1

INTELLECTUAL PROPERTY LAW Ruling:

Accession to the Madrid Protocol was constitutional
Ipap v ES et al
International agreements involving political issues
Facts: or changes of national policy and those involving
the Intellectual Property Office of the Philippines international arrangements of a permanent
(IPOPHL) character usually take the form of treaties. But
international agreements embodying adjustments of
It ultimately arrived at the conclusion that detail carrying out well-established national policies
accession would benefit the country and help raise and traditions and those involving arrangements of
the level of competitiveness for Filipino brands. a more or less temporary nature usually take the
Hence, it recommended in September 2011 to the form of executive agreements.
Department of Foreign Affairs (DFA) that the
Philippines should accede to the Madrid Protocol. In view of the expression of state policy having been
made by the Congress itself, the IPAP is plainly
After its own review, the DFA endorsed to the mistaken in asserting that "there was no
President the country's accession to the Madrid Congressional act that authorized the accession of
Protocol. the Philippines to the Madrid Protocol."
the DFA determined that the Madrid Protocol was Accordingly, DFA Secretary Del Rosario's
an executive agreement. The IPOPHL, the determination and treatment of the Madrid Protocol
Department of Science and Technology, and the as an executive agreement, being in apparent
Department of Trade and Industry concurred in the contemplation of the express state policies on
recommendation of the DFA. intellectual property as well as within his power
under Executive Order No. 459, are upheld.
President Benigno C. Aquino III ratified the Madrid
Protocol through an instrument of accession. The There is no conflict between the Madrid Protocol and
instrument of accession was deposited with the the IP Code
Director General of the World Intellectual Property
Organization (WIPO) on April 25, 2012,[8] The The IPAP also rests its challenge on the supposed
Madrid Protocol entered into force in the Philippines conflict between the Madrid Protocol and the IP
on July 25, 2012 Code, contending that the Madrid Protocol does
away with the requirement of a resident agent under
IPAP, an association of more than 100 law firms and Section 125 of the IP Code; and that the Madrid
individual practitioners in Intellectual Property Protocol is unconstitutional for being in conflict with
Law... has commenced this special civil action for the local law, which it cannot modify,The IPAP's
certiorari and prohibition... to challenge the validity contentions stand on a faulty premise. The method
of the President's accession to the Madrid Protocol of registration through the IPOPHL, as laid down by
without the concurrence of the Senate the IP Code, is distinct and separate from the
method of registration through the WIPO, as set in
According to the IPAP, the Madrid Protocol is a the Madrid Protocol. Comparing the two methods of
treaty, not an executive agreement; hence, registration despite their being governed by two
respondent DFA Secretary Albert Del Rosario acted separate systems of registration is thus
with grave abuse of discretion in determining the misplaced.In arguing that the Madrid Protocol
Madrid Protocol as an executive agreement. conflicts with Section 125 of the IP Code, the IPAP
The IPAP has argued that the implementation of the highlights the importance of the requirement for the
Madrid Protocol in the Philippines, specifically the designation of a resident agent, It underscores that
processing of foreign trademark applications, the requirement is intended to ensure that non-
conflicts with the IP Code,[14] whose Section 125 resident entities seeking protection or privileges
states under Philippine Intellectual Property Laws will be
subjected to the country's jurisdiction. It submits
The IPAP has insisted that Article 2 of the Madrid that without such resident agent, there will be a
Protocol means that foreign trademark applicants need to resort to costly, time consuming and
may file their applications through the International cumbersome extraterritorial service of writs and
Bureau or the WIPO, and their applications will be processes.[37]The IPAP misapprehends the
automatically granted trademark protection without procedure for examination under the Madrid
the need for designating their resident agents in the Protocol. The difficulty, which the IPAP illustrates,
country. is minimal, if not altogether inexistent. The IPOPHL
actually requires the designation of the resident
The IPAP has prayed that the implementation of the agent when it refuses the registration of a mark.
Madrid Protocol in the Philippines be restrained in Local representation is further required in the
order to prevent future wrongs considering that the submission of the Declaration of Actual Use, as well
IPAP and its constituency have a clear and as in the submission of the license contract.[38] The
unmistakable right not to be deprived of the rights Madrid Protocol accords with the intent and spirit of
granted them by the IP Code and existing local laws. the IP Code, particularly on the subject of the
Issues: registration of trademarks. The Madrid Protocol
does not amend or modify the IP Code on the
Whether or not the President's ratification of the acquisition of trademark rights considering that the
Madrid Protocol is valid and constitutional; applications under the Madrid Protocol are still
examined according to the relevant national law. In
Whether or not the Madrid Protocol is in conflict that regard, the IPOPHL will only grant protection to
with the IP Code.
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a mark that meets the local registration · GALLO cigarettes and Gallo Winerys wines
requirements. were totally unrelated products;
Principles: · Gallo Winerys GALLO trademark registration
certificate covered wines only, not cigarettes;
The Madrid System for the International
Registration of Marks {Madrid System), which is the · GALLO cigarettes and GALLO wines were sold
centralized system providing a one-stop solution for through different channels of trade;
registering and managing marks worldwide, allows
the trademark owner to file one application in one · GALLO cigarettes, sold at P4.60 for GALLO
language, and to pay one set of fees to protect his filters and P3 for GALLO menthols, were low-cost
mark in the territories of up to 97 member-states.[2] items compared to Gallo Winerys high-priced luxury
The Madrid System is governed by the Madrid wines which cost between P98 to P242.50;
Agreement, concluded in 1891, and the Madrid
Protocol, concluded in 1989. · the target market of Gallo Winerys wines was
The Madrid Protocol, which was adopted in order to the middle or high-income bracket with at least
remove the challenges deterring some countries P10,000 monthly income while GALLO cigarette
from acceding to the Madrid Agreement, has two buyers were farmers, fishermen, laborers and other
objectives, namely: (1) to facilitate securing low-income workers;
protection for marks; and (2) to make the
management of the registered marks easier in · the dominant feature of the GALLO cigarette
different countries. mark was the rooster device with the manufacturers
name clearly indicated as MIGHTY CORPORATION
while, in the case of Gallo Winerys wines, it was the
full names of the founders-owners ERNEST &
Mighty Corp
JULIO GALLO or just their surname GALLO;
Mighty Corporation vs. E.J. Gallow Winery
· by their inaction and conduct, respondents
Mighty Corporation and La Campana Fabrica De were guilty of laches and estoppel; and petitioners
Tabaco, Inc. vs. E. & J. Gallo Winery and The acted with honesty, justice and good faith in the
Andresons Group, Inc. exercise of their right to manufacture and sell
GALLO cigarettes.
[G.R. No. 154342. July 14, 2004]
The Makati RTC held petitioners liable for, and
permanently enjoined them from, committing
trademark infringement and unfair competition
E. & J. Gallo Winery and The Andresons Group,
with respect to the GALLO trademark. Makati RTC
Inc. sued Mighty Corporation and La Campana
granted respondents motion for partial
Fabrica De Tabaco, Inc. in the Makati RTC for
reconsideration and increased the award of actual
trademark and tradename infringement and unfair
and compensatory damages. On appeal, the CA
competition, with a prayer for damages and
affirmed the Makati RTC decision and subsequently
preliminary injunction.
denied petitioners motion for reconsideration.

Respondents charged petitioners with violating

Issues:
Article 6bis of the Paris Convention for the
Protection of Industrial Property (Paris Convention) · Whether or not CA did not follow prevailing
and RA 166 (Trademark Law), specifically, Sections laws and jurisprudence when it held that [a] RA
22 and 23 (for trademark infringement), 29 and 30 8293 (Intellectual Property Code of the Philippines
(for unfair competition and false designation of [IP Code]) was applicable in this case;
origin) and 37 (for tradename infringement). They
claimed that petitioners adopted the GALLO · Whether or not GALLO cigarettes and GALLO
trademark to ride on Gallo Winerys GALLO and wines were identical, similar or related goods for the
ERNEST & JULIO GALLO trademarks established reason alone that they were purportedly forms of
reputation and popularity, thus causing confusion, vice;and
deception and mistake on the part of the purchasing
· Whether or not petitioners were liable for
public who had always associated GALLO and
trademark infringement, unfair competition and
ERNEST & JULIO GALLO trademarks with Gallo
damages.
Winerys wines. Respondents prayed for the
issuance of a writ of preliminary injunction and ex
parte restraining order, plus P2 million as actual
and compensatory damages, at least P500,000 as Held:
exemplary and moral damages, and at least
· Yes.
P500,000 as attorney’s fees and litigation expenses.
Respondents sued petitioners on March 12, 1993
In their answer, petitioners alleged, among other
for trademark infringement and unfair competition
affirmative defenses, that: committed during the effectivity of the Paris
Convention and the Trademark Law.
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Yet, in the Makati RTC decision of November 26, unwary consumer but is the ordinarily intelligent
1998, petitioners were held liable not only under the buyer considering the type of product involved. He
aforesaid governing laws but also under the IP Code is accustomed to buy, and therefore to some extent
which took effect only on January 1, 1998, or about familiar with, the goods in question. The test of
five years after the filing of the complaint fraudulent simulation is to be found in the
likelihood of the deception of some persons in some
It is a fundamental principle that the validity and measure acquainted with an established design and
obligatory force of a law proceed from the fact that desirous of purchasing the commodity with which
it has first been promulgated. A law that is not yet that design has been associated. The test is not
effective cannot be considered as conclusively found in the deception, or the possibility of
known by the populace. To make a law binding even deception, of the person who knows nothing about
before it takes effect may lead to the arbitrary the design which has been counterfeited, and who
exercise of the legislative power. Nova constitutio must be indifferent between that and the other. The
futuris formam imponere debet non praeteritis. A simulation, in order to be objectionable, must be
new state of the law ought to affect the future, not such as appears likely to mislead the ordinary
the past. Any doubt must generally be resolved intelligent buyer who has a need to supply and is
against the retroactive operation of laws, whether familiar with the article that he seeks to purchase.
these are original enactments, amendments or
repeals. There are only a few instances when laws Hence, in the adjudication of trademark
may be given retroactive effect, none of which is infringement, we give due regard to the goods usual
present in this case. purchasers character, attitude, habits, age, training
and education.
The IP Code, repealing the Trademark Law, was
approved on June 6, 1997. Section 241 thereof Applying these legal precepts to the present case,
expressly decreed that it was to take effect only on petitioners use of the GALLO cigarette trademark is
January 1, 1998, without any provision for not likely to cause confusion or mistake, or to
retroactive application. Thus, the Makati RTC and deceive the ordinarily intelligent buyer of either
the CA should have limited the consideration of the wines or cigarettes or both as to the identity of the
present case within the parameters of the goods, their source and origin, or identity of the
Trademark Law and the Paris Convention, the laws business of petitioners and respondents.
in force at the time of the filing of the complaint.
Obviously, wines and cigarettes are not identical or
competing products. Neither do they belong to the
same class of goods. Respondents GALLO wines
· No. belong to Class 33 under Rule 84[a] Chapter III, Part
In resolving whether goods are related, several II of the Rules of Practice in Trademark Cases while
factors come into play: petitioners GALLO cigarettes fall under Class 34.

