INTELLECTUAL PROPERTY LAW | Judge Quirante
signals which the viewers receive in its unaltered form. PMSI does not
ABS-CBN BROADCASTING CORP vs.
PHILIPPINE MULTI-MEDIA SYSTEM, INC. (PMSI)
GR No. 175769-70
Facts:
PMSI, operator of Dream Broadcasting System, delivers a digital direct-to-
home (DTH) television satellite to its subscribers all over the Philippines, was
granted a legislative franchise under Republic Act 8630 and was given a
Provisional Authority by the National Telecommunications Commission (NTC)
to install, operate and maintain a nationwide DTH satellite service.
When it commenced operations, it offered as part of its program line-up,
together with other paid premium program channels, ABS-CBN Channels 2
and 23, NBN, Channel 4, ABC, Channel 5, GMA, Channel 7, RPN, Channel
9, and IBC, Channel 13.
ABS-CBN, demanded PMSI to cease and desist from “rebroadcasting”
Channels 2 and 23. According to PMSI, the broadcasting is mandated
pursuant to Memorandum Circular 4-08-88 which mandated all cable
television system operators, operating within the Grade “A” and “B” contours
to carry out the television signals of the authorized television broadcast
stations.
After termination of negotiations between the two, ABS-CBN filed with the
IPO a complaint for “Violation of Laws Involving Property Rights.
Issue:
Whether or not PMSI’s unauthorized rebroadcasting of Channels 2 and
23 is an infringement of ABS-CBN’s broadcasting rights and copyright
under the Intellectual Property Code.
Held:
Although broadcasting organizations have the right to authorize or prohibit
the rebroadcasting of its broadcast, this protection does not extend to cable
retransmission. Under the Rome Convention, rebroadcasting is “the
simultaneous broadcasting by one broadcasting organization of the
broadcast of another broadcasting organization.”
The retransmission of ABS-CBN’s signals by PMSI—which functions
essentially as a cable television—does not constitute rebroadcasting in
violation of the former’s intellectual property rights under the IP Code. ABS-
CBN creates and transmits its own signals whereas PMSI merely carries such
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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.
Further, 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: x x x x (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. 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. 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, 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.
Microsoft Corporation vs. Hwang
G.R. No. 147043. June 21, 2005
“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.”
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INTELLECTUAL PROPERTY LAW | Judge Quirante
“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.”
Facts:
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.
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) . . . 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) . . . 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[.]
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 for Beltron's non-payment of
royalties.
Afterwards, Microsoft learned that respondents were illegally copying
and selling Microsoft software. Their agent bought CPU contained pre-
installed Microsoft Windows 3.1 and MS-DOS software. The 12 CD-ROMs,
encased in plastic containers with Microsoft packaging, also contained
Microsoft software. At least two of the CD-ROMs were "installers," so-called
because they contain several software (Microsoft only or both Microsoft and
non-Microsoft). The agent was not given the Microsoft end-user license
agreements, user's manuals, registration cards or certificates of authenticity
for the articles they purchased.
Microsoft applied for search warrants against respondents in the
Regional Trial Court, Branch 23, Manila. The RTC granted Microsoft's
application and issued two search warrants.
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
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infringement under Section 5(A) in relation to Section 29 of Presidential
Decree No. 49, as amended, ("PD 49") 18 18 and with unfair competition
under Article 189(1) of the Revised Penal Code.
DOJ State Prosecutor Ong recommended the dismissal of Microsoft's
complaint for lack of merit and insufficiency of evidence. The Resolution says
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.
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
Held:
(1) 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.
(2) 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. 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. Significantly, under Section 5(A), a copyright owner is vested
with the exclusive right to "copy, distribute, multiply, [and] sell" his
intellectual works.
The Court finds that the 12 CD-ROMs ("installer" and "non-installer")
and the CPU with pre-installed Microsoft software the agents 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
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INTELLECTUAL PROPERTY LAW | Judge Quirante
intellectual works. 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.
The Agreement defines an authorized replicator as "a third party approved
by [Microsoft] which may reproduce and manufacture [Microsoft] Product[s]
for [Beltron] . . ." An authorized distributor, on the other hand, is a "third
party approved by [Microsoft] from which [Beltron] may purchase MED 53 53
Product."
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. These circumstances give rise to the
reasonable inference that respondents mass-produced the CD-ROMs in
question without securing Microsoft's prior authorization.
Microsoft Corporation v. Maxicorp
GR 140946, September 13, 2004
“Copyright infringement and unfair competition are not limited to the act of
selling counterfeit goods. They cover a whole range of acts, from copying,
assembling, packaging to marketing, including the mere offering for sale of the
counterfeit goods.”
Facts:
By virtue of 4 Search Warrants issued by Judge Bayhon against
Maxicorp, the NBI was able to search the Maxicorp’s premised and seized
property. During the preliminary examination, NBI Agent Samiano testified
that he saw Maxicrop display and offer for the sale counterfeit software in its
premises. He also saw how the counterfeit software were produced and
packaged within Maxicorp’s premises. NBI Agent testified that Maxicorp sold
them to its customers without giving the accompanying ownership manuals,
license agreement and certificates of authenticity.
RTC Ruled on the validity of the Search Warrants but CA disagreed.
The reversal centers on the fact that the two witnesses for Microsoft
during the preliminary examination failed to prove conclusively that they
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bought counterfeit software from Maxicorp. The Court of Appeals ruled that
this amounted to a failure to prove the existence of a connection between the
offense charged and the place searched..
Issue: WON the act purchasing the counterfeit software of Microsoft is the
only act that constitutes copyright infringement thereby negating the
issuance of Search Warrant due to lack of probable cause?
Held:
No.
The offense charged against Maxicorp is copyright infringement
under Sec 29 of PD 49 and unfair competition under Art. 189 of the RPC. To
support these charges, Microsoft presented the testimonies of NBI Agent
Samiano, computer technician Pante and Sacriz, a civilian. The offense that
petitioner charged Maxicrop contemplate serveal acts. The sale of
counterfeit products is but one of these acts.
There is reason to believe that Maxicorp engaged in copyright
infringement and unfair competition. The counterfeit softwares were not only
displayed and sold within Maxicorp’s premises; they were also produced,
packaged and in some cases, installed.
For purposes of determining probable cause, the sales receipt is not
the only proof that the sale of Microsoft’s software occurred. During the
search warrant application proceedings, NBI Agent Samiano presented to the
judge the computer unit that he purchased from Maxicorp, in which computer
unit Maxicorp had pre-installed Microsoft’s software. Sacriz, who was present
when NBI Agent Samiano purchased the computer unit, affirmed that NBI
Agent Samiano purchased the computer unit. Pante, the computer
technician, demonstrated to the judge the presence of petitioners' software on
the same computer unit. There was a comparison between petitioners' genuine
software and Maxicorp's software pre-installed in the computer unit that NBI
Agent Sambiano purchased.
The fact that Sacriz did not actually purchase counterfeit
software from Maxicorp does not eliminate the existence of probable
cause. Copyright infringement and unfair competition are not limited to
the act of selling counterfeit goods. They cover a whole range of acts,
from copying, assembling, packaging to marketing, including the mere
offering for sale of the counterfeit goods. The clear and firm testimonies of
petitioners' witnesses on such other acts stand untarnished.
Habana v. Robles Ibd
COLUMBIA v CA Ibd
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INTELLECTUAL PROPERTY LAW | Judge Quirante WEEK 5-6 case digest

