Wainwright, 558 F.2d at 95; International
News Service v. Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211 (1918); see Chicago
Record-Herald Co. v. Tribune Assn., 275 F. 797 (7th Cir.1921); 1 Nimmer on Copyright § 2.11[B]
(1983). Copyright protects the manner of expression of news reports, "the particular form or
collocation of words in which the writer has communicated it." International News Service, 248
U.S. at 234, 39 S.Ct. at 70. Such protection extends to electronic news reports as well as written
reports. See17 U.S.C. § 102(a) (5), (6), and (7); see also Iowa State University Research
Foundations, Inc. v. American Broadcasting Cos., 621 F.2d 57, 61 (2d Cir. 1980).99 (Emphasis
supplied)
The idea/expression dichotomy has long been subject to debate in the field of copyright law.
Abolishing the dichotomy has been proposed, in that non-protectibility of ideas should be re-
examined, if not stricken, from decisions and the law:
If the underlying purpose of the copyright law is the dual one expressed by Lord Mansfield, the
only excuse for the continuance of the idea-expression test as a judicial standard for determining
protectibility would be that it was or could be a truly useful method of determining the proper
balance between the creator’s right to profit from his work and the public's right that the "progress
of the arts not be retarded."
. . . [A]s used in the present-day context[,] the dichotomy has little or no relationship to the policy
which it should effectuate. Indeed, all too often the sweeping language of the courts regarding the
non-protectibility of ideas gives the impression that this is of itself a policy of the law, instead of
merely a clumsy and outdated tool to achieve a much more basic end.100
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.
Having established the protectible nature of news footage, we now discuss the concomitant rights
accorded to authors. The authors of a work are granted several rights in relation to it, including
copyright or economic rights:
SECTION 177. Copyright or Economic Rights. — Subject to the provisions of Chapter VIII,
copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent
the following acts:
177.1. Reproduction of the work or substantial portion of the work;
177.2. Dramatization, translation, adaptation, abridgment, arrangement or other
transformation of the work;
177.3. The first public distribution of the original and each copy of the work by sale or
other forms of transfer of ownership;
177.4. Rental of the original or a copy of an audiovisual or cinematographic work, a work
embodied in a sound recording, a computer program, a compilation of data and other
materials or a musical work in graphic form, irrespective of the ownership of the original or
the copy which is the subject of the rental; (n)
177.5. Public display of the original or a copy of the work;
177.6. Public performance of the work; and
177.7. Other communication to the public of the work.(Sec. 5, P. D. No. 49a) (Emphasis
supplied)
Under Section 211 of the Intellectual Property Code, broadcasting organizations are granted a
more specific set of rights called related or neighboring rights:
SECTION 211. Scope of Right. — Subject to the provisions of Section 212, broadcasting
organizations shall enjoy the exclusive right to carry out, authorize or prevent any of the following
acts:
211.1. The rebroadcasting of their broadcasts;
211.2. The recording in any manner, including the making of films or the use of video
tape, of their broadcasts for the purpose of communication to the public of television
broadcasts of the same; and
 211.3. The use of such records for fresh transmissions or for fresh recording. (Sec. 52,
P.D. No. 49) (Emphasis supplied)
Section 212 of the Code provides:
CHAPTER XV
LIMITATIONS ON PROTECTION
Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply where the acts
referred to in those Sections are related to:
212.1. The use by a natural person exclusively for his own personal purposes;
212.2. Using short excerpts for reporting current events;
212.3. Use solely for the purpose of teaching or for scientific research; and
212.4. Fair use of the broadcast subject to the conditions under Section 185. (Sec. 44,
P.D. No. 49a)
The Code defines what broadcasting is and who broadcasting organizations include:
202.7. "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;
202.8. "Broadcasting organization" shall include a natural person or a juridical entity duly
authorized to engage in broadcasting[.]
Developments in technology, including the process of preserving once ephemeral works and
disseminating them, resulted in the need to provide a new kind of protection as distinguished from
copyright.102 The designation "neighboring rights" was abbreviated from the phrase "rights
neighboring to copyright."103 Neighboring or related rights are of equal importance with copyright
as established in the different conventions covering both kinds of rights.104
Several treaties deal with neighboring or related rights of copyright. 105 The most prominent of
these is the "International Convention for the Protection of Performers, Producers of Phonograms
and Broadcasting Organizations" (Rome Convention).106
The Rome Convention protects the rights of broadcasting organizations in relation to their
broadcasts. Article XIII of the Rome Convention enumerates the minimum rights accorded to
broadcasting organizations:
Article 13
Minimum Rights for Broadcasting Organizations
Broadcasting organisations shall enjoy the right to authorize or prohibit:
(a) the rebroadcasting of their broadcasts;
(b) the fixation of their broadcasts;
(c) the reproduction:
(i) of fixations, made without their consent, of their broadcasts;
(ii) of fixations, made in accordance with the provisions of Article 15, of their
broadcasts, if the reproduction is made for purposes different from those referred
to in those provisions;
(d) the communication to the public of their television broadcasts if such communication is
made in places accessible to the public against payment of an entrance fee; it shall be a
matter for the domestic law of the State where protection of this right is claimed to
determine the conditions under which it may be exercised.
With regard to the neighboring rights of a broadcasting organization in this jurisdiction, this court
has discussed the difference between broadcasting and rebroadcasting:
Section 202.7 of the IP Code defines broadcasting as "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."
On the other hand, rebroadcasting as defined in Article 3(g) of the International Convention for the
Protection of Performers, Producers of Phonograms and Broadcasting Organizations, otherwise
known as the 1961 Rome Convention, of which the Republic of the Philippines is a signatory, is
"the simultaneous broadcasting by one broadcasting organization of the broadcast of another
broadcasting organization."
....
Under the Rome Convention, rebroadcasting is "the simultaneous broadcasting by one
broadcasting organization of the broadcast of another broadcasting organization." The Working
Paper prepared by the Secretariat of the Standing Committee on Copyright and Related Rights
defines broadcasting organizations as "entities that take the financial and editorial responsibility for
the selection and arrangement of, and investment in, the transmitted content."107 (Emphasis in the
original, citations omitted)
Broadcasting organizations are entitled to several rights and to the protection of these rights under
the Intellectual Property Code. Respondents’ argument that the subject news footage is not
copyrightable is erroneous. The Court of Appeals, in its assailed Decision, correctly recognized the
existence of ABS-CBN’s copyright over the news footage:
Surely, private respondent has a copyright of its news coverage. Seemingly, for airing said video
feed, petitioner GMA is liable under the provisions of the Intellectual Property Code, which was
enacted purposely to protect copyright owners from infringement.108
News as expressed in a video footage is entitled to copyright protection. Broadcasting
organizations have not only copyright on but also neighboring rights over their broadcasts.
Copyrightability of a work is different from fair use of a work for purposes of news reporting.
VI
ABS-CBN assails the Court of Appeals’ ruling that the footage shown by GMA-7 falls under the
scope of Section 212.2 and 212.4 of the Intellectual Property Code:
The evidence on record, as well as the discussions above, show that the footage used
by[respondents] could hardlybe characterized as a short excerpt, as it was aired over one and a
half minutes.
Furthermore, the footage used does not fall under the contemplation of Section 212.2 of the
Intellectual Property Code. A plain reading of the provision would reveal that copyrighted material
referred to in Section 212 are short portions of an artist’s performance under Section 203, or a
producer’s sound recordings under Sections 208 and 209. Section 212 does not refer to actual
use of video footage of another as its own.
The Angelo dela Cruz footage does not fall under the rule on Section 212.4 of the Intellectual
Property Code on fair use of the broadcast.
....
In determining fair use, several factors are considered, including the nature of the copyrighted
work, and the amount and substantiality of the person used in relation to the copyrighted work as
a whole.
In the business of television news reporting, the nature of the copyrighted work or the video
footages, are such that, footage created, must be a novelty to be a good report. Thus, when the . .
. Angelo dela Cruz footage was used by [respondents], the novelty of the footage was clearly
affected.
Moreover, given that a substantial portion of the Angelo dela Cruz footage was utilized by GMA-7
for its own, its use can hardly be classified as fair use.
Hence, [respondents] could not be considered as having used the Angelo dela Cruz [footage]
following the provisions on fair use.
It is also worthy to note that the Honorable Court of Appeals seem to contradict itself when it relied
on the provisions of fair use in its assailed rulings considering that it found that the Angelo dela
Cruz footage is not copyrightable, given that the fair use presupposes an existing copyright. Thus,
it is apparent that the findings of the Honorable Court of Appeals are erroneous and based on
wrong assumptions.109 (Underscoring in the original)
On the other hand, respondents counter that GMA-7’s use of ABS-CBN’s news footage falls under
fair use as defined in the Intellectual Property Code. Respondents, citing the Court of Appeals
Decision, argue that a strong statutory defense negates any finding of probable cause under the
same statute.110 The Intellectual Property Code provides that fair use negates infringement.
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.111
Copyright protection is not absolute.112 The Intellectual Property Code provides the limitations on
copyright:
CHAPTER VIII
LIMITATIONS ON COPYRIGHT
Section 184. Limitations on Copyright. - 184.1. Notwithstanding the provisions of Chapter V, the
following acts shall not constitute infringement of copyright:
....
184.2. The provisions of this section shall be interpreted in such a way as to allow the work to be
used in a manner which does not conflict with the normal exploitation of the work and does not
unreasonably prejudice the right holder's legitimate interests.
....
CHAPTER XV
LIMITATIONS ON PROTECTION
Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply where the acts
referred to in those Sections are related to:
....
212.2. Using short excerpts for reporting current events;
....
212.4. Fair use of the broadcast subject to the conditions under Section 185.(Sec. 44, P.D. No.
49a) (Emphasis supplied)
The determination of what constitutes fair use depends on several factors. Section 185 of the
Intellectual Property Code states:
SECTION 185. Fair Use of a Copyrighted Work. —
185.1. The fair use of a copyrighted work for criticism, comment, news reporting, teaching
including multiple copies for classroom use, scholarship, research, and similar purposes is not an
infringement of copyright. . . . In determining whether the use made of a work in any particular
case is fair use, the factors to be considered shall include:
a. The purpose and character of the use, including whether such use is of a commercial
nature or is for non-profit educational 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 effect of the use upon the potential market for or value of the copyrighted work.
Respondents allege that the news footage was only five (5) seconds long, thus falling
under fair use. ABS-CBN belies this contention and argues that the footage aired for two
(2) minutes and 40 seconds.113 According to the Court of Appeals, the parties admitted
that only five (5) seconds of the news footage was broadcasted by GMA-7.114
This court defined fair use as "aprivilege 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."116
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:
a. The purpose and character of the use, including whether such use is of a commercial
nature or is for non-profit educational 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 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 structure and nature of broadcasting as a business requires assigned values for each second
of broadcast or airtime. In most cases, broadcasting organizations generate revenue through sale
of time or timeslots to advertisers, which, in turn, is based on market share: 122 Once a news
broadcast has been transmitted, the broadcast becomes relatively worthless to the station. In the
case of the aerial broadcasters, advertising sales generate most of the profits derived from news
reports. Advertising rates are, in turn, governed by market share. Market share is determined by
the number of people watching a show at any particular time, relative to total viewers at that time.
News is by nature time-limited, and so re-broadcasts are generally of little worth because they
draw few viewers. Newscasts compete for market share by presenting their news in an appealing
format that will capture a loyal audience. Hence, 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.
Of course, in the real world there are exceptions to this perfect economic view. 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. First, the local
broadcaster is often not affiliated with a network (hence its need for more comprehensive
programming), confining any possible competition to a small geographical area. Second, the local
broadcaster is not in competition with CNN. Individuals who do not have cable TV (or a satellite
dish with decoder) cannot receive CNN; therefore there is no competition. . . . Third, CNN sells the
right of rebroadcast to the local stations. Ted Turner, owner of CNN, does not have First
Amendment freedom of access argument foremost on his mind. (Else he would give everyone free
cable TV so everyone could get CNN.) He is in the business for a profit. Giving away resources
does not a profit make.123 (Emphasis supplied)
The high value afforded to limited time periods is also seen in other media. In social media site
Instagram, users are allowed to post up to only 15 seconds of video.124 In short-video sharing
website Vine,125 users are allowed a shorter period of six (6) seconds per post. The mobile
application 1 Second Everyday takes it further by capturing and stitching one (1) second of video
footage taken daily over a span of a certain period.126
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.
VII
Respondents cannot invoke the defense of good faith to argue that no probable cause exists.
Respondents argue that copyright infringement is malum in se, in that "[c]opying alone is not what
is being prohibited, but its injurious effect which consists in the lifting from the copyright owners’
film or materials, that were the result of the latter’s creativity, work and productions and without
authority, reproduced, sold and circulated for commercial use to the detriment of the latter."127
Infringement under the Intellectual Property Code is malum prohibitum. The Intellectual Property
Code is a special law. Copyright is a statutory creation:
Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right
granted by the statute, and not simply a pre-existing right regulated by the statute. Being a
statutory grant, the rights are only such as the statute confers, and may be obtained and enjoyed
only with respect to the subjects and by the persons, and on terms and conditions specified in the
statute.128
The general rule is that acts punished under a special law are malum prohibitum. 129 "An act which
is declared malum prohibitum, malice or criminal intent is completely immaterial."130
In contrast, crimes mala in seconcern inherently immoral acts:
Not every criminal act, however, involves moral turpitude. It is for this reason that "as to what
crime involves moral turpitude, is for the Supreme Court to determine". In resolving the foregoing
question, the Court is guided by one of the general rules that crimes mala in se involve moral
turpitude, while crimes mala prohibita do not, the rationale of which was set forth in "Zari v.
Flores," to wit:
It (moral turpitude) implies something immoral in itself, regardless of the fact that it is punishable
by law or not. It must not be merely mala prohibita, but the act itself must be inherently immoral.
The doing of the act itself, and not its prohibition by statute fixes the moral turpitude. Moral
turpitude does not, however, include such acts as are not of themselves immoral but whose
illegality lies in their being positively prohibited. (Emphasis supplied)
[These] guidelines nonetheless proved short of providing a clear cut solution, for in International
Rice Research Institute v. NLRC, the Court admitted that it cannot always be ascertained whether
moral turpitude does or does not exist by merely classifying a crime as malum in se or as malum
prohibitum. There are crimes which are mala in se and yet but rarely involve moral turpitude and
there are crimes which involve moral turpitude and are mala prohibita only. In the final analysis,
whether or not a crime involves moral turpitude is ultimately a question of fact and frequently
depends on all the circumstances surrounding the violation of the statue. 131 (Emphasis in the
original)
"Implicit in the concept of mala in se is that of mens rea." 132 Mens reais defined as "the
nonphysical element which, combined with the act of the accused, makes up the crime charged.
Most frequently it is the criminal intent, or the guilty mind[.]"133
Crimes mala in sepre suppose that the person who did the felonious act had criminal intent to do
so, while crimes mala prohibita do not require knowledge or criminal intent:
In the case of mala in se it is necessary, to constitute a punishable offense, for the person doing
the act to have knowledge of the nature of his act and to have a criminal intent; in the case of mala
prohibita, unless such words as "knowingly" and "willfully" are contained in the statute, neither
knowledge nor criminal intent is necessary. In other words, a person morally quite innocent and
with every intention of being a law abiding citizen becomes a criminal, and liable to criminal
penaltes, if he does an act prohibited by these statutes.134 (Emphasis supplied) Hence, "[i]ntent to
commit the crime and intent to perpetrate the act must be distinguished. A person may not have
consciously intended to commit a crime; but he did intend to commit an act, and that act is, by the
very nature of things, the crime itself[.]"135 When an act is prohibited by a special law, it is
considered injurious to public welfare, and the performance of the prohibited act is the crime
itself.136
Volition, or intent to commit the act, is different from criminal intent. Volition or voluntariness refers
to knowledge of the act being done. On the other hand, criminal intent — which is different from
motive, or the moving power for the commission of the crime137 — refers to the state of mind
beyond voluntariness. It is this intent that is being punished by crimes mala in se.
Unlike other jurisdictions that require intent for a criminal prosecution of copyright infringement, the
Philippines does not statutorily support good faith as a defense. Other jurisdictions provide in their
intellectual property codes or relevant laws that mens rea, whether express or implied, is an
element of criminal copyright infringement.138
In Canada, criminal offenses are categorized under three (3) kinds: "the full mens rea offence,
meaning the accused’s actual or subjective state of mind has to be proved; strict liability offences
where no mens rea has to be proved but the accused can avoid liability if he can prove he took all
reasonable steps to avoid the particular event; [and] absolute liability offences where Parliament
has made it clear that guilt follows proof of the prescribed act only." 139 Because of the use of the
word "knowingly" in Canada’s Copyright Act, it has been held that copyright infringement is a full
mens rea offense.140
In the United States, willful intent is required for criminal copyright infringement. 141 Before the
passage of the No Electronic Theft Act, "civil copyright infringements were violations of criminal
copyright laws only if a defendant willfully infringed a copyright ‘for purposes of commercial
advantage or private financial gain.’"142 However, the No Electronic Theft Act now allows criminal
copyright infringement without the requirement of commercial gain. The infringing act may or may
not be for profit.143
There is a difference, however, between the required liability in civil copyright infringement and
that in criminal copyright infringement in the United States. Civil copyright infringement does not
require culpability and employs a strict liability regime144 where "lack of intention to infringe is not a
defense to an action for infringement."145
In the Philippines, the Intellectual Property Code, as amended, provides for the prosecution of
criminal actions for the following violations of intellectual property rights: Repetition of Infringement
of Patent (Section 84); Utility Model (Section 108); Industrial Design (Section 119); Trademark
Infringement (Section 155 in relation to Section 170); Unfair Competition (Section 168 in relation to
Section 170); False Designations of Origin, False Description or Representation (Section 169.1 in
relation to Section 170); infringement of copyright, moral rights, performers’ rights, producers’
rights, and broadcasting rights (Section 177, 193, 203, 208 and 211 in relation to Section 217);
and other violations of intellectual property rights as may be defined by law.
The Intellectual Property Code requires strict liability for copyright infringement whether for a civil
