Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

 

G.R. No. 108946 January 28, 1999

FRANCISCO G. JOAQUIN, JR., and BJ PRODUCTIONS, INC., petitioners, vs.HONORABLE FRANKLIN DRILON, GABRIEL ZOSA, WILLIAM ESPOSO, FELIPE MEDINA, JR., and CASEY FRANCISCO, respondents.

 

MENDOZA, J.:

This is a petition for certiorari. Petitioners seek to annul the resolution of the Department of Justice, dated August 12, 1992, in Criminal Case No. Q-92-27854, entitled "Gabriel Zosa, et al. v. City Prosecutor of Quezon City and Francisco Joaquin, Jr.," and its resolution, dated December 3, 1992, denying petitioner Joaquin's motion for reconsideration.

Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of Copyright No. M922, dated January 28, 1971, of Rhoda and Me, a dating game show aired from 1970 to 1977.

On June 28, 1973, petitioner BJPI submitted to the National Library an addendum to its certificate of copyright specifying the show's format and style of presentation.

On July 14, 1991, while watching television, petitioner Francisco Joaquin, Jr., president of BJPI, saw on RPN Channel 9 an episode of It's a Date, which was produced by IXL Productions, Inc. (IXL). On July 18, 1991, he wrote a letter to private respondent Gabriel M. Zosa, president and general manager of IXL, informing Zosa that BJPI had a copyright to Rhoda and Me and demanding that IXL discontinue airing It's a Date.

In a letter, dated July 19, 1991, private respondent Zosa apologized to petitioner Joaquin and requested a meeting to discuss a possible settlement. IXL, however, continued airing It's a Date, prompting petitioner Joaquin to send a second letter on July 25, 1991 in which he reiterated his demand and warned that, if IXL did not comply, he would endorse the matter to his attorneys for proper legal action.

Meanwhile, private respondent Zosa sought to register IXL's copyright to the first episode of It's a Date for which it was issued by the National Library a certificate of copyright August 14, 1991.

Upon complaint of petitioners, an information for violation of P.D. No. 49 was filed against private respondent Zosa together with certain officers of RPN Channel 9, namely, William Esposo, Felipe Medina, and Casey Francisco, in the Regional Trial Court of Quezon City where it was docketed as Criminal Case No. 92-27854 and assigned to Branch 104 thereof. However, private respondent Zosa sought a review of the resolution of the Assistant City Prosecutor before the Department of Justice.

On August 12, 1992, respondent Secretary of Justice Franklin M. Drilon reversed the Assistant City Prosecutor's findings and directed him to move for the dismissal of the case against private respondents. 1

Petitioner Joaquin filed a motion for reconsideration, but his motion denied by respondent Secretary of Justice on December 3, 1992. Hence, this petition. Petitioners contend that:

1. The public respondent gravely abused his discretion amounting to lack of jurisdiction — when he invoked non-presentation of the master tape as being fatal to the existence of probable cause to prove infringement, despite the fact that private respondents never raised the same as a controverted issue.

2. The public respondent gravely abused his discretion amounting to lack of jurisdiction when he arrogated unto himself the determination of what is copyrightable — an issue which is exclusively within the jurisdiction of the regional trial court to assess in a proper proceeding.

Both public and private respondents maintain that petitioners failed to establish the existence of probable cause due to their failure to present the copyrighted master videotape of Rhoda and Me. They contend that petitioner BJPI's copyright covers only a specific episode of Rhoda and Me and that the formats or concepts of dating game shows are not covered by copyright protection under P.D. No. 49.

Non-Assignment of Error.

Petitioners claim that their failure to submit the copyrighted master videotape of the television show Rhoda and Me was not raised in issue by private respondents during the preliminary investigation and, therefore, it was error for the Secretary of Justice to reverse the investigating prosecutor's finding of probable cause on this ground.

A preliminary investigation falls under the authority of the state prosecutor who is given by law the power to direct and control criminalactions. 2 He is, however, subject to the control of the Secretary of Justice. Thus, Rule 112, §4 of the Revised Rules of Criminal Procedure, provides:

Sec. 4. Duty of investigating fiscal. — If the investigating fiscal finds cause to hold the respondent for trial, he shall prepare the resolution and corresponding information. He shall certify under oath that he, or as shown by the record, an authorized officer, has personally examined the complainant and his witnesses, that there is reasonable ground to believe that a crime has been committed and that the accused is probably guilty thereof, that the accused was informed of the complaint and of the evidence submitted against him and that he was given an opportunity to submit controverting evidence. Otherwise, he shall recommend dismissal of the complaint.

In either case, he shall forward the records of the case to the provincial or city fiscal or chief state prosecutor within five (5) days from his resolution. The latter shall take appropriate action thereon ten (10) days from receipt thereof, immediately informing the parties of said action.

No complaint or information may be filed or dismissed by an investigating fiscal without the prior written authority or approval of the provincial or city fiscal or chief state prosecutor.

Where the investigating assistant fiscal recommends the dismissal of the case but his findings are reversed by the provincial or city fiscal or chief state prosecutor on the ground that a probable cause exists, the latter may, by himself, file the corresponding information against the respondent or direct any other assistant fiscal or state prosecutor to do so, without conducting another preliminary investigation.

If upon petition by a proper party, the Secretary of Justice reverses the resolution of the provincial or city fiscal or chief state prosecutor, he shall direct the fiscal concerned to file the corresponding information without conducting another preliminary investigation or to dismiss or move for dismissal of the complaint or information.

In reviewing resolutions of prosecutors, the Secretary of Justice is not precluded from considering errors, although unassigned, for the purpose of determining whether there is probable cause for filing cases in court. He must make his own finding, of probable cause and is not confined to the issues raised by the parties during preliminary investigation. Moreover, his findings are not subject to review unless shown to have been made with grave abuse.

Opinion of the Secretary of Justice

Petitioners contend, however, that the determination of the question whether the format or mechanics of a show is entitled to copyright protection is for the court, and not the Secretary of Justice, to make. They assail the following portion of the resolution of the respondent Secretary of Justice:

[T]he essence of copyright infringement is the copying, in whole or in part, of copyrightable materials as defined and enumerated in Section 2 of PD. No. 49. Apart from the manner in which it is actually expressed, however, the idea of a dating game show is, in the opinion of this Office, a non-copyrightable material. Ideas, concepts, formats, or schemes in their abstract form clearly do not fall within the class of works or materials susceptible of copyright registration as provided in PD. No. 49. 3 (Emphasis added.)

It is indeed true that the question whether the format or mechanics of petitioners television show is entitled to copyright protection is a legal question for the court to make. This does not, however, preclude respondent Secretary of Justice from making a preliminary determination of this question in resolving whether there is probable cause for filing the case in court. In doing so in this case, he did not commit any grave error.

Presentation of Master Tape

Petitioners claim that respondent Secretary of Justice gravely abused his discretion in ruling that the master videotape should have been predented in order to determine whether there was probable cause for copyright infringement. They contend that 20th Century Fox Film Corporation v. Court of Appeals, 4 on which respondent Secretary of Justice relied in reversing the resolution of the investigating prosecutor, is inapplicable to the case at bar because in the present case, the parties presented sufficient evidence which clearly establish "linkage between the copyright show "Rhoda and Me" and the infringing TV show "It's a Date." 5

The case of 20th Century Fox Film Corporation involved raids conducted on various videotape outlets allegedlly selling or renting out "pirated" videotapes. The trial court found that the affidavits of NBI agents, given in support of the application for the search warrant, were insufficient without the master tape. Accordingly, the trial court lifted the search warrants it had previously issued against the defendants. On petition for review, this Court sustained the action of the trial court and ruled: 6

The presentation of the master tapes of the copyrighted films from which the pirated films were allegedly copied, was necessary for the validity of search warrants against those who have in their possession the pirated films. The petitioner's argument to the effect that the presentation of the master tapes at the time of application may not be necessary as these would be merely evidentiary in nature and not determinative of whether or not a probable cause exists to justify the issuance of the search warrants is not meritorious.

The court cannot presume that duplicate or copied tapes were necessarily reproduced from master tapes that it owns.

The application for search warrants was directed against video tape outlets which allegedly were engaged in the unauthorized sale and renting out of copyrighted films belonging to the petitioner pursuant to P.D. 49.

The essence of a copyright infringement is the similarity or at least substantial similarity of the purported pirated works to the copyrighted work. Hence, the applicant must present to the court the copyrighted films to compare them with the purchased evidence of the video tapes allegedly pirated to determine whether the latter is an unauthorized reproduction of the former. This linkage of the copyrighted films to the pirated films must be established to satisfy the requirements of probable cause. Mere allegations as to the existence of the copyrighted films cannot serve as basis for the issuance of a search warrant.

This ruling was qualified in the later case of Columbia Pictures, Inc. v. Court of Appeals 7 in which it was held:

In fine, the supposed pronunciamento in said case regarding the necessity for the presentation of the master tapes of the copyrighted films for the validity of search warrants should at most be understood to merely serve as a guidepost in determining the existence of probable cause in copyright infringement cases where there is doubt as to the true nexus between the master tape and the printed copies. An objective and careful reading of the decision in said case could lead to no other conclusion than that said directive was hardly intended to be a sweeping and inflexible requirement in all or similar copyright infringement cases. . . 8

In the case at bar during the preliminary investigation, petitioners and private respondents presented written descriptions of the formats of their respective televisions shows, on the basis of which the investigating prosecutor ruled:

As may [be] gleaned from the evidence on record, the substance of the television productions complainant's "RHODA AND ME" and Zosa's "IT'S A DATE" is that two matches are made between a male and a female, both single, and the two couples are treated to a night or two of dining and/or dancing at the expense of the show. The major concepts of both shows is the same. Any difference appear mere variations of the major concepts.

That there is an infringement on the copyright of the show "RHODA AND ME" both in content and in the execution of the video presentation are established because respondent's "IT'S A DATE" is practically an exact copy of complainant's "RHODA AND ME" because of substantial similarities as follows, to wit:

RHODA AND ME "IT'S A DATE"Set 1 Set 1a. Unmarried participant of one gender (searcher) appears on one side of a divider, while three (3) unmarried participants of the other gender are on the other side of the divider. This arrangement is done to ensure that the searcher does not see the searchees.

a. same

b. Searcher asks a question to be answered by each of the searchees. The purpose is to determine who among

b. same

the searchees is the most compatible with the searcher.c. Searcher speculates on the match to the searchee. c. samed. Selection is made by the use of compute (sic) methods, or by the way questions are answered, or similar methods.

d. Selection is based on the answer of the Searchees.

Set 2 Set 2Same as above with the genders of the searcher and searchees interchanged. 9

same

Petitioners assert that the format of Rhoda and Me is a product of ingenuity and skill and is thus entitled to copyright protection. It is their position that the presentation of a point-by-point comparison of the formats of the two shows clearly demonstrates the nexus between the shows and hence establishes the existence of probable cause for copyright infringement. Such being the case, they did not have to produce the master tape.

To begin with the format of a show is not copyrightable. Section 2 of P.D. No. 49, 10 otherwise known as the DECREE ON INTELLECTUAL PROPERTY, enumerates the classes of work entitled to copyright protection, to wit:

Sec. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of the following classes of works:

(A) Books, including composite and cyclopedic works, manuscripts, directories, and gazetteers:

(B) Periodicals, including pamphlets and newspapers;

(C) Lectures, sermons, addresses, dissertations prepared for oral delivery;

(D) Letters;

(E) Dramatic or dramatico-musical compositions; choreographic works and entertainments in dumb shows, the acting form of which is fixed in writing or otherwise;

(F) Musical compositions, with or without words;

(G) Works of drawing, painting, architecture, sculpture, engraving, lithography, and other works of art; models or designs for works of art;

(H) Reproductions of a work of art;

(I) Original ornamental designs or models for articles of manufacture, whether or not patentable, and other works of applied art;

(J) Maps, plans, sketches, and charts;

(K) Drawings or plastic works of a scientific or technical character;

(I) Photographic works and works produced by a process analogous to photography lantern slides;

(M) Cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings;

(N) Computer programs;

(O) Prints, pictorial illustrations advertising copies, labels tags, and box wraps;

(P) Dramatizations, translations, adaptations, abridgements, arrangements and other alterations of literary, musical or artistic works or of works of the Philippine government as herein defined, which shall be protected as provided in Section 8 of this Decree.

(Q) Collections of literary, scholarly, or artistic works or of works referred to in Section 9 of this Decree which by reason of the selection and arrangement of their contents constitute intellectual creations, the same to be protected as such in accordance with Section 8 of this Decree.

(R) Other literary, scholarly, scientific and artistic works.

This provision is substantially the same as §172 of the INTELLECTUAL PROPERTY CODE OF PHILIPPINES (R.A. No. 8293). 11 The format or mechanics of a television show is not included in the list of protected works in §2 of P.D. No. 49. For this reason, the protection afforded by the law cannot be extended to cover them.

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted by the statute, and not simply a pre-existing right regulated by the statute. Being a statutory grant, the rights are only such as the statute confers, and may be obtained and enjoyed only with respect to the subjects and by the persons and on terms and conditions specified in the statute. 12

Since . . . copyright in published works is purely a statutory creation, a copyright may be obtained only for a work falling within the statutory enumeration or description. 13

Regardless of the historical viewpoint, it is authoritatively settled in the United States that there is no copyright except that which is both created and secured by act of Congress . . . . . 14

P.D. No. 49, §2, in enumerating what are subject to copyright, refers to finished works and not to concepts. The copyright does not extend to an idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work. 15Thus, the new INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES provides:

Sec. 175. Unprotected Subject Matter. — Notwithstanding the provisions of Sections 172 and 173, no protection shall extend, under this law, to any idea, procedure, system, method or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other miscellaneous facts having the character of mere items of press information; or any official text of a legislative, administrative or legal nature, as well as any official translation thereof.

What then is the subject matter of petitioners' copyright? This Court is of the opinion that petitioner BJPI's copyright covers audio-visual recordings of each episode of Rhoda and Me, as falling within the class of works mentioned in P.D. 49, §2(M), to wit:

Cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings;

The copyright does not extend to the general concept or format of its dating game show. Accordingly, by the very nature of the subject of petitioner BJPI's copyright, the investigating prosecutor should have the opportunity to compare the videotapes of the two shows.

Mere description by words of the general format of the two dating game shows is insufficient; the presentation of the master videotape in evidence was indispensable to the determination of the existence of probable cause. As aptly observed by respondent Secretary of Justice:

A television show includes more than mere words can describe because it involves a whole spectrum of visuals and effects, video and audio, such that no similarity or dissimilarity may be found by merely describing the general copyright/format of both dating game shows.

WHEREFORE, the petition is hereby DISMISSED

SO ORDERED.1âwphi1.nêt

Puno, Quisumbing and Buena, JJ., concur.

Bellosillo, J., took no part.

Footnotes

1 Petition, Annex A, p. 4; Rollo, p. 27..

2 Sangguniang Bayan of Batac, Ilocos Norte v. Albano, 260 SCRA 561 (1996)

3 Petition, Annex B, pp. 1-2; Rollo, pp. 28-29.

4 164 SCRA 655 (1988).

5 Petition, p. 17; Rollo, p. 18.

6 Id., at 663-664.

7 261 SCRA 144 (1996).

8 Id., 173.

9 Petition Annex "G"; Rollo, pp. 44-45.

10 Promulgated on November 14, 1972.

11 Effective on January 1, 1998.

Sec. 172. Literary and Artistic Works. — 172.1. Literary and artistic works, hereinafter referred to as "works", are original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include in particular:

(a) Books, pamphlets, articles and other writings;

(b) Periodicals and newspapers;

(c) Lectures, sermons, addresses, dissertations prepared for oral delivery whether or not reduced in writing or other material form;

(d) Letters;

(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;

(f) Musical compositions, with or without words;

(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or designs for works of art;

(h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design and other works of applied art;

(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography, architecture or science;

(j) Drawings or plastic works of a scientific or technical character;

(k) Photographic works including works produced by a process analogous to photography; lantern slides;

(l) Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recording;

(m) Pictorial illustrations and advertisements;

(n) Computer programs; and

(o) Other literary, scholarly, scientific and artistic works.

12 18 C.J.S. 161.

13 Id., at 165.

14 HORACE G. BALL, LAW OF COPYRIGHT AND LITERARY PROPERTY 45 (1944).

15 NEIL BOORSTYN, COPYRIGHT LAW 25 (1981).

16 Comment of Public Respondent, p. 9; Rollo, p. 152.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

First DivisionEN BANC

G.R. No. 175769-70             January 19, 2009

ABS-CBN BROADCASTING CORPORATION, Petitioners, vs.PHILIPPINE MULTI-MEDIA SYSTEM, INC., CESAR G. REYES, FRANCIS CHUA (ANG BIAO), MANUEL F. ABELLADA, RAUL B. DE MESA, AND ALOYSIUS M. COLAYCO, Respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for review on certiorari1 assails the July 12, 2006 Decision2 of the Court of Appeals in CA-G.R. SP Nos. 88092 and 90762, which affirmed the December 20, 2004 Decision of the Director-General of the Intellectual Property Office (IPO) in Appeal No. 10-2004-0002. Also assailed is the December 11, 2006 Resolution3 denying the motion for reconsideration.

Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is licensed under the laws of the Republic of the Philippines to engage in television and radio broadcasting.4 It broadcasts television programs by wireless means to Metro Manila and nearby provinces, and by satellite to provincial stations through Channel 2 on Very High Frequency (VHF) and Channel 23 on Ultra High Frequency (UHF). The programs aired over Channels 2 and 23 are either produced by ABS-CBN or purchased from or licensed by other producers.

ABS-CBN also owns regional television stations which pattern their programming in accordance with perceived demands of the region. Thus, television programs shown in Metro Manila and nearby provinces are not necessarily shown in other provinces.

Respondent Philippine Multi-Media System, Inc. (PMSI) is the operator of Dream Broadcasting System. It delivers digital direct-to-home (DTH) television via satellite to its subscribers all over the Philippines. Herein individual respondents, Cesar G. Reyes, Francis Chua, Manuel F. Abellada, Raul B. De Mesa, and Aloysius M. Colayco, are members of PMSI’s Board of Directors.

PMSI was granted a legislative franchise under Republic Act No. 86305 on May 7, 1998 and was given a Provisional Authority by the National Telecommunications Commission (NTC) on February 1, 2000 to install, operate and maintain a nationwide DTH satellite service. When it commenced operations, it offered as part of its program line-up ABS-CBN Channels 2 and 23, NBN, Channel 4, ABC Channel 5, GMA Channel 7, RPN Channel 9, and IBC Channel 13, together with other paid premium program channels.

However, on April 25, 2001,6 ABS-CBN demanded for PMSI to cease and desist from rebroadcasting Channels 2 and 23. On April 27, 2001,7 PMSI replied that the rebroadcasting was in accordance with the authority granted it by NTC and its obligation under NTC Memorandum Circular No. 4-08-88,8 Section 6.2 of which requires all cable television system operators operating in a community within Grade “A” or “B” contours to carry the television signals of the authorized television broadcast stations.9

Thereafter, negotiations ensued between the parties in an effort to reach a settlement; however, the negotiations were terminated on April 4, 2002 by ABS-CBN allegedly due to PMSI’s inability to ensure the prevention of illegal retransmission and further rebroadcast of its signals, as well as the adverse effect of the rebroadcasts on the business operations of its regional television stations.10

On May 13, 2002, ABS-CBN filed with the IPO a complaint for “Violation of Laws Involving Property Rights, with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction,” which was docketed as IPV No. 10-2002-0004. It alleged that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright.

On July 2, 2002, the Bureau of Legal Affairs (BLA) of the IPO granted ABS-CBN’s application for a temporary restraining order. On July 12, 2002, PMSI suspended its retransmission of Channels 2 and 23 and likewise filed a petition for certiorari with the Court of Appeals, which was docketed as CA-G.R. SP No. 71597.

Subsequently, PMSI filed with the BLA a Manifestation reiterating that it is subject to the must-carry rule under Memorandum Circular No. 04-08-88. It also submitted a letter dated December 20, 2002 of then NTC Commissioner Armi Jane R. Borje to PMSI stating as follows:

This refers to your letter dated December 16, 2002 requesting for regulatory guidance from this Commission in connection with the application and coverage of NTC Memorandum Circular No. 4-08-88, particularly Section 6 thereof, on mandatory carriage of television broadcast signals, to the direct-to-home (DTH) pay television services of Philippine Multi-Media System, Inc. (PMSI).

Preliminarily, both DTH pay television and cable television services are broadcast services, the only difference being the medium of delivering such services (i.e. the former by satellite and the latter by cable). Both can carry broadcast signals to the remote areas, thus enriching the lives of the residents thereof through the dissemination of social, economic, educational information and cultural programs.

The DTH pay television services of PMSI is equipped to provide nationwide DTH satellite services. Concededly, PMSI’s DTH pay television services covers very much wider areas in terms of carriage of broadcast signals, including areas not reachable by cable television services thereby providing a better medium of dissemination of information to the public.

In view of the foregoing and the spirit and intent of NTC memorandum Circular No. 4-08-88, particularly section 6 thereof, on mandatory carriage of television broadcast signals, DTH pay television services should be deemed covered by such NTC Memorandum Circular.

For your guidance. (Emphasis added)11

On August 26, 2003, PMSI filed another Manifestation with the BLA that it received a letter dated July 24, 2003 from the NTC enjoining strict and immediate compliance with the must-carry rule under Memorandum Circular No. 04-08-88, to wit:

Dear Mr. Abellada:

Last July 22, 2003, the National Telecommunications Commission (NTC) received a letter dated July 17, 2003 from President/COO Rene Q. Bello of the International Broadcasting Corporation (IBC-Channel 13) complaining that your company, Dream Broadcasting System, Inc., has cut-off, without any notice or explanation whatsoever, to air the programs of IBC-13, a free-to-air television, to the detriment of the public.