BAYANIHAN MUSIC PHILIPPINES INC. vs.
BMG RECORDS (PILIPINAS) AND JOSE MARI CHAN, ET AL.
GR No. 166337
Facts:
Respondent Jose Mari Chan entered into a contract with petitioner
Bayanihan Inc wherein the former assigned the copyrights of his song
compositions "Can We Just Stop and Talk A While" and "Afraid for Love To
Fade" with Bayanihan Inc.
of the publisher by advising the writer at least five days before the expiration
of the contract.
Since Bayanihan did not make use of the compositions within the two year
period, then such contracts have expired. Bayanihan also failed to advise
Chan to renew the contract upon its expiration. Hence, it would appear that
petitioner had no more right that is protectable by injunction due to the
expiration of the contracts.

Bayanihan then applied for and was granted by the National Library a
Certificate of Copyright Registration for each of the two musical
compositions. Bayanihan however did not make use of the compositions
during the duration of the contract.

After 20 years Chan authorized his co-respondent BMG Records to record

and distribute the said musical compositions in an album of singer Lea
Salonga without the knowledge and consent of Bayanihan.

Bayanihan sent demand letters to respondents of its existing copyrights over

the subject musical
compositions and the alleged violation of such right by the two. However, no
settlement was reached by the parties.

Hence, Bayanihan filed a complaint against respondents for violating his

rights under the Intellectual Property Code of the Philippines with a prayer
for TRO and Preliminary Injunction.

Issue:

Whether Bayanihan has an enforceable right under the Intellectual Property

Code of the Philippines to grant the prayer for TRO and Preliminary
Injunction against respondents.

Held:

No such right since contracts had already expired.

The provisions in the contract entered by Chan and Bayanihan state that if
the publisher fails to use in any manner the compositions within two years
from date of contract, such compositions may be released in favor of the
writer. It also states that renewal of the contract may be made at the option

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