action or a criminal prosecution; it does not require mens rea or culpa:146
SECTION 216. Remedies for Infringement. —
216.1. Any person infringing a right protected under this law shall be liable:
a. To an injunction restraining such infringement. The court may also order the
defendant to desist from an infringement, among others, to prevent the entry into
the channels of commerce of imported goods that involve an infringement,
immediately after customs clearance of such goods.
b. Pay to the copyright proprietor or his assigns or heirs such actual damages,
including legal costs and other expenses, as he may have incurred due to the
infringement as well as the profits the infringer may have made due to such
infringement, and in proving profits the plaintiff shall be required to prove sales
only and the defendant shall be required to prove every element of cost which he
claims, or, in lieu of actual damages and profits, such damages which to the
court shall appear to be just and shall not be regarded as penalty.
c. Deliver under oath, for impounding during the pendency of the action, upon
such terms and conditions as the court may prescribe, sales invoices and other
documents evidencing sales, all articles and their packaging alleged to infringe a
copyright and implements for making them.
d. Deliver under oath for destruction without any compensation all infringing
copies or devices, as well as all plates, molds, or other means for making such
infringing copies as the court may order.
e. Such other terms and conditions, including the payment of moral and
exemplary damages, which the court may deem proper, wise and equitable and
the destruction of infringing copies of the work even in the event of acquittal in a
criminal case.
216.2. In an infringement action, the court shall also have the power to order the seizure
and impounding of any article which may serve as evidence in the court proceedings.
(Sec. 28, P.D. No. 49a)
SECTION 217. Criminal Penalties. — 217.1. Any person infringing any right secured by provisions
of Part IV of this Actor aiding or abetting such infringement shall be guilty of a crime punishable
by:
a. Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty
thousand pesos (₱50,000) to One hundred fifty thousand pesos (₱150,000) for
the first offense.
b. Imprisonment of three (3) years and one (1) day to six (6) years plus a fine
ranging from One hundred fifty thousand pesos (₱150,000) to Five hundred
thousand pesos (₱500,000) for the second offense.
c. Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine
ranging from Five hundred thousand pesos (₱500,000) to One million five
hundred thousand pesos (₱1,500,000) for the third and subsequent offenses.
d. In all cases, subsidiary imprisonment in cases of insolvency.
217.2. In determining the number of years of imprisonment and the amount of fine, the
court shall consider the value of the infringing materials that the defendant has produced
 or manufactured and the damage that the copyright owner has suffered by reason of the
infringement.
217.3. Any person who at the time when copyright subsists in a work has in his
possession an article which he knows, or ought to know, to be an infringing copy of the
work for the purpose of: a. Selling, letting for hire, or by way of trade offering or exposing
for sale, or hire, the article;
b. Distributing the article for purpose of trade, or for any other purpose to an
extent that will prejudice the rights of the copyright owner in the work; or
c. Trade exhibit of the article in public, shall be guilty of an offense and shall be
liable on conviction to imprisonment and fine as above mentioned. (Sec. 29, P.D.
No. 49a) (Emphasis supplied)
The law is clear. Inasmuch as there is wisdom in prioritizing the flow and exchange of ideas as
opposed to rewarding the creator, it is the plain reading of the law in conjunction with the actions
of the legislature to which we defer. We have continuously "recognized the power of the legislature
. . . to forbid certain acts in a limited class of cases and to make their commission criminal without
regard to the intent of the doer. Such legislative enactments are based on the experience that
repressive measures which depend for their efficiency upon proof of the dealer’s knowledge or of
his intent are of little use and rarely accomplish their purposes."147
Respondents argue that live broadcast of news requires a different treatment in terms of good
faith, intent, and knowledge to commit infringement. To argue this point, they rely on the
differences of the media used in Habana et al. v. Robles, Columbia Pictures v. Court of Appeals,
and this case:
Petitioner ABS-CBN argues that lack of notice that the Angelo dela Cruz was under embargo is
not a defense in copyright infringement and cites the case of Columbia Pictures vs. Court of
Appeals and Habana et al. vs. Robles(310 SCRA 511). However, these cases refer to film and
literary work where obviously there is "copying" from an existing material so that the copier knew
that he is copying from an existing material not owned by him. But, how could respondents know
that what they are "copying was not [theirs]" when they were not copying but merely receiving live
video feed from Reuters and CNN which they aired? What they knew and what they aired was the
Reuters live video feed and the CNN feed which GMA-7 is authorized to carry in its news
broadcast, it being a subscriber of these companies[.]
It is apt to stress that the subject of the alleged copyright infringement is not a film or literary work
but live broadcast of news footage. In a film or literary work, the infringer is confronted face to face
with the material he is allegedly copying and therefore knows, or is presumed to know, that what
he is copying is owned by another. Upon the other hand, in live broadcast, the alleged infringer is
not confronted with the fact that the material he airs or re-broadcasts is owned by another, and
therefore, he cannot be charged of knowledge of ownership of the material by another. This
specially obtains in the Angelo dela Cruz news footage which GMA-7 received from Reuters and
CNN. Reuters and CNN were beaming live videos from the coverage which GMA-7 received as a
subscriber and, in the exercise of its rights as a subscriber, GMA-7 picked up the live video and
simultaneously re-broadcast it. In simultaneously broadcasting the live video footage of Reuters,
GMA-7 did not copy the video footage of petitioner ABS-CBN[.]148 (Emphasis in the original)
Respondents’ arguments must fail.
Respondents are involved and experienced in the broadcasting business. They knew that there
would be consequences in carrying ABS-CBN’s footage in their broadcast. That is why GMA-7
allegedly cut the feed from Reuters upon seeing ABS-CBN’s ogo and reporter. To admit a different
treatment for broadcasts would mean abandonment of a broadcasting organization’s minimum
rights, including copyright on the broadcast material and the right against unauthorized
rebroadcast of copyrighted material. The nature of broadcast technology is precisely why related
or neighboring rights were created and developed. Carving out an exception for live broadcasts
would go against our commitments under relevant international treaties and agreements, which
provide for the same minimum rights.149
Contrary to respondents’ assertion, this court in Habana,150 reiterating the ruling in Columbia
Pictures,151 ruled that lack of knowledge of infringement is not a valid defense. Habana and
Columbia Pictures may have different factual scenarios from this case, but their rulings on
copyright infringement are analogous. In Habana, petitioners were the authors and copyright
owners of English textbooks and workbooks. The case was anchored on the protection of literary
and artistic creations such as books. In Columbia Pictures, video tapes of copyrighted films were
the subject of the copyright infringement suit.
In Habana, knowledge of the infringement is presumed when the infringer commits the prohibited
act:
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.
....
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.
....
In cases of infringement, copying alone is not what is prohibited. The copying must produce an
"injurious effect". 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.152 (Emphasis supplied)
Habana and Columbia Pictures did not require knowledge of the infringement to constitute a
violation of the copyright. 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 find 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.153
We look at the purpose of copyright in relation to criminal prosecutions requiring willfulness: Most
importantly, in defining the contours of what it means to willfully infringe copyright for purposes of
criminal liability, the courts should remember the ultimate aim of copyright. Copyright is not
primarily about providing the strongest possible protection for copyright owners so that they have
the highest possible incentive to create more works. The control given to copyright owners is only
a means to an end: the promotion of knowledge and learning. Achieving that underlying goal of
copyright law also requires access to copyrighted works and it requires permitting certain kinds of
uses of copyrighted works without the permission of the copyright owner. While a particular
defendant may appear to be deserving of criminal sanctions, the standard for determining
willfulness should be set with reference to the larger goals of copyright embodied in the
Constitution and the history of copyright in this country.154
In addition, "[t]he 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."155
Intellectual property rights, such as copyright and the neighboring right against rebroadcasting,
establish an artificial and limited monopoly to reward creativity. Without these legally enforceable
rights, creators will have extreme difficulty recovering their costs and capturing the surplus or profit
of their works as reflected in their markets. This, in turn, is based on the theory that the possibility
of gain due to creative work creates an incentive which may improve efficiency or simply enhance
consumer welfare or utility. More creativity redounds to the public good.
These, however, depend on the certainty of enforcement. Creativity, by its very nature, is
vulnerable to the free rider problem. It is easily replicated despite the costs to and efforts of the
original creator. The more useful the creation is in the market, the greater the propensity that it will
be copied. The most creative and inventive individuals are usually those who are unable to
recover on their creations.
Arguments against strict liability presuppose that the Philippines has a social, historical, and
economic climate similar to those of Western jurisdictions. As it stands, there is a current need to
strengthen intellectual property protection.
Thus, unless clearly provided in the law, offenses involving infringement of copyright protections
should be considered malum prohibitum. 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.
Nevertheless, proof beyond reasonable doubt is still the standard for criminal prosecutions under
the Intellectual Property Code.
VIII
Respondents argue that GMA-7’s officers and employees cannot be held liable for infringement
under the Intellectual Property Code since it does not expressly provide direct liability of the
corporate officers. They explain that "(i) a corporation may be charged and prosecuted for a crime
where the penalty is fine or both imprisonment and fine, and if found guilty, may be fined; or (ii) a
corporation may commit a crime but if the statute prescribes the penalty therefore to be suffered
by the corporate officers, directors or employees or other persons, the latter shall be responsible
for the offense."156
Section 217 of the Intellectual Property Code states that "any person" may be found guilty of
infringement. It also imposes the penalty of both imprisonment and fine:
Section 217. Criminal Penalties. - 217.1. Any person infringing any right secured by provisions of
Part IV of this Act or aiding or abetting such infringement shall be guilty of a crime punishable by:
(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand
pesos (₱50,000) to One hundred fifty thousand pesos (₱150,000) for the first offense.
(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging
from One hundred fifty thousand pesos (₱150,000) to Five hundred thousand pesos
(₱500,000) for the second offense.
(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging
from five hundred thousand pesos (₱500,000) to One million five hundred thousand
pesos (₱1,500,000) for the third and subsequent offenses.
(d) In all cases, subsidiary imprisonment in cases of insolvency. (Emphasis supplied)
Corporations have separate and distinct personalities from their officers or
directors.157 This court has ruled that corporate officers and/or agents may be held
individually liable for a crime committed under the Intellectual Property Code:158
Petitioners, being corporate officers and/or directors, through whose act, default or omission the
corporation commits a crime, may themselves be individually held answerable for the crime. . . .
The existence of the corporate entity does not shield from prosecution the corporate agent who
knowingly and intentionally caused the corporation to commit a crime. Thus, petitioners cannot
hide behind the cloak of the separate corporate personality of the corporation to escape criminal
liability. A corporate officer cannot protect himself behind a corporation where he is the actual,
present and efficient actor.159
However, the criminal liability of a corporation’s officers or employees stems from their active
participation in the commission of the wrongful act:
The principle applies whether or not the crime requires the consciousness of wrongdoing. It
applies to those corporate agents who themselves commit the crime and to those, who, by virtue
of their managerial positions or other similar relation to the corporation, could be deemed
responsible for its commission, if by virtue of their relationship to the corporation, they had the
power to prevent the act. Moreover, all parties active in promoting a crime, whether agents or not,
are principals. Whether such officers or employees are benefited by their delictual acts is not a
touchstone of their criminal liability. Benefit is not an operative fact. 160 (Emphasis supplied) An
accused’s participation in criminal acts involving violations of intellectual property rights is the
subject of allegation and proof. The showing that the accused did the acts or contributed in a
meaningful way in the commission of the infringements is certainly different from the argument of
lack of intent or good faith. Active participation requires a showing of overt physical acts or
intention to commit such acts. Intent or good faith, on the other hand, are inferences from acts
proven to have been or not been committed.
We find that the Department of Justice committed grave abuse of discretion when it resolved to file
the Information against respondents despite lack of proof of their actual participation in the alleged
crime.
Ordering the inclusion of respondents Gozon, GMA-7 President; Duavit, Jr., Executive Vice-
President; Flores, Vice-President for News and Public Affairs; and Soho, Director for News, as
respondents, Secretary Agra overturned the City Prosecutor’s finding that only respondents Dela
Peña-Reyes and Manalastas are responsible for the crime charged due to their duties. 161 The
Agra Resolution reads:
Thus, from the very nature of the offense and the penalty involved, it is necessary that GMA-7’s
directors, officers, employees or other officers thereof responsible for the offense shall be charged
and penalized for violation of the Sections 177 and 211 of Republic Act No. 8293. In their
complaint for libel, respondents Felipe L Gozon, Gilberto R. Duavit, Jr., Marissa L. Flores, Jessica
A.Soho, Grace Dela Pena-Reyes, John Oliver T. Manalastas felt they were aggrieved because
they were "in charge of the management, operations and production of news and public affairs
programs of the network" (GMA-7). This is clearly an admission on respondents’ part. Of course,
respondents may argue they have no intention to infringe the copyright of ABS-CBN; that they
acted in good faith; and that they did not directly cause the airing of the subject footage, but again
this is preliminary investigation and what is required is simply probable cause. Besides, these
contentions can best be addressed in the course of trial.162 (Citation omitted)
In contrast, the Office of the City Prosecutor, in the Resolution dated December 3, 2004, found
that respondents Gozon, Duavit, Jr., Flores, and Soho did not have active participation in the
commission of the crime charged:
This Office, however, does not subscribe to the view that respondents Atty. Felipe Gozon, Gilberto
Duavit, Marissa Flores and Jessica Soho should be held liable for the said offense. Complainant
failed to present clear and convincing evidence that the said respondents conspired with Reyes
and Manalastas. 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. It must be stressed that,
conspiracy must be established by positive and conclusive evidence. It must be shown to exist as
clearly and convincingly as the commission of the offense itself.163 (Emphasis supplied, citations
omitted)
The City Prosecutor found respondents Dela Peña-Reyes and Manalastas liable due to the nature
of their work and responsibilities. He found that:
[t]his Office however finds respondents Grace Dela Peña-Reyes and John Oliver T. Manalastas
liable for copyright infringement penalized under Republic Act No. 8293. It is undisputed that
complainant ABSCBN holds the exclusive ownership and copyright over the "Angelo [d]ela Cruz
news footage". Hence, any airing and re-broadcast of the said footage without any consent and
authority from ABS-CBN will be held as an infringement and violation of the intellectual property
rights of the latter. Respondents Grace Dela Peña-Reyes as the Head of the News Operation and
John Oliver T. Manalastas as the Program Manager cannot escape liability since the news control
room was under their direct control and supervision. Clearly, they must have been aware that the
said footage coming from Reuters or CNN has a "No Access Philippines" advisory or embargo
thus cannot be re-broadcast. We find no merit to the defense of ignorance interposed by the
respondents. It is simply contrary to human experience and logic that experienced employees of
an established broadcasting network would be remiss in their duty in ascertaining if the said
footage has an embargo.164 (Emphasis supplied)
We agree with the findings as to respondents Dela Peña-Reyes and Manalastas. Both
respondents committed acts that promoted infringement of ABS-CBN’s footage. We note that
embargoes are common occurrences in and between news agencies and/or broadcast
organizations.165 Under its Operations Guide, Reuters has two (2) types of embargoes:
transmission embargo and publication embargo.166 Under ABS-CBN’s service contract with
Reuters, Reuters will embargo any content contributed by ABS-CBN from other broadcast
subscribers within the same geographical location:
4a. Contributed Content
You agree to supply us at our request with news and sports news stories broadcast on the Client
Service of up to three (3) minutes each for use in our Services on a non-exclusive basis and at a
cost of US$300.00 (Three Hundred United States Dollars) per story. In respect of such items we
agree to embargo them against use by other broadcast subscribers in the Territory and confirm we
will observe all other conditions of usage regarding Contributed Content, as specified in Section
2.5 of the Reuters Business Principles for Television Services. For the purposes of clarification,
any geographical restriction imposed by you on your use of Contributed Content will not prevent
us or our clients from including such Contributed Content in online transmission services including
the internet. We acknowledge Contributed Content is your copyright and we will not acquire any
intellectual property rights in the Contributed Content.167 (Emphasis supplied)
Respondents Dela Peña-Reyes and Manalastas merely denied receiving the advisory sent by
Reuters to its clients, including GMA-7. As in the records, the advisory reads:
ADVISORY - - +++LIVE COVER PLANS+++
PHILIPPINES: HOSTAGE RETURN
**ATTENTION ALL CLIENTS** In sum, the trial court erred in failing to resume the proceedings after the designated period. The
Court of Appeals erred when it held that Secretary Agra committed errors of jurisdiction despite its
PLEASE BE ADVISED OF THE FOLLOWING LIVE COVER own pronouncement that ABS-CBN is the owner of the copyright on the news footage. News
PLANNED FOR THURSDAY, JULY 22: should be differentiated from expression of the news, particularly when the issue involves
rebroadcast of news footage. The Court of Appeals also erroneously held that good faith, as. well
as lack of knowledge of infringement, is a defense against criminal prosecution for copyright and
....
neighboring rights infringement. In its current form, the Intellectual Property Code is malum
prohibitum and prescribes a strict liability for copyright infringement. Good faith, lack of knowledge
SOURCE: ABS-CBN of the copyright, or lack of intent to infringe is not a defense against copyright infringement.
TV AND WEB RESTRICTIONS: NO ACCESS PHILIPPINES.168 Copyright, however, is subject to the rules of fair. use and will be judged on a case-to-case basis.
Finding probable cause includes a determination of the defendant's active participation,
There is probable cause that respondents Dela Peña-Reyes and Manalastas directly committed particularly when the corporate veil is pierced in cases involving a corporation's criminal liability.
copyright infringement of ABS-CBN’s news footage to warrant piercing of the corporate veil. They
are responsible in airing the embargoed Angelo dela Cruz footage. They could have prevented the WHEREFORE, the Petition is partially GRANTED. The Department of Justice Resolution dated
act of infringement had they been diligent in their functions as Head of News Operations and June 29, 2010 ordering the filing of the Information is hereby REINSTATED as to respondents
Program Manager. Grace Dela Pena-Reyes and John Oliver T. Manalastas. Branch 93 of the Regional Trial Court of
Quezon City is directed to continue with the proceedings in Criminal Case No. Q-04-131533.
Secretary Agra, however, committed grave abuse of discretion when he ordered the filing of the
Information against all respondents despite the erroneous piercing of the corporate veil. SO ORDERED.
Respondents Gozon, Duavit, Jr., Flores, and Soho cannot be held liable for the criminal liability of
the corporation.