We were told that, until now, this has been going on.

Please be advised that as a direct broadcast satellite operator, operating a direct-to-home (DTH) broadcasting system, with a provisional authority (PA) from the NTC, your company, along with cable television operators, are mandated to strictly comply with the existing policy of NTC on mandatory carriage of television broadcast signals as provided under Memorandum Circular No. 04-08-88, also known as the Revised Rules and Regulations Governing Cable Television System in the Philippines.

This mandatory coverage provision under Section 6.2 of said Memorandum Circular, requires all cable television system operators, operating in a community within the Grade “A” or “B” contours to “must-carry” the television signals of the authorized television broadcast stations, one of which is IBC-13. Said directive equally applies to your company as the circular was issued to give consumers and the public a wider access to more sources of news, information, entertainment and other programs/contents.

This Commission, as the governing agency vested by laws with the jurisdiction, supervision and control over all public services, which includes direct broadcast satellite operators, and taking into consideration the paramount interest of the public in general, hereby directs you to immediately restore the signal of IBC-13 in your network programs, pursuant to existing circulars and regulations of the Commission.

For strict compliance. (Emphasis added)12

Meanwhile, on October 10, 2003, the NTC issued Memorandum Circular No. 10-10-2003, entitled “Implementing Rules and Regulations Governing Community Antenna/Cable Television (CATV) and Direct Broadcast Satellite (DBS) Services to Promote Competition in the Sector.” Article 6, Section 8 thereof states:

As a general rule, the reception, distribution and/or transmission by any CATV/DBS operator of any television signals without any agreement with or authorization from program/content providers are prohibited.

On whether Memorandum Circular No. 10-10-2003 amended Memorandum Circular No. 04-08-88, the NTC explained to PMSI in a letter dated November 3, 2003 that:

To address your query on whether or not the provisions of MC 10-10-2003 would have the effect of amending the provisions of MC 4-08-88 on mandatory carriage of television signals, the answer is in the negative.

x x x x

The Commission maintains that, MC 4-08-88 remains valid, subsisting and enforceable.

Please be advised, therefore, that as duly licensed direct-to-home satellite television service provider authorized by this Commission, your company continues to be bound by the guidelines provided for under MC 04-08-88, specifically your obligation under its mandatory carriage provisions, in addition to your obligations under MC 10-10-2003. (Emphasis added)

Please be guided accordingly.13

On December 22, 2003, the BLA rendered a decision14 finding that PMSI infringed the broadcasting rights and copyright of ABS-CBN and ordering it to permanently cease and desist from rebroadcasting Channels 2 and 23.

On February 6, 2004, PMSI filed an appeal with the Office of the Director-General of the IPO which was docketed as Appeal No. 10-2004-0002. On December 23, 2004, it also filed with the Court of Appeals a “Motion to Withdraw Petition; Alternatively, Memorandum of the Petition for Certiorari” in CA-G.R. SP No. 71597, which was granted in a resolution dated February 17, 2005.

On December 20, 2004, the Director-General of the IPO rendered a decision15 in favor of PMSI, the dispositive portion of which states:

WHEREFORE, premises considered, the instant appeal is hereby GRANTED. Accordingly, Decision No. 2003-01 dated 22 December 2003 of the Director of Bureau of Legal Affairs is hereby REVERSED and SET ASIDE.

Let a copy of this Decision be furnished the Director of the Bureau of Legal Affairs for appropriate action, and the records be returned to her for proper disposition. The Documentation, Information and Technology Transfer Bureau is also given a copy for library and reference purposes.

SO ORDERED.16

Thus, ABS-CBN filed a petition for review with prayer for issuance of a temporary restraining order and writ of preliminary injunction with the Court of Appeals, which was docketed as CA-G.R. SP No. 88092.

On July 18, 2005, the Court of Appeals issued a temporary restraining order. Thereafter, ABS-CBN filed a petition for contempt against PMSI for continuing to rebroadcast Channels 2 and 23 despite the restraining order. The case was docketed as CA- G.R. SP No. 90762.

On November 14, 2005, the Court of Appeals ordered the consolidation of CA-G.R. SP Nos. 88092 and 90762.

In the assailed Decision dated July 12, 2006, the Court of Appeals sustained the findings of the Director-General of the IPO and dismissed both petitions filed by ABS-CBN.17

ABS-CBN’s motion for reconsideration was denied, hence, this petition.

ABS-CBN contends that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 is an infringement of its broadcasting rights and copyright under the Intellectual Property Code (IP Code);18that Memorandum Circular No. 04-08-88 excludes DTH satellite television operators; that the Court of Appeals’ interpretation of the must-carry rule violates Section 9 of Article III19 of the Constitution because it allows the taking of property for public use without payment of just compensation; that the Court of Appeals erred in dismissing the petition for contempt docketed as CA-G.R. SP No. 90762 without requiring respondents to file comment.

Respondents, on the other hand, argue that PMSI’s rebroadcasting of Channels 2 and 23 is sanctioned by Memorandum Circular No. 04-08-88; that the must-carry rule under the Memorandum Circular is a valid exercise of police power; and that the Court of Appeals correctly dismissed CA-G.R. SP No. 90762 since it found no need to exercise its power of contempt.

After a careful review of the facts and records of this case, we affirm the findings of the Director-General of the IPO and the Court of Appeals.

There is no merit in ABS-CBN’s contention that PMSI violated its broadcaster’s rights under Section 211 of the IP Code which provides in part:

Chapter XIVBROADCASTING ORGANIZATIONS

Sec. 211. Scope of Right. - Subject to the provisions of Section 212, broadcasting organizations shall enjoy the exclusive right to carry out, authorize or prevent any of the following acts:

211.1. The rebroadcasting of their broadcasts;

x x x x

Neither is PMSI guilty of infringement of ABS-CBN’s copyright under Section 177 of the IP Code which states that copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the public performance of the work (Section 177.6), and other communication to the public of the work (Section 177.7).20

Section 202.7 of the IP Code defines broadcasting as “the transmission by wireless means for the public reception of sounds or of images or of representations thereof; such transmission by satellite is also ‘broadcasting’ where the means for decrypting are provided to the public by the broadcasting organization or with its consent.”

On the other hand, rebroadcasting as defined in Article 3(g) of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, otherwise known as the 1961 Rome Convention, of which the Republic of the Philippines is a signatory, 21 is “the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization.”

The Director-General of the IPO correctly found that PMSI is not engaged in rebroadcasting and thus cannot be considered to have infringed ABS-CBN’s broadcasting rights and copyright, thus:

That the Appellant’s [herein respondent PMSI] subscribers are able to view Appellee’s [herein petitioner ABS-CBN] programs (Channels 2 and 23) at the same time that the latter is broadcasting the same is undisputed. The question however is, would the Appellant in doing so be considered engaged in broadcasting. Section 202.7 of the IP Code states that broadcasting means

“the transmission by wireless means for the public reception of sounds or of images or of representations thereof; such transmission by satellite is also ‘broadcasting’ where the means for decrypting are provided to the public by the broadcasting organization or with its consent.”

Section 202.7 of the IP Code, thus, provides two instances wherein there is broadcasting, to wit:

1. The transmission by wireless means for the public reception of sounds or of images or of representations thereof; and

2. The transmission by satellite for the public reception of sounds or of images or of representations thereof where the means for decrypting are provided to the public by the broadcasting organization or with its consent.

It is under the second category that Appellant’s DTH satellite television service must be examined since it is satellite-based. The elements of such category are as follows:

1. There is transmission of sounds or images or of representations thereof;

2. The transmission is through satellite;

3. The transmission is for public reception; and

4. The means for decrypting are provided to the public by the broadcasting organization or with its consent.

It is only the presence of all the above elements can a determination that the DTH is broadcasting and consequently, rebroadcasting Appellee’s signals in violation of Sections 211 and 177 of the IP Code, may be arrived at.

Accordingly, this Office is of the view that the transmission contemplated under Section 202.7 of the IP Code presupposes that the origin of the signals is the broadcaster. Hence, a program that is broadcasted is attributed to the broadcaster. In the same manner, the rebroadcasted program is attributed to the rebroadcaster.

In the case at hand, Appellant is not the origin nor does it claim to be the origin of the programs broadcasted by the Appellee. Appellant did not make and transmit on its own but merely carried the existing signals of the Appellee. When Appellant’s subscribers view Appellee’s programs in Channels 2 and 23, they know that the origin thereof was the Appellee.

Aptly, it is imperative to discern the nature of broadcasting. When a broadcaster transmits, the signals are scattered or dispersed in the air. Anybody may pick-up these signals. There is no restriction as to its number, type or class of recipients. To receive the signals, one is not required to subscribe or to pay any fee. One only has to have a receiver, and in case of television signals, a television set, and to tune-in to the right channel/frequency. The definition of broadcasting, wherein it is required that the transmission is wireless, all the more supports this discussion. Apparently, the undiscriminating dispersal of signals in the air is possible only through wireless means. The use of wire in transmitting signals, such as cable television, limits the recipients to those who are connected. Unlike wireless transmissions, in wire-based transmissions, it is not enough that one wants to be connected and possesses the equipment. The service provider, such as cable television companies may choose its subscribers.

The only limitation to such dispersal of signals in the air is the technical capacity of the transmitters and other equipment employed by the broadcaster. While the broadcaster may use a less powerful transmitter to limit its coverage, this is merely a business strategy or decision and not an inherent limitation when transmission is through cable.

Accordingly, the nature of broadcasting is to scatter the signals in its widest area of coverage as possible. On this score, it may be said that making public means that accessibility is undiscriminating as long as it [is] within the range of the transmitter and equipment of the broadcaster. That the medium through which the Appellant carries the Appellee’s signal, that is via satellite, does not diminish the fact that it operates and functions as a cable television. It remains that the Appellant’s transmission of signals via its DTH satellite television service cannot be considered within the purview of broadcasting. x x x

x x x x

This Office also finds no evidence on record showing that the Appellant has provided decrypting means to the public indiscriminately. Considering the nature of this case, which is punitive in fact, the burden of proving the existence of the elements constituting the acts punishable rests on the shoulder of the complainant.

Accordingly, this Office finds that there is no rebroadcasting on the part of the Appellant of the Appellee’s programs on Channels 2 and 23, as defined under the Rome Convention.22

Under the Rome Convention, rebroadcasting is “the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization.” The Working Paper23 prepared by the Secretariat of the Standing Committee on Copyright and Related Rights defines broadcasting organizations as “entities that take the financial and editorial responsibility for the selection and arrangement of, and investment in, the transmitted content.”24 Evidently, PMSI would not qualify as a broadcasting organization because it does not have the aforementioned responsibilities imposed upon broadcasting organizations, such as ABS-CBN.

ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the viewers receive in its unaltered form. PMSI does not produce, select, or determine the programs to be shown in Channels 2 and 23. Likewise, it does not pass itself off as the origin or author of such programs. Insofar as Channels 2 and 23 are concerned, PMSI merely retransmits the same in accordance with Memorandum Circular 04-08-88. With regard to its premium channels, it buys the channels from content providers and transmits on an as-is basis to its viewers. Clearly, PMSI does not perform the functions of a broadcasting organization; thus, it cannot be said that it is engaged in rebroadcasting Channels 2 and 23.

The Director-General of the IPO and the Court of Appeals also correctly found that PMSI’s services are similar to a cable television system because the services it renders fall under cable “retransmission,” as described in the Working Paper, to wit:

(G) Cable Retransmission

47. When a radio or television program is being broadcast, it can be retransmitted to new audiences by means of cable or wire. In the early days of cable television, it was mainly used to improve signal reception, particularly in so-called “shadow zones,” or to distribute the signals in large buildings or building complexes. With improvements in technology, cable operators now often receive signals from satellites before retransmitting them in an unaltered form to their subscribers through cable.

48. In principle, cable retransmission can be either simultaneous with the broadcast over-the-air or delayed (deferred transmission) on the basis of a fixation or a reproduction of a fixation. Furthermore, they might be unaltered or altered, for example through replacement of commercials, etc. In general, however, the term “retransmission” seems to be reserved for such transmissions which are both simultaneous and unaltered.

49. The Rome Convention does not grant rights against unauthorized cable retransmission. Without such a right, cable operators can retransmit both domestic and foreign over the air broadcasts simultaneously to their subscribers without permission from the broadcasting organizations or other rightholders and without obligation to pay remuneration.25 (Emphasis added)

Thus, while the Rome Convention gives broadcasting organizations the right to authorize or prohibit the rebroadcasting of its broadcast, however, this protection does not extend to cable retransmission. The retransmission of ABS-CBN’s signals by PMSI – which functions essentially as a cable television – does not therefore constitute rebroadcasting in violation of the former’s intellectual property rights under the IP Code.

It must be emphasized that the law on copyright is not absolute. The IP Code provides that:

Sec. 184. Limitations on Copyright. -

184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright:

x x x x

(h) The use made of a work by or under the direction or control of the Government, by the National Library or by educational, scientific or professional institutions where such use is in the public interest and is compatible with fair use;

The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No. 04-08-88 is under the direction and control of the government though the NTC which is vested with exclusive jurisdiction to supervise, regulate and control telecommunications and broadcast services/facilities in the Philippines.26 The imposition of the must-carry rule is within the NTC’s power to promulgate rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities in these activities whenever the Commission finds it reasonably feasible.27 As correctly observed by the Director-General of the IPO:

Accordingly, the “Must-Carry Rule” under NTC Circular No. 4-08-88 falls under the foregoing category of limitations on copyright. This Office agrees with the Appellant [herein respondent PMSI] that the “Must-Carry Rule” is in consonance with the principles and objectives underlying Executive Order No. 436,28 to wit:

The Filipino people must be given wider access to more sources of news, information, education, sports event and entertainment programs other than those provided for by mass media and afforded television programs to attain a well informed, well-versed and culturally refined citizenry and enhance their socio-economic growth:

WHEREAS, cable television (CATV) systems could support or supplement the services provided by television broadcast facilities, local and overseas, as the national information highway to the countryside.29

The Court of Appeals likewise correctly observed that:

[T]he very intent and spirit of the NTC Circular will prevent a situation whereby station owners and a few networks would have unfettered power to make time available only to the highest bidders, to communicate only their own views on public issues, people, and to permit on the air only those with whom they agreed – contrary to the state policy that the (franchise) grantee like the petitioner, private respondent and other TV station owners, shall provide at all times sound and balanced programming and assist in the functions of public information and education.

This is for the first time that we have a structure that works to accomplish explicit state policy goals.30

Indeed, intellectual property protection is merely a means towards the end of making society benefit from the creation of its men and women of talent and genius. This is the essence of intellectual property laws, and it explains why certain products of ingenuity that are concealed from the public are outside the pale of protection afforded by the law. It also explains why the author or the creator enjoys no more rights than are consistent with public welfare.31

Further, as correctly observed by the Court of Appeals, the must-carry rule as well as the legislative franchises granted to both ABS-CBN and PMSI are in consonance with state policies enshrined in the Constitution, specifically Sections 9,32 17,33 and 2434 of Article II on the Declaration of Principles and State Policies.35

ABS-CBN was granted a legislative franchise under Republic Act No. 7966, Section 1 of which authorizes it “to construct, operate and maintain, for commercial purposes and in the public interest, television and radio broadcasting in and throughout the Philippines x x x.” Section 4 thereof mandates that it “shall provide adequate public service time to enable the government, through the said broadcasting stations, to reach the population on important public issues; provide at all times sound and balanced programming;

promote public participation such as in community programming; assist in the functions of public information and education x x x.”

PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which similarly states that it “shall provide adequate public service time to enable the government, through the said broadcasting stations, to reach the population on important public issues; provide at all times sound and balanced programming; promote public participation such as in community programming; assist in the functions of public information and education x x x.” Section 5, paragraph 2 of the same law provides that “the radio spectrum is a finite resource that is a part of the national patrimony and the use thereof is a privilege conferred upon the grantee by the State and may be withdrawn anytime, after due process.”

In Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC,36 the Court held that a franchise is a mere privilege which may be reasonably burdened with some form of public service. Thus:

All broadcasting, whether by radio or by television stations, is licensed by the government. Airwave frequencies have to be allocated as there are more individuals who want to broadcast than there are frequencies to assign. A franchise is thus a privilege subject, among other things, to amendment by Congress in accordance with the constitutional provision that “any such franchise or right granted . . . shall be subject to amendment, alteration or repeal by the Congress when the common good so requires.”

x x x x

Indeed, provisions for COMELEC Time have been made by amendment of the franchises of radio and television broadcast stations and, until the present case was brought, such provisions had not been thought of as taking property without just compensation. Art. XII, §11 of the Constitution authorizes the amendment of franchises for “the common good.” What better measure can be conceived for the common good than one for free air time for the benefit not only of candidates but even more of the public, particularly the voters, so that they will be fully informed of the issues in an election? “[I]t is the right of the viewers and listeners, not the right of the broadcasters, which is paramount.”

Nor indeed can there be any constitutional objection to the requirement that broadcast stations give free air time. Even in the United States, there are responsible scholars who believe that government controls on broadcast media can constitutionally be instituted to ensure diversity of views and attention to public affairs to further the system of free expression. For this purpose, broadcast stations may be required to give free air time to candidates in an election. Thus, Professor Cass R. Sunstein of the University of Chicago Law School, in urging reforms in regulations affecting the broadcast industry, writes:

x x x x

In truth, radio and television broadcasting companies, which are given franchises, do not own the airwaves and frequencies through which they transmit broadcast signals and images. They are merely given the temporary privilege of using them. Since a franchise is a mere privilege, the exercise of the privilege may reasonably be burdened with the performance by the grantee of some form of public service. x x x37

There is likewise no merit to ABS-CBN’s claim that PMSI’s carriage of its signals is for a commercial purpose; that its being the country’s top broadcasting company, the availability of its signals allegedly enhances PMSI’s attractiveness to potential customers;38 or that the unauthorized carriage of its signals by PMSI has created competition between its Metro Manila and regional stations.

ABS-CBN presented no substantial evidence to prove that PMSI carried its signals for profit; or that such carriage adversely affected the business operations of its regional stations. Except for the testimonies of its witnesses,[39] no studies, statistical data or information have been submitted in evidence.

Administrative charges cannot be based on mere speculation or conjecture. The complainant has the burden of proving by substantial evidence the allegations in the complaint.40 Mere allegation is not evidence, and is not equivalent to proof.41

Anyone in the country who owns a television set and antenna can receive ABS-CBN’s signals for free. Other broadcasting organizations with free-to-air signals such as GMA-7, RPN-9, ABC-5, and IBC-13 can likewise be accessed for free. No payment is required to view the said channels42 because these broadcasting networks do not generate revenue from subscription from their viewers but from airtime revenue from contracts with commercial advertisers and producers, as well as from direct sales.

In contrast, cable and DTH television earn revenues from viewer subscription. In the case of PMSI, it offers its customers premium paid channels from content providers like Star Movies, Star World, Jack TV, and AXN, among others, thus allowing its customers to go beyond the limits of “Free TV and Cable TV.”43 It does not advertise itself as a local channel carrier because these local channels can be viewed with or without DTH television.

Relevantly, PMSI’s carriage of Channels 2 and 23 is material in arriving at the ratings and audience share of ABS-CBN and its programs. These ratings help commercial advertisers and producers decide whether to buy airtime from the network. Thus, the must-carry rule is actually advantageous to the broadcasting networks because it provides them with increased viewership which attracts commercial advertisers and producers.

On the other hand, the carriage of free-to-air signals imposes a burden to cable and DTH television providers such as PMSI. PMSI uses none of ABS-CBN’s resources or equipment and carries the signals and shoulders the costs without any recourse of charging.44 Moreover, such carriage of signals takes up channel space which can otherwise be utilized for other premium paid channels.

There is no merit to ABS-CBN’s argument that PMSI’s carriage of Channels 2 and 23 resulted in competition between its Metro Manila and regional stations. ABS-CBN is free to decide to pattern its regional programming in accordance with perceived demands of the region; however, it cannot impose this kind of programming on the regional viewers who are also entitled to the free-to-air channels. It must be emphasized that, as a national broadcasting organization, one of ABS-CBN’s responsibilities is to scatter its signals to the widest area of coverage as possible. That it should limit its signal reach for the sole purpose of gaining profit for its regional stations undermines public interest and deprives the viewers of their right to access to information.

Indeed, television is a business; however, the welfare of the people must not be sacrificed in the pursuit of profit. The right of the viewers and listeners to the most diverse choice of programs available is paramount.45 The Director-General correctly observed, thus:

The “Must-Carry Rule” favors both broadcasting organizations and the public. It prevents cable television companies from excluding broadcasting organization especially in those places not reached by signal. Also, the rule prevents cable television companies from depriving viewers in far-flung areas the enjoyment of programs available to city viewers. In fact, this Office finds the rule more burdensome on the part of the cable television companies. The latter carries the television signals and shoulders the costs without any recourse of charging. On the other hand, the signals that are carried by cable television companies are dispersed and scattered by the television stations and anybody with a television set is free to pick them up.