(a) the business (and its location) to which the goods We are mindful that product classification alone
belong cannot serve as the decisive factor in the resolution
of whether or not wines and cigarettes are related
(b) the class of product to which the goods belong goods. Emphasis should be on the similarity of the
products involved and not on the arbitrary
(c) the product's quality, quantity, or size, including
classification or general description of their
the nature of the package, wrapper or container
properties or characteristics. But the mere fact that
(d) the nature and cost of the articles one person has adopted and used a particular
trademark for his goods does not prevent the
(e) the descriptive properties, physical attributes or adoption and use of the same trademark by others
essential characteristics with reference to their on articles of a different description.
form, composition, texture or quality
Both the Makati RTC and the CA held that wines
(f) the purpose of the goods and cigarettes are related products because: (1) they
are related forms of vice, harmful when taken in
(g) whether the article is bought for immediate
excess, and used for pleasure and relaxation and (2)
consumption, that is, day-to-day household items
they are grouped or classified in the same section of
(h) the fields of manufacture supermarkets and groceries.

(i) the conditions under which the article is usually We find these premises patently insufficient and too
purchased and arbitrary to support the legal conclusion that wines
and cigarettes are related products within the
(j) the channels of trade through which the goods contemplation of the Trademark Law and the Paris
flow, how they are distributed, marketed, displayed Convention.
and sold.
First, anything - not only wines and cigarettes ― can
A very important circumstance is whether there be used for pleasure and relaxation and can be
exists a likelihood that an appreciable number of harmful when taken in excess. Indeed, it would be
ordinarily prudent purchasers will be misled, or a grave abuse of discretion to treat wines and
simply confused, as to the source of the goods in cigarettes as similar or related products likely to
question. The purchaser is not the completely
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cause confusion just because they are pleasure- involved and there is a demonstrated intent to
giving, relaxing or potentially harmful. Such capitalize on it. Both of these are absent in the
reasoning makes no sense. present case.

Second, it is common knowledge that supermarkets

sell an infinite variety of wholly unrelated products
and the goods here involved, wines and cigarettes, · No, petitioners are not liable for trademark
have nothing whatsoever in common with respect to infringement and unfair competition.
their essential characteristics, quality, quantity, Trademark Infringement
size, including the nature of their packages,
wrappers or containers. Each trademark infringement case presents a
unique problem which must be answered by
Accordingly, the U.S. patent office and courts have weighing the conflicting interests of the litigants.
consistently held that the mere fact that goods are
sold in one store under the same roof does not Respondents claim that GALLO wines and GALLO
automatically mean that buyers are likely to be cigarettes flow through the same channels of trade,
confused as to the goods respective sources, that is, retail trade. If respondent’s assertion is true,
connections or sponsorships. The fact that different then both goods co-existed peacefully for a
products are available in the same store is an considerable period of time. It took respondents
insufficient standard, in and of itself, to warrant a almost 20 years to know about the existence of
finding of likelihood of confusion. GALLO cigarettes and sue petitioners for trademark
infringement. Given, on one hand, the long period of
Wines and cigarettes are non-competing and are time that petitioners were engaged in the
totally unrelated products not likely to cause manufacture, marketing, distribution and sale of
confusion vis--vis the goods or the business of the GALLO cigarettes and, on the other, respondents
petitioners and respondents. delay in enforcing their rights (not to mention
Wines are bottled and consumed by drinking while implied consent, acquiescence or negligence) we
cigarettes are packed in cartons or packages and hold that equity, justice and fairness require us to
smoked. There is a whale of a difference between rule in favor of petitioners. The scales of conscience
their descriptive properties, physical attributes or and reason tip far more readily in favor of petitioners
essential characteristics like form, composition, than respondents.
texture and quality. Moreover, there exists no evidence that petitioners
GALLO cigarettes are inexpensive items while employed malice, bad faith or fraud, or that they
GALLO wines are not. GALLO wines are patronized intended to capitalize on respondent’s goodwill in
by middle-to-high-income earners while GALLO adopting the GALLO mark for their cigarettes which
cigarettes appeal only to simple folks like farmers, are totally unrelated to respondents GALLO wines.
fishermen, laborers and other low-income workers. Thus, we rule out trademark infringement on the
Indeed, the big price difference of these two part of petitioners.
products is an important factor in proving that they Unfair Competition
are in fact unrelated and that they travel in different
channels of trade. There is a distinct price Under Section 29 of the Trademark Law, any person
segmentation based on vastly different social who employs deception or any other means contrary
classes of purchasers. to good faith by which he passes off the goods
manufactured by him or in which he deals, or his
GALLO cigarettes and GALLO wines are not sold business, or services for those of the one having
through the same channels of trade. GALLO established such goodwill, or who commits any acts
cigarettes are Philippine-made and petitioners calculated to produce said result, is guilty of unfair
neither claim nor pass off their goods as imported competition. It includes the following acts:
or emanating from Gallo Winery. GALLO cigarettes
are distributed, marketed and sold through (a) Any person, who in selling his goods shall give
ambulant and sidewalk vendors, small local sari- them the general appearance of goods of another
sari stores and grocery stores in Philippine rural manufacturer or dealer, either as to the goods
areas, mainly in Misamis Oriental, Pangasinan, themselves or in the wrapping of the packages in
Bohol, and Cebu. On the other hand, GALLO wines which they are contained, or the devices or words
are imported, distributed and sold in the Philippines thereon, or in any other feature of their appearance,
through Gallo Winerys exclusive contracts with a which would be likely to influence purchasers to
domestic entity, which is currently Andresons. By believe that the goods offered are those of a
respondents own testimonial evidence, GALLO manufacturer or dealer other than the actual
wines are sold in hotels, expensive bars and manufacturer or dealer, or who otherwise clothes
restaurants, and high-end grocery stores and the goods with such appearance as shall deceive the
supermarkets, not through sari-sari stores or public and defraud another of his legitimate trade,
ambulant vendors. or any subsequent vendor of such goods or any
agent of any vendor engaged in selling such goods
Tobacco and alcohol products may be considered with a like purpose;
related only in cases involving special
circumstances which exist only if a famous mark is
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(b) Any person who by any artifice, or device, or who

employs any other means calculated to induce the
false belief that such person is offering the services Petitioners filed a Motion to Quash the Information
of another who has identified such services in the on the following grounds: (1) the facts charged do
mind of the public;
not constitute an offense and (2) the court has no
(c) Any person who shall make any false statement
jurisdiction over the offense charged or the person
in the course of trade or who shall commit any other
act contrary to good faith of a nature calculated to of the accused. Petitioners argue that the fiscal
discredit the goods, business or services of another.
should have dismissed Welts's complaint because
The universal test question is whether the public is under the rules, the complaint must be sworn to
likely to be deceived. Nothing less than conduct
tending to pass off one man’s goods or business as before the prosecutor and the copy on record
that of another constitutes unfair competition. appears to be only a fax transmittal.
Actual or probable deception and confusion on the
part of customers by reason of defendant’s practices
must always appear. On this score, we find that The prosecutor filed his Comment/Opposition to the
petitioners never attempted to pass off their motion to quash, stating that he has the original
cigarettes as those of respondents. There is no
evidence of bad faith or fraud imputable to copy of the complaint, and that complainant has an
petitioners in using their GALLO cigarette mark. attorney-in-fact to represent it. The prosecutor also
contended that the State is entitled to prosecute the
offense even without the participation of the private
Sasot vs. People Case Digest
offended party, as the crime charged is a public
crime.
May a complaint affidavit notarized in a foreign
jurisdiction be the basis for a preliminary
The trial court sustained the prosecutions
investigation?
arguments and denied petitioners motion to quash.
Facts:
Held:

Upon complaint by NBA Properties, Inc., the NBI

Nowhere in the Rule 117 is there any mention of the
conducted an investigation where it was discovered
defect in the complaint filed before the fiscal and the
that petitioners were engaged in the manufacture,
complainants capacity to sue as grounds for a
printing, sale, and distribution of counterfeit NBA
motion to quash.
garment products. The NBI recommended
petitioners' prosecution for unfair competition
For another, under Section 3, Rule 112 of the 1985
under Article 189 of the Revised Penal Code.
Rules of Criminal Procedure, a complaint is
substantially sufficient if it states the known
In a Special Power of Attorney, Rick Welts, the
address of the respondent, it is accompanied by
President of NBA Properties, Inc., constituted a local
complainant's affidavit and his witnesses and
law firm as the companys attorney-in-fact, and to
supporting documents, and the affidavits are sworn
act for and on behalf of the company, in the filing of
to before any fiscal, state prosecutor or government
criminal, civil and administrative complaints,
official authorized to administer oath, or in their
among others. The Special Power of Attorney was
absence or unavailability, a notary public who must
notarized by a notary public of New York County
certify that he personally examined the affiants and
and certified by the County Clerk and Clerk of the
that he is satisfied that they voluntarily executed
Supreme Court of the State of New York. A
and understood their affidavits. All these have been
Philippine Consul of the Consulate General of the
duly satisfied in the complaint filed before
Philippines in New York, authenticated the
Prosecution Attorney Aileen Marie S. Gutierrez. It
certification. The company president also executed
must be noted that even the absence of an oath in
a Complaint-Affidavit before the same notary public
the complaint does not necessarily render it invalid.
of New York.
Want of oath is a mere defect of form, which does
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Quintin Cheng, the registered owner in the

not affect the substantial rights of the defendant on
Supplemental Register of the Philippine Patent
the merits. Office. Summerville (respondent) advertised and
sold petitioners cream products under the brand
name Chin Chun Su, in similar containers that Kho
In this case, Welts's Complaint-Affidavit contains an uses, thereby misleading the public, and resulting
in the decline in the business sales and income; and
acknowledgement by Notary Public Nicole Brown of that Summerville should be enjoined from allegedly
the State of New York that the same has been infringing on the copyrights and patents of the
petitioner.
subscribed and sworn to before her on February 12,
On the other hand, Summerville alleged as
1998, duly authenticated by the Philippine their defense that it is the exclusive and authorized
Consulate. While the copy on record of the importer, re-packer and distributor of Chin Chun
Su products manufactured by Shun Yi Factory of
complaint-affidavit appears to be merely a Taiwan; that the said Taiwanese manufacturing
photocopy thereof, Prosecution Attorney Gutierrez company authorized Summerville to register its
trade name Chin Chun Su Medicated Cream with
stated that complainants representative will present the Philippine Patent Office and other appropriate
the authenticated notarized original in court, and governmental agencies; that KEC Cosmetics
Laboratory obtained the copyrights through
Prosecutor Guray manifested that the original copy misrepresentation and falsification; and, that the
is already on hand. It is apt to state at this point authority of Quintin Cheng, assignee of the patent
registration certificate, to distribute and market
that the prosecutor enjoys the legal presumption of Chin Chun Su products in the Philippines had
regularity in the performance of his duties and already been terminated by the said Taiwanese
Manufacturing Company.
functions, which in turn gives his report the
Issue:
presumption of accuracy.
Whether the copyright and patent over the
name and container of a beauty cream product
Moreover, records show that there are other would entitle the registrant, Elidad Kho, to the use
and ownership over the same to the exclusion of
supporting documents from which the prosecutor others?
based his recommendation.
Ruling:
No. Trademark, copyright and patents are
Consequently, if the information is valid on its face, different intellectual property rights that cannot be
interchanged with one another. A trademark is any
and there is no showing of manifest error, grave
visible sign capable of distinguishing the goods
abuse of discretion and prejudice on the part of (trademark) or services (service mark) of an
enterprise and shall include a stamped or marked
public prosecutor, as in the present case, the trial
container of goods. In relation thereto, a trade name
court should respect such determination. means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope
of a copyright is confined to literary and artistic
More importantly, the crime of Unfair Competition works which are original intellectual creations in the
literary and artistic domain protected from the
punishable under Article 189 of the Revised Penal moment of their creation. Patentable inventions, on
Code is a public crime. It is essentially an act the other hand, refer to any technical solution of a
problem in any field of human activity which is new,
against the State and it is the latter which involves an inventive step and is industrially
principally stands as the injured party. The applicable.

complainant's capacity to sue in such case becomes Kho has no right to support her claim for the
exclusive use of the subject trade name and its
immaterial. (Sasot vs. People, G.R. No. 143193. June container. The name and container of a beauty
29, 2005) cream product are proper subjects of a trademark
inasmuch as the same falls squarely within its
definition. In order to be entitled to exclusively use
KHO VS CA, GR 115758, MARCH 19, 2002 the same in the sale of the beauty cream product,
the user must sufficiently prove that she registered
Facts: or used it before anybody else did. Kho’s copyright
The Elidad C. Kho (petitioner) , doing and patent registration of the name and container
business under the name and style of KEC would not guarantee her the right to the exclusive
Cosmetics Laboratory, is the registered owner of the use of the same for the reason that they are not
copyrights Chin Chun Su and Oval Facial Cream appropriate subjects of the said intellectual rights.
Container/Case and that she also has patent rights Consequently, a preliminary injunction order
on Chin Chun Su & Device and Chin Chun Su for cannot be issued for the reason that the petitioner
medicated cream after purchasing the same from has not proven that she has a clear right over the
said name and container to the exclusion of others,
 7

not having proven that she has registered a and trademarks. In the leading case of Kho vs. Court
trademark thereto or used the same before anyone of Appeals we ruled that these three legal rights are
did. completely distinct and separate from one another,
and the protection afforded by one cannot be used
Pearl & Dean (Phil), Inc. vs. Shoemart, Inc. G.R. interchangeably to cover items or works that
No. 148222, August 5, 2003 exclusively pertain to the others.