Mere membership in the Board or being President per se does not mean knowledge, approval,
and participation in the act alleged as criminal. There must be a showing of active participation,
not simply a constructive one.

Under principles of criminal law, the principals of a crime are those "who take a direct part in the
execution of the act; [t]hose who directly force or induce others to commit it; [or] [t]hose who
cooperate in the commission of the offense by another act without which it would not have been
accomplished."169 There is conspiracy "when two or more persons come to an agreement
concerning the commission of a felony and decide to commit it":170

Conspiracy is not presumed. Like the physical acts constituting the crime itself, the elements of
conspiracy must be proven beyond reasonable doubt.1âwphi1 While conspiracy need not be
established by direct evidence, for it may be inferred from the conduct of the accused before,
during and after the commission of the crime, all taken together, however, the evidence must be
strong enough to show the community of criminal design. For conspiracy to exist, it is essential
that there must be a conscious design to commit an offense. Conspiracy is the product of
intentionality on the part of the cohorts.

It is necessary that a conspirator should have performed some overt act as a direct or indirect
contribution to the execution of the crime committed. The overt act may consist of active
participation in the actual commission of the crime itself, or it may consist of moral assistance to
his co-conspirators by being present at the commission of the crime or by exerting moral
ascendancy over the other co-conspirators[.]171 (Emphasis supplied, citations omitted)
 Republic of the Philippines That on or about July to September, 1963, in the City of Manila and within the
SUPREME COURT jurisdiction of this Honorable Court, the said accused, as the proprietor aid
Manila general manager of the National Book Store, as enterprise engaged in the
business of publishing, selling and distributing books, did then and there, wilfully
SECOND DIVISION and illegaly sell and distribute spurious and pirated copies of the high school
textbook, entitled General Science Today for Philippine School, First Year, by
Gilam, Van Houten and Cornista, said accused knowing that said book was duly
G.R. No. L-25265 May 9, 1978
copyrighted by the Phoenix Publishing House, Inc., and was being distributed
exclusively by its sister corporation, Alemar's or Sibal and Sons, Inc.1
PEOPLE OF THE PHILIPPINES, plaintiff-appellant,
vs.
On September 7, 1965, identical motions to quash 2 were filed by accused Ramos on the ground
SOCORRO C. RAMOS, defendant-appellee, PHOENIX PUBLISHING HOUSE INC., intervenor.
of prescription, alleging therein, inter alia, that:

G.R. No. L-25644 May 9, 1978

xxx xxx xxx

SOCORRO C. RAMOS, petitioner,

Consequently, the delivery of the alleged offense was made as early as July 17,
vs. 1963 and all subsequent knowledge or discoveries of posterior sales and
HON. PLACIDO RAMOS, in his capacity as Presiding Judge, Branch III, CFI, Manila; and the
possession of said books by the respondents, including that involved in the police
PEOPLE OF THE PHILIPPINES, represented by State Prosecutor DELIA P.
search of September 4, 1963 were only confirmatory of the first. Under 91 of the
MEDINA, respondents.
Revised Penal Code and in the light of the afore-quoted ruling announced in the
Pangasinan Trans. Co. case, supra; the prescriptive period, therefore,
Solicitor General Arturo A. Alafriz, Assistant Solicitor General Pacifica P. de Castro and Solicitor commenced to run on the day after such discovery on July 17, 1963 and,
Sumilang V. Bernardo for People of the Philippines. accordingly, the offense has long since prescribed since under the Copyright
Law, Act 3134:
Florence D. Regalado for Socorro C. Ramos.
Sec. 24. All actions, suits, or proceedings arising under this Act
Sevilla & Aquino Law Office for Intervenor. shall be originally cognizable by the Court of First Instance of
the Philippine Islands and shall prescribe after two years from
the time the cause of action arose.

SANTOS, J.:
The above-entitled cases — the first an appeal and the second a special civil action — are
decided jointly because they raise a common — issue which arose from the prosecution of a
common defendant, Socorro C. Ramos, for alleged violations of the copyright law—viz, whether or
not the extra day in the leap year, 1964 should be taken into consideration in the computation of
the two-year period of prescription provided in Section 24 of the copyright law.
Assuming arguendo, that the last actual sale should be the starting point of
computation, again the offense charged has prescribed, since, as already
pointed out, the documented evidence on this point shows that the last sale was
made on August 30, 1963.
The prosecution, also in both cases, filed its Opposition to the Motion to Quash 3 raising two
issues, to wit:

The factual and procedural antecedents follow.
On September 3, 1965, two criminal cases — No. 80006 of the Court of First Instance of Manila,
Branch III, and No. 80007 also of the same Court, Branch XIV— identical in every respect, except
for the fact that they pertain to different editions of the same textbook, were filed against Socorro
C. Ramos, for alleged violations of Act 3134, otherwise known as the Copyright Law, as amended.
The information in Criminal Case No. 80007 alleged —
1. That the issue of prescription in this case can be resolved only after the
presentation of evidence and hence, it is premature to raise that issue before trial
2. That, as the violation committed by the defendant was a continuing offense,
the two-year prescriptive period may be counted from September 3, 1963, or one
day before the search in defendants' premises , which confirmed her possession
of spurious and pirated copies of the textbook in question.
The prosecution's theory is that "(T)he crime being a continuing offense, the statute of limitations
begins to run from the completion of the last act or series of acts which constitute the offense, "
and this last act was committed on September 3, 1963. Therefore when the information was filed
on September 3, 1965, it was filed within the two-year period, albeit the last day of the prescriptive
period.
Again, in both the accused filed a "Reply to Opposition to Motion to Quash." 4 She alleged that
even assuming that the crime is a continuing offense, the prescriptive period should start from
August 30, 1963, the date of the last invoiced sale, and not September 3, 1963, as there was no
indubitable proof that she had sold copies of the questioned book on that date. Nonetheless,
accused contended that even if the prescriptive period should start from September 3, 1963, as
proposed by the prosecution, the two-year period was tolled on September 2, 1965. She pointed
out that two years mean a period of 730 days in accordance with Article 13 of the New Civil Code,
and 1964, being a leap year consisting of 366 days, the 730th day fell on September 2, 1965.
Hence, "... . when the information was filed on September 3, 1965, the offense, if any, had already
prescribed. "
The prosecution filed a Rejoinder 5 in both cases alleging as follow:
l. That February 28, and 29, 1964, should be regarded as one day only, and
consequently, the two-year period commencing on September 3, 1963 would end
on September 3, 1965;
2. That under Act No. 3326, the prescriptive period was interrupted by the filing of
the proceedings in the fiscal's office;
3. That prescription would not lie in this case because the complainant never
waived the right to prosecute the defendant.
Accused Ramos, also in cases, filed an Urgent Motion to Strike the Rejoinder, 6 on the ground that
it was filed after the case had been submitted for resolution. She prayed that "in the event that the
same should at all be considered and allowed, that the accused be notified thereof and granted
reasonable opportunity to file a surrejoinder...".
7 search warrant procured by the offended party, seized, among other articles, 69
It appears that the Rejoinder was admitted by both trial courts, but a Surrejoinder was filed only
in Criminal Case No. 80006. Here, the accused traversed the prosecution's contentions in the
Rejoinder, thus:
1. Under applicable and specific provisions of Philippine law, the two-year period
of prescription commencing on September 3, 1963 ended on September 2, 1965
...;
2. The filing (of) proceedings in the Office of the City Fiscal of Manila did not
interrupt the prescriptive period.
In Criminal Case No. 80007, Hon. Jesus De Veyra granted the motion to quash by an order dated
October 7, 1965. 8 Pertinent portion of his order reads:
. . . . And now to the main issue - whether the crime has prescribed. In the
Opposition to the Motion to Quash, the Prosecution, in its insistence on the
theory of a continuing crime, admits that the two-year prescriptive period should
run from September 3, 1963. This case was filed on September 3, 1965 - one
day too late. Article 13, CCP provides that year shall mean a period of 365 days.
This had been applied to criminal cases (People v. del Rosario, 51 O.G., 2686).
1964 was a leap year so that when this case was filed, it was filed one day too
late.
The Motion to Quash is, therefore, granted and this case dismissed on the
ground that the crime has already prescribed. (Emphasis supplied.)
9
The prosecution appealed the above order to this Court on October 15, 1965.
Meanwhile, in Criminal Case No. 80006, the motion to quash was not resolved until December 23,
1965. On this date, Hon. Placido Ramos denied the motion to quash, and set the arraignment of
the accused on January 12, 1966, thus —
Wherefore, finding the information to have been filed well within the statutory
period of two years from the date of the last offense committed by the accused
the Court denies the motion to quash.
The arraignment of the accused is hereby set on January 12, 1966 at 8:30 A.M.
The trial court refused to accept the prosecution's view that the prescriptive period should run from
September 3, held instead, that the same should commence on September 4, 1963.
xxx xxx xxx
The evidence shows that on September 4, 1963, the Manila Police by virtue of a
copies of General Science Today for Philippine Schools, First Year, by Gilman,
Van Houten and Cornista and one copy of the same textbook for Second Year
(Exhibit 5). The evidence likewise shows that on September 3, 1963, the National
Book Store, run and managed by the accused, sold one said textbook, Exhibit 'D'
and Exhibit '2'. The mere possession by the accused on September 4, 1963 of
several copies of this textbook which is the textbook alleged to be spurious and
pirated, indicates that said accused was distributing or selling said textbook on
September 4, 1963 . . . This being the case, it follows of necessity that the period
of prescription commenced to run from September 4, 1963 and two years from
this date, by excluding the first and including the last, would expire on September
4, 1965 and hence, the action, which was instituted on September 3, 1965 is well
within the prescriptive period.
 xxx xxx xxx
Furthermore, the trial court ignored the accused's theory on leap year:
Even if the last sale of said textbook could be considered to have taken place on
September 3, 1963, Exhibits 'D' and '2', the Court is also of the opinion that the
two-year period would expire September 3, 1965.
The argument that inasmuch as 1964 is a leap year the two-year period must
contain 731 days, as contemplated by Article 13 of the Civil Code of the
Philippines, is, in the opinion of the Court, without merits for this particular legal
provision that a year is understood to be of 365 days each is applicable only in
determining the number of days a year must legally contain but not for the
purpose of ascertaining the period of prescription based on years. In the
computation of the period of prescription, a year should be construed as the
calendar year comprising the whole period from January 1 to December 31,
regardless of the number of days it contains. Consequently, in this particular
case, if it is considered that the last sale took place on September 3, 1963, the
two-year period, following the rule exclude the- first-and-include-the-last, will
expire on September 3, 1965.
The accused filed a Motion for Reconsideration. 10 Two more pleadings were filed, 11 after which,
the trial court finally denied said motion for reconsideration for lack of merit, 12 and reset the
arraignment of the accused on February 24, 1966 at 8:30 A.M.
The accused thus filed with this Court this petition for certiorari, mandamus and prohibition, 13 with
the following prayer:
(a) Forthwith issue, upon filing by petitioner of a bond in such amount as this
Honorable Court may fix, a Writ of Preliminary Injunction restraining, enjoining
and prohibiting respondents from further proceedings in Criminal Case No.
80006 of the Court of First instance of Manila, Branch III, daring the pendency of
this Action:
(b) After due hearing, to render judgment in favor of petitioner and against
respondents —
(1) Annulling and setting aside the Orders of the respondent
Judge of December 23, 1965 (Annex 'G') denying petitioner's
motion to quash, and of January 20, 1966 (Annex 'K') denying
petitioner's motion for reconsideration;
(2) Ordering respondent Judge to dismiss Criminal Case No.
80006 aforesaid; and
(3) Making the writ of preliminary injunction hereafter La be
issued permanent and final.
This Court on February 11, 1966, issued a writ of preliminary injunction restraining the trial Court
from further proceedings in Criminal Case No. 80006. 14 Also on the same date, the two cases,
G.R. No. L-25265 and G.R. No. L-25644, were consolidated.
1. In G.R. No. L-25265, the appeal, then Solicitor General Arturo Alafriz filed a four-page brief
dated December 21, 1965 15 wherein he recommended affirmance of the order of 'Judge De Veyra
quashing the information, and the dismissal of the appeal, for the simple reason that "the order
appealed from is in accordance with law." Accused, now appellee Ramos, filed a brief dated
January 21, 1966 16 reiterating her previous allegations in the lower court.
The Phoenix Publishing House, Inc., the offended party, filed a motion to intervene in this appeal,
on the following grounds:
a) That the Solicitor General, instead of prosecuting the appeal, recommended
its dismissal
b) That, to protect its interest, it is necessary that the movant be allowed to
intervene and to submit memorandum to sustain its view that the criminal action
against the accused had not yet prescribed. 17
Over the opposition of the accused-appellee, this Court granted the same. 18 Accordingly, the
Phoenix Publishing House, Inc. filed its Memorandum 19 wherein it alleged that the trial court erred
I. IN ACTING ON DEFENDANT'S MOTION TO QUASH WITHOUT REQUIRING THE
PRESENTATION OF EVIDENCE IN SUPPORT OF THE PLEA OF PRESCRIPTION.
II. IN NOT APPLYING TO THIS CASE THE FOUR-YEAR PRESCRIPTIVE PERIOD PROVIDED
FOR IN ACT NO. 3326.
III. IN NOT HOLDING THAT THE PRELIMINARY INVESTIGATION PROCEEDINGS IN THE
MANILA CITY FISCAL'S OFFICE AND IN THE DEPARTMENT OF JUSTICE INTERRUPTED
PRESCRIPTION.
IV. IN NOT CONSIDERING FEBRUARY 28 AND 29, 1964, AS ONE DAY FOR PURPOSES OF
PRESCRIPTION.
Accused-appellee, Ramos, filed a Reply Memorandum 20 refuting intervenor's assignment of
errors. Subsequent pleadings 21 focused on whether February 28, and 29 of a leap year should be
counted as one day or separate days in computing the period of prescription.
2. In G.R. No. L-25644-the special civil action — the issues raised in the foregoing assignment of
errors were relied upon in respondent People's Answer. 22 And, following respondent Judge
Ramos' reasoning, it was contended that the period of prescription should start from September 4,
1963, and not September 3, 1963, as originally proposed by the prosecution. Furthermore, as an
affirmative defense, it was alleged that the petitioner has no cause of action for certiorari,
prohibition and mandamus since Judge Ramos did not commit any grave abuse of discretion in
refusing to quash the information. Respondent contended that the "(P)etitioner's remedy is to
appeal the judgment of conviction rendered after a trial on the merits. " This allegation was
opposed by petitioner Ramos; 23 she insisted that she had a cause of action for certiorari
prohibition and mandamus. Respondent People filed a Reply Memorandum 24 disputing
petitioner's allegations.
We are, thus, faced with conflicting orders of two different Branches of the Court of First Instance
of Manila-one holding that the crime has prescribed, the other that it has not.
1. Now to resolve the preliminary issues:
a. On the propriety of the special civil action for certiorari and prohibition.
We find for petitioner. As We had occasion to hold in Quizon vs. Baltazar, 76 SCRA 559:
As to the contention of respondents that the denial of a motion to quash is not a
ground for certiorari and prohibition, suffice it to state that to allow an accused to
undergo the ordeals of trial and conviction when the information or complaint
against him is patently defective or the offense charged therein has been
indisputably shown to have already prescribed is unfair and unjust for which
reason, procedurally, the ordinary remedy of appeal cannot be plain and
adequate.
As to mandamus, We are incline to agree with respondent's allegation that "petitioner has no
cause of action for mandamus which is a writ intended to control the exercise of a purely
ministerial function. To quash an information is not a ministerial function," 25 However, mandamus
as a remedy is a superfluity here, considering that petitioner can obtain full relief thru certiorari and
prohibition.
b. On the applicability of the four-year prescriptive period provided in Act No. 3326. 26
The same is not applicable. Said Act provides:
Section 1. Violations penalized by special acts shall unless otherwise provided in
such acts, prescribe in accordance with the following rules: (a)........... (b) after
four years for those punished by imprisonment for more than one month, but less
than two years; ... (Emphasis supplied.)
Act No. 3326 applies only if the special act does not provide for its own prescriptive period. It has
no application here, where the Copyright Law provides for its own prescriptive period, viz:
Section 24. All actions, suits, or proceedings arising under this Act shall be
originally cognizable by the Courts of First Instance of the Philippines and shall
prescribe after two years from the time the cause of action arose.
2. Now on the main issue of prescription. The question to be resolved is the proper computation of
the two-year period of prescription from September 3, 1963. Resolution of this issue hinges, in
turn, on whether February 28, and 29 of a leap year, 1964, should be counted as one day, as
proposed by the prosecution; or as separate days, as alleged by the defense.
This issue which was in 1965 still undetermined is now a settled matter. It was held in 1969
in Namarco vs. Tuazon 27 that February 28 and 29 of a leap year should be counted as separate
days in computing periods of prescription. Thus, this Court, speaking thru former Chief Justice
Roberto Concepcion, held that where the prescriptive period was supposed to commence on
December 21, 1955, the filing of the action on December 21, 1965, was done after the ten-year
period has lapsed — since 1960 and 1964 were both leap years and the case was thus filed two
(2) days too late. Since this case was filed on September 3, 1965, it was filed one day too late;
considering that the 730th day fell on September 2, 1965 — the year 1964 being a leap year.
In explaining the rationale for its holding, the Court took pains to trace the antecedent decisional
and statutory bases for its conclusion, thus —
Prior to the approval of the Civil Code of Spain, the Supreme Court thereof held,
on March 30, 1887, that, when the law spoke of months, it meant a 'natural'
month or 'solar' month, in the absence of express provision to the contrary. Such
provision was incorporated into the Civil Code of Spain, subsequently
promulgated. Hence, the same Supreme Court declared that, pursuant to Article
7 of said Code, 'whenever months are referred to in the law. it shall be
understood that months are of 30 days,' not the 'natural', 'solar' or 'calendar'
months, unless they are 'designated by name,' in which case, 'they shall be
computed by the actual number of days they have.' This concept was, later,
modified in the Philippines, by Section 13 of the Revised Administrative Code,
pursuant to which 'month shall be understood to refer to a calendar month.' With
the approval of the Civil Code of the Philippines (RA 386) we have reverted to
the provisions of the Spanish Civil Code in accordance with which a month is to
be considered as the regular 30-month and not the solar or civil month with the
particularity that, whereas the Spanish Civil Code merely mentioned 'months,
days or nights,' ours has added thereto the term 'years' and explicitly ordains in
Article 13 that it shall be understood that years are of three hundred sixty-five
days. 28
With respect to the opinion of some members of the Court that Article 13 of the Civil Code is
unrealistic, the Court adverted to the proper remedy thus —
Although some justices of the Supreme Court are inclined to think that Article 13
of the Civil Code defining 'years' to mean 365 days is not realistic, the remedy is
not judicial legislation. If public interest demands a reversion to the policy
 embodied in the Revised Administrative Code, this may be done through
legislative process, not by judicial decree. 29

Finally, there is no merit in the allegation that the reckoning of the prescriptive period should start
from September 4, 1963. This was the date when the police authorities discovered several pirated
books in accused's store. But the accused was charged, in both Criminal Cases Nos. 80006 and
80007, with having allegedly sold and distributed spurious and pirated copies of the textbook in
question, not of illegal possession of the same. The prosecution's claim that the preliminary
investigation proceedings in the Manila City Fiscal's Office and in the prosecution Division of the
Department of Justice interrupted the running of the prescriptive period, is also without merit. We
held in People vs. Tayco 30 that the running of the period of prescription is interrupted not by the
act of the offended party in reporting the offense to the final but the filing of the complaint or
information in court.