With its enormous resources and vaunted technological capabilities, Appellee’s [herein petitioner ABS-CBN] broadcast signals can reach almost every corner of the archipelago. That in spite of such capacity, it chooses to maintain regional stations, is a business decision. That the “Must-Carry Rule” adversely affects the profitability of maintaining such regional stations since there will be competition between them and its Metro Manila station is speculative and an attempt to extrapolate the effects of the rule. As

discussed above, Appellant’s DTH satellite television services is of limited subscription. There was not even a showing on part of the Appellee the number of Appellant’s subscribers in one region as compared to non-subscribing television owners. In any event, if this Office is to engage in conjecture, such competition between the regional stations and the Metro Manila station will benefit the public as such competition will most likely result in the production of better television programs.”46

All told, we find that the Court of Appeals correctly upheld the decision of the IPO Director-General that PMSI did not infringe on ABS-CBN’s intellectual property rights under the IP Code. The findings of facts of administrative bodies charged with their specific field of expertise, are afforded great weight by the courts, and in the absence of substantial showing that such findings are made from an erroneous estimation of the evidence presented, they are conclusive, and in the interest of stability of the governmental structure, should not be disturbed.47

Moreover, the factual findings of the Court of Appeals are conclusive on the parties and are not reviewable by the Supreme Court. They carry even more weight when the Court of Appeals affirms the factual findings of a lower fact-finding body,48 as in the instant case.

There is likewise no merit to ABS-CBN’s contention that the Memorandum Circular excludes from its coverage DTH television services such as those provided by PMSI. Section 6.2 of the Memorandum Circular requires all cable television system operators operating in a community within Grade “A” or “B” contours to carry the television signals of the authorized television broadcast stations.49 The rationale behind its issuance can be found in the whereas clauses which state:

Whereas, Cable Television Systems or Community Antenna Television (CATV) have shown their ability to offer additional programming and to carry much improved broadcast signals in the remote areas, thereby enriching the lives of the rest of the population through the dissemination of social, economic, educational information and cultural programs;

Whereas, the national government supports the promotes the orderly growth of the Cable Television industry within the framework of a regulated fee enterprise, which is a hallmark of a democratic society;

Whereas, public interest so requires that monopolies in commercial mass media shall be regulated or prohibited, hence, to achieve the same, the cable TV industry is made part of the broadcast media;

Whereas, pursuant to Act 3846 as amended and Executive Order 205 granting the National Telecommunications Commission the authority to set down rules and regulations in order to protect the public and promote the general welfare, the National Telecommunications Commission hereby promulgates the following rules and regulations on Cable Television Systems;

The policy of the Memorandum Circular is to carry improved signals in remote areas for the good of the general public and to promote dissemination of information. In line with this policy, it is clear that DTH television should be deemed covered by the Memorandum Circular. Notwithstanding the different technologies employed, both DTH and cable television have the ability to carry improved signals and promote dissemination of information because they operate and function in the same way.

In its December 20, 2002 letter,50 the NTC explained that both DTH and cable television services are of a similar nature, the only difference being the medium of delivering such services. They can carry broadcast signals to the remote areas and possess the capability to enrich the lives of the residents thereof through the dissemination of social, economic, educational information and cultural programs. Consequently, while the Memorandum Circular refers to cable television, it should be understood as to include DTH television which provides essentially the same services.

In Eastern Telecommunications Philippines, Inc. v. International Communication Corporation,51 we held:

The NTC, being the government agency entrusted with the regulation of activities coming under its special and technical forte, and possessing the necessary rule-making power to implement its objectives, is in the best position to interpret its own rules, regulations and guidelines. The Court has consistently yielded and accorded great respect to the interpretation by administrative agencies of their own rules unless there is an error of law, abuse of power, lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of the law.52

With regard to the issue of the constitutionality of the must-carry rule, the Court finds that its resolution is not necessary in the disposition of the instant case. One of the essential requisites for a successful judicial inquiry into constitutional questions is that the resolution of the constitutional question must be necessary in deciding the case.53 In Spouses Mirasol v. Court of Appeals,54 we held:

As a rule, the courts will not resolve the constitutionality of a law, if the controversy can be settled on other grounds. The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of the political departments are valid, absent a clear and unmistakable showing to the contrary. To doubt is to sustain. This presumption is based on the doctrine of separation of powers. This means that the measure had first been carefully studied by the legislative and executive departments and found to be in accord with the Constitution before it was finally enacted and approved.55

The instant case was instituted for violation of the IP Code and infringement of ABS-CBN’s broadcasting rights and copyright, which can be resolved without going into the constitutionality of Memorandum Circular No. 04-08-88. As held by the Court of Appeals, the only relevance of the circular in this case is whether or not compliance therewith should be considered manifestation of lack of intent to commit infringement, and if it is, whether such lack of intent is a valid defense against the complaint of petitioner.56

The records show that petitioner assailed the constitutionality of Memorandum Circular No. 04-08-88 by way of a collateral attack before the Court of Appeals. In Philippine National Bank v. Palma,57 we ruled that for reasons of public policy, the constitutionality of a law cannot be collaterally attacked. A law is deemed valid unless declared null and void by a competent court; more so when the issue has not been duly pleaded in the trial court.58

As a general rule, the question of constitutionality must be raised at the earliest opportunity so that if not raised in the pleadings, ordinarily it may not be raised in the trial, and if not raised in the trial court, it will not be considered on appeal.59 In Philippine Veterans Bank v. Court of Appeals,60 we held:

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

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

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

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

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

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

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

SO ORDERED.

ACONSUELO YNARES-SANTIAGOAssociate Justice

WE CONCUR:

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

MINITA V. CHICO-NAZARIOAssociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

TERESITA J. LEONARDO-DE CASTROAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGOAssociate JusticeChairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Rollo, pp. 65-178.

2 Id. at 8-43.

3 Id. at 54-57.

4 ABS-CBN was granted a franchise under Republic Act No. 7966, entitled AN ACT GRANTING THE ABS-CBN BROADCASTING CORPORATION A FRANCHISE TO CONSTRUCT, INSTALL, OPERATE AND MAINTAIN TELEVISION AND RADIO BROADCASTING STATIONS IN THE PHILIPPINES, AND FOR OTHER PURPOSES.

5 AN ACT GRANTING THE PHILIPPINE MULTI-MEDIA SYSTEM, INC., A FRANCHISE TO CONSTRUCT, INSTALL, ESTABLISH, OPERATE AND MAINTAIN RADIO AND TELEVISION STATIONS IN THE PHILIPPINES.

6 Rollo, p. 316.

7 Id. at 317.

8 Revised Rules and Regulations Governing Cable Television Systems in the Philippines.

9 6.2. Mandatory Coverage

6.2.1. A cable TV system operating in a community which is within the Grade A or Grade B contours of an authorized TV broadcast station or stations must carry the TV signals of these stations.

10 Rollo, p. 322.

11 Id. at 852.

12 Id. at 853-854.

13 Id. at 857.

14 Id. at 567-590. Penned by Estrellita Beltran-Abelardo, Director, Bureau of Legal Affairs.

15 Id at 793-811. Penned by Director-General Emma C. Francisco.

16 Id. at 811.

17 Id. at 43.

18 Republic Act No. 8923, effective January 1, 1998.

19 Article III, Section 9 provides: “Private property shall not be taken for public use without just compensation.”

20 Sec. 177. Copy or Economic Rights. - Subject to the provisions of Chapter VIII, copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:

x x x x

177.6. Public performance of the work; and

177.7. Other communication to the public of the work (Sec. 5, P. D. No. 49a)

21 Entered into force on September 25, 1984. source: http://www.wipo.int/treaties/en/ShowResults.jsp?lang=en&treaty_id=17.

22 Rollo, pp. 805-809.

23 Eighth Session, Geneva, November 4-8, 2002.

24 Id.at paragraph 58, page 12.

25 Id. at paragraphs 47-49, page 10.

26 E.O. No. 546, Sec. 15. Functions of the Commission. The Commission shall exercise the following functions:

a. Issue Certificate of Public Convenience for the operation of communications utilities and services, radio communications systems, wire or wireless telephone or telegraph systems, radio and television broadcasting system and other similar public utilities;

b. Establish, prescribe and regulate areas of operation of particular operators of public service communications; and determine and prescribe charges or rates pertinent to the operation of such public utility facilities and services except in cases where charges or rates are established by international bodies or associations of which the Philippines is a participating member or by bodies recognized by the Philippine Government as the proper arbiter of such charges or rates;

c. Grant permits for the use of radio frequencies for wireless telephone and telegraph systems and radio communication systems including amateur radio stations and radio and television broadcasting systems;

d. Sub-allocate series of frequencies of bands allocated by the International Telecommunications Union to the specific services;

e. Establish and prescribe rules, regulations, standards, specifications in all cases related to the issued Certificate of Public Convenience and administer and enforce the same;

f. Coordinate and cooperate with government agencies and other entities concerned with any aspect involving communications with a view to continuously improve the communications service in the country;

g. Promulgate such rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities in these activities whenever the Commission finds it reasonably feasible;

h. Supervise and inspect the operation of radio stations and telecommunications facilities;

i. Undertake the examination and licensing of radio operators;

j. Undertake, whenever necessary, the registration of radio transmitters and transceivers; and

k. Perform such other functions as may be prescribed by law.

27 Id. Section 15 (g).

28 PRESCRIBING POLICY GUIDELINES TO GOVERN THE OPERATIONS OF CABLE TELEVISION IN THE PHILIPPINES.

29 Rollo, p. 810.

30 Id. at 42.

31 Fr. Ranhillo Callangan Aquino, Intellectual Property Law: Comments and Annotations, 2003, p. 5.

32 SEC. 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

33 SEC. 17. The State shall give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development.

34 SEC. 24. The State recognizes the vital role of communication and information in nation-building.

35 Rollo, p. 40.

36 352 Phil. 153 (1998).

37Id. at 171-174.

38 Rollo, pp. 129-130.

39 Id. at 134.

40 Artuz v. Court of Appeals, 417 Phil. 588, 597 (2001).

41 Navarro v. Clerk of Court, A.M. No. P-05-1962, February 17, 2005, 451 SCRA 626, 629.

42 Rollo, Comment, p. 1249.

43 http://www.dreamsatellite.com/about.htm

44 Rollo, p. 810.

45 Telecom. & Broadcast Attys. of the Phils., Inc v. COMELEC, 352 Phil. 153, 173 (1998).

46 Rollo, pp. 810-811.

47 Ocampo v. Salalila, 382 Phil. 522, 532 (2000).

48 Gala v. Ellice Agro-Industrial Corporation, G.R. No. 156819, December 11, 2003, 418 SCRA 431, 444.

49 Supra note 9.

50 Supra note 11.

51 G.R. No. 135992, January 31, 2006, 481 SCRA 163.

52 Id. at 166-167.

53 Meralco v. Secretary of Labor, 361 Phil. 845, 867 (1999).

54 403 Phil. 760 (2001).

55 Id. at 774.

56 Rollo, p. 41; citing the Decision of the Director-General of the IPO.

57 G.R. No. 157279, August 9, 2005, 466 SCRA 307.

58 Id. at 322-323.

59 Joaquin G. Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary, p. 858 (1996), citing People v. Vera, 65 Phil. 56 (1937).

60 G.R. No. 132561, June 30, 2005, 462 SCRA 336.

61 Id. at 349.

62 Montenegro v. Montenegro, G.R. No. 156829, June 8, 2004.

63 Soriano v. Court of Appeals, G.R. No. 128938, June 4, 2004, 431 SCRA 1, 7-8

64 Delgado v. Court of Appeals, G.R. No. 137881, August 19, 2005, 467 SCRA 418, 428.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 168662             February 19, 2008

SANRIO COMPANY LIMITED, petitioner, vs.EDGAR C. LIM, doing business as ORIGNAMURA TRADING, respondent.

D E C I S I O N

CORONA, J.:

This petition for review on certiorari1 seeks to set aside the decision of the Court of Appeals (CA) in CA-G.R. CV No. 746602 and its resolution3 denying reconsideration.

Petitioner Sanrio Company Limited, a Japanese corporation, owns the copyright of various animated characters such as "Hello Kitty," "Little Twin Stars," "My Melody," "Tuxedo Sam" and "Zashikibuta" among others.4 While it is not engaged in business in the Philippines, its products are sold locally by its exclusive distributor, Gift Gate Incorporated (GGI).5

As such exclusive distributor, GGI entered into licensing agreements with JC Lucas Creative Products, Inc., Paper Line Graphics, Inc. and Melawares Manufacturing Corporation.6 These local entities were allowed to manufacture certain products (bearing petitioner's copyrighted animated characters) for the local market.

Sometime in 2001, due to the deluge of counterfeit Sanrio products, GGI asked IP Manila Associates (IPMA) to conduct a market research. The research's objective was to identify those factories, department stores and retail outlets manufacturing and/or selling fake Sanrio items.7 After conducting several test-buys in various commercial areas, IPMA confirmed that respondent's Orignamura Trading in Tutuban Center, Manila was selling imitations of petitioner's products.8

Consequently, on May 29, 2000, IPMA agents Lea A. Carmona and Arnel P. Dausan executed a joint affidavit attesting to the aforementioned facts.9 IPMA forwarded the said affidavit to the National Bureau of Investigation (NBI) which thereafter filed an application for the issuance of a search warrant in the office of the Executive Judge of the Regional Trial Court of Manila.10

After conducting the requisite searching inquiry, the executive judge issued a search warrant on May 30, 2000.11On the same day, agents of the NBI searched the premises of Orignamura Trading. As a result thereof, they were able to seize various Sanrio products.12

On April 4, 2002, petitioner, through its attorney-in-fact Teodoro Y. Kalaw IV of the Quisumbing Torres law firm, filed a complaint-affidavit13 with the Task-Force on Anti-Intellectual Property Piracy (TAPP) of the Department of Justice (DOJ) against respondent for violation of Section 217 (in relation to Sections 17714 and 17815) of the Intellectual Property Code (IPC) which states:

Section 217. Criminal Penalties. - 217.1. Any person infringing any right secured by provisions of Part IV of this Act or aiding or abetting such infringement shall be guilty of a crime punishable by:

(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand pesos (P50,000) to One hundred fifty thousand pesos (P150,000) for the first offense.

(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from One hundred fifty thousand pesos (P150,000) to Five hundred thousand pesos (P500,000) for the second offense.

(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from Five hundred thousand pesos (P500,000) to One million five hundred thousand pesos (P1,500,000) for the third and subsequent offenses.

(d) In all cases, subsidiary imprisonment in cases of insolvency.

217.2. In determining the number of years of imprisonment and the amount of fine, the court shall consider the value of the infringing materials that the defendant has produced or manufactured and the damage that the copyright owner has suffered by reason of infringement.

217.3. Any person who at the time when copyright subsists in a work has in his possession an article which he knows, or ought to know, to be an infringing copy of the work for the purpose of:

(a) Selling, letting for hire, or by way of trade offering or exposing for sale, or hire, the article;

(b) Distributing the article for purpose of trade or any other purpose to an extent that will prejudice the rights of the copyright of the owner in the work; or

(c) Trade exhibit of the article in public, shall be guilty of an offense and shall be liable on conviction to imprisonment and fine as above mentioned. (emphasis supplied)

Respondent asserted in his counter-affidavit16 that he committed no violation of the provisions of the IPC because he was only a retailer.17 Respondent neither reproduced nor manufactured any of petitioner's copyrighted item; thus, he did not transgress the economic rights of petitioner.18 Moreover, he obtained his merchandise from authorized manufacturers of petitioner's products.19

On September 25, 2002, the TAPP found that:

Evidence on record would show that respondent bought his merchandise from legitimate sources, as shown by official receipts issued by JC Lucas Creative Products, Inc., Paper Line Graphics, Inc. and Melawares Manufacturing Corporation. In fact, in her letter dated May 23, 2002, Ms. Ma. Angela S. Garcia certified that JC Lucas Creative Products, Inc., Paper Line Graphics, Inc. and Melawares Manufacturing Corporation are authorized to produce certain Sanrio products. While it appears that some of the items seized during the search are not among those products which [GGI] authorized these establishments to produce, the fact remains that respondent bought these from the abovecited legitimate sources. At this juncture, it bears stressing that respondent relied on the representations of these manufacturers and distributors that the items they sold were genuine. As such, it is not incumbent upon respondent to verify from these sources what items [GGI] only authorized them to produce. Thus, as far as respondent is concerned, the items in his possession are not infringing copies of the original [petitioner's] products. (emphasis supplied)20

Thus, in a resolution dated September 25, 2002, it dismissed the complaint due to insufficiency of evidence.21

Petitioner moved for reconsideration but it was denied.22 Hence, it filed a petition for review in the Office of the Chief State Prosecutor of the DOJ.23 In a resolution dated August 29, 2003,24 the Office of the Chief State Prosecutor affirmed the TAPP resolution. The petition was dismissed for lack of reversible error.

Aggrieved, petitioner filed a petition for certiorari in the CA. On May 3, 2005, the appellate court dismissed the petition on the ground of prescription. It based its action on Act 3326 which states:

Section 1. Violations penalized by special acts shall, unless otherwise provided in such acts, prescribe in accordance with the following rules: (a) after a year for offenses punished only by a fine or by imprisonment for not more than one month, or both; (b) after four years for those punished by imprisonment for more than one month, but less than two years; (c) after eight years for those punished by imprisonment for two years or more, but less than six years; and (d) after twelve years for any other offense punished by imprisonment for six years or more, except the crime of treason, which shall prescribe after twenty years; Provided, however, That all offenses against any law or part of law administered by the Bureau of Internal Revenue shall prescribe after five years. Violations penalized by municipal ordinances shall prescribe after two months.

Section 2. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same may not be known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment.

The prescription shall be interrupted when proceedings are instituted against the guilty person, and shall begin to run again if the proceedings are dismissed for reasons not constituting jeopardy. (emphasis supplied)

According to the CA, because no complaint was filed in court within two years after the commission of the alleged violation, the offense had already prescribed.25

On the merits of the case, the CA concluded that the DOJ did not commit grave abuse of discretion in dismissing the petition for review.26 To be criminally liable for violation of Section 217.3 of the IPC, the following requisites must be present:

1. possession of the infringing copy and

2. knowledge or suspicion that the copy is an infringement of the genuine article.

The CA agreed with the DOJ that petitioner failed to prove that respondent knew that the merchandise he sold was counterfeit. Respondent, on the other hand, was able to show that he obtained these goods from legitimate sources.27

Petitioner moved for reconsideration but it was denied. Hence, this petition.

Petitioner now essentially avers that the CA erred in concluding that the alleged violations of the IPC had prescribed. Recent jurisprudence holds that the pendency of a preliminary investigation suspends the running of the prescriptive period.28 Moreover, the CA erred in finding that the DOJ did not commit grave abuse of discretion in dismissing the complaint. Respondent is liable for copyright infringement (even if he obtained his merchandise from legitimate sources) because he sold counterfeit goods.29

Although we do not agree wholly with the CA, we deny the petition.

Filing Of The Complaint In the DOJ Tolled The Prescriptive Period

Section 2 of Act 3326 provides that the prescriptive period for violation of special laws starts on the day such offense was committed and is interrupted by the institution of proceedings against respondent (i.e., the accused).

Petitioner in this instance filed its complaint-affidavit on April 4, 2002 or one year, ten months and four days after the NBI searched respondent's premises and seized Sanrio merchandise therefrom. Although no information was immediately filed in court, respondent's alleged violation had not yet prescribed.30

In the recent case of Brillantes v. Court of Appeals,31 we affirmed that the filing of the complaint for purposes of preliminary investigation interrupts the period of prescription of criminal responsibility.32 Thus, the prescriptive period for the prosecution of the alleged violation of the IPC was tolled by petitioner's timely filing of the complaint-affidavit before the TAPP.

In The Absence Of Grave Abuse Of Discretion, The Factual Findings Of The DOJ In Preliminary Investigations Will Not Be Disturbed

In a preliminary investigation, a public prosecutor determines whether a crime has been committed and whether there is probable cause that the accused is guilty thereof.33 Probable cause is defined as such facts and circumstances that will engender a well-founded belief that a crime has been committed and that the respondent is probably guilty thereof and should be held for trial.34 Because a public prosecutor is the one conducting a preliminary investigation, he determines the existence of probable cause.35 Consequently, the decision to file a criminal information in court or to dismiss a complaint depends on his sound discretion.36

As a general rule, a public prosecutor is afforded a wide latitude of discretion in the conduct of a preliminary investigation. For this reason, courts generally do not interfere with the results of such proceedings. A prosecutor alone determines the sufficiency of evidence that will establish probable cause justifying the filing of a criminal information against the respondent.37 By way of exception, however, judicial review is allowed where respondent has clearly established that the prosecutor committed grave abuse of discretion.38 Otherwise stated, such review is appropriate only when the prosecutor has exercised his discretion in an arbitrary, capricious, whimsical or despotic manner by reason of passion or personal hostility, patent and gross enough to amount to an evasion of a positive duty or virtual refusal to perform a duty enjoined by law.39

The prosecutors in this case consistently found that no probable cause existed against respondent for violation of the IPC. They were in the best position to determine whether or not there was probable cause. We find that they arrived at their findings after carefully evaluating the respective evidence of petitioner and respondent. Their conclusion was not tainted with grave abuse of discretion.

WHEREFORE, the petition is hereby DENIED.

Costs against petitioner.

SO ORDERED.

RENATO C. CORONAAssociate Justice

WE CONCUR:

REYNATO S. PUNOChief JusticeChairperson

ANGELINA SANDOVAL-GUTIERREZAssociate Justice

ADOLFO S. AZCUNAAssociate Justice

TERESITA J. LEONARDO-DE CASTROAssociate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court's Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Under Rule 45 of the Rules of Court.