Related Issues:
Facts: Pearl & Dean (Phil), Inc. is a corporation Issue: Was there patent infringement?
engaged in the manufacture of advertising display Ruling: None. P&D never secured a patent for the
units called light boxes. In January 1981, Pearl light boxes. It therefore acquired no patent rights
& Dean was able to acquire copyrights over the which could have protected its invention, if in fact it
designs of the display units. In 1988, their really was. And because it had no patent, P&D could
trademark application for “Poster Ads” was not legally prevent anyone from manufacturing or
approved; they used the same trademark to commercially using the contraption. To be able to
advertise their light boxes. effectively and legally preclude others from copying
and profiting from the invention, a patent is a
In 1985, Pearl & Dean negotiated with Shoemart, primordial requirement. No patent, no protection.
Inc. (SM) so that the former may be contracted to Issue: Was there trademark infringement?
install light boxes in the ad spaces of SM.
Eventually, SM rejected Pearl & Dean’s proposal. Ruling: None. The failure of P&D to secure a
Two years later, Pearl & Dean received report that trademark registration for specific use on the light
light boxes, exactly the same as theirs, were being boxes meant that there could not have been any
used by SM in their ad spaces. They demanded SM trademark infringement since registration was an
to stop using the light boxes and at the same time essential element thereof.
asked for damages amounting to P20 M. SM refused
to pay damages though they removed the light
boxes. Pearl & Dean eventually sued SM. SM argued Case Digest: Pharmawealth vs. Pfizer (Patent
that it did not infringe on Pearl & Dean’s trademark Infringement)
because Pearl & Dean’s trademark is only December 19, 2010
applicable to envelopes and stationeries and not to
the type of ad spaces owned by SM. SM also averred Phil. Pharmawealth, Inc. v. Pfizer, Inc. & Pfizer
that “Poster Ads” is a generic term hence it is not (Phil.), Inc. G.R. No. 167715, 17 November 2010
subject to trademark registration. SM also averred
that the actual light boxes are not copyrightable.
by: Alpheus D. Macalalad
The RTC ruled in favor of Pearl & Dean. But the
Court of Appeals ruled in favor of SM.
Facts: Pfizer is the registered owner of a patent
Issue: Was there copyright infringement? pertaining to Sulbactam Ampicillin. It is marketed
under the brand name “Unasyn.” Sometime in
Ruling: None. Copyright is a statutory right, subject January and February 2003, Pfizer discovered that
to the terms and conditions specified in the statute. Pharmawealth submitted bids for the supply of
It can only cover the works falling within the Sulbactam Ampicillin to several hospitals without
statutory enumeration or description. Petitioner’s the Pfizer’s consent. Pfizer then demanded that the
application for a copyright certificate was for a class hospitals cease and desist from accepting such bids.
“O” work under Section 2 (O) of PD 49 (The Pfizer also demanded that Pharmawealth
Intellectual Property Decree) which was the statute immediately withdraw its bids to supply Sulbactam
then prevailing. Said section includes "prints, Ampicillin. Pharmawealth and the hospitals ignored
pictorial illustrations, advertising copies, labels,
the demands.
tags and box wraps". The light boxes cannot, by any
stretch of the imagination, be considered as either
prints, pictorial illustrations, advertising copies, Pfizer then filed a complaint for patent infringement
labels, tags or box wraps, to be properly classified with a prayer for permanent injunction and
as copyrightable; what was copyrighted were the forfeiture of the infringing products. A preliminary
technical drawings only, and not the light boxes injunction effective for 90 days was granted by the
themselves. IPO’s Bureau of Legal Affairs (IPO-BLA). Upon
expiration, a motion for extension filed by Pfizer was
In fine, if SMI reprinted P&D’s technical drawings denied. Pfizer filed a Special Civil Action for
for sale to the public without license from P&D, then Certiorari in the Court of Appeals (CA) assailing the
no doubt they would have been guilty of copyright denial.
infringement. But this was not the case. SMI’s acts
complained of by P&D were to have units similar or While the case was pending in the CA, Pfizer filed
identical to their light box. In such case, there was
with the Regional Trial Court of Makati (RTC) a
no copyright infringement.
complaint for infringement and unfair competition,
Moreover, during the trial, the president of P&D with a prayer for injunction. The RTC issued a
himself admitted that the light box was neither a temporary restraining order, and then a preliminary
literary nor an artistic work but an engineering or injunction.
marketing invention. Obviously, there appeared to
be some confusion regarding what ought or ought Pharmawealth filed a motion to dismiss the case in
not to be the proper subjects of copyrights, patents the CA, on the ground of forum shopping.
 8

Nevertheless, the CA issued a temporary restraining

order. Pharmawealth again filed a motion to The elements of forum shopping are: (a) identity of
dismiss, alleging that the patent, the main basis of parties, or at least such parties that represent the
the case, had already lapsed, thus making the case same interests in both actions; (b) identity of rights
moot, and that the CA had no jurisdiction to review asserted and reliefs prayed for, the reliefs being
the order of the IPO-BLA because this was granted founded on the same facts; (c) identity of the two
to the Director General. The CA denied all the preceding particulars, such that any judgment
motions. Pharmawealth filed a petition for review on rendered in the other action will, regardless of which
Certiorari with the Supreme Court. party is successful, amount to res judicata in the
action under consideration. This instance meets
Issues: these elements.

a) Can an injunctive relief be issued based on an The parties are clearly identical. In both the
action of patent infringement when the patent complaints in the BLA-IPO and RTC, the rights
allegedly infringed has already lapsed? allegedly violated and the acts allegedly violative of
b) What tribunal has jurisdiction to review the such rights are identical, regardless of whether the
decisions of the Director of Legal Affairs of the patents on which the complaints were based are
Intellectual Property Office? different. In both cases, the ultimate objective of
c) Is there forum shopping when a party files two Pfizer was to ask for damages and to permanently
actions with two seemingly different causes of action prevent Pharmawealth from selling the contested
and yet pray for the same relief? products. Relevantly, the Supreme Court has
decided that the filing of two actions with the same
Held: objective, as in this instance, constitutes forum
shopping.
a) No. The provision of R.A. 165, from which the
Pfizer’s patent was based, clearly states that "[the] Owing to the substantial identity of parties, reliefs
patentee shall have the exclusive right to make, use and issues in the IPO and RTC cases, a decision in
and sell the patented machine, article or product, one case will necessarily amount to res judicata in
and to use the patented process for the purpose of the other action.
industry or commerce, throughout the territory of
the Philippines for the term of the patent; and such
making, using, or selling by any person without the In-and-out Burger
authorization of the patentee constitutes
infringement of the patent." Facts:

Petitioner IN-N-OUT BURGER, INC., a business

Clearly, the patentee’s exclusive rights exist only
entity incorporated under the laws of US, which is a
during the term of the patent. Since the patent was
signatory to the Convention of Paris on Protection of
registered on 16 July 1987, it expired, in accordance
Industrial Property and the Agreement on Trade
with the provisions of R.A. 165, after 17 years, or 16
Related Aspects of Intellectual Property Rights
July 2004. Thus, after 16 July 2004, Pfizer no longer
(TRIPS). Petitioner isengaged mainly in the
possessed the exclusive right to make, use, and sell
restaurant business, but it has never engaged in
the products covered by their patent. The CA was
business in the Philippines. Respondents Sehwani,
wrong in issuing a temporary restraining order after
Incorporatedand Benita Frites, Inc. are corporations
the cut-off date.
organized in the Philippines.On 2 June 1997,
petitioner filed trademark and service mark
b) According to IP Code, the Director General of the
applications with the Bureau of Trademarks (BOT)
IPO exercises exclusive jurisdiction over decisions of
of the IPO for "IN-N-OUT"and "IN-N-OUT Burger &
the IPO-BLA. The question in the CA concerns an
Arrow Design." Petitioner later found out, through
interlocutory order, and not a decision. Since the IP
the Official Action Papers issued by the IPO on 31
Code and the Rules and Regulations are bereft of
May 2000,that respondent Sehwani, Incorporated
any remedy regarding interlocutory orders of the
had already obtained Trademark Registration for
IPO-BLA, the only remedy available to Pfizer is to
the mark "IN N OUT (the inside of the letter
apply the Rules and Regulations suppletorily. Under
"O"formed like a star)." Petitioner eventually filed on
the Rules, a petition for certiorari to the CA is the
4 June 2001 before the Bureau of Legal Affairs (BLA)
proper remedy. This is consistent with the Rules of
of the IPO an administrativecomplaint against
Court. Thus, the CA had jurisdiction.
respondents for unfair competition and cancellation
of trademark registration. Respondents asserted
c) Yes. Forum shopping is defined as the act of a
therein that theyhad been using the mark "IN N
party against whom an adverse judgment has been
OUT" in the Philippines since 15 October 1982.
rendered in one forum, of seeking another (and
Respondent then filed with the BPTTT an
possibly favorable) opinion in another forum (other
application for theregistration of the mark. BPTTT
than by appeal or the special civil action of
approved its application and issued the
certiorari), or the institution of two (2) or more
corresponding certificate of registration in favor of
actions or proceedings grounded on the same cause
the respondent.On Dec 22, 2003, IPO Director of
on the supposition that one or the other court would
Legal Affairs rendered a decision in favor of
make a favorable disposition.
 9

petitioner stating petitioner had the right to use Inc., the producer of It’s a Date. Petitioner Joaquin
itstradename and mark in the Philippines to the informed respondent Zosa of a copyright to Rhoda
exclusion of others. However, the decision also and Me and demanded that IXL discontinue
includes that respondent is not guilty of unfair airing It’s a Date. Respondent Zosa apologized to
competition. Upon appeal by petitioner, the new IPO Joaquin, but continued airing the show. Zosa also
Director General declared that respondents were sought to register IXLs copyright to the first episode
of It’s a Date for which a certificate of copyright was
guilty of unfair competitionon December 23, 2005.
issued by the National Library on August 14, 1991.
On 18 July 2006, the Court of Appeals promulgated
a Decision reversing the Decision dated 23 With these developments, petitioners herein
December 2005 of the IPO Director General. The filed a complaint, as a result of which an
appellate court declared that Section 163 of the information for violation of P.D. No. 49 were filed.
Intellectual Property Code specifically confers upon
theregular courts, and not the BLA-IPO, sole
jurisdiction to hear and decide cases involving ISSUE: Whether or not respondent committed
provisions of the Intellectual Property copyright infringement, against petitioners’
Code,particularly trademarks. Hence, the present dating game show, “Rhoda and Me”?
petition.