WHEREFORE, the order dated October 7, 1965 of the Court of First Instance of Manila Branch
XIV in Criminal Case No. 80007 dismissing the case on the ground of prescription, is AFFIRMED.
The order dated December 23, 1965 of the same court, Branch III, in Criminal Case No. 80006, is
REVERSED and SET ASIDE, and the case is DISMISSED, on the ground that the crime charged
therein had already prescribed. Without pronouncement as to costs.

SO ORDERED.
 Republic of the Philippines The appellant contends that court below erred in not declaring that the defendant had reproduced
SUPREME COURT the plaintiff's work and that the defendant had violated article 7 of the Law of January 10, 1879, on
Manila Intellectual Property.

EN BANC Said article provides:

G.R. No. L-11937 April 1, 1918 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.
PEDRO SERRANO LAKTAW, plaintiff-appellant,
vs. Therefore, in order that said article may be violated, it is not necessary, as the court below seems
MAMERTO PAGLINAWAN, defendant-appellee. to have understood, 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
Perfecto Gabriel for appellant. though it be only to annotate, add something to it, or improve any edition thereof.
Felix Ferrer and Crossfield and O'Brien for appellee.
Upon making a careful and minute comparison of Exhibit A, the dictionary written and published
ARAULLO, J.: by the plaintiff, and Exhibit B, written and published by the defendant, and, taking into account the
memorandum (fols. 55 to 59) presented by the defendant, in which he enumerates the words and
terms which, according to him, are in his dictionary but not in that of that of the plaintiff, and
In the complaint presented in the Court of First Instance of the City of Manila on February 20,
viceversa, and the equivalents or definitions given by the plaintiff, as well as the new Tagalog
1915, it was alleged: (1) That the plaintiff was, according to the laws regulating literary properties,
words which are in the dictionary of the defendant but not in that of the plaintiff; and considering
the registered owner and author of a literary work entitled Diccionario Hispano-Tagalog (Spanish-
the notes, Exhibit C, first series, presented by the plaintiff, in which the terms copied by the
Tagalog Dictionary) published in the City of Manila in 1889 by the printing establishment La
defendant from the plaintiff's dictionary are enumerated in detail and in relation to each letter of the
Opinion, and a copy of which was attached to the complaint, as Exhibit A; (2) that the defendant, alphabet and which the plaintiff's own words and terms are set forth, with a summary, at the foot of
without the consent of the plaintiff, reproduced said literary work, improperly copied the greater each group of letters, which shows the number of initial Spanish words contained in the
part thereof in the work published by him and entitled Diccionariong Kastila-Tagalog (Spanish- defendant's dictionary, the words that are his own and the fact that the remaining ones are truly
Tagalog Dictionary), a copy of which was also attached to the complaint as Exhibit B; (3) that said copied from the plaintiff's dictionary — considering all of these facts, we come to a conclusion
act of the defendant, which is a violation of article 7 of the Law of January 10, 1879, on Intellectual completely different and contrary to that of the trial court, for said evidence clearly shows:
Property, caused irreparable injuries to the plaintiff, 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 the plaintiff by the publication of defendant's work 1. That, of the Spanish words in the defendant's dictionary, Exhibit B, which correspond to each
amounted to $10,000. The plaintiff therefore prayed the court to order the defendant to withdraw letter of the alphabet, those that are enumerated below have been copied and reproduced from
from sale all stock of the work herein identified as Exhibit B and to pay the plaintiff the sum of the plaintiff's dictionary, with the exception of those that are stated to be defendant's own.
$10,000, with costs.
Letter Words Defendant's own
The defendant in his answer denied generally each and every allegation of the complaint and
prayed the court to absolve him from the complaint. After trial and the introduction of evidence by "A" 1,184 231
both parties, the court on August 20, 1915, rendered judgment, absolving the defendant from the
complaint, but without making any special pronouncement as to costs. The plaintiff moved for a "B" 364 28
new trial on the ground that the judgment was against the law and the weight of the evidence.
Said motion having been overruled, plaintiff excepted to the order overruling it, and appealed the "C" 660 261
case to the Supreme Court upon a bill of exceptions.
"CH" 76 10
The ground of the decision appealed from is that a comparison of the plaintiff's dictionary with that
of the defendant does not show that the latter is an improper copy of the former, which has been "D" 874 231
published and offered for sale by the plaintiff for about twenty-five years or more. For this reason
the court held that the plaintiff had no right of action and that the remedy sought by him could not "E" 880 301
be granted.
"F" 383 152
 this number of words to those that are in the plaintiff's dictionary, he having reproduced or copied
"G" 302 111
the remaining 20,452 words.
"H" 57 64
2. That the defendant also literally reproduced and copied for the Spanish words in his dictionary,
"I" 814 328 the equivalents, definitions and different meanings in Tagalog, given in plaintiff's dictionary, having
reproduced, as to some words, everything that appears in the plaintiff's dictionary for similar
"J" 113 25 Spanish words, although as to some he made some additions of his own. Said copies and
reproductions are numerous as may be seen, by comparing both dictionaries and using as a guide
"K" 11 11 or index the defendant's memorandum and notes, first series, Exhibit C, in which, as to each word,
the similarities and differences between them are set forth in detail.
"L" 502 94
3. That the printer's errors in the plaintiff's dictionary as to the expression of some words in
"LL" 36 2 Spanish as well as their equivalents in Tagalog are also reproduced, a fact which shows that the
defendant, in preparing his dictionary, literally copied those Spanish words and their meanings
"M" 994 225 and equivalents in Tagalog from the plaintiff's dictionary.
"N" 259 53
The trial court has chosen at random, as is stated in the judgment appealed from, some words
"Ñ" 6 2 from said dictionaries in making the comparison on which its conclusion is based, and
consequently the conclusion reached by it must be inaccurate and not well founded, because said
"O" 317 67 comparison was not complete.

"P" 803 358 In said judgment some words of the defendant's dictionary are transcribed, the equivalents and
meanings of which in Tagalog are exactly the same as those that are given in the plaintiff's
"Q" 84 11 dictionary, with the exception, as to some of them, of only one acceptation, which is the
defendant's own production. And with respect to the examples used by the defendant in his
"R" 847 140 dictionary, which, according to the judgment, are not copied from the plaintiff's — the judgment
referring to the preposition a (to), in Tagalog sa — it must be noted that the defendant, in giving in
"S" 746 118 his dictionary an example of said preposition, uses the expression "voy a Tayabas" (I am going to
Tayabas) instead of "voy a Bulacan" (I am going to Bulacan), as the plaintiff does in his dictionary,
"T" 591 147 or what is the same thing, that one speaks of Bulacan while the other speaks of Tayabas. This
does not show that there was no reproduction or copying by the defendant of the plaintiffs work,
"U" 107 15 but just the opposite, for he who intends to imitate the work of another, tries to make it appear in
some manner that there is some difference between the original and the imitation; and in the
"V" 342 96 example referred to, with respect to the preposition a (to), that dissimilarity as to the province
designated seems to effect the same purpose.
"X" 6 6

"Y" 24 4 In the judgment appealed from, the court gives one to understand that the reproduction of
another's dictionary without the owner's consent does not constitute a violation of the Law of
"Z" 73 17 Intellectual Property for the court's idea of a dictionary is stated in the decision itself, as follows:

______ _____ Dictionaries have to be made with the aid of others, and they are improved by the
increase of words. What may be said of a pasture ground may be said also of a
23,560 3,108 dictionary, i. e., that it should be common property for all who may desire to write a new
dictionary, and the defendant has come to this pasture ground and taken whatever he
needed from it in the exercise of a perfect right.
Therefore, of the 23,560 Spanish words in the defendant's dictionary, after deducting 17 words
corresponding to the letters K and X (for the plaintiff has no words corresponding to them), only
3,108 words are the defendant's own, or, what is the same thing, the defendant has added only
Such idea is very erroneous, especially in relation to the Law of Intellectual Property. Danvilla y
Collado the author of the Law of January 10, 1879, on Intellectual Property, which was discussed
and approved in the Spanish Cortes, in his work entitled La Propiedad Intelectual (page 362, 1st
ed.) states with respect to dictionaries and in relation to article 7 of said law:
The protection of the law cannot be denied to the author of a dictionary, for 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 a special
work. On this point, the correctional court of the Seine held, on August 16, 1864, that a
dictionary constitutes property, although some of the words therein are explained by mere
definitions expressed in a few lines and sanctioned by usage, provided that the greater
part of the other words contain new meanings; new meanings which evidently may only
belonged to the first person who published them.
Therefore, the plaintiff, Pedro Serrano, cannot be denied the legal protection which he seeks, and
which is based on the fact that the dictionary published by him in 1889 is his property — said
property right being recognized and having been granted by article 7, in connection with article 2,
of said law — and on the further fact that said work was reproduced by the defendant without his
permission.
This law was published in the Gaceta de Madrid on January 12, 1879. It took effect in these
Islands six months after its promulgation or publication, as provided in article 56 thereof. The body
of rules for the execution of said law having been approved by royal decree of September 3, 1880,
and published in the Gaceta de Madrid on September 6, 1880 and extended to the Philippine
Islands by royal decree of May 5, 1887, it was in turn published in the Gaceta de Manila, with the
approval of the Governor-General of the Islands, on June 15, 1887. Said law of January 10, 1879,
and the rules for its application, were therefore in force in these Islands when the plaintiff's
dictionary was edited and published in 1889.
It appears from the evidence that although the plaintiff did not introduce at the trial the certificate of
registration of his property rights to said work which, according to said rules, was kept in the
Central Government of these Islands, and was issued to him in 1890, the same having been lost
during the revolution against Spain, and no trace relative to the issuance of said certificate being
obtainable in the Division of Archives of the Executive Bureau on account of the loss of the
corresponding records, yet as in the first page of said dictionary the property right of the plaintiff
was reserved by means of the words "Es propiedad del autor" (All rights reserved), taken in
connection with the permission granted him by the Governor-General on November 24, 1889, to
print and publish said dictionary, after an examination thereof by the permanent committee of
censors, which examination was made, and the necessary license granted to him, these facts
constitute sufficient proof, under the circumstances of the case, as they have not been overcome
by any evidence on the part of the defendant, showing that said plaintiff did not comply with the
requirements of article 36 of said law, which was the prerequisite to the enjoyment of the benefits
thereof according to the preceding articles, among which is article 7, which is alleged in the
complaint to have been violated by the defendant.
Even considering that said Law of January 10, 1879, ceased to operate in these Islands, upon the
termination of Spanish sovereignty and the substitution thereof by that of the United States of
America, the right of the plaintiff to invoke said law in support of the action instituted by him in the
present case cannot be disputed. His property right to the work Diccionario Hispano-
Tagalog (Spanish-Tagalog Dictionary), published by him and edited in 1889, is recognized and
sanctioned by said law, and by virtue thereof, he had acquired a right of which he cannot be
deprived merely because the law is not in force now or is of no actual application. This conclusion
is necessary to protect intellectual property rights vested after the sovereignty of Spain was
superseded by that of the United States. It was so held superseded by that of the United States. It
was so held in the Treaty of Paris of December 10, 1898, between Spain and the United States,
when it declared in article 13 thereof that the rights to literary, artistic, and industrial properties
acquired by the subject of Spain in the Island of Cuba and in Puerto Rico and the Philippines and
other ceded territories, at the time of the exchange of the ratification of said Treaty, shall continue
to be respect.
In addition to what has been said, according to article 428 of the Civil Code, the author of a
literary, scientific, or artistic work, has the right to exploit it and dispose thereof at will. In relation to
this right, there exists the exclusive right of the author, who is the absolute owner of his own work,
to produce it, according to article 2 of the Law of January 10, 1879, and consequently, nobody
may reproduce it, without his permission, not even to annotate or add something to it, or to
improve any edition thereof, according to article 7 of said law. Manresa, in his commentaries on
article 429 of the Civil Code (vol. 3, p. 633, 3d ed.) says that the concrete statement of the right to
literary properties is found in the legal doctrine according to which nobody may reproduce another
person's work, without the consent of his owner, or even to annotate or add something to it or to
improve any edition thereof. And on page 616 of said volume, Manresa says the following:
He who writes a book, or carves a statue, or makes an invention, has the absolute right to
reproduce or sell it, just as the owner of land has the absolute right to sell it or its fruits.
But while the owner of land, by selling it and its fruits, perhaps fully realizes all its
economic value, by receiving its benefits and utilities, which are presented, for example,
by the price, on the other hand the author of a book, statue or invention, does not reap all
the benefits and advantages of his own property by disposing of it, for the most important
form of realizing the economic advantages of a book, statue or invention, consists in the
right to reproduce it in similar or like copies, everyone of which serves to give to the
person reproducing them all the conditions which the original requires in order to give the
author the full enjoyment thereof. If the author of a book, after its publication, cannot
prevent its reproduction by any person who may want to reproduce it, then the property
right granted him is reduced to a very insignificant thing and the effort made in the
production of the book is no way rewarded.
Indeed the property right recognized and protected by the Law of January 10, 1879, on Intellectual
Property, would be illusory if, by reason of the fact that said law is no longer in force as a
consequence of the change of sovereignty in these Islands, the author of a work, who has the
exclusive right to reproduce it, could not prevent another person from so doing without his
consent, and could not enforce this right through the courts of justice in order to prosecute the
violator of this legal provision and the defrauder or usurper of his right, for he could not obtain the
full enjoyment of the book or other work, and his property right thereto, which is recognized by law,
would be reduced, as Manresa says, to an insignificant thing, if he should have no more right than
that of selling his work.
The reproduction by the defendant without the plaintiff's consent of the Diccionario Hispano-
Tagalog (Spanish-Tagalog Dictionary), published and edited in the City of Manila in 1889, by the
publication of the Diccionariong Kastila-Tagalog (Spanish-Tagalog Dictionary), published in the
same city and edited in the press El Progreso in 1913, as appears from Exhibit B, which is
attached to the complaint, has caused the plaintiff, according to the latter, damages in the sum of
$10,000. It is true that it cannot be denied that the reproduction of the plaintiff's book by the
defendant has caused damages to the former, but the amount thereof has not been determined at
the trial, for the statement of the plaintiff as to the proceeds he would have realized if he had
printed in 1913 the number of copies of his work which he stated in his declaration — a fact which
he did not do because the defendant had reproduced it — was not corroborated in any way at the
trial and is based upon mere calculations made by the plaintiff himself; for which reason no
pronouncement can be made in this decision as to the indemnification for damages which the
plaintiff seeks to recover.