2 Penned by Associate Justice Perlita J. Tria-Tirona and concurred in by Associate Justices Delilah Vidallon-Magtolis (retired) and Jose C. Reyes, Jr. of the Fourth Division of the Court of Appeals. Dated May 3, 2005.Rollo, pp. 51-63.

3 Dated June 22, 2005. Id., pp. 65-66.

4 Id., p. 15.

5 Id., p. 132.

6 Id., p. 155.

7 Id.

8 Id.

9 Annex "J," id., pp. 132-133.

10 Id., p. 134.

11 Search warrant no. 00-1616 issued by Manila executive judge Rebecca G. Salvador. Dated May 30, 2000. Annex "K," id., pp. 134-135.

12 Annexes "L," and "L-1," id., pp. 136-137.

13 Docketed as IS No. 2002-205. Annex "M," id., pp. 138-144.

14 Intellectual Property Code, Sec. 177 provides:

Section 177. Copy or Economic Rights.-- Subject to the provisions of Chapter VIII, copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:

177.1. Reproduction of the work or substantial portion of the work;

xxx xxx xxx

177.3. The first public distribution of the original and each copy of the work by sale or other forms of transfer of ownership;

xxx xxx xxx

15 Intellectual Property Code, Sec. 178 provides:

Section 178. Rules on Copyright Ownership. Copyright ownership shall be governed by the following rules:

178.1. Subject to the provisions of this section, in the case of original literary or artistic works, copyright shall belong to the author of the work;

xxx xxx xxx

178.3. In the case of work created by an author during and in the course of his employment, the copyright shall belong to:

(a) The employee, if the creation of the object of copyright is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer.

(b) The employer, if the work is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary.

178.4. In the case of a work commissioned by a person other than an employer of the author and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of the work, but the copyright thereto shall remain with the creator, unless there is a written stipulation to the contrary;

xxx xxx xxx

16 Annex "N," id., pp. 145-172.

17 Id., p. 112.

18 Id.

19 Id. To support his claim, respondent submitted photocopies of the receipts issued to him by JC Lucas Creative Products, Inc. and Melawares Manufacturing Corporation as evidence.

20 Id., pp. 113-114.

21 Penned by state prosecutor Aileen Marie S. Gutierrez and approved by chief state prosecutor Jovencito R. Zuno. Dated September 25, 2002. Annex "A," id., pp. 110-115.

22 Dated January 27, 2003. Annex "B," id., pp. 116-117.

23 Annex "T," id., pp. 207-233. Under Department of Justice Circular No. 70 (2000 NPS Rules on Appeal), 3 July 2000.

24 Signed by undersecretary Ma. Merceditas N. Gutierrez of the Department of Justice. Dated August 29, 2003. Annex "C," id., pp. 119-120.

Petitioner again moved for reconsideration but it was denied in a resolution dated March 24, 2004. Annex "D," id., pp. 121-122.

25 Id., p. 57.

26 Id., p. 58.

27 Id., pp. 60-61.

28 Id., pp. 23-29.

29 Id., pp. 29-40.

30 See Act 3326, Sec. 1.

31 G.R. Nos. 118757 & 121571, 19 October 2004, 440 SCRA 541.

32 Id., p. 563 citing People v. Olarte, 125 Phil. 895 (1967).

33 Rules of Court, Rule 112, Sec. 1. The section provides:

Section 1. Preliminary investigation defined; when required. Preliminary investigation is an inquiry or proceeding to determine whether there is sufficient ground to engender a well-founded belief that a crime has been committed and the respondent is probably guilty thereof, and should be held for trial.

Except as provided in section 6 of this Rule, a preliminary investigation is required to be conducted before the filing of a complaint or information for an offense where the penalty prescribed is at least four (4) years, two (2) months and one (1) day without regard to the fine. (emphasis supplied)

34 Baviera v. Paglinawan, G.R. No. 170602, 8 February 2007, 515 SCRA 170, 184 citing Pontejos v. Office of the Ombudsman, G.R. Nos. 158613-14, 22 February 2006, 483 SCRA 83, 92.

35 Id., at 184.

36 Id.

37 Glaxosmithkline Philippines, Inc. v. Khalid Mehmood Malik, G.R. No. 166924, 17 August 2006, 499 SCRA 268, 272-273 citing Punzalan v. de la Pena, G.R. No. 158543, 21 July 2004, 434 SCRA 601.

38 Id. at 273 citing Cabahug v. People, 426 Phil. 490 (2002).

39 Id., citing Baylon v. Office of the Ombudsman and the Sandiganbayan, 423 Phil. 705 (2001).

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G. R. No. 158767              June 26, 2007

SUMMERVILLE GENERAL MERCHANDISING CO., Petitioner, vs.HON. COURT OF APPEALS, HON. JUDGE ANTONIO EUGENIO, CHANG YU SHUI and JULIET LOPEZ,Respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

The Case

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, as amended, seeking to set aside the 13 March 2003 Decision1 and 18 June 2003 Resolution2 of the Court of Appeals in CA-G.R. SP No. 73799. The Court of Appeals in its assailed Decision upheld the 10 June 2002 Order3 of the Regional Trial Court (RTC) of the City of Manila, Branch 24, in Criminal Case No. 02-2623-26, partially granting the Motion to Quash Search Warrant No. 02-2625 filed by herein private respondents, namely Lilian D. Rosales, Marivic Lim, Andy Tang, Chang Yu Shui, Huang Tsung Lian, Ramon Cheng, Diana Lusuan and Mary Chong Victor Uy; and the 18 October 2002 Order,4 likewise of the RTC, denying the Motion for Reconsideration thereof.

This case stemmed from a letter-complaint5 by Ang Tiam Chay (Ang), President and General Manager of petitioner Summerville General Merchandising Co. (Summerville), alleging the illegal proliferation of fake Royal brand playing cards filed with the office of the Director, Criminal Investigation and Detection Group (CIDG) of the Philippine National Police (PNP).

The Facts

As synthesized from the records of the case, the facts are:

Petitioner Summerville is a corporation engaged in the business of trading, retailing and exporting/importing a variety of merchandise.6 It is a holder of a Deed of Assignment7 executed in its favor by one Norma C. Gabriel, owner/holder of several copyrights and patents over the Royal playing cards, Royal brand playing cards case, design for the case and packaging of a deck of Royal playing cards.8

Ang, President and General Manager of petitioner Summerville, personally appeared at the office of the Criminal Investigation and Detective Division (CIDD) of the CIDG, PNP, in Camp Crame, Quezon City, to personally complain and file a letter-complaint against several persons or establishments engaged in the unauthorized manufacturing, distribution and sale of Royal brand playing cards, the design and mark of which are claimed to have been duly patented/copyrighted and registered. Specifically, complainant Ang alleged that the aforesaid actions were violative of Sec. 1559 in relation to Sec. 170,10 both of Republic Act No. 8293,11 otherwise known as the "Intellectual Property Code of the Philippines." Among the establishments identified to be manufacturing and selling playing cards using petitioner Summerville’s patented Joker design and plastic container was Arotech International Corporation, owned by private respondents Chang Yu Shui, Juliet B. Lopes (a.k.a. Veronica Lopez), and several John Does.

In consideration of the aforementioned letter-complaint, on 18 January 2002, P/INSP. Romualdo B. Cruz, Team Leader, TM III-CIDD-CIDG, PNP, applied for a search warrant against private respondents, particularly Lilian D. Rosales, Marivic Lim, Andy Tang, Chang Yu Shui, Huang Tsung Lian, Ramon Cheng, Diana Lusuan, Mary Chong and Victor Uy, all of Arotech International Corporation. In the Application for Search Warrant, hereinbelow quoted in full, P/INSP. Cruz alleged:

That he has personal knowledge and verily believed that Chang Yu Shui, Huang Tsung Liang, Ramon Cheng, Diana Lusuan and Mary Chong, all Incorporators of AROTECH International Corporation of #90 J.P. Bautista St., Caloocan City, has (sic) in their possession and has (sic) in their control the following property/ies described below to wit:

Crown brand playing cards using copyright plastic container and joker of Royal, Machine used in manufacturing plastic container and joker of Royal; Cliché of Royal joker and casing; other materials being used in the manufacturing of fake Royal copyright joker and plastic container; L-300 van w/ Plate No. WJC – 133 used in the delivery of playing cards. Which they are keeping and concealing in the premise above described.

That the herein undersigned has verified the report and found it to be fact and has therefore reasons to believe that a SEARCH WARRANT should be issued to enable the undersigned to take possession and bring to this Court the following described property/ies.

a. Crown brand playing cards using copyright plastic container and joker of Royal

b. Machine used in manufacturing plastic container and joker of Royal

c. Cliché of Royal Joker and Plastic casing

d. Other materials, being used in the manufacture of fake Royal copyright Joker and Plastic container

e. L-300 van (White) w/Plate No. WJC – 133 in the delivery of playing cards.

WHEREFORE, the undersigned prays to this Honorable Court to issue a Search Warrant, authorizing him and his agents or any Peace Officer to search the premises described in this application and to seize and bring to this Honorable Court the persons and personal property/ies above described to be dealt with as the law directs.12

On 18 January 2002, the Acting Presiding Judge of RTC-Manila, Branch 1, Hon. Antonio M. Eugenio, Jr. issued a search warrant, i.e., Search Warrant No. 02-2625, after finding probable cause to believe that:

x x x [A] Violation of Sec. 155 in relation to Section 170, RA 8293 has been committed or is being committed and that there are good and sufficient reasons to believe that Chang Yu Shui; Huang Tsung Liang; Ramon Cheng; Diana Lusuan and Mary Chong of Arotech Int’l. Corp. of #90 J.P. Bautista St., Caloocan City have (sic) in their possession, control and custody at the stated address, as per description below and attached sketch, the following:

A) Crown brand playing cards using copyright plastic container and joker of Royal

B) Machine used in manufacturing plastic container and joker of Royal

C) Cliché of Royal Joker and Plastic casing

D) Other materials being used in the manufacture of fake Royal copyright Joker and Plastic container

E) L – 300 van (white) w/ Plate No. WJC 133 used in the delivery of playing cards13

Pursuant thereto, elements of the CIDD-CIDG conducted a raid of the premises of Arotech International Corporation at #90 J.P. Bautista St., Caloocan City. Per the raiding team’s report, specifically, Compliance/Return of Search Warrant,14 the following were seized:

a) 910 boxes containing 144 pieces of Crown brand playing cards using copyright/trademark plastic container and Joker of Royal brand;

b) 3 printing machines;

c) 203 boxes of Crown brand playing cards (finished product);

d) 521 Crown playing card sheets (unfinished product); and

e) 7,000 pieces plastic container.15

Thereafter, the record of the foregoing incident was forwarded to the City Prosecutor of Caloocan City for the filing of the appropriate criminal charges.16

In the interim, in an Order dated 31 January 2002, the RTC-Manila, Branch 1, directed that the custody of the seized items be turned over to Petitioner Summerville, subject to the condition that the key to the said warehouse be turned over to the Deputy Sheriff of the court.

On 4 February 2002, private respondents filed with the RTC-Manila, Branch 1, a Verified Omnibus Motion17essentially praying for the 1) reconsideration of the 31 January 2002 Order; 2) quashal of Search Warrant No. 02-2625; 3) return of the seized properties; and 4) declaration that the items seized are inadmissible in evidence against the movants.

The foregoing motion was grounded on the arguments that 1) there was no offense or subject of the offense to speak of, because the Joker found on the Crown brand playing cards, as well as the plastic containers, was registered and licensed in the name of Arotech International Corporation; 2) there was no basis for the finding of probable cause for infringement or the violation of Sec. 155, in relation to Sec. 170 of Republic Act No. 8293 since the playing cards seized were those of the Crown brand and not of the Royal brand; and 3) what was issued was a general search warrant as said warrant failed to describe the things to be seized with particularity.

In an Opposition18 dated 18 March 2002, petitioner Summerville maintained that the embossed name Arotech International Corporation on the plastic container of Crown brand playing cards is of no moment; that "except for said embossed mark, the plastic container is similarly deceiving in all respects with the container case"19 of Royal brand playing cards. Moreover, it insisted that private respondents were still liable for unfair competition and patent even though they were the holder of an earlier issued certificate bearing Copyright Registration No. 1-97-247,20 for their failure to make use of their registered container case design. In other words, it is its contention that the design of the container or case that comes with the Crown brand playing cards is that of petitioner Summerville, and not the one registered and licensed in private respondents’ name.

The trial court conducted a clarificatory hearing and required the parties to submit their respective position papers.

On 10 June 2004, the RTC-Manila, Branch 24,21 issued an Order22 partially granting the omnibus motion. It ordered that the seized Crown brand playing cards and the three printing machines be released and returned to private respondents; hence, only the containers of the playing cards were left in the custody of

the petitioner Summerville. According to the trial court, "from a perusal of both parties’ container cases x x x,"23 it would appear that they are "practically the same in all aspects with the exception of the brand name ARO TECH etched in the dorsal portion of respondents’ container x x x."24

Further, it ratiocinated that:

At any rate, since what is violative of private complainant’s intellectual property right is limited to the plastic container case, only the said item should have been the subject of the warrant and seized by the enforcement team.

Accordingly, the Motion to Quash filed by respondents is partially granted with respect to the playing cards and the three (3) printing machines.25

The Motion for Reconsideration and the Partial Motion for Reconsideration of petitioner Summerville and private respondents respectively, were denied by the trial court in an Order26 dated 18 October 2002.

Undaunted, petitioner Summerville filed with the Court of Appeals a Petition for Certiorari27 under Rule 65 of the Rules of Court, as amended. Said petition imputed grave abuse of discretion, amounting to lack or excess of jurisdiction, to the trial court when the latter 1) ordered the release of the Crown brand playing cards and the three printing machines; and 2) denied the Motion for Reconsideration of the assailed order. Petitioner Summerville justified the inclusion of the Crown brand playing cards in the search and seizure order by claiming that the playing cards were part and parcel of the plastic containers, the design of which is claimed by it. The seizure of the Crown brand playing cards was necessary to demonstrate how said cards were masquerading as Royal brand playing cards, thus, allegedly violating petitioner’s intellectual property rights. But, with the release of the Crown brand playing cards, petitioner Summerville concluded that it would "not be able to present sufficient evidence for Unfair Competition against private respondents considering that the playing cards with their container cases are the very instruments of Unfair Competition."28

In a Decision29 promulgated on 13 March 2003, the Court of Appeals dismissed the aforementioned petition, thefallo of which reads:

WHEREFORE, finding no grave abuse of discretion on the part of the public respondent, the petition is herebyDENIED and ordered DISMISSED.

In an extended Resolution30 dated 18 June 2003, the Court of Appeals denied petitioner Summerville’s Motion for Reconsideration31 and Supplemental Motion for Reconsideration.32

The Issues

Hence, this Petition for Review on Certiorari under Rule 45 of the Rules of Court, as amended, predicated on the following issues:33

I.

WHETHER THE SEIZED PLAYING CARDS INSIDE THE INFRINGING PLASTIC CONTAINER CASES MAY LEGALLY BE CONSIDERED "SUBJECT OF THE OFFENSE" FOR INFRINGEMENT AND UNFAIR

COMPETITION, AND HENCE MAY BE SUBJECT TO SEIZURE UNDER A SEARCH WARRANT UNDER SECTION 3, RULE 126 OF THE 2000 RULES OF CRIMINAL PROCEDURE;

II.

WHETHER THE TRIAL COURT TRANSGRESSED THE RIGHT OF THE PETITIONER TO DUE PROCESS OF LAW IN QUASHING THE SEARCH WARRANT AND ORDERING THE RETURN OF THE

PLAYING CARDS INSIDE THE INFRINGING PLASTIC CONTAINER CASES AND THE THREE PRINTING MACHINES USED IN MANUFACTURING THE INFRINING PLASTIC CONTAINERS BY

MAKING ARBITRARY FACTUAL FINDINGS WITHOUT RECEPTION OF EVIDENCE ON THE DISPUTED ISSUES OF FACTS..

The Court’s Ruling

At the core of the subject controversy is the issue respecting the propriety of the release and return of the seized Crown brand playing cards and the printing machines.

In dismissing the petition, the Court of Appeals articulated that:

Records reveal that the application for a Search Warrant sought for the seizure of, among others, "Crown brand playing cards using copyright plastic container and joker of Royal,  Machine  used in manufacturing plastic container and joker of Royal; Cliché of Royal joker and casing; other materials being used in the manufacturing of fake Royal copyright joker and plastic container." x x x

x x x x

Certainly, the seized Crown playing cards are not the subject of the offense, fruits of the offense or used or intended to be used as means of committing an offense. Said seized Crown playing cards are genuine and the trademark is registered and owned by private respondents. There is no reason to justify their seizure just because the same are inside the alleged infringed plastic container case.

Petitioner’s allegation of the "indivisibility" of the Crown playing cards and the alleged infringed plastic container case is absurd. To assent to the said theory will be tantamount to taking of one’s property without due process of law. Under the circumstances of the case, the law permits the seizure of a personal property if the same is the subject of the offense, fruit of the offense, or used or about to be used in committing an offense. Insofar as the Crown playing cards are concerned, the private respondents are very much entitled to the recovery of the same.

x x x x.

In the matter of the three (3) printing machines seized, there was no grave abuse of discretion in quashing the warrant insofar as these machines are concerned. x x x.

The use of the printing machines in the manufacture or printing of fake Joker, is unsubstantiated. Since the private respondents are engaged in the printing and manufacture of Crown playing cards, it is only normal and expected that printing machines be found in their possession. x x x

x x x x

The facts presented in the application of the search warrant of the printing machines’ character in the offense of unfair competition, is wanting. This is obviously the absence of personal knowledge on the part of the applicant regarding the use of the printing machines in the commission of the offense. Competent proof of the printing machines’ use in the commission of the offense, must be made in order to ascertain probable cause.34 (Citation omitted.) [Emphasis supplied.]

Additionally, in denying petitioner Summerville’s motions for reconsideration, the appellate court had this to say,viz:

Petitioner alleges that the individuality of Crown Playing Cards is subsumed or lost in the identity of petitioner’s Royal plastic container.

Petitioner should be reminded that the matter of who owns the design of the contested plastic container manufactured or used by private respondents, (sic) is still the subject of inquiry before the lower court. Hence, petitioner can not (sic) prematurely claim ownership over the said plastic container.

As stated in this Court’s decision, the subject matter complained of is the plastic container and not the Crown Playing Cards belonging to private respondents. Public respondent correctly ordered the release of the said cards.

x x x x

WHEREFORE, premises considered, the Motion for Reconsideration and Supplemental Motion for Reconsideration are DENIED for lack of merit.35

Pending the disposition of this case, private respondents filed a Motion to Dismiss36 on the ground that the RTC-Caloocan City Branch 123, in an Order37 dated 10 December 2004, provisionally dismissed Criminal Case No. C-67456, the main case filed against private respondents for the prosecution of the trademark infringement, for failure to prosecute.38 Petitioner Summerville, in its Comment,39 does not controvert such dismissal, or deny the finality of such dismissal; thus, it may be reasonably concluded that the dismissal of the criminal complaint for trademark infringement against private respondents had become final, and no other criminal case is pending or has been filed pursuant to Search Warrant No. 02-2625. Furthermore, there is no record of any civil case having been filed in connection with the seized articles. Since there is no pending criminal or civil case in connection with the articles seized, the return of the said articles to private respondents are but a matter of course.

Be that as it may, despite such dismissal, which has rendered moot or academic the core issue of the subject petition, the matter of whether or not the RTC-Manila, Branch 24 acted with grave abuse of discretion amounting to lack or excess of discretion when it partially granted the motion to quash the Warrants of Search and Seizure and released the Crown brand playing cards as well as the three printing machines seized, needs to be addressed.

In assailing the decision of the Court of Appeals, petitioner Summerville contends that:

The Crown (brand) playing cards encased and wrapped inside the Royal plastic container cases intended to be passed off as Royal (brand) playing cards are ‘the subject of the offense’ of infringement of the registered trademark of the petitioner inasmuch as using such ‘packages’ or ‘wrappers’ intended for commerce or in connection with the sale x x x is likely to cause confusion, or to cause mistake or to deceive’ (sic) which is a criminal offense under section 155.2 in relation to Section 170 of RA 8293.

The intention of the private respondents to pass off their merchandise as Royal (brand) Playing Cards and not as Crown (brand) Playing Cards is very evident in the fact that when inside the Royal (brand) plastic container, the Crown (brand) Playing Cards are to be mistaken by the buying public as Royal (brand) Playing Cards likewise belonging to petitioner.

Such deception in passing off their goods for those of the petitioner who has established a goodwill renders the private respondents criminally liable for unfair competition under Section 168.2 and 168.3 (a) (in relation to Sec.) 170 of RA 8293.40

In contrast, private respondents assert that the use of the term "Registered Mark" in Sec. 155 of Republic Act No. 8293 specifically requires that only owners of registered marks can sue for infringement of trademarks.41Petitioner Summerville, however, has yet to produce evidence to buttress its claim in order

to sustain the issued search warrant.42 With respect to the allegation of the crime of copyright infringement, private respondents aver that petitioner failed to establish an essential element of the said crime, i.e., goodwill.43 They claim that no iota of evidence was ever presented to show that the Royal brand plastic container has already acquired goodwill in accordance with current jurisprudence.44

The petition has no merit.

Petitioner Summerville’s assertion that the Crown brand playing cards are "subject of the offense" is erroneous, bearing in mind the distinctive circumstances of this case, i.e., that private respondents are the owners of the registered Crown brand. The articles seized – hundreds of Crown brand playing cards, among other articles – had little, if any, evidentiary value for the criminal action of trademark infringement relating to the use of the plastic containers, which petitioner Summerville filed before the RTC-Caloocan City, Branch 123; or even one for unfair competition also respecting the use of such plastic containers.