Issue: RULING: NO

(1) Whether the IPO (administrative bodies) have PD. No. 49 (Decree On Intellectual Property),
jurisdiction to cases involving unfair competition(2) Section 2 - in enumerating what are subject to
Whether respondent Sehwani is liable of unfair copyright, refers to finished works, and not to
competitionHeld: (1) Yes. Sec. 160 and 170, which concepts. The copyright does not extend to an idea,
are found under Part III of the IP Code, recognize the procedure, process, system, method of operation,
concept, principle, or discovery, regardless of the
concurrent jurisdiction of civil courts and theIPO
form in which it is described, explained, illustrated,
over unfair competition cases. Therefore, the IPO or embodied in such work. Thus, the new
Director of Legal Affairs have jurisdiction to decide Intellectual Property Code of the Philippines provides:
the petitioner's administrativecase against
respondents and the IPO Director General have SEC. 175. Unprotected Subject
exclusive jurisdiction over the appeal of the Matter. - Notwithstanding the
provisions of Sections 172 and 173,
judgment of the IPO Director of Legal Affairs.(2) Yes.
no protection shall extend, under
The evidence on record shows that the respondents
this law, to any idea, procedure,
were not using their registered trademark but that system, method or operation,
of the petitioner. Further,respondents are giving concept, principle, discovery or mere
their products the general appearance that would data as such, even if they are
likely influence purchasers to believe that these expressed, explained, illustrated or
products arethose of the petitioner. The intention to embodied in a work; news of the day
deceive may be inferred from the similarity of the and other miscellaneous facts having
goods as packed and offered for sale, and, thus, the character of mere items of press
information; or any official text of a
action will lie to restrain such unfair competition. legislative, administrative or legal
Also, respondent’s use of IN nature, as well as any official
translation thereof.
-N-OUT BURGER in busineses signages reveals
fraudulentintent to deceive purchasers. Furthermore, to begin with, the format of a
show is not copyrightable. Section 2 of P.D. No. 49,
N.B. enumerates the classes of work entitled to copyright
protection (this provision is substantially the same
The essential elements of an action for unfair as Section 172 of the Intellectual Property Code of the
competition are 1) confusing similarity in the Philippines -R.A. No. 8293). The format or
general appearance of the goods and (2) intentto mechanics of a television show is not included in the
deceive the public and defraud a competitor. list of protected works in Section 2 of P.D. No. 49.
For this reason, the protection afforded by the law
cannot be extended to cover them.
Joaquin v Drilon

FACTS: ABS-CBN BROADCASTING CORP. vs PHILIPPINE

MULTI-MEDIA SYSEM INC. (PMSI)
Petitioner BJ Productions, Inc. (BJPI) is the
holder/grantee of Certificate of Copyright dated GR No. 175769-70
January 28, 1971 of Rhoda and Me, a dating game
show. Petitioner BJPI submitted to the National
Library an addendum to its certificate of copyright Facts:
specifying the shows format and style presentation.
ABS-CBN is licensed to engage in tv and radio
In 1991, petitioner Francisco Joaquin, Jr.,
broadcasting. It broadcasts tv programs through
president of BJPI, protested the airing of the show
wireless means to Metro Manila and by satellite to
It’s a Date through a letter sent to Grabriel M. Zosa,
provincial stations. The programs aired over
president and general manager of IXL Productions,
 10

Channel 2 and Channel 23 are either produced by 3. The transmission is for public reception; and
or purchased from other producers by ABS-CBN. It
also owns regional stations which pattern their 4. The means for decrypting are provided to the
programming in accordance with the demands of public by the broadcasting organization or with
the region thus, tv programs shown in Metro Manila its consent.
are not necessarily shown in other provinces. Section 202.7 of the IP Code presupposes that the
PMSI is the operator of Dream Broadcasting System. origin of the signals is the broadcaster. PMSI is not
It delivers direct-to-home (DTH) television via the origin nor does it claim to be the origin of the
satellite to its subscriber. It was granted a legislative programs broadcasted by ABS-CBN. PMSI merely
franchise and was given a Provisional Authority by carried the existing signals of ABS-CBN and when
NTC to operate nationwide DTH satellite service. subscribers view programs of Channel 2 and 23,
Part of the program it offered are ABS-CBN Channel they know that the origin was ABS-CBN.
2 and 23. When a broadcaster transmits, such as ABS-CBN,
ABS-CBN demanded PMSI to cease and desist from the signals are dispersed in the air and anybody
rebroadcasting their channels, PMSI replied that the may receive the signal and is not required to
rebroadcasting was in accordance with the subscribe or to pay. The dispersal of signals in the
obligation under a memorandum (MC No. 4-08-88) air is possible only through wireless means while in
which reguires all cable tv operators to carry the wire-based transmissions, such as cable television,
television signals of the authorized tv broadcast the use of wire in transmitting signals limits the
stations. recipients to those who are connected and the
service provider, may choose its subscribers. Hence,
ABS-CBN filed with the IPO a complaint for PMSI transmission of signal via satellite service
Violation of Laws involving Property Rights with cannot be considered as broadcasting
TRO/injunction alleging that PMSI’s unathorized
rebroadcasting infringed their broadcasting rights Rebroadcasting is the simultaneous broadcasting
and copyright. The Bureau of Legal Affairs of IPO by one broadcasting organization of the broadcast of
rendered a decision ordering PMSI to permanently another broadcasting organization. (Article 3(g) of
cease and desist from rebroadcasting. PMSI filed an the International Convention for the Protection of
appeal with the Director General of IPO and it Performers, Producers of Phonograms and
rendered a decision in favor of PMSI. CA affirmed Broadcasting Organizations)
the decision of the Director General.
ABS-CBN creates and transmits its own signals;
Issues: PMSI merely carries such signals which the viewers
receive in its unaltered form. PMSI does not
1. Did PMSI infringe ABS-CBN’s broadcasting rights produce, select, or determine the programs to be
and copyright under the Intellectual Property Code? shown in Channel 2 and 23. It merely retransmits
the same in accordance with memorandum. Clearly,
2. Does Memorandum Circular exclude DTH
PMSI does not perform the functions of a
satellite television operators?
broadcasting organization; thus, it cannot be said
Ruling: that it is engaged in rebroadcasting Channels 2 and
23.
(1) PMSI does not perform the function of a
broadcasting organization. (2) Memorandum Circular include Direct-to-home
satellite television operators.
Broadcasting is the transmission by wireless means
for the public reception of sounds or of images or of Director General correctly found that PMSI’s
representations thereof; such transmission by services are similar to a cable television system
satellite is also broadcasting where the means for because the services it renders fall under the cable
decrypting are provided to the public by the retransmission. Cable retransmission can either be
broadcasting organization or with its consent. simultaneous or a reproduction, they might be
(Section 202.7 of the IP Code) unaltered or altered through replacement of
commercials. In general, the term retransmission
Two instances where there is broadcasting: seems to be reserved for such transmissions which
1. The transmission by wireless means for the are both simultaneous and unaltered.
public reception of sounds or of images or of
representations thereof; and While, the Rome Convention gives broadcasting
organizations the right to authorize or prohibit the
2. The transmission by satellite for the public
rebroadcasting of its broadcast, however, this
reception of sounds or of images or of
protection does not extend to cable
representations thereof where the means for
retransmission. The retransmission of ABS-CBNs
decrypting are provided to the public by the
signals by PMSI which functions essentially as a
broadcasting organization or with its consent.
cable television does not therefore constitute
rebroadcasting in violation of the former’s
DTH is a satellite-based so it shall fall under intellectual property rights under the IP Code.
the second category. The elements of such
category are as follows:
1. There is transmission of sounds or images or of FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND
representations thereof; PUBLISHERS, INC. vs. BENJAMIN TAN, G.R. No. L-
36402, March 16, 1987
2. The transmission is through satellite;
 11

FILSCAP:
Facts: Plaintiff-appellant is the owner of certain musical - Is the owner of certain musical compositions
compositions among which are the songs entitled: "Dahil among which are the songs entitled: "Dahil SaIyo",
SaIyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao
Lamang" and "The Nearness Of You." It filed a complaint with Lamang" and "The Nearness Of You."
the lower court for infringement of copyright against
defendant - allowing the playing in defendant-appellee's - Filed a complaint with the lower court for
restaurant of said songs copyrighted in the name of the infringement of copyright against defendant-
former. Defendant-appellee countered that the appellee for allowing the playing in defendant-
complaint states no cause of action. While not appellee's restaurant of said songs copyrighted in
denying the playing of said copyrighted compositions in the name of the former.
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 under the
provisions of Section 3 of the Copyright Law. Benjamin Tan:

Issue: - Countered that the complaint states no cause of

action. While not denying the playing of said
1. Whether or not the playing and signing of musical
copyrighted compositions in his establishment,
compositions which have been copyrighted under the
appellee maintains that the mere singing and
provisions of the Copyright Law (Act 3134)
inside the establishment of the defendant-appellee playing of songs and popular tunes even if they are
constitute a public performance for profit within the copyrighted do not constitute an infringement
meaning and contemplation of the Copyright Law of the under the provisions of Section 3 of the Copyright
Philippines Law.
2. Whether or not appellee can be held liable assuming
that there were indeed public performances for profit
ISSUE: whether or not the playing and signing of
Ruling: No. It has been held that "The playing of music in dine musical compositions which have been copyrighted
and dance establishment which was paid for by the public in under the provisions of the Copyright Law (Act
purchases of food and drink constituted "performance for 3134) inside the establishment of the defendant-
profit “within a Copyright Law." Thus, it has been appellee constitute a public performance for profit
explained that while it is possible in such within the meaning and contemplation of the
establishments for the patrons to purchase their Copyright Law of the Philippines; and assuming that
food and drinks and at the same time dance to the there were indeed public performances for profit,
music of the orchestra, the music is furnished and used by whether or not appellee can be held liable therefor.
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 Held: NO
it is public; and the music is performed for profit.
Nevertheless, appellee cannot be said to have It has been held that "The playing of music in dine
infringed upon the Copyright Law. and dance establishment which was paid for by the
public in purchases of food and drink constituted
"performance for profit" within a Copyright Law."
Appellee's allegation that the composers of the contested Thus, it has been explained that while it is possible
musical compositions waived their right in favor of the in such establishments for the patrons to purchase
general public when they allowed their intellectual creations their food and drinks and at the same time dance to
to become property of the public domain before applying for the music of the orchestra, the music is furnished
the corresponding copyrights for the same is correct. The and used by the orchestra for the purpose of
Supreme Court has ruled that "Paragraph 33 of Patent Office inducing the public to patronize the establishment
Administrative Order No. 3 (as amended, dated September and pay for the entertainment in the purchase of
18, 1947) entitled 'Rules of Practice in the Philippines Patent food and drinks. The defendant conducts his place
Office relating to the Registration of Copyright Claims' of business for profit, and it is public; andt he music
promulgated pursuant to Republic Act165, provides among is performed for profit.
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 Nevertheless, appellee cannot be said to have
property." Indeed, if the general public has made use of the infringed upon the Copyright Law. Appellee's
object sought to be copyrighted for thirty (30) days prior to the allegation that the composers of the contested
copyright application the law deems the object to have been musical compositions waived their right in favor of
donated to the public domain and the same can no longer be the general public when they allowed their
copyrighted. Under the circumstances, it is clear that the intellectual creations to become property of the
musical compositions in question had long become public public domain before applying for the corresponding
property, and are therefore beyond the protection of the copyrights for the same is correct.
Copyright Law.
Filscap v Tan
 12