The plaintiff having prayed, not for a permanent injunction against the defendant, as the plaintiff
himself in his brief erroneously states, but for a judgment ordering the defendant to withdraw from
sale all stock of his work Diccionariong Kastila-Tagalog (Spanish-Tagalog Dictionary), of which
Exhibit B is a copy, and the suit instituted by said plaintiff being proper, we reverse the judgment
appealed from and order the defendant to withdraw from sale, as prayed for in the complaint, all
stock of his work above-mentioned, and to pay the costs of first instance. We make no special
pronouncement as to the costs of this instance. So ordered.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 131522 July 19, 1999
PACITA I. HABANA, ALICIA L. CINCO and JOVITA N. FERNANDO, petitioners,
vs.
FELICIDAD C. ROBLES and GOODWILL TRADING CO., INC., respondents.
PARDO, J.:
The case before us is a petition for review on certiorari1 to set aside the (a) decision or the Court
of Appeals2, and (b) the resolution denying petitioners' motion for reconsideration,3 in which the
appellate court affirmed the trial court's dismissal of the complaint for infringement and/or unfair
competition and damages but deleted the award for attorney's fees.1âwphi1.nêt
The facts are as follows:
Petitioners are authors and copyright owners of duly issued certificates of copyright registration
covering their published works, produced through their combined resources and efforts, entitled
COLLEGE ENGLISH FOR TODAY (CET for brevity), Books 1 and 2, and WORKBOOK FOR
COLLEGE FRESHMAN ENGLISH, Series 1.
Respondent Felicidad Robles and Goodwill Trading Co., Inc. are the author/publisher and
distributor/seller of another published work entitled "DEVELOPING ENGLISH PROFICIENCY"
(DEP for brevity), Books 1 and 2 (1985 edition) which book was covered by copyrights issued to
them.
In the course of revising their published works, petitioners scouted and looked around various
bookstores to check on other textbooks dealing with the same subject matter. By chance they
came upon the book of respondent Robles and upon perusal of said book they were surprised to
see that the book was strikingly similar to the contents, scheme of presentation, illustrations and
illustrative examples in their own book, CET.
After an itemized examination and comparison of the two books (CET and DEP), petitioners found
that several pages of the respondent's book are similar, if not all together a copy of petitioners'
book, which is a case of plagiarism and copyright infringement.
Petitioners 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
respondent Robles' works.
However, respondents ignored the demands, hence, on July 7, 1988; petitioners filed with the
Regional Trial Court, Makati, a complaint for "Infringement and/or unfair competition with
damages" 4 against private respondents.5
In the complaint, petitioners alleged that in 1985, 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. The textual
contents and illustrations of CET were literally reproduced in the book DEP. The plagiarism,
incorporation and reproduction of particular portions of the book CET in the book DEP, without the
authority or consent of petitioners, and the misrepresentations of respondent Robles that the same
was her original work and concept adversely affected and substantially diminished the sale of the
petitioners' book and caused them actual damages by way of unrealized income.
Despite the demands of the petitioners for respondents to desist from committing further acts of
infringement and for respondent to recall DEP from the market, respondents refused. Petitioners
asked the court to order the submission of all copies of the book DEP, together with the molds,
plates and films and other materials used in its printing destroyed, and for respondents to render
an accounting of the proceeds of all sales and profits since the time of its publication and sale.
Respondent Robles was impleaded in the suit because she authored and directly committed the
acts of infringement complained of, while respondent Goodwill Trading Co., Inc. was impleaded as
the publisher and joint co-owner of the copyright certificates of registration covering the two books
authored and caused to be published by respondent Robles with obvious connivance with one
another.
On July 27, 1988, respondent Robles filed a motion for a bill of particulars 6 which the trial court
approved on August 17, 1988. Petitioners complied with the desired particularization, and
furnished respondent Robles the specific portions, inclusive of pages and lines, of the published
and copyrighted books of the petitioners which were transposed, lifted, copied and plagiarized
and/or otherwise found their way into respondent's book.
On August 1, 1988, respondent Goodwill Trading Co., Inc. filed its answer to the complaint 7 and
alleged that petitioners had no cause of action against Goodwill Trading Co., Inc. since it was not
privy to the misrepresentation, plagiarism, incorporation and reproduction of the portions of the
book of petitioners; that there was an agreement between Goodwill and the respondent Robles
that Robles guaranteed Goodwill that the materials utilized in the manuscript were her own or that
she had secured the necessary permission from contributors and sources; that the author
assumed sole responsibility and held the publisher without any liability.
On November 28, 1988, respondent Robles filed her answer8, and denied the allegations of
plagiarism and copying that petitioners claimed. Respondent stressed that (1) the book DEP is the
product of her independent researches, studies and experiences, and was not a copy of any
existing valid copyrighted book; (2) DEP followed the scope and sequence or syllabus which are
common to all English grammar writers as recommended by the Association of Philippine Colleges
of Arts and Sciences (APCAS), so any similarity between the respondents book and that of the
petitioners was due to the orientation of the authors to both works and standards and syllabus;
and (3) the similarities may be due to the authors' exercise of the "right to fair use of copyrigthed
materials, as guides."
Respondent interposed a counterclaim for damages on the ground that bad faith and malice
attended the filing of the complaint, because petitioner Habana was professionally jealous and the
book DEP replaced CET as the official textbook of the graduate studies department of the Far
Eastern University.9
During the pre-trial conference, the parties agreed to a stipulation of
facts 10 and for the trial court to first resolve the issue of infringement before disposing of the claim
for damages.
After the trial on the merits, on April 23, 1993, the trial court rendered its judgment finding thus:
WHEREFORE, premises considered, the court hereby orders that the complaint
filed against defendants Felicidad Robles and Goodwill Trading Co., Inc. shall be
DISMISSED; that said plaintiffs solidarily reimburse defendant Robles for
P20,000.00 attorney's fees and defendant Goodwill for P5,000.00 attorney's fees.
Plaintiffs are liable for cost of suit.
IT IS SO ORDERED.
Done in the City of Manila this 23rd day of April, 1993.
(s/t) MARVIE R. ABRAHAM SINGSON
Assisting Judge
11
S. C. Adm. Order No. 124-92
12
On May 14, 1993, petitioners filed their notice of appeal with the trial court , and on July 19,
1993, the court directed its branch clerk of court to forward all the records of the case to the Court
of Appeals. 13
In the appeal, petitioners argued that the trial court completely disregarded their evidence and fully
subscribed to the arguments of respondent Robles that the books in issue were purely the product
of her researches and studies and that the copied portions were inspired by foreign authors and
as such not subject to copyright. Petitioners also assailed the findings of the trial court that they
were animated by bad faith in instituting the complaint. 14
On June 27, 1997, the Court of Appeals rendered judgment in favor of respondents Robles and
Goodwill Trading Co., Inc. The relevant portions of the decision state:
It must be noted, however, that similarity of the allegedly infringed work to the
author's or proprietor's copyrighted work does not of itself establish copyright
infringement, especially if the similarity results from the fact that both works deal
with the same subject or have the same common source, as in this case.
Appellee Robles has fully explained that the portion or material of the book
claimed by appellants to have been copied or lifted from foreign books. She has
duly proven that most of the topics or materials contained in her book, with
particular reference to those matters claimed by appellants to have been
plagiarized were topics or matters appearing not only in appellants and her books
but also in earlier books on College English, including foreign books, e.i. Edmund
Burke's "Speech on Conciliation", Boerigs' "Competence in English" and
Broughton's, "Edmund Burke's Collection."
xxx xxx xxx
Appellant's reliance on the last paragraph on Section II is misplaced. It must be
emphasized that they failed to prove that their books were made sources by
appellee. 15
The Court of Appeals was of the view that the award of attorneys' fees was not proper, since there
was no bad faith on the part of petitioners Habana et al. in instituting the action against
respondents.
16
On July 12, 1997, petitioners filed a motion for reconsideration, however, the Court of Appeals
denied the same in a Resolution 17 dated November 25, 1997.
Hence, this petition.
In this appeal, petitioners submit that the appellate court erred in affirming the trial court's decision.
Petitioners raised the following issues: (1) whether or not, despite the apparent textual, thematic
and sequential similarity between DEP and CET, respondents committed no copyright
infringement; (2) whether or not there was animus furandi on the part of respondent when they
refused to withdraw the copies of CET from the market despite notice to withdraw the same; and
(3) whether or not respondent Robles abused a writer's right to fair use, in violation of Section 11
of Presidential Decree No. 49. 18
We find the petition impressed with merit.
The complaint for copyright infringement was filed 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. It provides for the copy or economic rights of an owner of a copyright as
follows:
 Sec. 177. Copy or Economic rights. — Subject to the provisions of chapter VIII,
copyright or economic rights shall consist of the exclusive right to carry out,
authorize or prevent the following acts:
177.1 Reproduction of the work or substanlial portion of the work;
177.2 Dramatization, translation, adaptation, abridgement, arrangement or other
transformation of the work;
177.3 The first public distribution of the original and each copy of the work by
sale or other forms of transfer of ownership;
177.4 Rental of the original or a copy of an audiovisual or cinematographic work,
a work embodied in a sound recording, a computer program, a compilation of
data and other materials or a musical work in graphic form, irrespective of the
ownership of the original or the copy which is the subject of the rental; (n)
177.5 Public display of the original or copy of the work;
177.6 Public performance of the work; and
19
177.7 Other communication to the public of the work
The law also provided for the limitations on copyright, thus:
Sec. 184.1 Limitations on copyright. — Notwithstanding the provisions of Chapter
V, the following acts shall not constitute infringement of copyright:
(a) the recitation or performance of a work, once it has been
lawfully made accessible to the public, if done privately and free
of charge or if made strictly for a charitable or religious
institution or society; [Sec. 10(1), P.D. No. 49]
(b) The making of quotations from a published work if they are
compatible with fair use and only to the extent justified for the
purpose, including quotations from newspaper articles and
periodicals in the form of press summaries; Provided, that the
source and the name of the author, if appearing on the work are
mentioned; (Sec. 11 third par. P.D. 49)
xxx xxx xxx
(e) The inclusion of a work in a publication, broadcast, or other communication to
the public, sound recording of film, if such inclusion is made by way of illustration
for teaching purposes and is compatible with fair use: Provided, That the source
and the name of the author, if appearing in the work is mentioned; 20
In the above quoted provisions, "work" has reference to literary and artistic creations and this
includes books and other literary, scholarly and scientific works. 21
A perusal of the records yields several pages of the book DEP that are similar if not identical with
the text of CET.
On page 404 of petitioners' Book 1 of College English for Today, the authors wrote:
Items in dates and addresses:
He died on Monday, April 15, 1975.
Miss Reyes lives in 214 Taft Avenue,
Manila 22
On page 73 of respondents Book 1 Developing English Today, they wrote:
He died on Monday, April 25, 1975.
Miss Reyes address is 214 Taft Avenue Manila 23
On Page 250 of CET, there is this example on parallelism or repetition of sentence structures,
thus:
The proposition is peace. Not peace through the medium of war; not peace to be
hunted through the labyrinth of intricate and endless negotiations; not peace to
arise out of universal discord, fomented from principle, in all parts of the empire;
not peace to depend on the juridical determination of perplexing questions, or the
precise marking of the boundary of a complex government. It is simple peace;
sought in its natural course, and in its ordinary haunts. It is peace sought in the
spirit of peace, and laid in principles purely pacific.
— Edmund Burke, "Speech on Criticism." 24
On page 100 of the book DEP 25, also in the topic of parallel structure and repetition, the same
example is found in toto. The only difference is that petitioners acknowledged the author Edmund
Burke, and respondents did not.
In several other pages 26 the treatment and manner of presentation of the topics of DEP are similar
if not a rehash of that contained in CET.
We believe that 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.
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. 27
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. 28
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. 29
The respondents' claim that the copied portions of the book CET are also found in foreign books
and other grammar books, and that the similarity between her style and that of petitioners can not
be avoided since they come from the same background and orientation may be true. However, in
this jurisdiction under Sec 184 of Republic Act 8293 it is provided that:
Limitations on Copyright. Notwithstanding the provisions of Chapter V, the
following shall not constitute infringement of copyright:
xxx xxx xxx
(c) The making of quotations from a published work if they are
compatible with fair use and only to the extent justified for the
purpose, including quotations from newspaper articles and
periodicals in the form of press summaries: Provided, That the
source and the name of the author, if appearing on the work,
are mentioned.
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. 30
The next question to resolve is to what extent can copying be injurious to the author of the book
being copied. Is it enough that there are similarities in some sections of the books or large
segments of the books are the same?
In the case at bar, there is no question that petitioners presented several pages of the books CET
and DEP that more or less had the same contents. It may be correct that the books being
grammar books may contain materials similar as to some technical contents with other grammar
books, such as the segment about the "Author Card". However, the numerous pages that the
petitioners presented showing 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.
The respondents claim 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 experience, teaching
approach and methodology are almost identical because they were of the same background.
However, we believe that even if petitioners and respondent Robles were of the same background
in terms of teaching experience and orientation, it is not an excuse for them to be identical even in
examples contained in their books. The similarities in examples and material contents are so
obviously present in this case. How can similar/identical examples not be considered as a mark of
copying?
We consider as an indicia of guilt or wrongdoing the act of respondent Robles of pulling out from
Goodwill bookstores the book DEP upon learning of petitioners' complaint while pharisaically
denying petitioners' demand. It was further noted that when the book DEP was re-issued as a
revised version, all the pages cited by petitioners to contain portion of their book College English
for Today were eliminated.
In cases of infringement, copying alone is not what is prohibited. The copying must produce an
"injurious effect". 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 did not acknowledged
petitioners as her source.
Hence, there is a clear case of appropriation of copyrighted work for her benefit that respondent Robles
committed. Petitioners' 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.
In the case at bar, the least that respondent Robles could have done was to acknowledge petitioners
Habana et. al. as the source of the portions of DEP. The final product of an author's toil is her book. To
allow another to copy the book without appropriate acknowledgment is injury enough.
WHEREFORE, the petition is hereby GRANTED. The decision and resolution of the Court of Appeals in
CA-G. R. CV No. 44053 are SET ASIDE. The case is ordered remanded to the trial court for further
proceedings to receive evidence of the parties to ascertain the damages caused and sustained by
petitioners and to render decision in accordance with the evidence submitted to it.
SO ORDERED.
 FIRST DIVISION
G.R. No. 147043 June 21, 2005
NBI - MICROSOFT CORPORATION & LOTUS DEVELOPMENT CORP., petitioners,
vs.
JUDY C. HWANG, BENITO KEH & YVONNE K. CHUA/BELTRON COMPUTER PHILIPPINES
INC., JONATHAN K. CHUA, EMILY K. CHUA, BENITO T. SANCHEZ, NANCY I. VELASCO,
ALFONSO CHUA, ALBERTO CHUA, SOPHIA ONG, DEANNA CHUA/TAIWAN MACHINERY
DISPLAY & TRADE CENTER, INC., and THE SECRETARY OF JUSTICE, respondents.
DECISION
CARPIO, J.:
The Case
1 2
This is a petition for certiorari of the Resolutions of the Department of Justice dismissing for "lack
of merit and insufficiency of evidence" petitioner Microsoft Corporation’s complaint against
respondents for copyright infringement and unfair competition.
The Facts
Petitioner Microsoft Corporation ("Microsoft"), a Delaware, United States corporation, owns the
copyright and trademark to several computer software.3 Respondents Benito Keh and Yvonne Keh
are the President/Managing Director and General Manager, respectively, of respondent Beltron
Computer Philippines, Inc. ("Beltron"), a domestic corporation. Respondents Jonathan K. Chua,
Emily K. Chua, Benito T. Sanchez, and Nancy I. Velasco are Beltron’s Directors. On the other
hand, respondents Alfonso Chua, Alberto Chua, Judy K. Chua Hwang, Sophia Ong, and Deanna
Chua are the Directors of respondent Taiwan Machinery Display & Trade Center, Inc. ("TMTC"),
also a domestic corporation.4
In May 1993, Microsoft and Beltron entered into a Licensing Agreement ("Agreement"). Under
Section 2(a) of the Agreement, as amended in January 1994, Microsoft authorized Beltron, for a
fee, to:
(i) xxx reproduce and install no more than one (1) copy of [Microsoft] software on each
Customer System hard disk or Read Only Memory ("ROM"); [and]
(ii) xxx distribute directly or indirectly and license copies of the Product (reproduced as
per Section 2(a)(i) and/or acquired from Authorized Replicator or Authorized Distributor)
in object code form to end users[.] xxxx5
The Agreement also authorized Microsoft and Beltron to terminate the contract if the other fails to
comply with any of the Agreement’s provisions. Microsoft terminated the Agreement effective 22
June 1995 for Beltron’s non-payment of royalties.6
Afterwards, Microsoft learned that respondents were illegally copying and selling Microsoft
software. Consequently, Microsoft, through its Philippine agent,7 hired the services of Pinkerton
Consulting Services ("PCS"), a private investigative firm. Microsoft also sought the assistance of
the National Bureau of Investigation ("NBI"). On 10 November 1995, PCS employee John
Benedic8 Sacriz ("Sacriz") and NBI agent Dominador Samiano, Jr. ("Samiano"), posing as
representatives of a computer shop,9 bought computer hardware (central processing unit ("CPU")
and computer monitor) and software (12 computer disks ("CDs") in read-only memory ("ROM")
format) from respondents. The CPU contained pre-installed10 Microsoft Windows 3.1 and MS-DOS
software. The 12 CD-ROMs, encased in plastic containers with Microsoft packaging, also
contained Microsoft software.11 At least two of the CD-ROMs were "installers," so-called because
they contain several software (Microsoft only or both Microsoft and non-Microsoft).12 Sacriz and
Samiano were not given the Microsoft end-user license agreements, user’s manuals, registration
cards or certificates of authenticity for the articles they purchased. The receipt issued to Sacriz
and Samiano for the CPU and monitor bore the heading "T.M.T.C. (PHILS.) INC. BELTRON
COMPUTER."13 The receipt for the 12 CD-ROMs did not indicate its source although the name
"Gerlie" appears below the entry "delivered by."14
On 17 November 1995, Microsoft applied for search warrants against respondents in the Regional
Trial Court, Branch 23, Manila ("RTC").15 The RTC granted Microsoft’s application and issued two
search warrants ("Search Warrant Nos. 95-684 and 95-685").16 Using Search Warrant Nos. 95-
684 and 95-685, the NBI searched the premises of Beltron and TMTC and seized several
computer-related hardware, software, accessories, and paraphernalia. Among these were 2,831
pieces of CD-ROMs containing Microsoft software.17
Based on the articles obtained from respondents, Microsoft and a certain Lotus Development
Corporation ("Lotus Corporation") charged respondents before the Department of Justice ("DOJ")
with copyright infringement under Section 5(A) in relation to Section 29 of Presidential Decree No.
49, as amended, ("PD 49")18 and with unfair competition under Article 189(1)19 of the Revised
Penal Code. In its Complaint ("I.S. No. 96-193"), which the NBI indorsed, Microsoft alleged that
respondents illegally copied and sold Microsoft software.20
In their joint counter-affidavit, respondents Yvonne Keh ("respondent Keh") and Emily K. Chua
("respondent Chua") denied the charges against respondents. Respondents Keh and Chua
alleged that: (1) Microsoft’s real intention in filing the complaint under I.S. No. 96-193 was to
pressure Beltron to pay its alleged unpaid royalties, thus Microsoft should have filed a collection
suit instead of a criminal complaint; (2) TMTC bought the confiscated 59 boxes of MS-DOS CDs
from a Microsoft dealer in Singapore (R.R. Donnelly); (3) respondents are not the "source" of the
Microsoft Windows 3.1 software pre-installed in the CPU bought by Sacriz and Samiano, but only
of the MS-DOS software; (4) Microsoft’s alleged proof of purchase (receipt) for the 12 CD-ROMs is
inconclusive because the receipt does not indicate its source; and (5) respondents Benito Keh,
Jonathan K. Chua, Alfonso Chua, Alberto Chua, Judy K. Chua Hwang, Sophia Ong, and Deanna
Chua are stockholders of Beltron and TMTC in name only and thus cannot be held criminally
liable.21
The other respondents did not file counter-affidavits.
Meanwhile, respondents moved to quash Search Warrant Nos. 95-684 and 95-685. The RTC
partially granted their motion in its Order of 16 April 1996. Microsoft sought reconsideration but the
RTC denied Microsoft’s motion in its Order of 19 July 1996. Microsoft appealed to the Court of
Appeals in CA-G.R. CV No. 54600. In its Decision of 29 November 2001, the Court of Appeals
granted Microsoft’s appeal and set aside the RTC Orders of 16 April 1996 and 19 July 1996. The
Court of Appeals’ Decision became final on 27 December 2001.
The DOJ Resolutions
In the Resolution of 26 October 1999, DOJ State Prosecutor Jocelyn A. Ong ("State Prosecutor
Ong") recommended the dismissal of Microsoft’s complaint for lack of merit and insufficiency of
evidence. State Prosecutor Ong also recommended the dismissal of Lotus Corporation’s
complaint for lack of interest to prosecute and for insufficiency of evidence. Assistant Chief State
Prosecutor Lualhati R. Buenafe ("Assistant Chief State Prosecutor Buenafe") approved State
Prosecutor Ong’s recommendations.22 The 26 October 1999 Resolution reads in part:
[T]wo (2) issues have to be resolved in this case, namely:
a) Whether or not Beltron Computer and/or its stockholders should be held liable for the
offenses charged.
b) Whether or not prima facie case exist[s] against Taiwan Machinery Display and Trade
Center, Inc. (TMTC) for violation of the offense charged.
Complainant had alleged that from the time the license agreement was terminated, respondent/s
is/are no longer authorized to copy/distribute/sell Microsoft products. However, respondent/s
averred that the case is civil in nature, not criminal, considering that the case stemmed only out of
the desire of complainant to collect from them the amount of US$135,121.32 and that the contract
entered into by the parties cannot be unilaterally terminated.
In the order of Honorable William Bayhon dated July 19, 1996 [denying reconsideration to the
Order partially quashing the search warrants], he observed the following:
"It is further argued by counsel for respondent that the act taken by private complainant is to spite
revenge against the respondent Beltron for the latter failed to pay the alleged monetary obligation
in the amount of US$135,121.32. That respondent has some monetary obligation to complainant
which is not denied by the complainant."
["]It appears therefore that prior to the issuance of the subject search warrants, complainant had
some business transactions with the respondent [Beltron] along the same line of products.
Complainant failed to reveal the true circumstances existing between the two of them as it now
appears, indeed the search warrant[s] xxx [are] being used as a leverage to secure collection of
the money obligation which the Court cannot allow."
From said order, it can be gleaned that the [RTC] xxx, had admitted that the search warrants
applied for by complainant were merely used as a leverage for the collection of the alleged
monetary obligation of the respondent/s.
From said order, it can be surmise (sic) that the obligations between the parties is civil in nature
not criminal.
Moreover, complainant had time and again harped that respondent/s is/are not authorized to
sell/copy/distribute Microsoft products at the time of the execution of the search warrants. Still, this
office has no power to pass upon said issue for one has then to interpret the provisions of the
contract entered into by the parties, which question, should be raised in a proper civil proceeding.
Accordingly, absen[t] a resolution from the proper court of (sic) whether or not the contract is still
binding between the parties at the time of the execution of the search warrants, this office cannot
pass upon the issue of whether respondent/s is or are liable for the offense charged.
As to the second issue, we find for the respondent/s. TMTC had provided sufficient evidence such
as pro-forma invoice from R.R. Donnelley; Debt Advice of the Bank of Commerce; Official
Receipts from the Bureau of Customs; and Import Entry Declaration of the Bureau of Customs to
prove that indeed the Microsoft software in their possession were bought from Singapore.
Thus, respondent/s in this case has/have no intent to defraud the public, as provided under Article
189 of the Revised Penal Code, for they bought said Microsoft MS-DOS 6.0 from an alleged
licensee of Microsoft in Singapore, with all the necessary papers. In their opinion, what they have
are genuine Microsoft software, therefore no unfair competition exist.
Moreover, violation of P.D. 49 does not exist, for respondent/s was/were not the manufacturers of
the Microsoft software seized and were selling their products as genuine Microsoft software,
considering that they bought it from a Microsoft licensee.
Complainant, on the other hand, considering that it has the burden of proving that the
respondent/s is/are liable for the offense charged, has not presented any evidence that the items
seized namely the 59 boxes of MS-DOS 6.0 software are counterfeit.
The certification issued on December 12, 1995 by Christopher Austin, Corporate Attorney of the
complainant, does not disclose this fact. For the term used by Mr. Austin was that the items seized
were unauthorized.
The question now, is whether the products were unauthorized because TMTC has no license to
sell Microsoft products, or is it unauthorized because R.R. Donnelley has no authority to sell said
products here in the Philippines.
Still, to determine the culpability of the respondents, complainant should present evidence that
what is in the possession of the respondent/s is/are counterfeit Microsoft products.
This it failed to do.23
Microsoft sought reconsideration and prayed for an ocular inspection of the articles seized from
respondents. However, in the Resolution of 3 December 1999, Assistant Chief State Prosecutor
Buenafe, upon State Prosecutor Ong’s recommendation, denied Microsoft’s motion.24
Microsoft appealed to the Office of the DOJ Secretary. In the Resolution of 3 August 2000, DOJ
Undersecretary Regis V. Puno dismissed Microsoft’s appeal.25 Microsoft sought reconsideration
but its motion was denied in the Resolution of 22 December 2000.26
Hence, this petition. Microsoft contends that:
I. THE DOJ ERRED IN RULING THAT THE LIABILITY OF RESPONDENTS WAS ONLY CIVIL IN
NATURE BY VIRTUE OF THE LICENSE AGREEMENT.
II. THE DOJ MISAPPRECIATED THE FACT THAT RESPONDENTS WERE ENGAGED IN THE
ILLEGAL IMPORTATION, SALE AND DISTRIBUTION OF COUNTERFEIT SOFTWARE AS
EVIDENCED BY THE ITEMS PURCHASED DURING THE TEST-BUY AND THE ITEMS SEIZED
FROM RESPONDENTS’ PREMISES.
III. THE DOJ MISAPPRECIATED THE LAW ON COPYRIGHT INFRINGEMENT AND UNFAIR
COMPETITION.
IV. ONLY TWO OUT OF THE NINE RESPONDENTS BOTHERED TO FILE COUNTER-
AFFIDAVITS; HENCE, THE CHARGES AGAINST SEVEN [RESPONDENTS] REMAIN
UNCONTROVERTED.27
In its Comment, filed by the Solicitor General, the DOJ maintains that it did not commit grave
abuse of discretion in dismissing Microsoft’s complaint.28
For their part, respondents allege in their Comment that Microsoft is guilty of forum-shopping
because its petition in CA-G.R. CV No. 54600 was filed ahead of, and has a "common interest"
with, this petition. On the merits, respondents reiterate their claims in their motion to quash Search
Warrant Nos. 95-684 and 95-685 that the articles seized from them were either owned by others,
purchased from legitimate sources, or not produced by Microsoft. Respondents also insist that the
Agreement entitled Beltron to "copy and replicate or reproduce" Microsoft products. On the
confiscated 2,831 CD-ROMs, respondents allege that a certain corporation29 left the CD-ROMs
with them for safekeeping. Lastly, respondents claim that there is no proof that the CPU Sacriz
and Samiano bought from them contained pre-installed Microsoft software because the receipt for
the CPU does not indicate "[s]oftware hard disk." 30
In its Reply, Microsoft counters that it is not liable for forum-shopping because its petition in CA-
G.R. CV No. 54600 involved the Orders of the RTC partially quashing Search Warrant Nos. 95-
684 and 95-685 while this petition concerns the DOJ Resolutions dismissing its complaint against
respondents for copyright infringement and unfair competition. On the merits, Microsoft maintains
that respondents should be indicted for copyright infringement and unfair competition.31
The Issues
The petition raises the following issues:
(1) Whether Microsoft engaged in forum-shopping; and
(2) Whether the DOJ acted with grave abuse of discretion in not finding probable cause to
charge respondents with copyright infringement and unfair competition.
The Ruling of the Court
The petition has merit.
Microsoft did not Engage in Forum-Shopping
Forum-shopping takes place when a litigant files multiple suits involving the same parties, either
simultaneously or successively, to secure a favorable judgment.32 Thus, it exists where the
elements of litis pendentia are present, namely: (a) identity of parties, or at least such parties who
represent the same interests in both actions; (b) identity of rights asserted and relief prayed for,
the relief being founded on the same facts; and (c) the identity with respect to the two preceding
particulars in the two cases is such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the other case.33 Forum-
shopping is an act of malpractice because it abuses court processes.34 To check this pernicious
practice, Section 5, Rule 7 of the 1997 Rules of Civil Procedure requires the principal party in an
initiatory pleading to submit a certification against forum-shopping.35 Failure to comply with this
requirement is a cause for the dismissal of the case and, in case of willful forum-shopping, for the
imposition of administrative sanctions.
Here, Microsoft correctly contends that it is not liable for forum-shopping. What Microsoft appealed
in CA-G.R. CV No. 54600 were the RTC Orders partially quashing Search Warrant Nos. 95-684
and 95-685. In the present case, Microsoft is appealing from the DOJ Resolutions dismissing its
complaint against respondents for copyright infringement and unfair competition. Thus, although
the parties in CA-G.R. CV No. 54600 and this petition are identical, the rights asserted and the
reliefs prayed for are not such that the judgment in CA-G.R. CV No. 54600 does not amount to res
judicata in the present case. This renders forum-shopping impossible here.
The DOJ Acted with Grave Abuse of Discretion
in not Finding Probable Cause to Charge Respondents with
Copyright Infringement and Unfair Competition
Generally, this Court is loath to interfere in the prosecutor’s discretion in determining probable
cause36 — unless such discretion is shown to have been abused.37 This case falls under the
exception.
Unlike the higher quantum of proof beyond reasonable doubt required to secure a conviction, it is
the lower standard of probable cause which is applied during the preliminary investigation to
determine whether the accused should be held for trial. This standard is met if the facts and
circumstances incite a reasonable belief that the act or omission complained of constitutes the
offense charged. As we explained in Pilapil v. Sandiganbayan:38
The term [probable cause] does not mean "actual and positive cause" nor does it import absolute
certainty. It is merely based on opinion and reasonable belief. Thus, a finding of probable cause
does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is
enough that it is believed that the act or omission complained of constitutes the offense charged.
Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge.
PD 49 and Article 189(1)
Section 539 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 civilly40 and
criminally41 liable for copyright infringement. We held in Columbia Pictures, Inc. v. Court of
Appeals:42
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. (Emphasis supplied)
Significantly, under Section 5(A), a copyright owner is vested with the exclusive right to "copy,
distribute, multiply, [and] sell" his intellectual works.
On the other hand, the elements of unfair competition under Article 189(1)43 of the Revised Penal
Code are:
(a) That the offender 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 offender offers 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.44
The element of intent to deceive may be inferred from the similarity of the goods or their
appearance.45
On the Sufficiency of Evidence to
Support a Finding of Probable Cause
Against Respondents
In its pleadings filed with the DOJ, Microsoft invoked three clusters of evidence to support its
complaint against respondents, namely: (1) the 12 CD-ROMs containing Microsoft software Sacriz
and Samiano bought from respondents; (2) the CPU with pre-installed Microsoft software Sacriz
and Samiano also purchased from respondents; and (3) the 2,831 CD-ROMs containing Microsoft
software seized from respondents.46 The DOJ, on the one hand, refused to pass upon the
relevance of these pieces of evidence because: (1) the "obligations between the parties is civil and
not criminal" considering that Microsoft merely sought the issuance of Search Warrant Nos. 95-
684 and 95-685 to pressure Beltron to pay its obligation under the Agreement, and (2) the validity
of Microsoft’s termination of the Agreement must first be resolved by the "proper court." On the
other hand, the DOJ ruled that Microsoft failed to present evidence proving that what were
obtained from respondents were counterfeit Microsoft products.
This is grave abuse of discretion.47
First. Being the copyright and trademark owner of Microsoft software, Microsoft acted well
within its rights in filing the complaint under I.S. No. 96-193 based on the incriminating
evidence obtained from respondents. Hence, it was highly irregular for the DOJ to hold,
based on the RTC Order of 19 July 1996, that Microsoft sought the issuance of Search
Warrant Nos. 95-684 and 95-685, and by inference, the filing of the complaint under I.S.
No. 96-193, merely to pressure Beltron to pay its overdue royalties to Microsoft.
Significantly, in its Decision in CA-G.R. CV No. 54600 dated 29 November 2001, the
Court of Appeals set aside the RTC Order of 19 July 1996. Respondents no longer
contested that ruling which became final on 27 December 2001.
Second. There is no basis for the DOJ to rule that Microsoft must await a prior "resolution
from the proper court of (sic) whether or not the [Agreement] is still binding between the
parties." Beltron has not filed any suit to question Microsoft’s 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, some of the counterfeit 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 because Microsoft does not (and could not
have authorized anyone to) produce such CD-ROMs. The copying of the genuine
Microsoft software to produce these fake CD-ROMs 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 respondents’ liability for copyright infringement and
unfair competition.
Lastly, Section 10(b)48 of the Agreement provides that Microsoft’s "rights and remedies"
under the contract are "not xxx exclusive and are in addition to any other rights and
remedies provided by law or [the] Agreement." Thus, even if the Agreement still subsists,
Microsoft is not precluded from seeking remedies under PD 49 and Article 189(1) of the
Revised Penal Code to vindicate its rights.
 Third. The Court finds that the 12 CD-ROMs ("installer" and "non-installer") and the CPU
with pre-installed Microsoft software Sacriz and Samiano bought from respondents and
the 2,831 Microsoft CD-ROMs seized from respondents suffice to support a finding 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. The installer CD-ROMs with Microsoft software, to repeat, are
counterfeit per se. On the other hand, the illegality of the "non-installer" CD-ROMs
purchased from respondents and of the Microsoft software pre-installed in the CPU is
shown by the absence of the standard features accompanying authentic Microsoft
products, namely, the Microsoft end-user license agreements, user’s manuals,
registration cards or certificates of authenticity.
On the 2,831 Microsoft CD-ROMs49 seized from respondents, respondent Beltron, the only
respondent who was party to the Agreement, could not have reproduced them under the
Agreement as the Solicitor General50 and respondents contend. Beltron’s rights51 under the
Agreement were limited to:
Respondents’ contention that the 12 CD-ROMs Sacriz and Samiano purchased cannot be traced
to them because the receipt for these articles does not indicate its source is unavailing. The
receipt in question should be taken together with Microsoft’s claim that Sacriz and Samiano
bought the CD-ROMs from respondents.56 Together, these considerations point to respondents as
the vendor of the counterfeit CD-ROMs. Respondents do not give any reason why the Court
should not give credence to Microsoft’s claim. For the same reason, the fact that the receipt for the
CPU does not indicate "[s]oftware hard disk" does not mean that the CPU had no pre-installed
Microsoft software. Respondents Keh and Chua admit in their counter-affidavit that respondents
are the "source" of the pre-installed MS-DOS software.
WHEREFORE, we GRANT the petition. We SET ASIDE the Resolutions dated 26 October 1999,
3 December 1999, 3 August 2000, and 22 December 2000 of the Department of Justice.
SO ORDERED.