In the case at bar, petitioner Summerville does not dispute that the design and/or mark of the Crown brand playing cards is owned by private respondents. In fact, there is no allegation that the design and/or mark of such Crown brand playing cards is a reproduction, counterfeit, copy, or colorable imitation of another registered mark legally owned by another; hence, no crime of trademark infringement appears to have been committed or perpetrated to warrant the inference that the Crown brand playing cards are "subject of the offense" as contemplated by Sec. 4 of Rule 126 of the Rules of Court. All the more telling is the contention of petitioner Summerville that it is the plastic container/case and its marking that bear the reproduction, counterfeit, copy, or colorable imitation of its registered mark. In other words, it is the design of the plastic container/case that is alleged to have been utilized by private respondents to deceive the public into believing that their Crown brand playing cards are the same as those manufactured by petitioner Summerville.

As succinctly put by the Court of Appeals:

Certainly, the seized Crown playing cards are not the subject of the offense, fruits of the offense or used or intended to be used as means of committing an offense. Said seized Crown playing cards are genuine and the trademark is registered and owned by private respondents. There is no reason to justify their seizure just because the same are inside the alleged infringed plastic container case.45

Furthermore, assuming for the sake of argument that the Crown brand playing cards can be considered "subject of the offense," a sample or two are more than enough to retain, should there have been a need to examine them along with the plastic container/case. There was no need to hold the hundreds of articles seized. It is alleged in the Affidavits executed pursuant to the application for the search warrant that as part of the investigation conducted by the CIDD-CIDG, PNP, sample purchases were made. Said samples, therefore, are fairly sufficient to represent the hundreds of articles that were seized.

More to the point, during the presentation of the seized Crown brand playing cards at trial, the prosecution need not present each and every seized pack of playing cards in order to show or prove the point that Crown brand playing cards bear the reproduction, counterfeit, copy, or colorable imitation of petitioner Summerville’s mark – the rest would just be surplus to requirement. The trial court will not allow the presentation of superfluous evidence. Given the availability of actual samples, there was no need for the court to take custody of the countless articles seized.

With respect to the release of the three printing machines, the foregoing arguments equally hold true. This Court finds no error in the actions of the trial court. The record of the case is bereft of any finding as to the use of the printing machines in the production of the subject plastic containers. Absent any connection between the two, no amount of intellectual calisthenics will substantiate portraying the printing machines as "subject of the offense," "fruit of the offense" or used or intended to be used as means of committing an offense.

All things considered, it should be noted that there is no law prohibiting the trial court from returning the articles seized before a case is actually filed in court and even before the final determination by the prosecutor or the DOJ of whether a case should be filed in court. It is true that in most cases, the release of the articles seized would be unjustified. However, in the case at bar, the return of the playing cards and the printing machines would better serve the purposes of justice and expediency.

There exists a constitutional safeguard against unreasonable searches and seizures,46 which refers to the immunity of one’s person from interference by the government, included in which is his residence, his papers and other possessions.47 The Constitution, however, does not provide a blanket prohibition against all searches and seizures; rather, the fundamental protection accorded by the search and seizure clause is that, between persons and the police, there must stand the protective authority of a magistrate clothed with the power to issue or refuse such search warrant.48 Yet, the responsibilities of the magistrate do not end with the granting of the warrant, but extends to the custody of the articles seized.49 In exercising custody over these articles, the property rights of the owner should be balanced with the social need to preserve evidence, which will be used in the prosecution of a case.50

In the present petition, the criminal action for the prosecution of the crime of trademark infringement has already been dismissed. Thus, the RTC-Manila, Branch 24, would have been left with the custody of depreciable items. More importantly, the Crown brand playing cards would have been non-essential if presented as evidence for the following reasons: 1) private respondents have already admitted that they are the owners of the Crown brand, which made use of the plastic containers in dispute; 2) petitioner Summerville does not deny private respondents’ ownership of the Crown brand; and 3) what is in dispute is the design of plastic containers/cases of playing cards and not the playing cards per se. Actual samples of the impugned plastic containers/cases of Crown brand playing cards are already in the possession of the trial court. Where the articles seized have already been found not to be the "subject of the offense" and the purpose of presenting them as evidence is no longer served, there is no justification for severely curtailing the rights of a person to his property.

By and large, in ordering the return of the articles seized, the RTC-Manila, Branch 24, merely exercised its discretion in determining from the circumstances of the case what constitutes a reasonable and an unreasonable search and seizure. The belief that to value the privacy of home and person and to afford its constitutional protection against the long reach of the government are no less than to value human dignity; and this privacy must not be disturbed except in the overriding social need, and then only under the stringent procedural rules.51

WHEREFORE, premises considered, the instant petition is hereby DENIED. The assailed 13 March 2003 Decision and 18 June 2003 Resolution both of the Court of Appeals in CA-G.R. SP No. 73799, are hereby AFFIRMED. Costs against petitioner Summerville General Merchandising Company.

SO ORDERED.

MINITA V. CHICO-NAZARIOAssociate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGOAssociate Justice

Chairperson

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO Associate JusticeChairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNOChief Justice

Footnotes

1 Penned by Court of Appeals Associate Justice Remedios A. Salazar-Fernando with Associate Justices Ruben T. Reyes and Edgardo F. Sundiam, concurring; Annex "A" of the Petition; rollo, pp. 26-37.

2 Annex "E" of the Petition; id. at 56-57.

3 CA rollo, pp. 14-16.

4 Id. at 19.

5 Records of Search Warrant No. 02-2623, p. 6.

6 Id.

7 Id. at 18-21.

8 Id. at 22-41.

9 SEC. 155. Remedies; Infringement. – Any person who shall, without the consent of the owner of the registered mark:

Sec. 155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

Sec. 155.2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels,

signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set forth: Provided, That the infringement takes place at the moment any of the acts stated in Subsection 155.1 or this subsection are committed regardless of whether there is actual sale of goods or services using the infringing material.

10 SEC. 170. Penalties. – Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000.00) to Two hundred thousand pesos (P200,000.00), shall be imposed on any person who is found guilty of committing any of the acts mentioned in Section 155, Section 168 and Subsection 169.1 (Arts. 188 and 189, Revised Penal Code).

11 AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES.

12 CA rollo, p. 93.

13 Id. at 95.

14 Id. at 102 – 103.

15 Compliance/Return of Search Warrant dated 19 January 2002, accomplished by P/INSP Romualdo B. Cruz, id.

16 Letter dated 22 January 2001; id. at 104.

17 Id. at 106-123.

18 Id. at 135 – 140.

19 Id. at 138-139.

20 28 May 1997.

21 The case was re-raffled from Branch 1 to Branch 24 presided over by the same judge, Hon. Antonio M. Eugenio, Jr.

22 Rollo, pp. 85 – 87.

23 Id. at 86.

24 Id.

25 Id.

26 CA rollo, p. 19.

27 Id. at 2–12.

28 Id. at 9.

29 Annex "A" of the Petition; rollo, pp. 25 – 37.

30 Annex "E" of the Petition; id at 55 – 57.

31 Annex "B" of the Petition; id at 38 – 40.

32 Annex "C" of the Petition; id at 41 – 43.

33 Petitioner’s Memorandum, p. 9; id. at 114.

34 Id. at 34-37.

35 Id. at 56-57.

36 Id. at 123 – 125.

37 Annex "A" of respondent’s Motion to Dismiss dated 21 March 2005, filed before the Court on 29 March 2005; Id. at 126.

38 Id. In view of the foregoing, and considering that this case has been pending for a considerable length of time, in violation of the right of the accused to a speedy trial, let this case be DISMISSED PROVISIONALLY with the express consent of the accused and their counsel.

39 Id. at 154-159.

40 Id. at 114-115.

41 Id. at 137.

42 Id.

43 Id. at 140.

44 Id. at 141.

45 Id. at 35.

46 Caterpillar, Inc. v. Samson, G.R. No. 164605, 27 October 2006, 505 SCRA 704, 714.

47 Id. citing Villanueva v. Querubin, 150-C Phil. 519, 524 (1972).

48 Id. citing People v. Libnao, G.R. No. 136860, 20 January 2003, 395 SCRA 407, 413.

49 Id.

50 Id.

51 Caterpillar, Inc. v. Samson, supra note 46 at 715.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. Nos. 76649-51 August 19, 1988

20TH CENTURY FOX FILM CORPORATION, petitioner, vs.COURT OF APPEALS, EDUARDO M. BARRETO, RAUL SAGULLO and FORTUNE LEDESMA, respondents.

Siguion Reyna, Montecillo & Ongsiako Law Office for petitioner.

B.C. Salazar & Associates for respondents.

 

GUTIERREZ, JR., J.:

The petitioner questions the application of the constitutional provision against illegal searches and seizures to raids conducted in connection with the government's anti-film piracy campaign. The main issue hinges on whether or not the judge properly lifted the search warrants he issued earlier upon the application of the National Bureau of Investigation on the basis of the complaint filed by the petitioner.

In a letter-complaint dated August 26, 1985, petitioner 20th Century Fox Film Corporation through counsel sought the National Bureau of Investigation's (NBI) assistance in the conduct of searches and seizures in connection with the latter's anti-film piracy campaign. Specifically, the letter-complaint alleged that certain videotape outlets all over Metro Manila are engaged in the unauthorized sale and renting out of copyrighted films in videotape form which constitute a flagrant violation of Presidential Decree No. 49 (otherwise known as the Decree on the Protection of Intellectual Property).

Acting on the letter-complaint, the NBI conducted surveillance and investigation of the outlets pinpointed by the petitioner and subsequently filed three (3) applications for search warrants against the video outlets owned by the private respondents. The applications were consolidated and heard by the Regional Trial Court of Makati, Branch 132.

On September 4, 1985, the lower court issued the desired search warrants.

Armed with the search warrants, the NBI accompanied by the petitioner's agents, raided the video outlets and seized the items described therein. An inventory of the items seized was made and left with the private respondents.

Acting on a motion to lift search warrants and release seized properties filed by the private respondents, the lower court issued an order dated October 8, 1985, lifting the three (3) search warrants issued earlier against the private respondents by the court. The dispositive portion of the order reads:

WHEREFORE, the Court hereby orders that Search Warrants Nos. SW- 85-024; issued against Eduardo M. Barreto of the Junction Video, etc., Paranaque, Metro Manila; SW No. 85-025, issued against Raul M. Sagullo of South Video Bug Center, Inc., etc., also of No. 5355 Pres. Avenue BF Homes, Parañaque, Metro Manila; and SW No. 85-026,

issued against Fortune A. Ledesma of Sonix Video Services of San Antonio Plaza, Forbes Park, Makati, Metro Manila, be lifted.

Consequently, the articles listed in the returns of the three search warrants which could not be a basis of any criminal prosecution, now in the possession of the National Bureau of Investigation which under the law must be delivered to this Court, but which the NBI failed to do, are hereby ordered to be returned to their owners through their lawyer, Atty. Benito Salazar or his agents or representatives, against proper receipt, to be forwarded to this Court for record purposes, as proof that said properties have been returned to the possession of the rightful owners." (p. 34, Rollo)

The lower court denied a motion for reconsideration filed by the petitioner in its order dated January 2, 1986.

The petitioner filed a petition for certiorari with the Court of Appeals to annul the October 8, 1985 and January 2, 1986 orders of the lower court. The petition was dismissed.

Hence, this petition.

The main issue hinges on the meaning of "probable cause" within the context of the constitutional provision against illegal searches and seizures (Section 3, Article IV, 1973 Constitution, now, Section 2, Article Ill, 1987 Constitution.

The petitioner maintains that the lower court issued the questioned search warrants after finding the existence of a probable cause justifying their issuance. According to the petitioner, the lower court arrived at this conclusion on the basis of the depositions of applicant NBI's two witnesses which were taken through searching questions and answers by the lower court.

Section 2, Article III of the present Constitution which substantially reproduces Section 3, Article IV of the 1973 Constitution on illegal searches and seizures provides:

The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized.

This constitutional right protects a citizen against wanton and unreasonable invasion of his privacy and liberty as to his person, papers and effects. We have explained in the case of People v. Burgos (144 SCRA 1) citingVillanueva v. Querubin (48 SCRA 345) why the right is so important:

It is deference to one's personality that lies at the core of this right, but it could be also looked upon as a recognition of a constitutionally protected area, primarily one's home, but not necessarily thereto confined. (Cf. Hoffa v. United States, 385 US 293 119661) What is sought to be guarded is a man's prerogative to choose who is allowed entry to his residence. In that haven of refuge, his individuality can assert itself not only in the choice of who shall be welcome but likewise in the kind of objects he wants around him. There the state, however powerful, does not as such have access except under the circumstances above noted, for in the traditional formulation, his house, however humble, is his castle. Thus is outlawed any unwarranted intrusion by government, which is called upon to refrain from any invasion of his dwelling and to respect the privacies of his life. (Cf Schmerber v. California, 384 US 757 [1966], Brennan, J. and Boyd v. United States, 116 630 [1886]). In the same vein, Landynski in his authoritative work (Search and

Seizure and the Supreme Court [1966]), could fitly characterize constitutional right as the embodiment of a "spiritual concept: the belief that to value the privacy of home and person and to afford its constitutional protection against the long reach of government is no less than to value human dignity, and that his privacy must not be disturbed except in case of overriding social need, and then only under stringent procedural safeguards."(ibid, p. 74).

The government's right to issue search warrants against a citizen's papers and effects is circumscribed by the requirements mandated in the searches and seizures provision of the Constitution.

In the case of Burgos, Sr. v. Chief of Staff, AFP (133 SCRA 800), we defined probable cause for a valid search "as such facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense has been committed and that the objects sought in connection with the offense are in the place sought to be searched." This constitutional provision also demands "no less than personal knowledge by the complainant or his witnesses of the facts upon which the issuance of a search warrant may be justified" in order to convince the judge, not the individual making the affidavit and seeking the issuance of the warrant, of the existence of a probable cause. (Alvarez v. Court of First Instance, 64 Phil. 33; Burgos, Sr. v. Chief of Staff, AFP, supra).

In the instant case, the lower court lifted the three questioned search warrants against the private respondents on the ground that it acted on the application for the issuance of the said search warrants and granted it on the misrepresentations of applicant NBI and its witnesses that infringement of copyright or a piracy of a particular film have been committed. Thus the lower court stated in its questioned order dated January 2,1986:

According to the movant, all three witnesses during the proceedings in the application for the three search warrants testified of their own personal knowledge. Yet, Atty. Albino Reyes of the NBI stated that the counsel or representative of the Twentieth Century Fox Corporation will testify on the video cassettes that were pirated, so that he did not have personal knowledge of the alleged piracy. The witness Bacani also said that the video cassettes were pirated without stating the manner it was pirated and that it was Atty. Domingo that has knowledge of that fact.

On the part of Atty. Domingo, he said that the re-taping of the allegedly pirated tapes was from master tapes allegedly belonging to the Twentieth Century Fox, because, according to him, it is of his personal knowledge.

At the hearing of the Motion for Reconsideration, Senior NBI Agent Atty. Albino Reyes testified that when the complaint for infringement was brought to the NBI, the master tapes of the allegedly pirated tapes were shown to him and he made comparisons of the tapes with those purchased by their man Bacani. Why the master tapes or at least the film reels of the allegedly pirated tapes were not shown to the Court during the application gives some misgivings as to the truth of that bare statement of the NBI agent on the witness stand. "

Again as the application and search proceedings is a prelude to the filing of criminal cases under PD 49, the copyright infringement law, and although what is required for the issuance thereof is merely the presence of probable cause, that probable cause must be satisfactory to the Court, for it is a time- honored precept that proceedings to put a man to task as an offender under our laws should be interpreted in strictissimi juris against the government and liberally in favor of the alleged offender.

xxx xxx xxx

This doctrine has never been overturned, and as a matter of fact it had been enshrined in the Bill of Rights in our 1973 Constitution.

So that lacking in persuasive effect, the allegation that master tapes were viewed by the NBI and were compared to the purchased and seized video tapes from the respondents' establishments, it should be dismissed as not supported by competent evidence and for that matter the probable cause hovers in that grey debatable twilight zone between black and white resolvable in favor of respondents herein.

But the glaring fact is that 'Cocoon,' the first video tape mentioned in the search warrant, was not even duly registered or copyrighted in the Philippines. (Annex C of Opposition p. 152 record). So, that lacking in the requisite presentation to the Court of an alleged master tape for purposes of comparison with the purchased evidence of the video tapes allegedly pirated and those seized from respondents, there was no way to determine whether there really was piracy, or copying of the film of the complainant Twentieth Century Fox." (pp. 37-39, Rollo)

xxx xxx xxx

The lower court, therefore, lifted the three (3) questioned search warrants in the absence of probable cause that the private respondents violated P.D. 49. As found out by the court, the NBI agents who acted as witnesses did not have personal knowledge of the subject matter of their testimony which was the alleged commission of the offense by the private respondents. Only the petitioner's counsel who was also a witness during the application for the issuance of the search warrants stated that he had personal knowledge that the confiscated tapes owned by the private respondents were pirated tapes taken from master tapes belonging to the petitioner. However, the lower court did not give much credence to his testimony in view of the fact that the master tapes of the allegedly pirated tapes were not shown to the court during the application.

All these factors were taken into consideration by the lower court when it lifted the three questioned search warrants. There is no truth, therefore, to the petitioner's allegation that the lower court based its January 2, 1986 order only "on the fact that the original or master copies of the copyrighted films were not presented during the application for search warrants, thus leading it to conclude that it had been "misled by the applicant and his witnesses." (p. 17, Rollo)

The presentation of the master tapes of the copyrighted films from which the pirated films were allegedly copied, was necessary for the validity of search warrants against those who have in their possession the pirated films. The petitioner's argument to the effect that the presentation of the master tapes at the time of application may not be necessary as these would be merely evidentiary in nature and not determinative of whether or not a probable cause exists to justify the issuance of the search warrants is not meritorious. The court cannot presume that duplicate or copied tapes were necessarily reproduced from master tapes that it owns.

The application for search warrants was directed against video tape outlets which allegedly were engaged in the unauthorized sale and renting out of copyrighted films belonging to the petitioner pursuant to P.D. 49.

The essence of a copyright infringement is the similarity or at least substantial similarity of the purported pirated works to the copyrighted work. Hence, the applicant must present to the court the copyrighted films to compare them with the purchased evidence of the video tapes allegedly pirated to determine whether the latter is an unauthorized reproduction of the former. This linkage of the copyrighted films to the pirated films must be established to satisfy the requirements of probable cause. Mere allegations as to the existence of the copyrighted films cannot serve as basis for the issuance of a search warrant.

Furthermore, we note that the search warrants described the articles sought to be seized as follows:

xxx xxx xxx

xxx xxx xxx

c) Television sets, Video Cassettes Recorders, rewinders, tape head cleaners, accessories, equipments and other machines used or intended to be used in the unlawful reproduction, sale, rental/lease distribution of the above-mentioned video tapes which she is keeping and concealing in the premises above-described." (p. 26, Rollo)

In the case of Burgos v. Chief of Staff, AFP supra, we stated:

xxx xxx xxx

Another factor which makes the search warrants under consideration constitutionally objectionable is that they are in the nature of general warrants. The search warrants describe the articles sought to be seized in this wise:

l] All printing equipment, paraphernalia, paper, ink, photo equipment, typewriters, cabinets, tables communications/recording equipment, tape recorders, dictaphone and the like used and/or connected in the printing of the 'WE FORUM' newspaper and any and all document/communications, letters and facsimile of prints related to "WE FORUM" newspaper.

2] Subversive documents, pamphlets, leaflets, books, and other publications to promote the objectives and purposes of the subversive organizations known as Movement for Free Philippines, Light-a-Fire Movement and April 6 Movement; and

3] Motor vehicles used in the distribution/circulation of the 'WE FORUM and other subversive materials and propaganda, more particularly,

1] Toyota-Corolla, colored yellow with Plate No. NKA 892;

2] DATSUN pick-up colored white with Plate No. NKV 969;

3] A delivery truck with Plate No. NBS 542;

4] TOYOTA-TAMARAW, colored white with Plate No. PBP 665;and,

5] TOYOTA Hi-Lux, pick-up truck with Plate No. NGV 472 with marking "Bagong Silang."

In Stanford v. State of Texas (379 U.S. 476,13 L ed 2nd 431), the search warrant which authorized the search for 'books, records, pamphlets, cards, receipts, lists, memoranda, pictures, recordings and other written instruments concerning the Communist Parties of Texas, and the operations of the Community Party in Texas," was declared void by the U.S. Supreme Court for being too general. In like manner, directions to "seize any evidence in connection with the violation of SDC 13-3703 or otherwise' have been held too general, and that portion of a search warrant which authorized the seizure of any "paraphernalia which could be used to violate Sec. 54-197 of the Connecticut General Statutes [the statute dealing with the crime of conspiracy]"' was held to be a general

warrant, and therefore invalid (68 Am. Jur. 2d., pp. 736-737). The description of the articles sought to be seized under the search warrants in question cannot be characterized differently. (at pp. 814-815)

Undoubtedly, a similar conclusion can be deduced from the description of the articles sought to be confiscated under the questioned search warrants.