The Supreme Court has ruled that "Paragraph 33 of Robles' act of lifting from the book of petitioners
Patent Office Administrative Order No. 3(as substantial portions of discussions and examples,
amended, dated September 18, 1947) entitled 'Rules and her failure to acknowledge the same in her book
of Practice in the Philippines Patent Office relating is an infringement of petitioners' copyrights.
to the Registration of Copyright Claims'
promulgated pursuant to Republic Act165, provides
among other things that an intellectual creation In the case at bar, the least that respondent Robles
should be copyrighted thirty (30)days after its could have done was to acknowledge petitioners
publication, if made in Manila, or within the (60) Habana et. al. as the source of the portions of DEP.
days if made elsewhere, failure of which renders The final product of an author's toil is her book. To
such creation public property." Indeed, if the allow another to copy the book without appropriate
acknowledgment is injury enough.
general public has made use of the object sought to
be copyrighted for thirty (30) days prior to the G.R. No. 147043. June 21, 2005
copyright application the law deems the object to
have been donated to the public domain and the NBI MICROSOFT CORPORATION et al v HWANG
same can no longer be copyrighted. Under the
circumstances, it is clear that the musical
compositions in question had long become public
FACTS:In May 1993, Microsoft Corporation and
property, and are therefore beyond the protection of Beltron Computer Philippines, Inc. entered into a
the Copyright Law Licensing Agreement. Under Section 2(a) of the
Agreement, Microsoft authorized Beltron, for a fee,
PACITA I. HABANA, ALICIA L. CINCO and JOVITA
to:
N. FERNANDO vs. FELICIDAD C. ROBLES and
GOODWILL TRADING CO., INC.
1. Reproduce and install no more than one copy of
G.R. No. 131522, July 19, 1999 Windows on each Customer System hard disk;

2. Distribute directly or indirectly and license copies

FACTS: Pacita Habana et al., are authors and of Windows (reproduced as per Section 2 of the
copyright owners of duly issued of the book, College Agreement and/or acquired from an Authorized
English For Today (CET). Respondent Felicidad Replicator or Authorized Distributor.
Robles was the author of the book Developing
English Proficiency (DEP). Petitioners found that Their agreement allowed either party to terminate if
several pages of the respondent's book are similar, one fails to comply with their respective obligations.
if not all together a copy of petitioners' book. Habana Microsoft terminated the Agreement in June 1995
et al. filed an action for damages and injunction, by reason of Beltron’s non-payment of royalties.
alleging respondent’s infringement of copyrights, in Later, Microsoft learned that Beltron was illegally
violation of P.D. 49. They allege respondent copying and selling copies of Windows. Microsoft
Felicidad C. Robles being substantially familiar with then sought the assistance of the National Bureau
the contents of petitioners' works, and without of Investigation. NBI agents made some purchase
securing their permission, lifted, copied, plagiarized from Beltron where they acquired a computer unit
and/or transposed certain portions of their book pre-installed with Windows, 12 windows installer
CET. CDs packed as Microsoft products. The agents were
not given the end-user license agreements, user
manuals, and certificates of authenticity for the
On the other hand, Robles contends that the book products purchased. They were given a receipt
DEP is the product of her own intellectual creation, which has a header of “T.M.T.C. (Phils) Inc.
and was not a copy of any existing valid copyrighted BELTRON COMPUTER”. TMTC stands for Taiwan
book and that the similarities may be due to the Machinery Display and Trade Center.
authors' exercise of the "right to fair use of
copyrighted materials, as guides." A search warrant was subsequently issued where
2,831 CDs of Windows installers, among others,
were seized. Based on the items seized from Beltron,
The trial court ruled in favor of the respondents, Microsoft filed a case of copyright infringement
against Beltron and TMTC as well as their officers
absolving them of any liability. Later, the Court of
(Judy Hwang et al) before the Department of Justice
Appeals rendered judgment in favor of respondents
(DOJ). Beltron, in its counter-affidavit, argued the
Robles and Goodwill Trading Co., Inc. In this appeal,
following:
petitioners submit that the appellate court erred in
affirming the trial court's decision.
1. That Microsoft’s issue with Beltron was really just
to have leverage in forcing Beltron to pay the unpaid
royalties; and that Microsoft should have filed a
ISSUE: Whether Robles committed infringement in collection suit.
the production of DEP.
2. That the computer unit allegedly purchased by
the NBI agents from them cannot be decisively
HELD: A perusal of the records yields several pages traced as coming from Beltron because the receipt
of the book DEP that are similar if not identical with issued to the agents did not list the computer unit
the text of CET. The court finds that respondent as one of the items bought.
 13

3. That the 12 installers purchased by the agents Second. There is no basis for the DOJ to rule that
which are actually listed in the receipt were not Microsoft must await a prior resolution from the
manufactured by Beltron but rather they were proper court of (sic) whether or not the [Agreement]
genuine copies purchased by TMTC from an is still binding between the parties. Beltron has not
authorized Microsoft seller in Singapore. filed any suit to question Microsofts termination of
the Agreement.
4. That the 2,831 installers seized from them were
not a property of Beltron but rather they were left to Third. The Court finds that the 12 CD-ROMs
them by someone for safekeeping. (installer and non-installer) and the CPU with pre-
installed Microsoft software Sacriz and Samiano
The DOJ secretary agreed with Beltron and bought from respondents and the 2,831 Microsoft
dismissed the case. The Secretary ruled that the CD-ROMs seized from respondents suffice to
issue of the authority of Beltron to copy and sell support a finding of probable cause to indict
Microsoft products should first be resolved in a civil respondents for copyright infringement under
suit. Microsoft appealed the decision of the DOJ Section 5(A) in relation to Section 29 of PD 49 for
secretary before the Supreme Court. Meanwhile, unauthorized copying and selling of protected
Beltron filed a motion to quash the search warrant intellectual works. The illegality of the non-installer
before the RTC that issued the same. The RTC CD-ROMs purchased from respondents and of the
partially granted the quashal. The Court of Appeals Microsoft software pre-installed in the CPU is shown
reversed the RTC. Hwang et al did not appeal the CA by the absence of the standard features
decision. accompanying authentic Microsoft products,
namely, the Microsoft end-user license agreements,
ISSUE: Whether the DOJ acted with grave abuse of user’s manuals, registration cards or certificates of
discretion in not finding probable cause to charge authenticity.
respondents with copyright infringement and unfair
competition. From the foregoing evidences, it clearly suffices to
support a finding of probable cause to indict
HELD: respondents for violation of copyright infringement
and unfair competition.
YES. Under section 5 of PD 49 enumerates the
rights vested exclusively on the copyright owner. Thus, the petition for certiorari of the Resolutions of
The gravamen of copyright infringement is not the Department of Justice dismissing for lack of
merely the unauthorized manufacturing of merit and insufficiency of evidence petitioner
intellectual works but rather the unauthorized Microsoft Corporations complaint against
performance of any of the acts covered by Section 5. respondents for copyright infringement and unfair
Hence, any person who performs any of the acts competition is granted.
under Section 5 without obtaining the copyright
owners prior consent renders himself civilly and Manly Sportswear v. dadodette, GR 165306,
criminally liable for copyright infringement. Sepy. 20, 2001

The DOJ committed grave abuse of discretion when

it refused to pass upon the relevance of the pieces Facts:
of evidence because it contended that: (1) the On the basis of information that respondent
obligations between the parties is civil and not Dadodette Enterprises were in possession of
criminal considering that Microsoft merely sought sporting goods or articles, the copyright of which
the issuance of Search Warrant Nos. 95-684 and belonged to petitioner Manly, the NBI applied for
95-685 to pressure Beltron to pay its obligation search warrant before the trial court which ruled on
under the Agreement, and (2) the validity of its issuance. Thereafter, respondent moved to quash
Microsofts termination of the Agreement must first the warrant on the ground that petitioner’s goods
be resolved by the proper court. Also, the DOJ ruled are ordinary and not among the works protected
that Microsoft failed to present evidence proving under the IP Code. The trial court annulled the
that what were obtained from respondents were warrant holding that there were certificates of
counterfeit Microsoft products. registration over the same goods issued earlier than
that of petitioner negating its claim that the goods
First. Being the copyright and trademark owner of were original works entitled to copyright protection.
Microsoft software, Microsoft acted well within its CA affirmed.
rights in filing the complaint under I.S. No. 96-193
based on the incriminating evidence obtained from Issue:
respondents. Hence, it was highly irregular for the Whether or not the certificates of registration issued
DOJ to hold, based on the RTC Order of 19 July to petitioner is proof of its ownership.
1996, that Microsoft sought the issuance of Search
Warrant Nos. 95-684 and 95-685, and by inference, Ruling: NO.
the filing of the complaint under I.S. No. 96-193,
merely to pressure Beltron to pay its overdue Besides, no copyright accrues in favor of MANLY
royalties to Microsoft. Significantly, in its Decision despite issuance of the certificates of registration
in CA-G.R. CV No. 54600 dated 29 November 2001, and deposit pursuant to Section 2, Rule 7 of the
the Court of Appeals set aside the RTC Order of 19 Copyrights Safeguards and Regulations which
July 1996. states:
 14