(1) the "reproduc[tion] and install[ation of] no more than one copy of [Microsoft] software
on each Customer System hard disk or Read Only Memory ("ROM")"; and

(2) the "distribut[ion] xxx and licens[ing of] copies of the [Microsoft] Product [as
reproduced above] and/or acquired from Authorized Replicator or Authorized
Distributor) in object code form to end users."

The Agreement defines an authorized replicator as "a third party approved by [Microsoft] which
may reproduce and manufacture [Microsoft] Product[s] for [Beltron] xxx." 52 An authorized
distributor, on the other hand, is a "third party approved by [Microsoft] from which [Beltron] may
purchase MED53 Product."54 Being a mere reproducer/installer of one Microsoft software copy on
each customer’s hard disk or ROM, Beltron could only have acquired the hundreds of Microsoft
CD-ROMs found in respondents’ possession from Microsoft distributors or replicators.

However, respondents makes no such claim. What respondents contend is that these CD-ROMs
were left to them for safekeeping. But neither is this claim tenable for lack of substantiation.
Indeed, respondents Keh and Chua, the only respondents who filed counter-affidavits, did not
make this claim in the DOJ. These circumstances give rise to the reasonable inference that
respondents mass-produced the CD-ROMs in question without securing Microsoft’s prior
authorization.