Television sets, video cassette recorders, reminders and tape cleaners are articles which can be found in a video tape store engaged in the legitimate business of lending or renting out betamax tapes. In short, these articles and appliances are generally connected with, or related to a legitimate business not necessarily involving piracy of intellectual property or infringement of copyright laws. Hence, including these articles without specification and/or particularity that they were really instruments in violating an Anti-Piracy law makes The search warrant too general which could result in the confiscation of all items found in any video store. In fact, this actually happened in the instant case. Thus, the lower court, in its questioned order dated October 8, 1985 said:

Although the applications and warrants themselves covered certain articles of property usually found in a video store, the Court believes that the search party should have confined themselves to articles that are according to them, evidence constitutive of infringement of copyright laws or the piracy of intellectual property, but not to other articles that are usually connected with, or related to, a legitimate business, not involving piracy of intellectual property, or infringement of copyright laws. So that a television set, a rewinder, and a whiteboard listing Betamax tapes, video cassette cleaners video cassette recorders as reflected in the Returns of Search Warrants, are items of legitimate business engaged in the video tape industry, and which could not be the subject of seizure, The applicant and his agents therefore exceeded their authority in seizing perfectly legitimate personal property usually found in a video cassette store or business establishment." (p. 33, Rollo)

All in all, we find no grave abuse of discretion on the part of the lower court when it lifted the search warrants it earlier issued against the private respondents. We agree with the appellate court's findings to the effect that:

An assiduous examination of the assailed orders reveal that the main ground upon which the respondent Court anchored said orders was its subsequent findings that it was misled by the applicant (NBI) and its witnesses 'that infringement of copyright or a piracy of a particular film have been committed when it issued the questioned warrants.' Stated differently, the respondent Court merely corrected its erroneous findings as to the existence of probable cause and declared the search and seizure to be unreasonable. Certainly, such action is within the power and authority of the respondent Court to perform, provided that it is not exercised in an oppressive or arbitrary manner. Indeed, the order of the respondent Court declaring the existence of probable cause is not final and does not constitute res judicata.

A careful review of the record of the case shows that the respondent Court did not commit a grave abuse of discretion when it issued the questioned orders. Grave abuse of discretion' implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or, in other words, where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.' But far from being despotic or arbitrary, the assailed orders were motivated by a noble desire of rectifying an error, much so when the erroneous findings collided with the constitutional rights of the private respondents. In fact, the petitioner did not even contest the righteousness and legality of

the questioned orders but instead concentrated on the alleged denial of due process of law." (pp. 44-45, Rollo)

The proliferation of pirated tapes of films not only deprives the government of much needed revenues but is also an indication of the widespread breakdown of national order and discipline. Courts should not impose any unnecessary roadblocks in the way of the anti-film piracy campaign. However, the campaign cannot ignore or violate constitutional safeguards. To say that the problem of pirated films can be solved only by the use of unconstitutional shortcuts is to denigrate the long history and experience behind the searches and seizures clause of the Bill of Rights. The trial court did not commit reversible error.

WHEREFORE, the instant petition is DISMISSED. The questioned decision and resolution of the Court of Appeals are AFFIRMED.

SO ORDERED.

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

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

 

G.R. No. 110318 August 28, 1996

COLUMBIA PICTURES, INC., ORION PICTURES CORPORATION, PARAMOUNT PICTURES CORPORATION, TWENTIETH CENTURY FOX FILM CORPORATION, UNITED ARTISTS CORPORATION, UNIVERSAL CITY STUDIOS, INC., THE WALT DISNEY COMPANY, and WARNER BROTHERS, INC., petitioners, vs.COURT OF APPEALS, SUNSHINE HOME VIDEO, INC. and DANILO A. PELINDARIO, respondents.

 

REGALADO, J.:p

Before us is a petition for review on certiorari of the decision of the Court of Appeals 1 promulgated on July 22, 1992 and its resolution 2 of May 10, 1993 denying petitioners' motion for reconsideration, both of which sustained the order 3 of the Regional Trial Court, Branch 133, Makati, Metro Manila, dated November 22, 1988 for the quashal of Search Warrant No. 87-053 earlier issued per its own order 4 on September 5, 1988 for violation of Section 56 of Presidential Decree No. 49, as amended, otherwise known as the "Decree on the Protection of Intellectual Property."

The material facts found by respondent appellate court are as follows:

Complainants thru counsel lodged a formal complaint with the National Bureau of Investigation for violation of PD No. 49, as amended, and sought its assistance in their anti-film piracy drive. Agents of the NBI and private researchers made discreet surveillance on various video establishments in Metro Manila including Sunshine Home Video Inc. (Sunshine for brevity), owned and operated by Danilo A. Pelindario with address at No. 6 Mayfair Center, Magallanes, Makati, Metro Manila.

On November 14, 1987, NBI Senior Agent Lauro C. Reyes applied for a search warrant with the courta quo against Sunshine seeking the seizure, among others, of pirated video tapes of copyrighted films all of which were enumerated in a list attached to the application; and, television sets, video cassettes and/or laser disc recordings equipment and other machines and paraphernalia used or intended to be used in the unlawful exhibition, showing, reproduction, sale, lease or disposition of videograms tapes in the premises above described. In the hearing of the application, NBI Senior Agent Lauro C. Reyes, upon questions by the court a quo, reiterated in substance his averments in his affidavit. His testimony was corroborated by another witness, Mr. Rene C. Baltazar. Atty. Rico V. Domingo's deposition was also taken. On the basis of the affidavits and depositions of NBI Senior Agent Lauro C. Reyes, Rene C. Baltazar and Atty. Rico V. Domingo, Search Warrant No. 87-053 for violation of Section 56 of PD No. 49, as amended, was issued by the court a quo.

The search warrant was served at about 1:45 p.m. on December 14, 1987 to Sunshine and/or their representatives. In the course of the search of the premises indicated in the search warrant, the NBI Agents found and seized various video tapes of duly copyrighted motion pictures/films owned or exclusively distributed by private complainants, and machines, equipment, television sets, paraphernalia, materials, accessories all of which were included in the receipt for properties accomplished by the raiding team. Copy of the receipt was furnished and/or tendered to Mr. Danilo A. Pelindario, registered owner-proprietor of Sunshine Home Video.

On December 16, 1987, a "Return of Search Warrant" was filed with the Court.

A "Motion To Lift the Order of Search Warrant" was filed but was later denied for lack of merit (p. 280, Records).

A Motion for reconsideration of the Order of denial was filed. The court a quo granted the said motion for reconsideration and justified it in this manner:

It is undisputed that the master tapes of the copyrighted films from which the pirated films were allegedly copies (sic), were never presented in the proceedings for the issuance of the search warrants in question. The orders of the Court granting the search warrants and denying the urgent motion to lift order of search warrants were, therefore, issued in error. Consequently, they must be set aside. (p. 13, Appellant's Brief) 5

Petitioners thereafter appealed the order of the trial court granting private respondents' motion for reconsideration, thus lifting the search warrant which it had theretofore issued, to the Court of Appeals. As stated at the outset, said appeal was dismissed and the motion for reconsideration thereof was denied. Hence, this petition was brought to this Court particularly challenging the validity of respondent court's retroactive application of the ruling in 20th Century Fox Film Corporation vs. Court of Appeals, et al., 6 in dismissing petitioners' appeal and upholding the quashal of the search warrant by the trial court.

I

Inceptively, we shall settle the procedural considerations on the matter of and the challenge to petitioners' legal standing in our courts, they being foreign corporations not licensed to do business in the Philippines.

Private respondents aver that being foreign corporations, petitioners should have such license to be able to maintain an action in Philippine courts. In so challenging petitioners' personality to sue, private respondents point to the fact that petitioners are the copyright owners or owners of exclusive rights of distribution in the Philippines of copyrighted motion pictures or films, and also to the appointment of Atty. Rico V. Domingo as their attorney-in-fact, as being constitutive of "doing business in the Philippines" under Section 1 (f)(1) and (2), Rule 1 of the Rules of the Board of Investments. As foreign corporations doing business in the Philippines, Section 133 of Batas Pambansa Blg. 68, or the Corporation Code of the Philippines, denies them the right to maintain a suit in Philippine courts in the absence of a license to do business. Consequently, they have no right to ask for the issuance of a search warrant. 7

In refutation, petitioners flatly deny that they are doing business in the Philippines, 8 and contend that private respondents have not adduced evidence to prove that petitioners are doing such business here, as would require them to be licensed by the Securities and Exchange Commission, other than averments in the quoted portions of petitioners' "Opposition to Urgent Motion to Lift Order of Search Warrant" dated April 28, 1988 and Atty. Rico V. Domingo's affidavit

of December 14, 1987. Moreover, an exclusive right to distribute a product or the ownership of such exclusive right does not conclusively prove the act of doing business nor establish the presumption of doing business. 9

The Corporation Code provides:

Sec. 133. Doing business without a license. — No foreign corporation transacting business in the Philippines without a license, or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.

The obtainment of a license prescribed by Section 125 of the Corporation Code is not a condition precedent to the maintenance of any kind of action in Philippine courts by a foreign corporation. However, under the aforequoted provision, no foreign corporation shall be permitted to transact business in the Philippines, as this phrase is understood under the Corporation Code, unless it shall have the license required by law, and until it complies with the law intransacting business here, it shall not be permitted to maintain any suit in local courts. 10 As thus interpreted, any foreign corporation not doing business in the Philippines may maintain an action in our courts upon any cause of action, provided that the subject matter and the defendant are within the jurisdiction of the court. It is not the absence of the prescribed license but "doing business" in the Philippines without such license which debars the foreign corporation from access to our courts. In other words, although a foreign corporation is without license to transact business in the Philippines, it does not follow that it has no capacity to bring an action. Such license is not necessary if it is not engaged in business in the Philippines. 11

Statutory provisions in many jurisdictions are determinative of what constitutes "doing business" or "transacting business" within that forum, in which case said provisions are controlling there. In others where no such definition or qualification is laid down regarding acts or transactions failing within its purview, the question rests primarily on facts and intent. It is thus held that all the combined acts of a foreign corporation in the State must be considered, and every circumstance is material which indicates a purpose on the part of the corporation to engage in some part of its regular business in the State. 12

No general rule or governing principles can be laid down as to what constitutes "doing" or "engaging in" or "transacting" business. Each case must be judged in the light of its own peculiar environmental circumstances. 13 The true tests, however, seem to be whether the foreign corporation is continuing the body or substance of the business or enterprise for which it was organized or whether it has substantially retired from it and turned it over to another.  14

As a general proposition upon which many authorities agree in principle, subject to such modifications as may be necessary in view of the particular issue or of the terms of the statute involved, it is recognized that a foreign corporation is "doing," "transacting," "engaging in," or "carrying on" business in the State when, and ordinarily only when, it has entered the State by its agents and is there engaged in carrying on and transacting through them some substantial part of its ordinary or customary business, usually continuous in the sense that it may be distinguished from merely casual, sporadic, or occasional transactions and isolated acts. 15

The Corporation Code does not itself define or categorize what acts constitute doing or transacting business in the Philippines. Jurisprudence has, however, held that the term implies a continuity of commercial dealings and arrangements, and contemplates, to that extent, the performance of acts or works or the exercise of some of the functions normally incident to or in progressive prosecution of the purpose and subject of its organization. 16

This traditional case law definition has evolved into a statutory definition, having been adopted with some qualifications in various pieces of legislation in our jurisdiction.

For instance, Republic Act No. 5455 17 provides:

Sec. 1. Definitions and scope of this Act. — (1) . . . ; and the phrase "doing business" shall include soliciting orders, purchases, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors who are domiciled in the Philippines or who in any calendar year stay in the Philippines for a period or periods totalling one hundred eighty days or more; participating in the management, supervision or control of any domestic business firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization.

Presidential Decree No. 1789, 18 in Article 65 thereof, defines "doing business" to include soliciting orders, purchases, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors who are domiciled in the Philippines or who in any calendar year stay in the Philippines for a period or periods totalling one hundred eighty days or more; participating in the management, supervision or control of any domestic business firm, entity or corporation in the Philippines, and any other act or acts that imply a continuity of commercial dealings or arrangements and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of the business organization.

The implementing rules and regulations of said presidential decree conclude the enumeration of acts constituting "doing business" with a catch-all definition, thus:

Sec. 1(g). "Doing Business" shall be any act or combination of acts enumerated in Article 65 of the Code. In particular "doing business" includes:

xxx xxx xxx

(10) Any other act or acts which imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, or in the progressive prosecution of, commercial gain or of the purpose and object of the business organization.

Finally, Republic Act No. 7042 19 embodies such concept in this wise:

Sec. 3. Definitions. — As used in this Act:

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(d) the phrase "doing business shall include soliciting orders, service contracts, opening offices, whether called "liaison" offices or branches; appointing representatives or distributors domiciled in the Philippines or who in any calendar year stay in the country for a period or periods totalling one hundred eight(y) (180) days or more; participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the exercise of some of the functions normally incident to, and in

progressive prosecution of, commercial gain or of the purpose and object of the business organization: Provided, however, That the phrase "doing business" shall not be deemed to include mere investment as a shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; nor having a nominee director or officer to represent its interests in such corporation; nor appointing a representative or distributor domiciled in the Philippines which transacts business in its own name and for its own account.

Based on Article 133 of the Corporation Code and gauged by such statutory standards, petitioners are not barred from maintaining the present action. There is no showing that, under our statutory or case law, petitioners are doing, transacting, engaging in or carrying on business in the Philippines as would require obtention of a license before they can seek redress from our courts. No evidence has been offered to show that petitioners have performed any of the enumerated acts or any other specific act indicative of an intention to conduct or transact business in the Philippines.

Accordingly, the certification issued by the Securities and Exchange Commission 20 stating that its records do not show the registration of petitioner film companies either as corporations or partnerships or that they have been licensed to transact business in the Philippines, while undeniably true, is of no consequence to petitioners' right to bring action in the Philippines. Verily, no record of such registration by petitioners can be expected to be found for, as aforestated, said foreign film corporations do not transact or do business in the Philippines and, therefore, do not need to be licensed in order to take recourse to our courts.

Although Section 1(g) of the Implementing Rules and Regulations of the Omnibus Investments Code lists, among others —

(1) Soliciting orders, purchases (sales) or service contracts. Concrete and specific solicitations by a foreign firm, or by an agent of such foreign firm, not acting independently of the foreign firm amounting to negotiations or fixing of the terms and conditions of sales or service contracts, regardless of where the contracts are actually reduced to writing, shall constitute doing business even if the enterprise has no office or fixed place of business in the Philippines. The arrangements agreed upon as to manner, time and terms of delivery of the goods or the transfer of title thereto is immaterial. A foreign firm which does business through the middlemen acting in their own names, such as indentors, commercial brokers or commission merchants, shall not be deemed doing business in the Philippines. But such indentors, commercial brokers or commission merchants shall be the ones deemed to be doing business in the Philippines.

(2) Appointing a representative or distributor who is domiciled in the Philippines, unless said representative or distributor has an independent status, i.e., it transacts business in its name and for its own account, and not in the name or for the account of a principal. Thus, where a foreign firm is represented in the Philippines by a person or local company which does not act in its name but in the name of the foreign firm, the latter is doing business in the Philippines.

as acts constitutive of "doing business," the fact that petitioners are admittedly copyright owners or owners of exclusive distribution rights in the Philippines of motion pictures or films does not convert such ownership into an indicium of doing business which would require them to obtain a license before they can sue upon a cause of action in local courts.

Neither is the appointment of Atty. Rico V. Domingo as attorney-in-fact of petitioners, with express authority pursuant to a special power of attorney, inter alia —

To lay criminal complaints with the appropriate authorities and to provide evidence in support of both civil and criminal proceedings against any person or persons involved in the criminal infringement of copyright or concerning the unauthorized importation, duplication, exhibition or distribution of any cinematographic work(s) — films or video cassettes — of which . . . is the owner of copyright or the owner of exclusive rights of distribution in the Philippines pursuant to any agreement(s) between . . . and the respective owners of copyright in such cinematographic work(s), to initiate and prosecute on behalf of . . . criminal or civil actions in the Philippines against any person or persons unlawfully distributing, exhibiting, selling or offering for sale any films or video cassettes of which . . . is the owner of copyright or the owner of exclusive rights of distribution in the Philippines pursuant to any agreement(s) between . . . and the respective owners of copyright in such works. 21

tantamount to doing business in the Philippines. We fail to see how exercising one's legal and property rights and taking steps for the vigilant protection of said rights, particularly the appointment of an attorney-in-fact, can be deemed by and of themselves to be doing business here.

As a general rule, a foreign corporation will not be regarded as doing business in the State simply because it enters into contracts with residents of the State, where such contracts are consummated outside the State. 22 In fact, a view is taken that a foreign corporation is not doing business in the State merely because sales of its product are made there or other business furthering its interests is transacted there by an alleged agent, whether a corporation or a natural person, where such activities are not under the direction and control of the foreign corporation but are engaged in by the alleged agent as an independent business.23

It is generally held that sales made to customers in the State by an independent dealer who has purchased and obtained title from the corporation to the products sold are not a doing of business by the corporation.24 Likewise, a foreign corporation which sells its products to persons styled "distributing agents" in the State, for distribution by them, is not doing business in the State so as to render it subject to service of process therein, where the contract with these purchasers is that they shall buy exclusively from the foreign corporation such goods as it manufactures and shall sell them at trade prices established by it. 25

It has moreover been held that the act of a foreign corporation in engaging an attorney to represent it in a Federal court sitting in a particular State is not doing business within the scope of the minimum contact test.26 With much more reason should this doctrine apply to the mere retainer of Atty. Domingo for legal protection against contingent acts of intellectual piracy.

In accordance with the rule that "doing business" imports only acts in furtherance of the purposes for which a foreign corporation was organized, it is held that the mere institution and prosecution or defense of a suit, particularly if the transaction which is the basis of the suit took place out of the State, do not amount to the doing of business in the State. The institution of a suit or the removal thereof is neither the making of a contract nor the doing of business within a constitutional provision placing foreign corporations licensed to do business in the State under the same regulations, limitations and liabilities with respect to such acts as domestic corporations. Merely engaging in litigation has been considered as not a sufficient minimum contact to warrant the exercise of jurisdiction over a foreign corporation. 27

As a consideration aside, we have perforce to comment on private respondents' basis for arguing that petitioners are barred from maintaining suit in the Philippines. For allegedly being foreign corporations doing business in the Philippines without a license, private respondents repeatedly maintain in all their pleadings that petitioners have thereby no legal personality to bring an action before Philippine Courts. 28

Among the grounds for a motion to dismiss under the Rules of Courtare lack of legal capacity to sue 29 and that the complaint states no cause of action. 30 Lack of legal capacity to sue means that the plaintiff is not in the exercise of his civil rights, or does not have the necessary qualification to appear in the case, or does not have the character or representation he claims.31 On the other hand, a case is dismissible for lack of personality to sue upon proof that the plaintiff is not the real party in interest, hence grounded on failure to state a cause of action. 32 The term "lack of capacity to sue" should not be confused with the term "lack of personality to sue." While the former refers to a plaintiff's general disability to sue, such as on account of minority, insanity, incompetence, lack of juridical personality or any other general disqualifications of a party, the latter refers to the fact that the plaintiff is not the real party in interest. Correspondingly, the first can be a ground for a motion to dismiss based on the ground of lack of legal capacity to sue; 33 whereas the second can be used as a ground for a motion to dismiss based on the fact that the complaint, on the face thereof, evidently states no cause of action. 34

Applying the above discussion to the instant petition, the ground available for barring recourse to our courts by an unlicensed foreign corporation doing or transacting business in the Philippines should properly be "lack of capacity to sue," not "lack of personality to sue." Certainly, a corporation whose legal rights have been violated is undeniably such, if not the only, real party in interest to bring suit thereon although, for failure to comply with the licensing requirement, it is not capacitated to maintain any suit before our courts.

Lastly, on this point, we reiterate this Court's rejection of the common procedural tactics of erring local companies which, when sued by unlicensed foreign corporations not engaged in business in the Philippines, invoke the latter's supposed lack of capacity to sue. The doctrine of lack of capacity to sue based on failure to first acquire a local license is based on considerations of public policy. It was never intended to favor nor insulate from suit unscrupulous establishments or nationals in case of breach of valid obligations or violation of legal rights of unsuspecting foreign firms or entities simply because they are not licensed to do business in the country. 35

II

We now proceed to the main issue of the retroactive application to the present controversy of the ruling in20th Century Fox Film Corporation vs. Court of Appeals, et al., promulgated on August 19, 1988, 36 that for the determination of probable cause to support the issuance of a search warrant in copyright infringement cases involving videograms, the production of the master tape for comparison with the allegedly pirate copies is necessary.

Petitioners assert that the issuance of a search warrant is addressed to the discretion of the court subject to the determination of probable cause in accordance with the procedure prescribed therefore under Sections 3 and 4 of Rule 126. As of the time of the application for the search warrant in question, the controlling criterion for the finding of probable cause was that enunciated in Burgos vs. Chief of Staff 37 stating that:

Probable cause for a search warrant is defined as such facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense has been committed and that the objects sought in connection with the offense are in the place sought to be searched.

According to petitioners, after complying with what the law then required, the lower court determined that there was probable cause for the issuance of a search warrant, and which determination in fact led to the issuance and service on December 14, 1987 of Search Warrant No. 87-053. It is further argued that any search warrant so issued in accordance with all applicable legal requirements is valid, for the lower court could not possibly have been expected

to apply, as the basis for a finding of probable cause for the issuance of a search warrant in copyright infringement cases involving videograms, a pronouncement which was not existent at the time of such determination, on December 14, 1987, that is, the doctrine in the 20th Century Fox case that was promulgated only on August 19, 1988, or over eight months later.