Sec. 2 Effects of Registration and Deposit of Work. original, its transformative elements, and potential
The registration and deposit of the work is purely for for market harm.
recording the date of registration and deposit of the
work and shall not be conclusive as to copyright
ownership or the term of the copyrights or the rights
of the copyright owner, including neighboring
rights. Universal City Studios v. Sony, 464 US 417
(1984)
At most, the certificates of registration and deposit
issued by the National Library and the Supreme
Court Library serve merely as a notice of recording
and registration of the work but do not confer any Facts. Sony Corp. (Sony) (Defendant) marketed
right or title upon the registered copyright owner or Betamax videocassette recorders (VCRs or VTRs),
automatically put his work under the protective which allowed home recording of televised
mantle of the copyright law. It is not a conclusive programs. Several movie studios (Plaintiff), holders
proof of copyright ownership. As it is, non- of copyrights on televised movies and other televised
registration and deposit of the work within the programs, brought an action for contributory
prescribed period only makes the copyright owner copyright infringement on the theory that Defendant
liable to pay a fine. was contributorily liable for infringement by
consumers of VTRs of the studios’ (Plaintiff)
copyrighted works on the basis of Sony’s
Campbell v. Acuff-Rose Music, Inc. (Defendant) marketing and distribution of the
VTRs. The district court, finding, inter alia, that no
Sony (Defendant) employee had either direct
Brief Fact Summary. 2 Live Crew (Defendant) involvement with the allegedly infringing activity or
argued that its parody of Roy Orbison’s song, “Oh, direct contact with purchasers of Betamax who
Pretty Woman,” was a fair use within the meaning recorded copyrighted works off-the-air, and that
of the Copyright Act of 1976. The appellate court, there was no evidence that any of the copies made
however, concluded the parody was presumptively by individuals were influenced or encouraged by
unfair because of its commercial nature. Defendant’s advertisements, held that Defendant
was not liable for direct or contributory copyright
infringement. The court of appeals reversed. The
Facts. 2 Live Crew (Defendant) recorded a rap United States Supreme Court granted certeriori.
parody of the hit by Roy Orbison, “Oh, Pretty
Woman.” Acuff-Rose (Plaintiff), the copyright holder Issue. Is one who supplies the way to accomplish an
of the original song, brought suit against 2 Live infringing activity and encourages that activity
Crew (Defendant) for copyright infringement. The through advertisement liable for copyright
district court granted summary judgment for 2 Live infringement?
Crew (Defendant), concluding that its song made
fair use of Orbison’s original. The appeals court
Held.(Stevens, J.) No. One who supplies the way to
reversed and remanded. It concluded that every
accomplish an infringing activity and encourages
commercial use is presumptively unfair and the
that activity through advertisement is not liable for
blatantly commercial purpose of 2 Live Crew’s
copyright infringement. The protection given to
(Defendant) version prevented it from constituting
copyrights is wholly statutory, and, in a case like
fair use. Defendant appealed.
this, in which Congress has not plainly marked the
course to be followed by the judiciary, the Court
Issue. For fair use purposes, is the commercial must be circumspect in construing the scope of
purpose of a work the decisive element of the inquiry rights created by a statute that never contemplated
into the purpose and character of the work? such a calculus of interests based on technological
advances. In proceeding, the Court must balance
Held. (Souter, J.) No. For fair use purposes, the the encouraging and rewarding of authors to create
commercial purpose of a work is only one element new works with the public good. This case does not
of the inquiry into the purpose and character of the fall in the category of those in which it is manifestly
work. The other elements to be considered are the just to impose vicarious liability because the
nature of the copyrighted work, the amount and “contributory infringer was in a position to control
substantiality of the portion used in relation to the the use of copyrighted works by others and had
copyrighted work as a whole, and the effect of the authorized the use without permission from the
use upon the potential market for the copyrighted copyright owner. In this case, the only contact
work. In this case, it was error for the court of between Defendant and the users of the VTR’s
appeals to conclude that the commercial nature of occurred at the moment of sale. However, there is
2 Live Crew’s (Defendant) parody rendered it no precedent for imposing vicarious liability on the
presumptively unfair. No such evidentiary theory that Sony (Defendant) sold the VTR’s with
presumption exists for either the first factor (the constructive knowledge that its customers might
character and purpose of the use) or the fourth use the equipment to make unauthorized copies of
factor (market harm). The court also erred in copyrighted material. The sale of copying
holding that 2 Live Crew (Defendant) had copied equipment, like the sale of other articles of
excessively from the Orbison original, considering commerce, does not constitute contributory
the satiric purpose of their version. Reversed and infringement if the product is widely used for
remanded to evaluate the amount taken from the legitimate, unobjectionable purposes, or actually, is
merely capable of substantial noninfringing
 15

uses. In this case, a large portion of the public’s use Facts: Plaintiff Castle Rock is the producer and
of VTRs does not implicate copyright at all, and also copyright owner of the Seinfeld televisions series.
time-shifting, the most common use for the Betama, Defendant Carol Publishing is the publisher of The
constitutes a fair use. Reversed. Seinfeld Aptitude Test (The SAT), a book containing
trivia questions and answers about Seinfeld. Every
question and correct answer has its source from a
fictional moment in the show. The name “Seinfeld”
DR. SEUSS ENTERPRISES V Penguin Books
appears on the front and back covers of The SAT,
and pictures of the principal characters are on the
cover and within the book. The writer of The SAT
Facts: created the book by taking notes while watching
Seinfeld at the time it was aired, and as recorded by
Defendants, Penguin Books and Dove Audio, her or her friends. Castle Rock has been selective in
Inc., were book publishers who sought to publish marketing products associated with the show,
and distribute a book titled The Cat NOT in the Hat! rejecting numerous proposals from publishers
A Parody by Dr. Juice, a rhyming summary of the seeking approval for varying products related to the
O.J. Simpson trial. Plaintiff Dr. Seuss Enterprises, show. Castle Rock has licensed one Seinfeld book
LP owned most of the copyright and trademark and one CD-ROM, the CD-ROM allegedly might
rights for the children’s books written and include a trivia bank.
illustrated by Theodor S. Geisel under the
pseudonym “Dr. Seuss,” including The Cat in the The United States District Court for the Southern
Hat. Defendants were not authorized to use any District of New York granted plaintiff’s motion for
element of plaintiff’s original books and did not summary judgment, denied defendant’s cross
attempt to obtain permission. Defendants’ book had motion for summary judgment, and awarded Castle
many similarities to the original work, including Rock $403,000 for copyright infringement. The
rhyme scheme, thematic and narrative elements, district court also enjoined the defendants from
and certain chief character identifiers, such as the publishing The SAT.
distinctive red and white striped hat. Plaintiff filed
suit, and the district court granted a preliminary Issues: 1. Whether The SAT takes sufficient
injunction. Defendants filed an interlocutory protected expression from the original such that in
appeal. the absence of any defenses the book
Issue: would infringe the copyright in Seinfeld.

Whether unauthorized copying of an original 2. Whether The SAT constitutes fair use
work’s artistic style, plot, themes, and certain key of the Seinfeld television series.
character elements qualified as fair use.
Ruling: The SAT unlawfully copies form Seinfeld and
Ruling: that its copying does not constitute fair use. The
judgment of the district court is affirmed. The court
No. The Ninth Circuit concluded that the begins by deciding if there’s copyright infringement
district court’s finding that plaintiff had shown a by laying out the two part test used in analyzing
likelihood of success on the merits was not clearly copyright infringement. First, a plaintiff must show
erroneous, in light of fair use analysis of defendants’ that his work was actually copied, and next he must
work, and affirmed the preliminary injunction. First, show that the copying amounts to an improper or
the court found that the use was not transformative. unlawful appropriation. The court points out that
The work was not a parody, because it did not hold it’s undisputed the work was copied because the
up Dr. Seuss’s style, but merely mimicked it to writer of The SAT admitted she copied from the
attract attention or avoid the difficult work of show. Next as to deciding whether the copying is
developing original material. Furthermore, unlawful appropriation, the court looks to see if the
according to the court there was “no effort to create copying is quantitatively and qualitatively sufficient
a transformative work with ‘new expression, to support infringement occurred. As to the
meaning, or message.’” Second, the court found that quantitative element, the court concludes that The
the creative, imaginative and original nature of SAT crossed the de minimis threshold by copying
plaintiff’s work weighed against fair use. Third, the not a few but 643 fragments from the television
court found that defendant had copied substantial series. For the qualitative element the court finds
portions, because the character of the cat, used in that The SAT copies creative expressions, and the
both works, was the “highly expressive core” of alleged “facts” that are coped are really fictitious
plaintiff’s work. Other principal thematic and expressions created by the Seinfeld authors.
narrative elements were also copied. Finally,
because the use was commercial and non- The defendants claim that even if copying Seinfeld
transformative, harm to the market for the original constitutes copyright infringement, The SAT is still
work could be more readily inferred. Further, a fair use of the show. The court says to determine
because fair use is an affirmative defense, and whether the use made of a work is fair use, four
defendants failed to submit evidence on the fourth factors must be considered: 1) the purpose and
factor, this disentitled defendants from relief from character of the use, 2) the nature of the copyrighted
the preliminary injunction. work, 3) the amount and substantiality of the
portion used in relation to the copyrighted work as
Castle Rock Entertainment vs. Carol Publishing a whole, and 4) the effect of the use upon the
potential market for or value of the copyrighted
work. First, the court finds that The SAT’s use is
commercial and this weighs against a finding of fair
 16

use. Also The SAT’s transformative purpose is too the market for plaintiff’s work because the use was
slight and non-existent. Next, the fictional nature of “too few, too short, and too small in relation to the
the copyrighted work remains significant, where the whole. If the broadcast of [Story] impacts [Kings’]
secondary use is at best minimally transformative reception, it almost surely will be as a result of their
thus the second factors favors the plaintiff. Thirdly, common subject, not the minute or so of common
in deciding about the amount and substantiality of footage.”
the portion of the copyrighted work used, the
question must focus on whether the extent of the Finally, the historic nature of the allegedly
copying is consistent with or more than necessary infringed films clips also supported a finding of fair
to further the purpose and character of the use. The use
court finds that The SAT does not serve a critical or
otherwise transformative purpose. Finally, as to the
effect of the use upon the potential market,
Seinfeld’s audience grew after the publication of The
SAT, and Castle Rock has evidenced no interest in Kelly vs Arriba soft
publishing Seinfeld trivia quiz books and only
minimal interest in publishing Seinfeld related Facts: Arriba Soft Corporation (defendant), operated
books, thus the fourth factor also falls to the a search engine for images. The Arriba search
plaintiff. returned results as thumbnail versions of relevant
images from websites across the Internet. If a user
clicked on a thumbnail, a webpage would open
showing the full-size photograph from the website,
Monster Communications, Inc. v. Turner Broad. absent the surrounding website content. The result
System., Inc., page showing the full-size image would also show
the link to the website where the image was found
935 F. Supp. 490 (S.D.N.Y. 1996) and a notice that users should check for use
FACTS: restrictions on the original website before copying.
Arriba’s search engine indexed 35 images published
Plaintiff Monster Communications, Inc. by Kelly (plaintiff) on his websites. Kelly objected to
owned the film rights for the movie “When We Were Arriba’s thumbnail display of his images, and Arriba
Kings” (Kings,) that contained historic footage removed the images from its index. Kelly then sued
documenting the 1974 title boxing match, often Arribasoft, alleging copyright infringement and
called the “Rumble in the Jungle,” between violation of 17 U.S.C. § 1202(b) for removal of the
Mohammed Ali and George Foreman. images’ copyright-management information (CMI).
Arribasoft moved for summary judgment. The
Defendant Turner Broadcasting System, Inc. District Court found that Kelly had established a
made the documentary “Ali—The Whole Story” prima facie case of copyright infringement based on
(Story), which contained “a number of film clips, Arriba’s unauthorized reproduction and display of
aggregating approximately between forty-one Kelly’s works, but that this reproduction and
seconds and two minutes, that appear in Kings and display constituted“fair use” under Section 107 of
allegedly are owned by Monster.” the Copyright Act. Kelly appealed that decision, and
Plaintiff sued Turner for infringing its the Ninth Circuit Court of Appeal affirmed the
copyright in the historic film footage, seeking to decision.
enjoin the company from exhibiting the Issue: Was there a copyright infringement?
documentary.
Ruling: None. The creation and use of the
thumbnails in the search engine constitutes “fair
ISSUE: use”.