The counterfeit "non-installer" CD-ROMs Sacriz and Samiano bought from respondents also
suffice to support a finding of probable cause to indict respondents for unfair competition under
Article 189(1) of the Revised Penal Code for passing off Microsoft products. From the pictures of
the CD-ROMs’ packaging,55 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.
 THIRD DIVISION
G.R. No. 195835, March 14, 2016
SISON OLAÑO, SERGIO T. ONG, MARILYN O. GO, AND JAP FUK HAI, Petitioners, v. LIM
ENG CO, Respondent.
DECISION
REYES, J.:
This is a petition for review on certiorari1 under Rule 45 of the Rules of Court, assailing the
Decision2 dated July 9, 2010 and Resolution3 dated February 24, 2011 of the Court of Appeals
(CA) in CA-G.R. SP No. 95471, which annulled the Resolutions dated March 10, 2006 4 and May
25, 20065 of the Department of Justice (DOJ) in I.S. No. 2004-925, finding no probable cause for
copyright infringement against Sison Olano, Sergio Ong, Marilyn Go and Jap Fuk Hai (petitioners)
and directing the withdrawal of the criminal information filed against them.
The Antecedents
The petitioners are the officers and/or directors of Metrotech Steel Industries, Inc.
(Metrotech).6 Lim Eng Co (respondent), on the other hand, is the Chairman of LEC Steel
Manufacturing Corporation (LEC), a company which specializes in architectural metal
manufacturing.7
Sometime in 2002, LEC was invited by the architects of the Manansala Project (Project), a high-
end residential building in Rockwell Center, Makati City, to submit design/drawings and
specifications for interior and exterior hatch doors. LEC complied by submitting on July 16, 2002,
shop plans/drawings, including the diskette therefor, embodying the designs and specifications
required for the metal hatch doors.8
After a series of consultations and revisions, the final shop plans/drawings were submitted by LEC
on January 15, 2004 and thereafter copied and transferred to the title block of Ski-First Balfour
Joint Venture (SKI-FB), the Project's contractor, and then stamped approved for construction on
February 3, 2004.9
LEC was thereafter subcontracted by SKI-FB, to manufacture and install interior and exterior hatch
doors for the 7th to 22nd floors of the Project based on the final shop plans/drawings.10
Sometime thereafter, LEC learned that Metrotech was also subcontracted to install interior and
exterior hatch doors for the Project's 23rd to 41st floors.11
On June 24, 2004, LEC demanded Metrotech to cease from infringing its intellectual property
rights. Metrotech, however, insisted that no copyright infringement was committed because the
hatch doors it manufactured were patterned in accordance with the drawings provided by SKI-
FB.12
On July 2, 2004, LEC deposited with the National Library the final shop plans/drawings of the
designs and specifications for the interior and exterior hatch doors of the Project. 13 On July 6,
2004, LEC was issued a Certificate of Copyright Registration and Deposit showing that it is the
registered owner of plans/drawings for interior and exterior hatch doors under Registration Nos. 1-
2004-13 and 1-2004-14, respectively.14 This copyright pertains to class work "I" under Section 172
of Republic Act (R.A.) No. 8293, The Intellectual Property Code of the Philippines, which covers
"illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography,
topography, architecture or science."
On December 9, 2004, LEC was issued another Certificate of Copyright Registration and Deposit
showing that it is the registered owner of plans/drawings for interior and exterior hatch doors under
Registration Nos. H-2004-566 and H-2004-56715 which is classified under Section 172(h) of R.A.
No. 8293 as "original ornamental designs or models for articles of manufacture, whether or not
registrable as an industrial design, and other works of applied art."
When Metrotech still refused to stop fabricating hatch doors based on LEC's shop plans/drawings,
the latter sought the assistance of the National Bureau of Investigation (NBI) which in turn applied
for a search warrant before the Regional Trial Court (RTC) of Quezon City, Branch 24. The
application was granted on August 13, 2004 thus resulting in the confiscation of finished and
unfinished metal hatch doors as well as machines used in fabricating and manufacturing hatch
doors from the premises of Metrotech.16
On August 13, 2004, the respondent filed a Complaint-Affidavit17 before the DOJ against the
petitioners for copyright infringement. In the meantime or on September 8, 2004, the RTC
quashed the search warrant on the ground that copyright infringement was not established.18
Traversing the complaint, the petitioners admitted manufacturing hatch doors for the Project. They
denied, however, that they committed copyright infringement and averred that the hatch doors
they manufactured were functional inventions that are proper subjects of patents and that the
records of the Intellectual Property Office reveal that there is no patent, industrial design or utility
model registration on LEC's hatch doors. Metrotech further argued that the manufacturing of hatch
doors per se is not copyright infringement because copyright protection does not extend to the
objects depicted in the illustrations and plans. Moreover, there is no artistic or ornamental
expression embodied in the subject hatch doors that would subject them to copyright protection. 19
Resolutions of the DOJ
In a Resolution20 dated August 18, 2005, 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 are among the classes of copyrightable work enumerated in Sections 172 and 173
of the same law.21
Adamant, the respondent filed a petition for review before the DOJ but it was also denied due
course in the Resolution22 dated November 16, 2005.
Upon the respondent's motion for reconsideration, however, the Resolution23 dated January 27,
2006 of the DOJ reversed and set aside the Resolution dated August 18, 2005 and directed the
Chief State Prosecutor to file the appropriate information for copyright infringement against the
petitioners.24 The DOJ reasoned that the pieces of evidence adduced show that the subject hatch
doors are artistic or ornamental with distinctive hinges, door and jamb, among others. The
petitioners were not able to sufficiently rebut these allegations and merely insisted on the non-
artistic nature of the hatch doors. The DOJ further held that probable cause was established
insofar as the artistic nature of the hatch doors and based thereon the act of the petitioners in
manufacturing or causing to manufacture hatch doors similar to those of the respondent can be
considered as unauthorized reproduction; hence, copyright infringement under Section 177.1 in
relation to Section 216 of R.A. No. 8293.25
Aggrieved, the petitioners moved for reconsideration. This time, the DOJ made a complete turn
around by granting the motion, vacating its Resolution dated January 27, 2006 and declaring that
the evidence on record did not establish probable cause because the subject hatch doors were
plainly metal doors with functional components devoid of any aesthetic or artistic features.
Accordingly, the DOJ Resolution26 dated March 10, 2006 disposed as follows:
WHEREFORE, finding cogent reason to reverse the assailed resolution, the motion for
reconsideration is GRANTED finding no probable cause against the [petitioners]. Consequently,
the City Prosecutor of Manila is hereby directed to cause the withdrawal of the information, if any
has been filed in court, and to report the action taken thereon within TEN (10) DAYS from receipt
hereof.
SO ORDERED.27
The respondent thereafter filed a motion for reconsideration of the foregoing resolution but it was
denied28 on May 25, 2006. The respondent then sought recourse before the CA via a petition
for certiorari29 ascribing grave abuse of discretion on the part of the DOJ.
In its assailed Decision30 dated July 9, 2010, the CA granted the petition. The CA held that the
vacillating findings of the DOJ on the presence or lack of probable cause manifest capricious and
arbitrary exercise of discretion especially since its opposite findings were based on the same
factual evidence and arguments.
The CA then proceeded to make its own finding of probable cause and held that:
[F]or probable cause for copyright infringement to exist, essentially, it must be shown that the
violator reproduced the works without the consent of the owner of the copyright.
In the present case before Us, [the petitioners] do not dispute that: (1) LEG was issued copyrights
for the illustrations of the hatch doors under Section 171.i, and for the hatch doors themselves as
ornamental design or model for articles of manufacture pursuant to Section 171.h of R.A. [No.]
8293; and (2) they manufactured hatch doors based on drawings and design furnished by SKI-FB,
which consists of LEC works subject of copyrights. These two (2) circumstances, taken together,
are sufficient to excite the belief in a reasonable mind that [the petitioners] are probably guilty of
copyright infringement. First, LEC has indubitably established that it is the owner of the copyright
for both the illustrations of the hatch doors and [the] hatch doors themselves, and second, [the
petitioners] manufactured hatch doors based on LEC's works, sans EEC's consent.
xxxx
[T]he fact that LEC enjoys ownership of copyright not only on the illustrations of the hatch doors
but on the hatch doors itself and that [the petitioners] manufactured the same is sufficient to
warrant a finding of probable cause for copyright infringement. x x x.31ChanRoblesVirtualawlibrary
The CA further ruled that any allegation on the non-existence of ornamental or artistic values on
the hatch doors are matters of evidence which are best ventilated in a full-blown trial rather than
during the preliminary investigation stage. Accordingly, the CA disposed as follows:
WHEREFORE, considering the foregoing premises, the present Petition is GRANTED, and
accordingly, the assailed Resolutions dated 10 March 2006 and 25 May 2006 are ANNULLED
and SET ASIDE. The Resolution of the Secretory of Justice dated 27 January 2006 finding
probable cause against [the petitioners], is REINSTATED.
SO ORDERED.32
The CA reiterated the above ruling in its Resolution33 dated February 24, 2011 when it denied the
petitioners' motion for reconsideration. Hence, the present appeal, arguing that:
I. There was no evidence of actual reproduction of the hatch doors during the preliminary
investigation that would lead the investigating prosecutor to declare the existence of
probable cause;34
II. Even assuming that the petitioners manufactured hatch doors based on the illustrations
and plans covered by the respondent's Certificate of Registration Nos. 1-2004-13 and 1-
2004-14, the petitioners could not have committed copyright infringement. Certificate of
Registration Nos. 1-2004-13 and 1-2004-14 are classified under Section 172(i) which
pertains to "illustrations, maps, plans, sketches, charts and three-dimensional works
relative to geography, topography, architecture or science." Hence the original works that
are copyrighted are the illustrations and plans of interior hatch doors and exterior hatch
doors. Thus, it is the reproduction of the illustrations and plans covered by the copyright
registration that amounts to copyright infringement. The petitioners did not reproduce the
illustrations and plans covered under Certificate of Registration Nos. 1-2004-13 and 1-
2004-14.
The manufacturing of hatch doors per se does not fall within the purview of copyright
infringement because copyright protection does not extend to the objects depicted in the
illustrations and plans;35 and
III. LEC's copyright registration certificates are not conclusive proofs that the items covered
thereby are copyrightable. The issuance of registration certificate and acceptance of
deposit by the National Library is ministerial in nature and does not involve a
determination of whether the item deposited is copyrightable or not. Certificates of
registration and deposit 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.36
Ruling of the Court
It is a settled judicial policy that courts do not reverse the Secretary of Justice's findings and
conclusions on the matter of probable cause. Courts are not empowered to substitute their
judgment for that of the executive branch upon which full discretionary authority has been
delegated in the determination of probable cause during a preliminary investigation. Courts may,
however, look into whether the exercise of such discretionary authority was attended with grave
abuse of discretion.37
Otherwise speaking, "judicial review of the resolution of the Secretary of Justice is limited to a
determination of whether there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction."38
The CA anchored its act of reversing the DOJ Resolution dated March 10, 2006 upon the
foregoing tenets. Thus, the Court's task in the present petition is only to determine if the CA erred
in concluding that the DOJ committed grave abuse of discretion in directing the withdrawal of any
criminal information filed against the petitioners.
Grave abuse of discretion has been defined as "such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where
the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility
and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal
to perform the duty enjoined by or to act at all in contemplation of law."39 "'Capricious,' usually
used in tandem with the term 'arbitrary,' conveys the notion of willful and unreasoning action."40
According to the CA, the DOJ's erratic findings on the presence or absence of probable cause
constitute grave abuse of discretion. The CA explained:
This, to Our minds, in itself creates a nagging, persistent doubt as to whether [the DOJ Secretary]
issued the said resolutions untainted with a whimsical and arbitrary use of his discretion. For one
cannot rule that there is reason to overturn the investigating prosecutor's findings at the first
instance and then go on to rule that ample evidence exists showing that the hatch doors possess
artistic and ornamental elements at the second instance and proceed to rule that no such artistry
can be found on the purely utilitarian hatch doors at the last instance. x x x. 41
The Court disagrees. It has been held that the issuance by the DOJ of several resolutions with
varying findings of fact and conclusions of law on the existence of probable cause, by itself, is not
indicative of grave abuse of discretion.42
Inconsistent findings and conclusions on the part of the DOJ will denote grave abuse of discretion
only if coupled with gross misapprehension of facts,43 which, after a circumspect review of the
records, is not attendant in the present case.
The facts upon which the resolutions issued by the investigating prosecutor and the DOJ were
actually uniform, viz:
(a) LEC is the registered owner of plans/drawings for interior and exterior hatch doors under
Certificate of Registration Nos. 1-2004-13 and 1-2004-14 classified under Section 172(i) of
R.A. No. 8293 as pertaining to "illustrations, maps, plans, sketches, charts and three-
dimensional works relative to geography, topography, architecture or science";
(b) LEC is also the registered owner of plans/drawings for interior and exterior hatch doors
under Certificate of Registration Nos. H-2004-566 and H-2004-567 classified under Section
172(h) of R.A. No. 8293 as to "original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial design, and other works of applied
art";
(c) LEC as the subcontractor of SKI-FB in the Project first manufactured and installed the
interior and exterior hatch doors at the Manansala Tower in Rockwell Center, Makati City,
from the 7th to 22nd floors. The hatch doors were based on the plans/drawings submitted by
LEC to SKI-FB and subject of the above copyright registration numbers; and
(d) thereafter, Metrotech fabricated and installed hatch doors at the same building's 23rd to
41st floor based on the drawings and specifications provided by SKI-FB.44
The positions taken by the DOJ and the investigating prosecutor differed only in the issues tackled
and the conclusions arrived at.
It may be observed that in the Resolution dated August 18, 2005 issued by the investigating
prosecutor, the primary issue was whether the hatch doors of LEC fall within copyrightable works.
This was resolved by ruling that hatch doors themselves are not covered by LEC's Certificate of
Registration Nos. 1-2004-13 and 1-2004-14 issued on the plans/drawing depicting them. The DOJ
reversed this ruling in its Resolution dated January 27, 2006 wherein the issue was streamlined to
whether the illustrations of the hatch doors under LEC's Certificate of Registration Nos. H-2004-
566 and H-2004-567 bore artistic ornamental designs.
This situation does not amount to grave abuse of discretion but rather a mere manifestation of the
intricate issues involved in the case which thus resulted in varying conclusions of law.
Nevertheless, the DOJ ultimately pronounced its definite construal of copyright laws and their
application to the evidence on record through its Resolution dated March 10, 2006 when it granted
the petitioners' motion for reconsideration. Such construal, no matter how erroneous to the CA's
estimation, did not amount to grave abuse of discretion. "[I]t is elementary that not every
erroneous conclusion of law or fact is an abuse of discretion."45
More importantly, the Court finds that no grave abuse of discretion was committed by the DOJ in
directing the withdrawal of the criminal information against the respondents because a finding of
probable cause contradicts the evidence on record, law, and jurisprudence.
"Probable cause has been defined as the existence of such facts and circumstances as would
excite the belief in a reasonable mind, acting on the facts within the knowledge of the prosecutor,
that the person charged was guilty of the crime for which he was prosecuted. It is a reasonable
ground of presumption that a matter is, or may be, well-founded on such a state of facts in the
mind of the prosecutor as would lead a person of ordinary caution and prudence to believe, or
entertain an honest or strong suspicion, that a thing is so."46
"The term does not mean actual and positive cause nor does it import absolute certainty. It is
merely based on opinion and reasonable belief. Thus, a finding of probable cause does not
require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that
it is believed that the act or omission complained of constitutes the offense charged." 47
"In order that probable cause to file a criminal case may be arrived at, or in order to engender the
well-founded belief that a crime has been committed, the elements of the crime charged should be
present. This is based on the principle that every crime is defined by its elements, without which
there should be - at the most - no criminal offense."48
A copyright refers to "the right granted by a statute to the proprietor of an intellectual production to
its exclusive use and enjoyment to the extent specified in the statute."49 Under Section 177 of R.A.
No. 8293, the Copyright or Economic Rights consist of the exclusive right to carry out, authorize or
prevent the following acts:
177.1 Reproduction of the work or substantial portion of the work;
177.2 Dramatization, translation, adaptation, abridgment, arrangement or other transformation of
the work;
177.3 The first public distribution of the original and each copy of the work by sale or other forms
of transfer of ownership;
177.4 Rental of the original or a copy of an audiovisual or cinematographic work, a work
embodied in a sound recording, a computer program, a compilation of data and other
materials or a musical work in graphic form, irrespective of the ownership of the original or
the copy which is the subject of the rental;
177.5 Public display of the original or a copy of the work;
177.6 Public performance of the work; and
177.7 Other communication to the public of the work.
Copyright infringement is thus committed by any person who shall use original literary or artistic
works, or derivative works, without the copyright owner's consent in such a manner as to violate
the foregoing copy and economic rights. 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.50
While both elements subsist in the records, they did not simultaneously concur so as to
substantiate infringement of LEC's two sets of copyright registrations.
The respondent failed to substantiate the alleged reproduction of the drawings/sketches of hatch
doors copyrighted under Certificate of Registration Nos. 1-2004-13 and 1-2004-14. There is no
proof that the respondents reprinted the copyrighted sketches/drawings of LEC's hatch doors. 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 finished and
unfinished hatch doors.
Certificate of Registration Nos. 1-2004-13 and 1-2004-14 pertain to class work "I" under 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."51 As such, LEC's
copyright protection there under covered only the hatch door sketches/drawings and not the actual
hatch door they depict.52
As the Court held in Pearl and Dean (Philippines), Incorporated v. Shoemart, Incorporated:53
Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant,
the rights are limited to what the statute confers. It may be obtained and enjoyed only with respect
to the subjects and by the persons, and on terms and conditions specified in the
statute. Accordingly, it can cover only the works falling within the statutory enumeration or
description.54 (Citations omitted and italics in the original)
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. To constitute infringement,
the usurper must have copied or appropriated the original work of an author or copyright
proprietor, absent copying, there can be no infringement of copyright.55
"Unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only
to the expression of the idea — not the idea itself."56
The respondent claimed that the petitioners committed copyright infringement when they
fabricated/manufactured hatch doors identical to those installed by LEC. The petitioners could not
have manufactured such hatch doors in substantial quantities had they not reproduced the