Private respondents predictably argue in support of the ruling of the Court of Appeals sustaining the quashal of the search warrant by the lower court on the strength of that 20th Century Fox ruling which, they claim, goes into the very essence of probable cause. At the time of the issuance of the search warrant involved here, although the 20th Century Fox case had not yet been decided, Section 2, Article III of the Constitution and Section 3, Rule 126 of the 1985 Rules on Criminal Procedure embodied the prevailing and governing law on the matter. The ruling in 20th Century Fox was merely an application of the law on probable cause. Hence, they posit that there was no law that was retrospectively applied, since the law had been there all along. To refrain from applying the 20th Century Fox ruling, which had supervened as a doctrine promulgated at the time of the resolution of private respondents' motion for reconsideration seeking the quashal of the search warrant for failure of the trial court to require presentation of the master tapes prior to the issuance of the search warrant, would have constituted grave abuse of discretion. 38

Respondent court upheld the retroactive application of the 20th Century Fox ruling by the trial court in resolving petitioners' motion for reconsideration in favor of the quashal of the search warrant, on this renovated thesis:

And whether this doctrine should apply retroactively, it must be noted that in the 20th Century Fox case, the lower court quashed the earlier search warrant it issued. On certiorari, the Supreme Court affirmed the quashal on the ground among others that the master tapes or copyrighted films were not presented for comparison with the purchased evidence of the video tapes to determine whether the latter is an unauthorized reproduction of the former.

If the lower court in the Century Fox case did not quash the warrant, it is Our view that the Supreme Court would have invalidated the warrant just the same considering the very strict requirement set by the Supreme Court for the determination of "probable cause" in copyright infringement cases as enunciated in this 20th Century Fox case. This is so because, as was stated by the Supreme Court in the said case, the master tapes and the pirated tapes must be presented for comparison to satisfy the requirement of "probable cause."So it goes back to the very existence of probablecause. . . . 39

Mindful as we are of the ramifications of the doctrine of stare decisis and the rudiments of fair play, it is our considered view that the 20th Century Fox ruling cannot be retroactively applied to the instant case to justify the quashal of Search Warrant No. 87-053. Herein petitioners' consistent position that the order of the lower court of September 5, 1988 denying therein defendants' motion to lift the order of search warrant was properly issued, there having been satisfactory compliance with the then prevailing standards under the law for determination of probable cause, is indeed well taken. The lower court could not possibly have expected more evidence from petitioners in their application for a search warrant other than what the law and jurisprudence, then existing and judicially accepted, required with respect to the finding of probable cause.

Article 4 of the Civil Code provides that "(l)aws shall have no retroactive effect, unless the contrary is provided. Correlatively, Article 8 of the same Code declares that "(j)udicial decisions applying the laws or the Constitution shall form part of the legal system of the Philippines."

Jurisprudence, in our system of government, cannot be considered as an independent source of law; it cannot create law. 40 While it is true that judicial decisions which apply or interpret the Constitution or the laws are part of the legal system of the Philippines, still they are not laws. Judicial decisions, though not laws, are nonetheless evidence of what the laws mean, and it is for this reason that they are part of the legal system of the Philippines.  41 Judicial decisions of the Supreme Court assume the same authority as the statuteitself. 42

Interpreting the aforequoted correlated provisions of the Civil Code and in light of the above disquisition, this Court emphatically declared in Co vs. Court of Appeals, et al. 43 that the principle of prospectivity applies not only to original or amendatory statutes and administrative rulings and circulars, but also, and properly so, to judicial decisions. Our holding in the earlier case of People vs. Jabinal 44 echoes the rationale for this judicial declaration, viz.:

Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws mean, and this is the reason why under Article 8 of the New Civil Code, "Judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system." The interpretation upon a law by this Court constitutes, in a way, a part of the law as of the date that the law was originally passed, since this Court's construction merely establishes the contemporaneous legislative intent that the law thus construed intends to effectuate. The settled rule supported by numerous authorities is a restatement of the legal maxim "legis interpretatio legis vim obtinet" — the interpretation placed upon the written law by a competent court has the force of law. . . . , but when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply to parties who had relied on the old doctrine and acted on the faith thereof . . . . (Emphasis supplied).

This was forcefully reiterated in Spouses Benzonan vs. Court of Appeals, et al., 45 where the Court expounded:

. . . . But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]). The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. . . . .

The reasoning behind Senarillos vs. Hermosisima 46 that judicial interpretation of a statute constitutes part of the law as of the date it was originally passed, since the Court's construction merely establishes the contemporaneous legislative intent that the interpreted law carried into effect, is all too familiar. Such judicial doctrine does not amount to the passage of a new law but consists merely of a construction or interpretation of a pre-existing one, and that is precisely the situation obtaining in this case.

It is consequently clear that a judicial interpretation becomes a part of the law as of the date that law was originally passed, subject only to the qualification that when a doctrine of this Court is overruled and a different view is adopted, and more so when there is a reversal thereof, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted in good faith. 47 To hold otherwise would be to deprive the law of its quality of fairness and justice then, if there is no recognition of what had transpired prior to such adjudication. 48

There is merit in petitioners' impassioned and well-founded argumentation:

The case of 20th Century Fox Film Corporation vs. Court of Appeals, et al., 164 SCRA 655 (August 19, 1988) (hereinafter 20th Century Fox) was inexistent in December of 1987 when Search Warrant 87-053 was issued by the lower court. Hence, it boggles the imagination how the lower court could be expected to apply the formulation of 20th Century Fox in finding probable cause when the formulation was yet non-existent.

xxx xxx xxx

In short, the lower court was convinced at that time after conducting searching examination questions of the applicant and his witnesses that "an offense had been committed and that the objects sought in connection with the offense (were) in the place sought to be searched" (Burgos v. Chief of Staff, et al., 133 SCRA 800). It is indisputable, therefore, that at the time of the application, or on December 14, 1987, the lower court did not commit any error nor did it fail to comply with any legal requirement for the valid issuance of search warrant.

. . . (W)e believe that the lower court should be considered as having followed the requirements of the law in issuing Search Warrant No. 87-053. The search warrant is therefore valid and binding. It must be noted that nowhere is it found in the allegations of the Respondents that the lower court failed to apply the law as then interpreted in 1987. Hence, we find it absurd that it is (sic) should be seen otherwise, because it is simply impossible to have required the lower court to apply a formulation which will only be defined six months later.

Furthermore, it is unjust and unfair to require compliance with legal and/or doctrinal requirements which are inexistent at the time they were supposed to have been complied with.

xxx xxx xxx

. . . If the lower court's reversal will be sustained, what encouragement can be given to courts and litigants to respect the law and rules if they can expect with reasonable certainty that upon the passage of a new rule, their conduct can still be open to question? This certainly breeds instability in our system of dispensing justice. For Petitioners who took special effort to redress their grievances and to protect their property rights by resorting to the remedies provided by the law, it is most unfair that fealty to the rules and procedures then obtaining would bear but fruits ofinjustice. 49

Withal, even the proposition that the prospectivity of judicial decisions imports application thereof not only to future cases but also to cases still ongoing or not yet final when the decision was promulgated, should not be countenanced in the jural sphere on account of its inevitably unsettling repercussions. More to the point, it is felt that the reasonableness of the added requirement in 20th Century Fox calling for the production of the master tapes of the copyrighted films for determination of probable cause in copyright infringement cases needs revisiting and clarification.

It will be recalled that the 20th Century Fox case arose from search warrant proceedings in anticipation of the filing of a case for the unauthorized sale or renting out of copyrighted films in videotape format in violation of Presidential Decree No. 49. It revolved around the meaning of probable cause within the context of the constitutional provision against illegal searches and seizures, as applied to copyright infringement cases involving videotapes.

Therein it was ruled that —

The presentation of master tapes of the copyrighted films from which the pirated films were allegedly copied, was necessary for the validity of search warrants against those who have in their possession the pirated films. The petitioner's argument to the effect that the presentation of the master tapes at the time of application may not be necessary as these would be merely evidentiary in nature and not determinative of whether or not a probable cause exists to justify the issuance of the search warrants is not meritorious. The court cannot presume that duplicate or copied tapes were necessarily reproduced from master tapes that it owns.

The application for search warrants was directed against video tape outlets which allegedly were engaged in the unauthorized sale and renting out of copyrighted films belonging to the petitioner pursuant to P.D. 49.

The essence of a copyright infringement is the similarity or at least substantial similarity of the purported pirated works to the copyrighted work. Hence, the applicant must present to the court the copyrighted films to compare them with the purchased evidence of the video tapes allegedly pirated to determine whether the latter is an unauthorized reproduction of the former. This linkage of the copyrighted films to the pirated films must be established to satisfy the requirements of probable cause. Mere allegations as to the existence of the copyrighted films cannot serve as basis for the issuance of a search warrant.

For a closer and more perspicuous appreciation of the factual antecedents of 20th Century Fox, the pertinent portions of the decision therein are quoted hereunder, to wit:

In the instant case, the lower court lifted the three questioned search warrants against the private respondents on the ground that it acted on the application for the issuance of the said search warrants and granted it on the misrepresentations of applicant NBI and its witnesses that infringement of copyright or a piracy of a particular film have been committed. Thus the lower court stated in its questioned order dated January 2, 1986:

According to the movant, all three witnesses during the proceedings in the application for the three search warrants testified of their own personal knowledge. Yet, Atty. Albino Reyes of the NBI stated that the counsel or representative of the Twentieth Century Fox Corporation will testify on the video cassettes that were pirated, so that he did not have personal knowledge of the alleged piracy. The witness Bacani also said that the video cassettes were pirated without stating the manner it was pirated and that it was Atty. Domingo that has knowledge of that fact.

On the part of Atty. Domingo, he said that the re-taping of the allegedly pirated tapes was from master tapes allegedly belonging to the Twentieth Century Fox, because, according to him it is of his personal knowledge.

At the hearing of the Motion for Reconsideration, Senior NBI Agent Atty. Albino Reyes testified that when the complaint for infringement was brought to the NBI, the master tapes of the allegedly pirated tapes were shown to him and he made comparisons of the tapes with those purchased by their man Bacani. Why the master tapes or at least the film reels of the allegedly pirated tapes were not shown to the Court during the application gives some misgivings as to the truth of that bare statement of the NBI agent on the witness stand.

Again as the application and search proceedings is a prelude to the filing of criminal cases under PD 49, the copyright infringement law, and although what is required for the issuance thereof is merely the presence of probable cause, that probable cause must be satisfactory to the Court, for it is a time-honored precept that proceedings to put a man to task as an offender under our laws should be interpreted in strictissimi juris against the government and liberally in favor of the alleged offender.

xxx xxx xxx

This doctrine has never been overturned, and as a matter of fact it had been enshrined in the Bill of Rights in our 1973 Constitution.

So that lacking in persuasive effect, the allegation that master tapes were viewed by the NBI and were compared to the purchased and seized video tapes from the respondents' establishments, it should be dismissed as not supported by competent evidence and for that matter the probable cause hovers in that grey debatable twilight zone between black and white resolvable in favor of respondents herein.

But the glaring fact is that "Cocoon," the first video tape mentioned in the search warrant, was not even duly registered or copyrighted in the Philippines. (Annex C of Opposition p. 152 record.) So, that lacking in the requisite presentation to the Court of an alleged master tape for purposes of comparison with the purchased evidence of the video tapes allegedly pirated and those seized from respondents, there was no way to determine whether there really was piracy, or copying of the film of the complainant Twentieth Century Fox.

xxx xxx xxx

The lower court, therefore, lifted the three (3) questioned search warrants in the absence of probable cause that the private respondents violated P.D. 49. As found out by the court, the NBI agents who acted as witnesses did not have personal knowledge of the subject matter of their testimony which was the alleged commission of the offense by the private respondents. Only the petitioner's counsel who was also a witness during the application for the issuance of the search warrants stated that he had personal knowledge that the confiscated tapes owned by the private respondents were pirated tapes taken from master tapes belonging to the petitioner. However, the lower court did not give much credence to his testimony in view of the fact that the master tapes of the allegedly pirated tapes were not shown to the court during the application (Emphasis ours).

The italicized passages readily expose the reason why the trial court therein required the presentation of the master tapes of the allegedly pirated films in order to convince itself of the existence of probable cause under the factual milieu peculiar to that case. In the case at bar, respondent appellate court itself observed:

We feel that the rationale behind the aforequoted doctrine is that the pirated copies as well as the master tapes, unlike the other types of personal properties which may be seized, were available for presentation to the court at the time of the application for a search warrant to determine the existence of the linkage of the copyrighted films with the pirated ones. Thus, there is no reason not the present them (Emphasis supplied ).50

In fine, the supposed pronunciamento in said case regarding the necessity for the presentation of the master tapes of the copyrighted films for the validity of search warrants should at most be understood to merely serve as a guidepost in determining the existence of probable cause in copyright infringement caseswhere there is doubt as to the true nexus between the master tape and the pirated copies. An objective and careful reading of the decision in said case could lead to no other conclusion than that said directive was hardly intended to be a sweeping and inflexible requirement in all or similar copyright infringement cases. Judicial dicta should always be construed within the factual matrix of their parturition, otherwise a careless interpretation thereof could unfairly fault the writer with the vice of overstatement and the reader with the fallacy of undue generalization.

In the case at bar, NBI Senior Agent Lauro C. Reyes who filed the application for search warrant with the lower court following a formal complaint lodged by petitioners, judging from his affidavit 51 and his deposition, 52 did testify on matters within his personal knowledge based on said complaint of petitioners as well as his own investigation and surveillance of the private respondents' video rental shop. Likewise, Atty. Rico V. Domingo, in his capacity as attorney-in-fact, stated in his affidavit 53 and further expounded in his deposition 54 that he personally knew of the fact that private respondents had never been authorized by his clients to reproduce, lease and possess for the purpose of selling any of the copyrighted films.

Both testimonies of Agent Reyes and Atty. Domingo were corroborated by Rene C. Baltazar, a private researcher retained by Motion Pictures Association of America, Inc. (MPAA, Inc.), who was likewise presented as a witness during the search warrant proceedings. 55 The records clearly reflect that the testimonies of the abovenamed witnesses were straightforward and stemmed from matters within their personal knowledge. They displayed none of the ambivalence and uncertainty that the witnesses in the 20th Century Fox case exhibited. This categorical forthrightness in their statements, among others, was what initially and correctly convinced the trial court to make a finding of the existence of probable cause.

There is no originality in the argument of private respondents against the validity of the search warrant, obviously borrowed from 20th Century Fox, that petitioners' witnesses — NBI Agent Lauro C. Reyes, Atty. Rico V. Domingo and Rene C. Baltazar — did not have personal knowledge of the subject matter of their respective testimonies and that said witnesses' claim that the video tapes were pirated, without stating the manner by which these were pirated, is a conclusion of fact without basis. 56 The difference, it must be pointed out, is that the records in the present case reveal that (1) there is no allegation of misrepresentation, much less a finding thereof by the lower court, on the part of petitioners' witnesses; (2) there is no denial on the part of private respondents that the tapes seized were illegitimate copies of the copyrighted ones not have they shown that they were given any authority by petitioners to copy, sell, lease, distribute or circulate, or at least, to offer for sale, lease, distribution or circulation the said video tapes; and (3) a discreet but extensive surveillance of the suspected area was undertaken by petitioners' witnesses sufficient to enable them to execute trustworthy affidavits and depositions regarding matters discovered in the course thereof and of which they have personal knowledge.

It is evidently incorrect to suggest, as the ruling in 20th Century Fox may appear to do, that in copyright infringement cases, the presentation of master tapes of the copyrighted films is always necessary to meet the requirement of probable cause and that, in the absence thereof, there can be no finding of probable cause for the issuance of a search warrant. It is true that such master tapes are object evidence, with the merit that in this class of evidence the ascertainment of the controverted fact is made through demonstrations involving the direct use of the senses of the presiding magistrate. 57 Such auxiliary procedure, however, does not rule out the use of testimonial or documentary evidence, depositions, admissions or other classes of evidence tending to prove the factum probandum, 58 especially where the production in court of object evidence would result in delay, inconvenience or expenses out of proportion to its evidentiary value. 59

Of course, as a general rule, constitutional and statutory provisions relating to search warrants prohibit their issuance except on a showing of probable cause, supported by oath or affirmation. These provisions prevent the issuance of warrants on loose, vague, or doubtful bases of fact, and emphasize the purpose to protect against all general searches. 60 Indeed, Article III of our Constitution mandates in Sec. 2 thereof that no search warrant shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the things to be seized; and Sec. 3 thereof provides that any evidence obtained in violation of the preceding section shall be inadmissible for any purpose in any proceeding.

These constitutional strictures are implemented by the following provisions of Rule 126 of the Rules of Court:

Sec. 3. Requisites for issuing search warrant. — A search warrant shall not issue but upon probable cause in connection with one specific offense to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the things to be seized.

Sec. 4. Examination of complainant; record. — The judge must, before issuing the warrant, personally examine in the form of searching questions and answers, in writing and under oath the complainant and any witnesses he may produce on facts personally known to them and attach to the record their sworn statements together with any affidavits submitted.

Sec. 5. Issuance and form of search warrant. — If the judge is thereupon satisfied of the existence of facts upon which the application is based, or that there is probable cause to believe that they exist, he must issue the warrant, which must be substantially in the form prescribed by these Rules.

The constitutional and statutory provisions of various jurisdictions requiring a showing of probable cause before a search warrant can be issued are mandatory and must be complied with, and such a showing has been held to be an unqualified condition precedent to the issuance of a warrant. A search warrant not based on probable cause is a nullity, or is void, and the issuance thereof is, in legal contemplation, arbitrary. 61 It behooves us, then, to review the concept of probable cause, firstly, from representative holdings in the American jurisdiction from which we patterned our doctrines on the matter.

Although the term "probable cause" has been said to have a well-defined meaning in the law, the term is exceedingly difficult to define, in this case, with any degree of precision; indeed, no definition of it which would justify the issuance of a search warrant can be formulated which would cover every state of facts which might arise, and no formula or standard, or hard and fast rule, may be laid down which may be applied to the facts of every situation. 62 As to what acts constitute probable cause seem incapable of definition. 63 There is, of necessity, no exact test. 64

At best, the term "probable cause" has been understood to mean a reasonable ground of suspicion, supported by circumstances sufficiently strong in themselves to warrant a cautious man in the belief that the person accused is guilty of the offense with which he is charged;  65 or the existence of such facts and circumstances as would excite an honest belief in a reasonable mind acting on all the facts and circumstances within the knowledge of the magistrate that the charge made by the applicant for the warrant is true. 66

Probable cause does not mean actual and positive cause, nor does it import absolute certainty. The determination of the existence of probable cause is not concerned with the question of

whether the offense charged has been or is being committed in fact, or whether the accused is guilty or innocent, but only whether the affiant has reasonable grounds for his belief.  67 The requirement is less than certainty or proof, but more than suspicion or possibility. 68

In Philippine jurisprudence, probable cause has been uniformly defined as such facts and circumstances which would lead a reasonable, discreet and prudent man to believe that an offense has been committed, and that the objects sought in connection with the offense are in the place sought to be searched. 69 It being the duty of the issuing officer to issue, or refuse to issue, the warrant as soon as practicable after the application therefor is filed, 70 the facts warranting the conclusion of probable cause must be assessed at the time of such judicial determination by necessarily using legal standards then set forth in law and jurisprudence, and not those that have yet to be crafted thereafter.

As already stated, the definition of probable cause enunciated in Burgos, Sr. vs. Chief of Staff, et al., supra,vis-a-vis the provisions of Sections 3 and 4 of Rule 126, were the prevailing and controlling legal standards, as they continue to be, by which a finding of probable cause is tested. Since the propriety of the issuance of a search warrant is to be determined at the time of the application therefor, which in turn must not be too remote in time from the occurrence of the offense alleged to have been committed, the issuing judge, in determining the existence of probable cause, can and should logically look to the touchstones in the laws theretofore enacted and the decisions already promulgated at the time, and not to those which had not yet even been conceived or formulated.

It is worth noting that neither the Constitution nor the Rules of Court attempt to define probable cause, obviously for the purpose of leaving such matter to the court's discretion within the particular facts of each case. Although the Constitution prohibits the issuance of a search warrant in the absence of probable cause, such constitutional inhibition does not command the legislature to establish a definition or formula for determining what shall constitute probable cause.  71 Thus, Congress, despite its broad authority to fashion standards of reasonableness for searches and seizures, 72 does not venture to make such a definition or standard formulation of probable cause, nor categorize what facts and circumstances make up the same, much less limit the determination thereof to and within the circumscription of a particular class of evidence, all in deference to judicial discretion and probity. 73

Accordingly, to restrict the exercise of discretion by a judge by adding a particular requirement (the presentation of master tapes, as intimated by 20th Century Fox) not provided nor implied in the law for a finding of probable cause is beyond the realm of judicial competence or statesmanship. It serves no purpose but to stultify and constrict the judicious exercise of a court's prerogatives and to denigrate the judicial duty of determining the existence of probable cause to a mere ministerial or mechanical function. There is, to repeat, no law or rule which requires that the existence of probable cause is or should be determined solely by a specific kind of evidence. Surely, this could not have been contemplated by the framers of the Constitution, and we do not believe that the Court intended the statement in 20th Century Fox regarding master tapes as the dictum for all seasons and reasons in infringement cases.

Turning now to the case at bar, it can be gleaned from the records that the lower court followed the prescribed procedure for the issuance of a search warrant: (1) the examination under oath or affirmation of the complainant and his witnesses, with them particularly describing the place to be searched and the things to be seized; (2) an examination personally conducted by the judge in the form of searching questions and answers, in writing and under oath of the complainant and witnesses on facts personally known to them; and, (3) the taking of sworn statements, together with the affidavits submitted, which were duly attached to the records.