Whether defendant would be likely to establish that To bring a lawsuit for copyright infringement,
its use of plaintiff’s historic film footage in a individuals must first show that they hold a
documentary constituted fair use? copyright on works which were copied by another
party. The Photographer met this requirement, and
so the court had to determine if the "fair use"
exception found in the federal Copyright Act
RULING: YES. permitted the Website's copying of the
The court denied plaintiff’s motion for Photographer's works. The Copyright Act sets forth
injunctive relief because it concluded that defendant four factors to evaluate in determining whether a
was likely to prevail on its argument that use of the copying constitutes "fair use:"
historic footage in its documentary was a fair use. 1. the purpose and character of the use, including
In reaching that conclusion, the court found whether the use is for commercial purposes or is for
that defendant’s work, while commercial in nature, nonprofit educational purposes;
“undeniably constituted a combination of comment,
2. the nature of the copyrighted work
criticism, scholarship and research.” The court also
determined that the amount used weighed in favor 3. the amount and substantiality of the portion used
of finding fair use because the footage used was not in relation to the copyrighted work as a whole;
the focus of defendant’s documentary.
4. the effect of the use upon the potential market for,
Additionally, the court found that
or value of, the copyrighted work.
defendant’s use of the footage was unlikely to harm
 17

Applying the first factor, the court found that the relation to the whole of the copyrighted work was
use of the images by the Website had very limited minimal, amounting to “a hint of [the mayor’s]
commercial purpose, since the Website was not smile” and “the outline of his face.”
trying to profit from the use of the images. The court
also found that the creation of thumbnail shots was
transformative, because it was using the smaller
images for purposes of displaying search results.
This reduction made it unlikely that anyone would
use the thumbnail images for any other purpose,
since enlargement of the thumbnail images would
cause the image to become distorted. Therefore,
anyone who was interested in the full-size image
would still need to download the original. Thus, the
Patrick CARIOU v. Richard PRINCE
court found that the first factor favored the Website.
The court found that the second factor, which
considers the nature of the work, favored the United States Court of Appeals, Second Circuit.
Photographer, since photographs are the type of
creative works that the Copyright Act is designed to
protect. Looking the third factor (amount of FACTS: Plaintiff Patrick Cariou is a professional
copyrighted work used), the court found that the photographer who, over the course of six years
Website's copying of the work did not favor either in the mid-1990s, lived and worked among
party because, even though the Website did copy the Rastafarians in Jamaica. The relationships that
entire image, it used the image in a manner which Cariou developed with them and allowed him to
still required the user to seek out the original image. take a series of portraits and landscape
Finally, the transforming of the images into photographs that Cariou published in 2000 in a
thumbnail shots did not harm the market for the book titled Yes Rasta.
Photographer's works and so favored the Website.
The court found that two of the four factors favored Meanwhile, defendant Richard Prince is a well-
the Website, one favored the Photographers, and known appropriation artist. The Tate Gallery has
one factor was neutral. Therefore, the court ruled defined appropriation art as "the more or less
that the Website's creation of thumbnail shots direct taking over into a work of art a real
constituted a fair use object or even an existing work of art." Defendant
Prince used the photos of Plaintiff Cariou from his
Kienitz v. Sconnie Nation, LLC Yes Rasta book. Plaintiff altered and incorporated
several of plaintiff’s photograph into series of
paintings called Canal Zone that was exhibited at a
gallery and in the gallery’s exhibition catalogue.
766 F.3d 756 (7th Cir. 2014)
On December 30, 2008, he sued Prince, the
Cert. denied 135 S. Ct. 1555 (2015)
Gagosian Gallery, and Lawrence Gagosian, raising
claims of copyright infringement. The defendants
asserted a fair use defense, arguing that Prince's
Facts: Plaintiff photographer Michael Kienitz owned artworks are transformative of Cariou's
the copyright to a 2011 photo photographs and, accordingly, do not violate
Cariou's copyrights. Ruling on the parties'
of Madison, Wisconsin Mayor Paul Soglin.
subsequently filed cross motions for summary
Defendant Sconnie Nation, LLC reproduced aspects
judgment, the district court (Batts, J.) "impose[d] a
of plaintiff’s photo on a small batch of t-shirts and
requirement that the new work in some way
tank tops and sold them in connection with a
comment on, relate to the historical context of, or
Madison, Wisconsin block party event. The design
critically refer back to the original works" in order to
that appeared on the t-shirts and tank tops
be qualify as fair use, and stated that "Prince's
included a “posterized” version of plaintiff’s
Paintings are transformative only to the extent that
photograph with the background removed and the
they comment on the Photos." The court
mayor’s face turned lime green. Plaintiff filed suit,
concluded that "Prince did not intend to
claiming defendants’ unauthorized use of the
comment on Cariou, on Cariou's Photos, or on
photograph violated his copyright.
aspects of popular culture closely associated with
Cariou or the Photos when he appropriated the
Photos," and for that reason rejected the defendants'
Issue: Whether defendants’ unauthorized fair use defense and granted summary judgment to
reproduction of aspects of plaintiff’s photograph on Cariou. The district court also granted sweeping
a small batch of t-shirts and tank tops was fair use. injunctive relief, ordering the defendants to
"deliver up for impounding, destruction, or other
disposition, as [Cariou] determines, all infringing
Ruling: The court found that defendants’ use was copies of the Photographs, including the
fair use. In reaching its conclusion, the court Paintings and unsold copies of the Canal Zone
emphasized its findings that defendants’ use did not exhibition book, in their possession.
reduce the demand for plaintiff’s photograph and ISSUE: Whether defendant’s appropriation artwork,
served as a permissible compliment, rather than a which incorporated plaintiff’s photographs, must
prohibited substitute, to the photograph. The court comment on, relate to the historical context of, or
also found that the extent of defendants’ copying in
 18

critically refer back to the plaintiff’s original work to copyrighted songs that “often are sold per song as
qualify for a fair use defense. well as per album.” The court then focused on the
negative effect of the use on the potential market,
HELD: The doctrine was codified in the Copyright finding that “[m]usic downloaded for free from the
Act of 1976, which lists four non-exclusive Internet is a close substitute for purchased music.”
factors that must be considered in determining fair The court discounted defendant’s assertion that she
use. Under the statute, The fair use of a was trying music before buying by pointing out that
copyrighted work for purposes such as criticism, the market for methods of introducing potential
comment, news reporting, teaching (including consumers to music, for example radio, was
multiple copies for classroom use), scholarship, or negatively impacted by competition from peer-to-
research, is not an infringement of copyright. In peer networks. Finally, the court noted that there
determining whether the use made of a work in existed myriad authorized means for customers to
any particular case is a fair use the factors to be listen to music before purchasing, and concluded
considered shall include — that defendant’s downloading was not a fair use.
(1) the purpose and character of the use,
including whether such use is of a commercial
nature or is for non-profit educational purposes;
Leibovitz v. Paramount Pictures Corp.,
(2) the nature of the copyrighted work;
137 F.3d 109 (2d Cir. 1998)
(3) the amount and substantiality of the portion
Circuit; Internet/Digitization; Music Outcome Fair
used in relation to the copyrighted work as a whole;
use not found Source: U.S. Copyright Office Fair Use
and
Index.
(4) the effect of the use upon the potential market
for or value of the copyrighted work.
Facts:
In 1991, Annie Leibovitz, a professional
photographer, took a photograph of actress Demi
Moore seven months pregnant, which was
The appellate court held that the law imposes no
published on the cover of Vanity Fair Magazine. The
requirement that a work comment on the original or
photo received significant attention and notoriety. In
its author in order to be considered transformative.
1993, Paramount Pictures decided to take a similar
It concluded that the 25 of the 30 works at issue
photograph of a pregnant model, but superimposed
constituted fair use. The court also found the
the face of Leslie Nielson onto the model as part of
plaintiff’s works transformative because the
an advertising campaign for the film Naked Gun 33
defendant’s composition, presentation, scale, colour
1/3: The Final Insult. The advertisement was shot
palette, and media are fundamentally different and
using a similar pose and under similar lighting. The
new compared to the photographs, as is the
composite photograph depicting Nielsen as the
expressive nature of his work. The court also found
pregnant Moore proclaimed, “DUE THIS MARCH.”
no evidence that defendant’s work usurped either
The advertisement ran nationally and Leibovitz sued
the primary or derivative market for plaintiff’s
for copyright infringement.
photographs. As to the other five works, the court
remanded to the district for further consideration
Procedure:
under the proper standard.
The Southern District of New York found the use to
BMG Music v. Gonzalez, 430 F.3d 888 (7th Cir. be fair, and dismissed the claim for copyright
2005) Year 2005 Court United States Court of infringement, granting summary judgment for the
Appeals for the Seventh Circuit Key defendant. Plaintiff appeals the decision before the
United States Court of Appeals, Second circuit.
Facts. Plaintiffs, recording companies including
BMG Music, alleged that defendant Gonzalez Issue:
infringed their copyrights in several audio Whether the fair use defense to copyright
recordings when she used a “file-sharing network” infringement applies in the context of an
to download and retain unauthorized copies on her advertisement claimed to be a parody of a
home computer. Defendant asserted a fair use copyrighted photograph.
defense, claiming she intended to sample the works
on a “try-before-you-buy basis.” Defendant Holding:
appealed the district court’s ruling in plaintiffs’ Yes. Decision of district court is affirmed.
favor.
Analysis:
Issue. Whether defendant’s unauthorized Examining the four fair use factors, under section
downloading and retention of plaintiffs’ copyright- 107, the court found that although Paramount's
protected works to purportedly sample the works photographer drew heavily from Leibovitz'
before buying was fair use. composition, in light of Paramount's parodic
purpose and absence of market harm the use of the
Holding. The court held that defendant’s photograph was a fair use. The court acknowledges
unauthorized downloading and retention of that the statute does not specifically list “parodies”
copyright protected works was not fair use. In among the categories of potentially “fair” uses, but
reaching its conclusion, the court first determined courts have long afforded such works some measure
that defendant was not engaged in a nonprofit use of protection under this doctrine. The factors are (1)
due to her downloading and retention of whole the purpose and character of the use, (2) the nature
 19

of the copyrighted work, (3) the amount and The search warrants were subsequently enforced
substantiality of the work used, and (4) the effect of
the use on the market for the original. and items were seized from Solid Laguna on the
The court weighed the four factors together. As to strength of the two warrants.
the first factor, the court found that defendant’s ad
adds something new and qualifies as a Solid Laguna thereafter presented a certification
“transformative” work, and that it “comments” on
the original based on the smirking face of Nielsen that they are actually authorized to manufacture
contrasting so strikingly with the serious expression and sell CDs by the VRB at the same time it asked
on the face of Moore. “The ad may reasonably be the court to quash the search warrants and return
perceived as commenting on the seriousness, even
the pretentiousness, of the original.” The contrast the items seized. Judge Español then quashed the
achieves the effect of ridicule and serves as a search warrant issued for probable violation of PD
sufficient “comment” to tip the first factor in
defendant’s favor. As to the second factor there is 1987.
significant creative expression in plaintiff’s
photograph (the pose, lighting, etc.), so the court Judge Español later quashed the other warrant
found this factor in favor of Leibovitz. As to the third because of the fact that the items seized as a result
factor, the amount and substantiality of the portion of the two warrants were commingled hence they
used, the court found Leibovitz is entitled to no
protection for the appearance in her photograph of cannot be examined properly. Judge Español also
the body of a nude, pregnant female. Only the ruled that the issuance of the warrant stemmed
photographer's particular expression of such a body
is entitled to protection. And as to the fourth factor, from the intimation made by petitioners that Solid
the court found that the Paramount photograph did Laguna was not authorized to manufacture and sell
not interfere with any potential market for her
CDs but in fact they were authorized by the VRB.
photograph or for derivative works based upon it.
The court looks to the aggregate assessment for an This being, the warrants are of no force and effect
ultimate decision, and found the balance markedly because of the lack of probable cause.
favors the defendant. Therefore fair use as a parody
in light of the four factors under §107, is a valid ISSUE: Whether or not Judge Español is correct.
defense to copyright infringement.
HELD: Yes. The issuance of the search warrant in
question did not meet the requirements of probable
Sony Music Entertainment (Phils.), Inc. vs Judge cause. Judge Español did not accordingly err in
Dolores Español
quashing the same, let alone gravely abuse her
453 SCRA 360 – Mercantile Law – Intellectual discretion. It is also within her authority to quash
Property – Law on Copyright – Probable Cause the said warrants based on her findings which were
found to be valid by the Supreme Court. Further, it
In 2000, Sony Music Entertainment (Phils.),
cannot be overemphasized that not one of the
Inc. sought the assistance of the National Bureau of
applicants of the warrants testified seeing the
Investigation (NBI) agent Lavin as they complained
pirated discs being manufactured at Solid Laguna’s
that Solid Laguna Corporation, together with its
premises, they merely relied on unnamed persons
officers were engaged in the replication,
which is at best are hearsays.
reproduction and distribution of Sony videograms
without license and authority from the Video The Supreme Court also noted that the lack of
Regulatory Board (violation of P.D. 1987); that Solid supporting evidence and documents in applying for
Laguna was manufacturing, selling, and the search warrants on this infringement case does
distributing various titles of CDs in violation of Sony not mean that the master tapes of the alleged copies
Music’s copyrights (and a violation of RA 8293). being pirated should have been produced. It is true
Agent Lavin, in applying for a search warrant, stated that the Supreme Court, in 20th Century Fox
before Judge Dolores Español that an unnamed Case, underscored the necessity, in determining the
person provided them information as to the existence of probable cause in copyright
presence of pirated CDs in the premises of Solid infringement cases, of presenting the master tapes
Laguna; that Lavin and other witnesses were of the copyrighted work. But, as emphatically
accompanied by unnamed persons to enter the clarified in Columbia Pictures vs CA “such auxiliary
premise and conduct further investigation. The procedure, however, does not rule out the use of
judge then issued two corresponding search testimonial or documentary evidence,
warrants; one for probable violation of PD 1987 and depositions, admissions or other classes of evidence
the other for probable violation of RA 8293. xxx especially where the production in court of object
 20