copyrighted plans/drawings submitted by LEC to SK1-FB. This insinuation, without more, does not
suffice to establish probable cause for infringement against the petitioners. "[Although the
determination of probable cause requires less than evidence which would justify conviction, it
should at least be more than mere suspicion."57
Anent, LEC's Certificate of Registration Nos. H-2004-566 and H-2004-567, the Court finds that the
ownership thereof was not established by the evidence on record because the element of
copyrightability is absent.
"Ownership of copyrighted material is shown by proof of originality and copyrightability."58 While it
is true that where the complainant presents a copyright certificate in support of the claim of
infringement, the validity and ownership of the copyright is presumed. This presumption, however,
is rebuttable and it cannot be sustained where other evidence in the record casts doubt on the
question of ownership,59 as in the instant case.
Moreover, "[t]he presumption of validity to a certificate of copyright registration merely orders the
burden of proof. The applicant should not ordinarily be forced, in the first instance, to prove all the
multiple facts that underline the validity of the copyright unless the respondent, effectively
challenging them, shifts the burden of doing so to the applicant."60
Here, evidence negating originality and copyrightability as elements of copyright ownership was
satisfactorily proffered against LEC's certificate of registration.
The following averments were not successfully rebuffed by LEC:
[T]he hinges on LEC's "hatch doors" have no ornamental or artistic value. In fact, they are just
similar to hinges found in truck doors that had been in common use since the 1960's. The gaskets
on LEC's "hatch doors", aside from not being ornamental or artistic, were merely procured from a
company named Pemko and are not original creations of LEC. The locking device in LEC's "hatch
doors" are ordinary drawer locks commonly used in furniture and office desks.61
In defending the copyrightability of its hatch doors' design, LEC merely claimed:
LEC's Hatch Doors were particularly designed to blend in with the floor of the units in which they
are installed and, therefore, appeal to the aesthetic sense of the owner of units or any visitors
thereto[;]
LEC's Hatch Doors have a distinct set of hinges, a distinct door a distinct jamb, all of which are
both functional or utilitarian and artistic or ornamental at the same time[;] and
Moreover, the Project is a high-end residential building located in the Rockwell Center, a very
prime area in Metro Manila. As such, the owner of the Project is not expected to settle for Hatch
Doors that simply live up to their function as such. The owner would require, as is the case for the
Project, Hatch Doors that not only fulfill their utilitarian purposes but also appeal to the artistic or
ornamental sense of their beholders.62ChanRoblesVirtualawlibrary
From the foregoing description, it is clear that the hatch doors were not artistic works within the
meaning of copyright laws. A copyrightable work refers to literary and artistic works defined as
original intellectual creations in the literary and artistic domain.63
A hatch door, by its nature is an object of utility. It is defined as a small door, small gate or an
opening that resembles a window equipped with an escape for use in case of fire or
emergency.64 It is thus by nature, functional and utilitarian serving as egress access during
emergency. It is not primarily an artistic creation but rather an object of utility designed to have
aesthetic appeal. It is intrinsically a useful article, which, as a whole, is not eligible for copyright.
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.65
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.66
The design of a useful article shall be considered a pictorial, graphic, or sculptural work only if, and
only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can
be identified separately from, and are capable of existing independently of, the utilitarian aspects
of the article.67
A belt, being an object utility with the function of preventing one's pants from falling down, is in
itself not copyrightable. However, an ornately designed belt buckle which is irrelevant to or did not
enhance the belt's function hence, conceptually separable from the belt, is eligible for copyright. It
is copyrightable as a sculptural work with independent aesthetic value, and not as an integral
element of the belt's functionality.68
A table lamp is not copyrightable because it is a functional object intended for the purpose of providing
illumination in a room. The general shape of a table lamp is likewise not copyrightable because it
contributes to the lamp's ability to illuminate the reaches of a room. But, a lamp base in the form of a
statue of male and female dancing figures made of semi vitreous china is copyrightable as a work of art
because it is unrelated to the lamp's utilitarian function as a device used to combat darkness.69
In the present case, LEC's hatch doors bore no design elements that are physically and conceptually
separable, independent and distinguishable from the hatch door itself. The allegedly distinct set of
hinges and distinct jamb, were related and necessary hence, not physically or conceptually separable
from the hatch door's utilitarian function as an apparatus for emergency egress. Without them, the hatch
door will not function.
More importantly, they are already existing articles of manufacture sourced from different suppliers.
Based on the records, it is unrebutted that: (a) the hinges are similar to those used in truck doors; (b)
the gaskets were procured from a company named Pemko and are not original creations of LEC; and
(c) the locking device are ordinary drawer locks commonly used in furniture and office desks.
Being articles of manufacture already in existence, they cannot be deemed as original creations. As
earlier stated, valid copyright ownership denotes originality of the copyrighted material. Originality
means that the material was not copied, evidences at least minimal creativity and was independently
created by the author.70 It connotes production as a result of independent labor.71 LEC did not produce
the door jambs and hinges; it bought or acquired them from suppliers and thereafter affixed them to the
hatch doors. No independent original creation can be deduced from such acts.
The same is true with respect to the design on the door's panel. As LEC has stated, the panels were
"designed to blend in with the floor of the units in which they [were] installed." 72 Photos of the panels
indeed show that their color and pattern design were similar to the wooden floor parquet of the
condominium units.73 This means that the design on the hatch door panel was not a product of LEC's
independent artistic judgment and discretion but rather a mere reproduction of an already existing
design.
Verily then, the CA erred in holding that a probable cause for copyright infringement is imputable
against the petitioners. Absent originality and copyrightability as elements of a valid copyright
ownership, no infringement can subsist.
WHEREFORE, premises considered, the petition is hereby GRANTED. The Decision dated July 9,
2010 and Resolution dated February 24, 2011 of the Court of Appeals in CA-G.R. SP No. 95471
are REVERSED and SET ASIDE. The Resolutions dated March 10, 2006 and May 25, 2006 of the
Department of Justice in I.S. No. 2004-925 dismissing the complaint for copyright infringement
are REINSTATED.
SO ORDERED.
 FIRST DIVISION
OCTOBER 21, 2015
G.R. No. 166391
MICROSOFT CORPORATION, Petitioner
vs.
ROLANDO D. MANANSALA and/or MEL MANANSALA, doing business as DATAMAN
TRADING COMPANY and/or COMIC ALLEY, Respondent
DECISION
BERSAMIN, J.:
This appeal seeks to overturn the decision promulgated on February 27, 2004,1 whereby the Court
of Appeals (CA) dismissed the petition for certiorari filed by petitioner to annul the orders of the
Department of Justice (DOJ) dated March 20, 2000,2 May 15, 2001,3 and January 27,
20034 dismissing the criminal charge of violation of Section 29 of Presidential Decree No.
49 (Decree on Intellectual Property) it had instituted against the respondents; and the resolution
promulgated on December 6, 2004 denying its motion for reconsideration.5
Antecedents
The CA summarized the factual and procedural antecedents thusly:
Petitioner (Microsoft Corporation) is the copyright and trademark owner of all rights relating to all
versions and editions of Microsoft software (computer programs) such as, but not limited to, MS-
DOS (disk operating system), Microsoft Encarta, Microsoft Windows, Microsoft Word, Microsoft
Excel, Microsoft Access, Microsoft Works, Microsoft Powerpoint, Microsoft Office, Microsoft Flight
Simulator and Microsoft FoxPro, among others, and their user’s guide/manuals.
Private Respondent-Rolando Manansala is doing business under the name of DATAMAN
TRADING COMPANY and/or COMIC ALLEY with business address at 3rd Floor, University Mall
Building, Taft Ave., Manila.
Private Respondent Manansala, without authority from petitioner, was engaged in distributing and
selling Microsoft computer software programs.
On November 3, 1997, Mr. John Benedict A. Sacriz, a private investigator accompanied by an
agent from the National Bureau of Investigation (NBI) was able to purchase six (6) CD-ROMs
containing various computer programs belonging to petitioner.
As a result of the test-purchase, the agent from the NBI applied for a search warrant to search the
premises of the private respondent.
On November 17, 1997, a Search Warrant was issued against the premises of the private
respondent.
On November 19, 1997, the search warrant was served on the private respondent’s premises and
yielded several illegal copies of Microsoft programs.
Subsequently, petitioner, through Atty. Teodoro Kalaw IV filed an Affidavit-Complaint in the DOJ
based on the results of the search and seizure operation conducted on private respondent’s
premises.
However, in a Resolution dated March 20, 2000, public respondent State Prosecutor dismissed
the charge against private respondent for violation of Section 29 P.D. 49 in this wise, to quote:
‘The evidence is extant in the records to show that respondent is selling Microsoft computer
software programs bearing the copyrights and trademarks owned by Microsoft Corporation. There
is, however, no proof that respondent was the one who really printed or copied the products of
complainant for sale in his store.
WHEREFORE, it is hereby, recommended that respondent be charged for violation of Article 189
of the Revised Penal Code. The charge for violation of Section 29 of
PD No. 49 is recommended dismissed for lack of evidence.’
Petitioner filed a Motion for Partial Reconsideration arguing that printing or copying is not essential
in the crime of copyright infringement under Section 29 of PD No. 49.
On May 15, 2001, the public respondent issued a Resolution denying the Motion for Partial
Reconsideration.
Thereafter, petitioner filed a Petition for Review with the DOJ, which denied the petition for
review.6
Dissatisfied with the outcome of its appeal, the petitioner filed its petition for certiorari in the CA to
annul the DOJ’s dismissal of its petition for review on the ground of grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the DOJ.
On February 27, 2004, the CA rendered the assailed decision affirming the dismissal by the
DOJ,7 disposing as follows:
WHEREFORE, premises considered, the instant petition is DENIED. Consequently, the Orders
dated March 20, 2000, May 15, 2001 and January 27, 2003 respectively are
hereby AFFIRMED. SO ORDERED.8
Issue
The petitioner insists that printing or copying was not essential in the commission of the crime of
copyright infringement under Section 29 of Presidential Decree No. 49; hence, contrary to the
holding of the DOJ, as upheld by the CA, the mere selling of pirated computer software constituted
copyright infringement.9
Ruling of the Court
The appeal is meritorious.
Although the general rule is that the determination of the existence of probable cause by the public
prosecutor is not to be judicially scrutinized because it is an executive function, an exception
exists when the determination is tainted with grave abuse of discretion.10 Bearing this in mind, we
hold that the DOJ committed grave abuse of discretion in sustaining the public prosecutor’s
dismissal of the charge of copyright infringement under Section 29 of Presidential Decree No. 49
on the ground of lack of evidence because the public prosecutor thereby flagrantly disregarded the
existence of acts sufficient to engender the well-founded belief that the crime of copyright
infringement had been committed, and that the respondent was probably guilty thereof.11
Section 5 of Presidential Decree No. 49 specifically defined copyright as an exclusive right in the
following manner:
Section 5. Copyright shall consist in the exclusive right;
(A) To print, reprint, publish, copy, distribute, multiply, sell, and make photographs, photo-
engravings, and pictorial illustrations of the works;
(B) To make any translation or other version or extracts or arrangements or adaptations thereof; to
dramatize it if it be a non-dramatic work; to convert it into a non-dramatic work if it be a drama; to
complete or execute if it be a model or design;
(C) To exhibit, perform, represent, produce, or reproduce, the work in any manner or by any
method whatever for profit or otherwise; it not reproduced in copies for sale, to sell any manuscript
or any record whatsoever thereof;
(D) To make any other use or disposition of the work consistent with the laws of the land.
Accordingly, the commission of any of the acts mentioned in Section 5 of Presidential Decree No.
49 without the copyright owner’s consent constituted actionable copyright infringement.
In Columbia Pictures, Inc. v. Court of Appeals,12 the Court has emphatically declared:
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.
The "gravamen of copyright infringement," according to NBI-Microsoft Corporation v. Hwang:13
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.14
The CA stated in the assailed decision as follows:
A reading of Section 5 (a) of the Copyright Law shows that the acts enumerated therein are
punctuated by commas and the last phrase is conjoined by the words ‘and’. Clearly, the same
should be interpreted to mean as ‘relating to one another’ because it is basic in legal hermeneutics
that the word ‘and’ is not meant to separate words but is a conjunction used to denote a ‘joinder’
or ‘union’.
In the book of Noli C. Diaz entitled as STATUTORY CONSTRUCTION, the word ‘and’ was defined
as a ‘conjunction connecting words or phrases expressing the idea that the latter is to be added to
or taken along with the first’. Stated differently, the word ‘and’ is a conjunction pertinently defined
as meaning ‘together with’, ‘joined with’, ‘along or together with’, ‘added to or linked to’ used to
conjoin ‘word with word’, ‘phrase with phrase’, ‘clause with clause’. The word ‘and’ does not mean
‘or’, it is a conjunction used to denote a joinder or union, ‘binding together’, relating the one to the
other.
Hence the key to interpret and understand Section 5 (a) of P.D. 49 is the word ‘and’. From the
foregoing definitions of the word ‘and’ it is unmistakable that to hold a person liable under the said
provision of law, all the acts enumerated therein must be present and proven. As such, it is not
correct to construe the acts enumerated therein as being separate or independent from one
another.
In the case at bar, petitioner failed to allege and adduce evidence showing that the private
respondent is the one who copied, replicated or reproduced the software programs of the
petitioner. In other words, ‘sale’ alone of pirated copies of Microsoft software programs does not
constitute copyright infringement punishable under P.D. 49.15
The CA erred in its reading and interpretation of Section 5 of Presidential Decree No. 49. Under
the rules on syntax, the conjunctive word "and" denotes a "joinder or union" of words, phrases, or
clause;16 it is different from the disjunctive word "or" that signals disassociation or
independence.17 However, a more important rule of statutory construction dictates that laws
should be construed in a manner that avoids absurdity or unreasonableness. 18 As the Court
pointed out in Automotive Parts & Equipment Company, Inc. v. Lingad:19
Nothing is better settled then that courts are not to give words a meaning which would lead to
absurd or unreasonable consequence. That is a principle that goes back to In re Allen decided on
October 29, 1903, where it was held that a literal interpretation is to be rejected if it would be
unjust or lead to absurd results. That is a strong argument against its adoption. The words of
Justice Laurel are particularly apt. Thus: ‘The fact that the construction placed upon the statute by
the appellants would lead to an absurdity is another argument for rejecting it x x x.’
It is of the essence of judicial duty to construe statutes so as to avoid such a deplorable result.
That has long been a judicial function. A literal reading of a legislative act which could be thus
characterized is to be avoided if the language thereof can be given a reasonable application
consistent with the legislative purpose. In the apt language of Frankfurter: "A decent respect for
the policy of Congress must save us from imputing to it a self-defeating, if not disingenuous
purpose. Certainly, we must reject a construction that at best amounts to a manifestation of verbal
ingenuity but hardly satisfies the test of rationality on which law must be based. 20
The conjunctive "and" should not be taken in its ordinary acceptation, but should be construed like
the disjunctive "or" if the literal interpretation of the law would pervert or obscure the legislative
intent.21 To accept the CA’s reading and interpretation is to accept absurd results because the
violations listed in Section 5(a) of Presidential Decree No. 49 – "To print, reprint, publish, copy,
distribute, multiply, sell, and make photographs, photo-engravings, and pictorial illustrations of the
works" – cannot be carried out on all of the classes of works enumerated in Section 2 of
Presidential Decree No. 49, viz.:
Section 2. - The Rights granted by this Decree shall, from the moment of creation, subsist with
respect to any of the following classes of works:
(A) Books, including composite and encyclopedic works, manuscripts, directories, and gazetteers;
(B) Periodicals, including pamphlets and newspapers;
(C) Lectures, sermons, addresses, dissertations prepared for oral delivery;
(D) Letters;
(E) Dramatic or dramatico-musical compositions; choreographic works and entertainments in dumb
shows, the acting form of which is fixed in writing or otherwise;
(F) Musical compositions, with or without words;
(G) Works of drawing, painting, architecture, sculpture, engraving, lithography, and other works of art;
models or designs for works of art;
(H) Reproductions of a work of art;
(I) Original ornamental designs or models for articles of manufacture, whether or not patentable, and
other works of applied art;
(J) Maps, plans, sketches, and charts;
(K) Drawings, or plastic works of a scientific or technical character;
(L) Photographic works and works produced by a process analogous to photography; lantern slides;
(M) Cinematographic works and works produced by a process analogous to cinematography or any
process for making audio-visual recordings;
(N) Computer programs;
(O) Prints, pictorial, illustration, advertising copies, labels, tags, and box wraps;
(P) Dramatization, translations, adaptations, abridgements, arrangements and other alterations of
literary, musical or artistic works or of works of the Philippine Government as herein defined, which shall
be protected as provided in Section 8 of this Decree.
(Q) Collection of literary, scholarly, or artistic works or of works referred to in Section 9 of this Decree
which by reason of the selection and arrangement of their contents constitute intellectual creations, the
same to be protected as such in accordance with Section 8 of this Decree.
(R) Other literary, scholarly, scientific and artistic works .
Presidential Decree No. 49 thereby already acknowledged the existence of computer programs as
works or creations protected by copyright.22 To hold, as the CA incorrectly did, that the legislative intent
was to require that the computer programs be first photographed, photoengraved, or pictorially
illustrated as a condition for the commission of copyright infringement invites ridicule. Such
interpretation of Section 5(a) of Presidential Decree No. 49 defied logic and common sense because it
focused on terms like "copy," "multiply," and "sell," but blatantly ignored terms like "photographs,"
"photo-engravings," and "pictorial illustrations."
Had the CA taken the latter words into proper account, it would have quickly seen the absurdity of its
interpretation.
The mere sale of the illicit copies of the software programs was enough by itself to show the existence
of probable cause for copyright infringement.1âwphi1 There was no need for the petitioner to still prove
who copied, replicated or reproduced the software programs. Indeed, the public prosecutor and
the DOI gravely abused their discretion in dismissing the petitioner's charge for copyright infringement
against the respondents for lack of evidence. There was grave abuse of discretion because the public
prosecutor and the DOI acted whimsically or arbitrarily in disregarding the settled jurisprudential rules
on finding the existence of probable cause to charge the offender in court. Accordingly, the CA erred in
upholding the dismissal by the DOI of the petitioner's petition for review. We reverse.
WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS
ASIDE the decision promulgated on February 27, 2004 in C.A.-G.R. SP No. 76402; DIRECTS the
Department of Justice to render the proper resolution to charge respondent ROLANDO D.
MANANSALA and/or MEL MANANSALA, doing business as DATAMAN TRADING COMPANY
and/or COMIC ALLEY in accordance with this decision; and ORDERS the respondents to pay the
costs of suit.
SO ORDERED.