evidence would result in delay, inconvenience or

The Court of Appeals rendered a decision on 9
expenses out of proportion to its evidentiary November 2010, which granted the
value. What the Supreme Court is saying is that any Petition for Certiorari to reverse and set aside DOJ
Sec. Alberto Agra's resolution and a prayer for
evidence presented in lieu of the master tapes, if not issuance of a temporary restraining order and/or
readily available, in similar application proceedings Writ of
Preliminary Injunction.
must be reliable, and, if testimonial, it must, at the
The appellate court stated that the petitioner has
very least, be based on the witness’ personal copyright of its news coverage, but respondents’ act
knowledge. of airing five (5) seconds of the homecoming footage
without notice of the “No Access Philippines”
restriction of the live Reuter's video feed, was
undeniably attended by good faith and thus, serves
People v Christopher Choi to exculpate from criminal liability under the
Intellectual Property Code.
!! guys, mao ra ni ako nakit an na digest, nya dli
sya ma copy paste kay pag ipaste nya sa sa docu
ISSUES
kay mahimo syang jejemon, check the link below W/N there is probable cause to find respondents
nlng hihihi to be held liable criminally for the case of
copyright infringement under the Intellectual
https://www.scribd.com/document/301916842
Property Law (RA 8293, as amended)?
/People-v-Choi

ABS-CBN V. GOZON HELD

G.R. No. 195956, March 11, 2015 The Supreme Court PARTIALLY GRANTED ABS-
CBN’s petition and ordered RTC Q.C. Branch 93 to
CASE DIGEST continue with the criminal proceedings against
Grace Dela PeñaReyes and John Oliver Manalastas
Facts: due to copyright infringement. The other
On August 13, 2004, petitioner ABS-CBN filed a respondents, Atty. Felipe Gozon, Gilberto Duavit
criminal complaint against respondent GMA for Jr., Marissa L. Flores, and Jessica A. Soho were held
(alleged) act of copyright infringement under not liable for the (criminal) act of copyright
Sections 177 and infringement. The Court held that their mere
211 of the Intellectual Property Code membership in GMA7's Board of Directors does not
(RA 8293, as amended), because the respondent mean that they have knowledge, approval, or
aired footage of the arrival and homecoming of OFW participation in the criminal act of copyright
Angelo dela Cruz at NAIA from Iraq without the infringement as there is a need for their
petitioner's consent. ABS-CBN stated that it has an direct/active participation in such act. Also, there
agreement with Reuter's that the petition will was lack of proof that they actively participated or
contribute news and content that it owns and exercised moral ascendancy over Manalastas and
makes to Reuters in exchange of the latter's news Dela Cruz-Pena. Contrary to GMA’s contention, the
and video material, and Supreme Court deemed GMA's mere act of
Reuters will ensure that ABS-CBN's materials rebroadcast of ABS-CBN’s news footage (arrival and
cannot be aired in the country. homecoming of OFW Angelo dela Cruz at NAIA from
The respondent was a subscriber of Reuter's and Iraq last 22 July 2004) for 2 mins and 40
CNN live feeds. After it received the live feed of secs.without the latter's authority creates probable
Angelo Dela Cruz's arrival and homecoming from cause to find GMA's news personnel Manalastas
Reuter's, it immediately aired the video from that and Dela Peña-Reyes criminally liable for violating
news feed. The respondent alleged that its news staff provisions of Intellectual Property Code (Section
was not aware that there was (a news embargo) 216¬217 of RA 8293, as amended) that
agreement between ABSCBN and Reuters. imposes strict liability for copyright infringement,
Respondent alleged that it was not also aware that since they have not been diligent in their functions
it aired petitioner's footage. to prevent that footage from being aired on
Assistant City Prosecutor Dindo Venturanza issued television. They knew that there would be
resolution on 3 December 2004 which found consequences in carrying ABS-CBN’s footage in
probable cause to indict Dela Peña-Reyes and their broadcast – which is why they allegedly cut the
Manalastas. The respondents appealed the feed from Reuters upon seeing ABS-CBN’s logo and
Prosccutor's resolution before DOJ. DOJ Secretary reporter. The difference of an act mala in se and
Raul mala prohibita was stated in the present case. Acts
M. Gonzalez ruled in favor of respondents in his mala in se requires presence of criminal intent and
resolution dated 1 August 2005 and held that good the person's knowledge of the nature of his/her act,
faith may be raised as a defense in the case. while in acts mala prohibita, presence of criminal
Meanwhile, DOJ Acting Secretary Alberto C. Agra intent and the person's knowledge is not necessary.
issued a resolution on 29 June The Court also stated that Philippine laws on
2010 which reversed Sec. Gonzalez's resolution and copyright infringement does not require criminal
found probable cause to charge Dela Peña-Reyes, intent (mens rea) and does not support good faith as
Manalastas, as well as to indict Gozon, Duavit, Jr., a defense. Thus, the act of infringement and not the
Flores, and Soho for violation of the Intellectual intent is the one that causes the damage. It held
Property Code (due to copyright infringement). that ABS-CBN's video footage is copyrightable
 21

because it is under “audiovisual works and The parties subsequently settled the case, with
cinematographic works and works produced by a Slater agreeing to donate 25 percent of his gross
process analogous to cinematography or any proceeds from the pictures to charities working to
process for making audiovisual recordings.” It also protect monkeys, and moved jointly to dismiss the
stated that news or the event itself is not appeal. The Ninth Circuit rejected the request,
copyrightable. The Court differentiated idea and noting that considerable resources had already been
expression – idea meant as “a form, the look or expended by the court, and further, that Naruto was
appearance of a thing” while expression is its reality not a party to the settlement agreement.
or the “external, perceptible world of articulate
sounds and visible written symbols that others can Ruling on the merits of the appeal, a majority of the
understand.” Thus, the Supreme Court stated that panel affirmed the district court’s dismissal on the
“only the expression of an idea is protected by grounds that Naruto, as an animal, lacked statutory
copyright, not the idea itself”, citing the US Supreme standing to sue under the Copyright Act.
Court's decision in Baker vs Selden (101 U.S. 99). As an initial matter, however, the majority held that
In the present case, expression applies to the event PETA did not establish next friend status to Naruto.
captured and presented in a specific medium via First, PETA had failed to establish any “significant
cinematography or processes analogous to it. The relationship” with Naruto, which is the touchstone
Court also gave the four-fold test under the Fair Use of the next friend doctrine. Second, the court
Doctrine (stated in section 185 of RA 8293 or the explained that, under Supreme Court precedent,
Intellectual Property Code, as amended) to the scope of the next friend doctrine is no broader
determine fair use: a. The purpose and character of than what is permitted by statute, and that no such
the use, including whether such use is of a express authorization was provided in the Copyright
commercial nature or is for non-profit educational Act.
purposes; b. The nature of the copyrighted work; c.
The amount and substantiality of the portion used The majority opinion explained that PETA’s lack of
in relation to the copyrighted work as a whole; and next friend standing did not resolve the question of
d. The effect of the use upon the potential market Naruto’s independent standing to assert a copyright
for or value of the copyrighted work. Fair use, which claim. In considering Naruto’s Article III standing —
is an exception to copyright owner’s monopoly of the a jurisdictional requirement — the majority decision
work's usage, was defined by the Supreme Court as explained that it was bound by the Ninth Circuit’s
privilege to use the copyrighted material in a 2004 decision in Cetacean Community v.
reasonable manner without the copyright owner's Bush, which, as the majority characterized it, held
consent or by copying the material's theme or idea that “non-human animals enjoy constitutional
rather than its expression. It also said that standing to pursue claims in federal court.” Because
determination of whether the Angelo dela Cruz the complaint alleged that Naruto was the owner of
footage is subject to fair use is better left to the trial the photos in the Monkey Selfie book, and had
court where the proceedings are currently pending. suffered harm as a result of defendants’ conduct
that could be redressed by the court, he had fairly
Naruto V Peta stated a “case or controversy” and thus had
sufficiently alleged standing under Article III. While
Ninth Circuit affirms dismissal of copyright bound by the decision in Cetacean, the majority
infringement action over “monkey selfies,” ruling that expressed strong disagreement with its holding,
animals do not have statutory standing under the calling on the Ninth Circuit to re-examine its
Copyright Act. holding.
Plaintiff Naruto, a macaque monkey living on an Despite Naruto’s Article III standing, however, the
island in Indonesia, took a number of selfies with a court held that the monkey lacked statutory
camera that wildlife photographer David Slater left standing to sue under the Copyright Act. As the
unattended on a wildlife reserve. Slater and co- majority explained, Cetacean set forth a bright line
defendants Wildlife Personalities, Ltd. and Blurb, rule for statutory standing of animals: “If an Act of
Inc. produced a book featuring Naruto’s photos. In Congress plainly states that animals have statutory
the book, Slater and Wildlife claimed copyright standing, then animals have statutory standing. If
ownership of Naruto’s works, despite captions that the statute does not so plainly state, then animals
stated that Naruto had taken the photos. do not have statutory standing.” Because the
Copyright Act does not expressly authorize animals
People for the Ethical Treatment of Animals and Dr.
to file copyright infringement actions, the majority
Antje Englehardt, who has studied the macaque
held that Naruto lacked statutory standing to do so.
monkeys on Naruto’s reserve, and has known and
monitored Naruto since birth, initiated suit as “next In a concurring opinion, one judge on the panel
friends” of Naruto, asserting claims for copyright disagreed with the majority’s conclusion that
infringement on Naruto’s behalf against Slater, Naturo’s Article III standing could be resolved
Wildlife and Blurb. Defendants moved to dismiss on independently of PETA’s next friend status. The
the basis that Naruto lacked both Article III standing concurrence explained that, under that view, next
and statutory standing under the Copyright Act. friend standing is an Article III jurisdictional issue
The district court held that Naruto, as an animal and that, broadly, next friend standing cannot be
and not a human, could not establish statutory asserted in behalf of animals
standing under the Copyright Act, and determined
that it was unnecessary to reach the question of
Article III standing. PETA and Englehardt appealed,
although Dr. Englehardt subsequently withdrew
from the litigation.