Thereafter, the court a quo made the following factual findings leading to the issuance of the search warrant now subject of this controversy:

In the instant case, the following facts have been established: (1) copyrighted video tapes bearing titles enumerated in Search Warrant No. 87-053 were being sold, leased, distributed or circulated, or offered for sale, lease, distribution, or transferred or caused to be transferred by defendants at their video outlets, without the written consent of the private complainants or their assignee; (2) recovered or confiscated from defendants' possession were video tapes containing copyrighted motion picture films without the authority of the complainant; (3) the video tapes originated from spurious or unauthorized persons; and (4) said video tapes were exact reproductions of the films listed in the search warrant whose copyrights or distribution rights were owned by complainants.

The basis of these facts are the affidavits and depositions of NBI Senior Agent Lauro C. Reyes, Atty. Rico V. Domingo, and Rene C. Baltazar. Motion Pictures Association of America, Inc. (MPAA) thru their counsel, Atty. Rico V. Domingo, filed a complaint with the National Bureau of Investigation against certain video establishments one of which is defendant, for violation of PD No. 49 as amended by PD No. 1988. Atty. Lauro C. Reyes led a team to conduct discreet surveillance operations on said video establishments. Per information earlier gathered by Atty. Domingo, defendants were engaged in the illegal sale, rental, distribution, circulation or public exhibition of copyrighted films of MPAA without its written authority or its members. Knowing that defendant Sunshine Home Video and its proprietor, Mr. Danilo Pelindario, were not authorized by MPAA to reproduce, lease, and possess for the purpose of selling any of its copyrighted motion pictures, instructed his researcher, Mr. Rene Baltazar to rent two video cassettes from said defendants on October 21, 1987. Rene C. Baltazar proceeded to Sunshine Home Video and rented tapes containing Little Shop of Horror. He was issued rental slip No. 26362 dated October 21, 1987 for P10.00 with a deposit of P100.00. Again, on December 11, 1987, the returned to Sunshine Home Video and rented Robocop with rental slip No. 25271 also for P10.00: On the basis of the complaint of MPAA thru counsel, Atty. Lauro C. Reyes personally went to Sunshine Home Video at No. 6 Mayfair Center, Magallanes Commercial Center, Makati. His last visit was on December 7, 1987. There, he found the video outlet renting, leasing, distributing video cassette tapes whose titles were copyrighted and without the authority of MPAA.

Given these facts, a probable cause exists. . . . 74

The lower court subsequently executed a volte-face, despite its prior detailed and substantiated findings, by stating in its order of November 22, 1988 denying petitioners' motion for reconsideration and quashing the search warrant that —

. . . The two (2) cases have a common factual milieu; both involve alleged pirated copyrighted films of private complainants which were found in the possession or control of the defendants. Hence, the necessity of the presentation of the master tapes from which the pirated films were allegedly copied is necessary in the instant case, to establish the existence of probable cause. 75

Being based solely on an unjustifiable and improper retroactive application of the master tape requirement generated by 20th Century Fox upon a factual situation completely different from that in the case at bar, and without anything more, this later order clearly defies elemental fair play and is a gross reversible error. In fact, this observation of the Court in La Chemise Lacoste, S.A. vs. Fernandez, et al., supra, may just as easily apply to the present case:

A review of the grounds invoked . . . in his motion to quash the search warrants reveals the fact that they are not appropriate for quashing a warrant. They are matters of defense which should be ventilated during the trial on the merits of the case. . . .

As correctly pointed out by petitioners, a blind espousal of the requisite of presentation of the master tapes in copyright infringement cases, as the prime determinant of probable cause, is too exacting and impracticable a requirement to be complied with in a search warrant application which, it must not be overlooked, is only an ancillary proceeding. Further, on realistic considerations, a strict application of said requirement militates against the elements of secrecy and speed which underlie covert investigative and surveillance operations in police enforcement campaigns against all forms of criminality, considering that the master tapes of a motion picture required to be presented before the court consists of several reels contained in circular steel casings which, because of their bulk, will definitely draw attention, unlike diminutive objects like video tapes which can be easily concealed. 76 With hundreds of titles being pirated, this onerous and tedious imposition would be multiplied a hundredfold by judicial fiat, discouraging and preventing legal recourses in foreign jurisdictions.

Given the present international awareness and furor over violations in large scale of intellectual property rights, calling for transnational sanctions, it bears calling to mind the Court's admonition also in La Chemise Lacoste, supra, that —

. . . . Judges all over the country are well advised to remember that court processes should not be used as instruments to, unwittingly or otherwise, aid counterfeiters and intellectual pirates, tie the hands of the law as it seeks to protect the Filipino consuming public and frustrate executive and administrative implementation of solemn commitments pursuant to international conventions and treaties.

III

The amendment to Section 56 of Presidential Decree No. 49 by Presidential Decree No. 1987, 77 which should here be publicized judicially, brought about the revision of its penalty structure and enumerated additional acts considered violative of said decree on intellectual property, namely, (1) directly or indirectly transferring or causing to be transferred any sound recording or motion picture or other audio-visual works so recorded with intent to sell, lease, publicly exhibit or cause to be sold, leased or publicly exhibited, or to use or cause to be used for profit such articles on which sounds, motion pictures, or other audio-visual works are so transferred without the written consent of the owner or his assignee; (2) selling, leasing, distributing, circulating, publicly exhibiting, or offering for sale, lease, distribution, or possessing for the purpose of sale, lease, distribution, circulation or public exhibition any of the abovementioned articles, without the written consent of the owner or his assignee; and, (3) directly or indirectly offering or making available for a fee, rental, or any other form of compensation any equipment, machinery, paraphernalia or any material with the knowledge that such equipment, machinery, paraphernalia or material will be used by another to reproduce, without the consent of the owner, any phonograph record, disc, wire, tape, film or other article on which sounds, motion pictures or other audio-visual recordings may be transferred, and which provide distinct bases for criminal prosecution, being crimes independently punishable under Presidential Decree No. 49, as amended, aside from the act of infringing or aiding or abetting such infringement under Section 29.

The trial court's finding that private respondents committed acts in blatant transgression of Presidential Decree No. 49 all the more bolsters its findings of probable cause, which determination can be reached even in the absence of master tapes by the judge in the exercise of sound discretion. The executive concern and resolve expressed in the foregoing amendments to the decree for the protection of intellectual property rights should be matched by corresponding judicial vigilance and activism, instead of the apathy of submitting to technicalities in the face of ample evidence of guilt.

The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its gravity by an appropriate understanding thereof. Infringement of a copyright is a trespass on a

private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the doing by any person, without the consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright. 78

A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such cases, did not know what works he was indirectly copying, or did not know whether or not he was infringing any copyright; he at least knew that what he was copying was not his, and he copied at his peril. In determining the question of infringement, the amount of matter copied from the copyrighted work is an important consideration. To constitute infringement, it is not necessary that the whole or even a large portion of the work shall have been copied. If so much is taken that the value of the original is sensibly diminished, or the labors of the original author are substantially and to an injurious extent appropriated by another, that is sufficient in point of law to constitute apiracy. 79 The question of whether there has been an actionable infringement of a literary, musical, or artistic work in motion pictures, radio or television being one of fact,  80 it should properly be determined during the trial. That is the stage calling for conclusive or preponderating evidence, and not the summary proceeding for the issuance of a search warrant wherein both lower courts erroneously require the master tapes.

In disregarding private respondent's argument that Search Warrant No. 87-053 is a general warrant, the lower court observed that "it was worded in a manner that the enumerated seizable items bear direct relation to the offense of violation of Sec. 56 of PD 49 as amended. It authorized only the seizur(e) of articles used or intended to be used in the unlawful sale, lease and other unconcerted acts in violation of PD 49 as amended. . . . 81

On this point, Bache and Co., (Phil.), Inc., et al. vs. Ruiz, et al., 82 instructs and enlightens:

A search warrant may be said to particularly describe the things to be seized when the description therein is as specific as the circumstances will ordinarily allow (People vs. Rubio, 57 Phil. 384); or when the description expresses a conclusion of fact — not of law — by which the warrant officer may be guided in making the search and seizure (idem., dissent of Abad Santos, J.,); or when the things described are limited to those which bear direct relation to the offense for which the warrant is being issued (Sec 2, Rule 126, Revised Rules of Court). . . . If the articles desired to be seized have any direct relation to an offense committed, the applicant must necessarily have some evidence, other than those articles, to prove the said offense; and the articles subject of search and seizure should come in handy merely to strengthen such evidence. . . .

On private respondents' averment that the search warrant was made applicable to more than one specific offense on the ground that there are as many offenses of infringement as there are rights protected and, therefore, to issue one search warrant for all the movie titles allegedly pirated violates the rule that a search warrant must be issued only in connection with one specific offense, the lower court said:

. . . . As the face of the search warrant itself indicates, it was issued for violation of Section 56, PD 49 as amended only. The specifications therein (in Annex A) merely refer to the titles of the copyrighted motion pictures/films belonging to private complainants which defendants were in control/possession for sale, lease, distribution or public exhibition in contravention of Sec. 56, PD 49 as amended. 83

That there were several counts of the offense of copyright infringement and the search warrant uncovered several contraband items in the form of pirated video tapes is not to be confused with the number of offenses charged. The search warrant herein issued does not violate the one-specific-offense rule.

It is pointless for private respondents to insist on compliance with the registration and deposit requirements under Presidential Decree No. 49 as prerequisites for invoking the court's protective mantle in copyright infringement cases. As explained by the court below:

Defendants-movants contend that PD 49 as amended covers only producers who have complied with the requirements of deposit and notice (in other words registration) under Sections 49 and 50 thereof. Absent such registration, as in this case, there was no right created, hence, no infringement under PD 49 as amended. This is not well-taken.

As correctly pointed out by private complainants-oppositors, the Department of Justice has resolved this legal question as far back as December 12, 1978 in its Opinion No. 191 of the then Secretary of Justice Vicente Abad Santos which stated that Sections 26 and 50 do not apply to cinematographic works and PD No. 49 "had done away with the registration and deposit of cinematographic works" and that "even without prior registration and deposit of a work which may be entitled to protection under the Decree, the creator can file action for infringement of its rights". He cannot demand, however, payment of damages arising from infringement. The same opinion stressed that "the requirements of registration and deposit are thus retained under the Decree, not as conditions for the acquisition of copyright and other rights, but as prerequisites to a suit for damages". The statutory interpretation of the Executive Branch being correct, is entitled (to) weight and respect.

xxx xxx xxx

Defendants-movants maintain that complainant and his witnesses led the Court to believe that a crime existed when in fact there was none. This is wrong. As earlier discussed, PD 49 as amended, does not require registration and deposit for a creator to be able to file an action for infringement of his rights. These conditions are merely pre-requisites to an action for damages. So, as long as the proscribed acts are shown to exist, an action for infringement may be initiated. 84

Accordingly, the certifications 85 from the Copyright Section of the National Library, presented as evidence by private respondents to show non-registration of some of the films of petitioners, assume no evidentiary weight or significance whatsoever.

Furthermore, a closer review of Presidential Decree No. 49 reveals that even with respect to works which are required under Section 26 thereof to be registered and with copies to deposited with the National Library, such as books, including composite and cyclopedic works, manuscripts, directories and gazetteers; and periodicals, including pamphlets and newspapers; lectures, sermons, addresses, dissertations prepared for oral delivery; and letters, the failure to comply with said requirements does not deprive the copyright owner of the right to sue for infringement. Such non-compliance merely limits the remedies available to him and subjects him to the corresponding sanction.

The reason for this is expressed in Section 2 of the decree which prefaces its enumeration of copyrightable works with the explicit statement that "the rights granted under this Decree shall, from the moment of creation, subsist with respect to any of the following classes of works." This means that under the present state of the law, the copyright for a work is acquired by an intellectual creator from the moment of creation even in the absence of registration and deposit. As has been authoritatively clarified:

The registration and deposit of two complete copies or reproductions of the work with the National Library within three weeks after the first public dissemination or performance of the work, as provided for in Section 26 (P.D. No. 49, as amended), is not for the purpose

of securing a copyright of the work, but rather to avoid the penalty for non-compliance of the deposit of said two copies and in order to recover damages in an infringement suit.  86

One distressing observation. This case has been fought on the basis of, and its resolution long delayed by resort to, technicalities to a virtually abusive extent by private respondents, without so much as an attempt to adduce any credible evidence showing that they conduct their business legitimately and fairly. The fact that private respondents could not show proof of their authority or that there was consent from the copyright owners for them to sell, lease, distribute or circulate petitioners' copyrighted films immeasurably bolsters the lower court's initial finding of probable cause. That private respondents are licensed by the Videogram Regulatory Board does not insulate them from criminal and civil liability for their unlawful business practices. What is more deplorable is that the reprehensible acts of some unscrupulous characters have stigmatized the Philippines with an unsavory reputation as a hub for intellectual piracy in this part of the globe, formerly in the records of the General Agreement on Tariffs and Trade and, now, of the World Trade Organization. Such acts must not be glossed over but should be denounced and repressed lest the Philippines become an international pariah in the global intellectual community.

WHEREFORE, the assailed judgment and resolution of respondent Court of Appeals, and necessarily inclusive of the order of the lower court dated November 22, 1988, are hereby REVERSED and SET ASIDE. The order of the court a quo of September 5, 1988 upholding the validity of Search Warrant No. 87-053 is hereby REINSTATED, and said court is DIRECTED to take and expeditiously proceed with such appropriate proceedings as may be called for in this case. Treble costs are further assessed against private respondents.

SO ORDERED.

Narvasa, C.J., Padilla, Davide, Jr., Romero, Melo, Puno, Vitug, Kapunan, Mendoza, Francisco, Hermosisima, Jr., Panganiban and Torres, Jr., JJ., concur.

Bellosillo, J., took no part.

Footnotes

1 Rollo, CA-G.R. CV No. 20622, 155-158; Justice Quirino D. Abad-Santos, Jr., ponente, with Justices Luis A. Javellana and Eduardo R. Bengson concurring; Rollo, 36-40.

2 Ibid., 184; ibid., 42.

3 Rollo, 50-51; Original Record, 327-328.

4 Ibid., 43-49; ibid., 274-280; per Judge Buenaventura J. Guerrero.

5 Ibid., 36-37; Rollo, CA-G.R. CV No. 20622, 155-156.

6 G.R. Nos. 76649-51, August 19, 1988, 164 SCRA 655.

7 Original Record, 236-239; Rollo, 83-85, 188-190.

8 Ibid., 267-268; ibid., 124; ibid., 114-115, 169-170.

9 Rollo, 114-115, 169-170.

10 Marshall-Wells Co. vs. Henry W. Elser & Co., 46 Phil. 71 (1924).

11 Martin, T.C., Commentaries and Jurisprudence on Philippine Commercial Laws, Vol. 4, 1986 rev. ed., 371-372, citing Pacific Vegetable Oil Corporation vs. Singzon, L-7917, April 29, 1955, 96 Phil. 986 (unrep.) and Eastbound Navigation, Ltd. vs. Juan Ysmael and Co., Inc., 102 Phil. 1 (1957); La Chemise Lacoste, S.A. vs. Fernandez, etc., et al., G.R. Nos. 63795-97, May 21, 1984, 129 SCRA 373; Antam Consolidated, Inc., et al. vs. Court of Appeals, et al., G.R. No. 61523, July 31, 1986, 143 SCRA 288; Converse Rubber Corporation vs. Universal Rubber Products, Inc., et al., L-27906, January 8, 1987, 147 SCRA 154; Puma Sportschuhfabriken Rudolf Dassler, K.G. vs. Intermediate Appellate Court, et al., G.R. No. 75067, February 26, 1988, 158 SCRA 233; Merill Lynch Futures, Inc. vs. Court of Appeals, et al., G.R. No. 97816, July 24, 1992, 211 SCRA 824; Philip Morris, Inc., et al. vs. Court of Appeals, et al., G.R. No. 91332, July 16, 1993, 224 SCRA 576; Signetics Corporation vs. Court of Appeals, et al., G.R. No. 105141, August 31, 1993, 225 SCRA 737, Georg Grotjahn GMBH & Co. vs. Isnani, et al., G.R. No. 109272, August 10, 1994, 235 SCRA 216.

12 Lopez, R.N., Corporation Code of the Philippines Annonated, Vol. 3, 1994 ed., 1152-1153, citing Com. v. Wilkesbarre & H.R. Co., 251 Pa 6, 95 Atl. 915.

13 36 Am. Jur. 2d, Foreign Corporations, Sec. 317, 312-313; National Sugar Trading Corporation, et al. vs. Court of Appeals, et al., G.R. No. 110910, July 17, 1995, 246 SCRA 465.

14 Martin, T.C., op. cit., 373, citing Tracton Co. v. Collector of Internal Revenue, 223 F. 984.

15 Ibid., id., id., 314-315.

16 Mentholatum Co., Inc. vs. Mangaliman, 92 Phil. 524 (1941).

17 An Act to Require that the Making of Investments and the Doing of Business Within the Philippines by Foreigners or Business Organizations Owned in Whole or in Part by Foreigners Should Contribute to the Sound and Balanced Development of the National Economy on a Self-Sustaining Basis, and for Other Purposes; Enacted without executive approval, September 30, 1968.

18 A Decree to Revise, Amend and Codify the Investment, Agricultural and Export Incentives Acts to be Known as the Omnibus Investments Code, effective January 16, 1981. See also Art. 44 of the Omnibus Investments Code of 1987 (Executive Order No. 226, effective July 16, 1987).

19 An Act to Promote Foreign Investments, Prescribe the Procedures for Registering Enterprises Doing Business in the Philippines, and for Other Purposes; Approved, June 13, 1991.

20 Exhibit I; Original Record, 257.

21 Original Record, 268.

22 36 Am. Jur. 2d, Foreign Corporations, Sec. 335, 336.

23 Ibid., id., Sec. 362, 375-376.

24 Cannon Mfg. Co. v. Cudahy Packing Co., 267 US 333, 69 L ed 634, 45 S Ct 250; Hessig-Ellis Drug Co. v. Sly, 83 Kan 60, 109 P 770; Barnes v. Maxwell Motor Sales Corporation, 172 Ky 409, 89 SW 444; Harrell v. Peters Cartridge Co., 36 Okla 684, 129 P 872.

25 Gottschalk Co. v. Distilling & Cattle Feeding Co. (CC Md.), 50 F 681.

26 O'Brien v. Lanpar Co. (Tex Civ App) 391 SW 2d 483.

27 36 Am. Jur. 2d., Foreign Corporation, Sec. 337, 339.

28 Original Record, 236-237, 281-284; Rollo, CA-G.R. CV No. 20622, 100-102; Rollo, 83-85, 188-190.

29 Sec. 1(d), Rule 16.

30 Sec. 1(g), id.

31 Lunsod vs. Ortega, 46 Phil. 664 (1921); Recreation and Amusement Association of the Philippines vs. City of Manila, et al., 100 Phil. 950 (1957).

32 Casimiro vs. Roque, et al., 98 Phil. 880 (1956); Gonzales, et al. vs. Alegarbes, 99 Phil. 213 (1956).

33 Calano vs. Cruz, 91 Phil. 247 (1952). See also Arguelles vs. Syyap, 22 Phil. 442 (1912); Leviton Industries, et al. vs. Salvador, etc., et al., L-40163, June 19, 1982, 114 SCRA 420; Bulakhidas vs. Navarro, etc., et al., L-49695, April 7, 1986, 142 SCRA 1; Acain vs. Intermediate Appellate Court, et al., G.R. No. 72706, October 27, 1987, 155 SCRA 100; Pilipinas Shell Petroleum Corporation vs. Dumlao, etc., et al., L-44888, February 7, 1992, 206 SCRA 40.

34 Sustiguer, et al. vs. Tamayo, et al., L-29341, August 21, 1989, 176 SCRA 579. See Annotations on Legal Capacity to Sue by Severino S. Tabios, following the published decision in La Chemise Lacoste, S.A. vs. Fernandez, etc., et al., supra, fn. 11.

35 Facilities Management Corporation vs. De la Osa, et al., L-38649, March 26, 1979, 89 SCRA 131; Antam Consolidated, Inc., et al. vs. Court of Appeals, et al., and cases cited therein supra, fn. 11; Signetics Corporation vs. Court of Appeals, et al., supra, fn. 11; National Sugar Trading Corporation, et al. vs. Court of Appeals, et al., supra, fn. 13.

36 164 SCRA 655, fn. 6.

37 G.R. No. 64261, December 26, 1984, 133 SCRA 800.

38 Rollo, 80-81.

39 Ibid., 39-40.

40 Tolentino, A.M., Commentaries and Jurisprudence on The Civil Code of the Philippines, Vol. I, 1990 ed., 36.

41 Paras, E.L., Civil Code of the Philippines Annotated, 12th ed., 57.

42 Caltex (Philippines), Inc. vs. Palomar, etc., L-19650, September 29, 1966, 18 SCRA 247; Floresca, et al., vs. Philex Mining Corporation, et al., L-30642, April 30, 1985, 136 SCRA 141.

43 G.R. No. 100716, October 28, 1993, 227 SCRA 444, and cases cited therein.

44 L-30061, February 27, 1974, 55 SCRA 607.

45 G.R. No. 97998, January 27, 1992, 205 SCRA 515.

46 100 Phil. 501 (1956). See also People vs. Licera, L-39990, July 22, 1975, 65 SCRA 270.

47 People vs. Jabinal, supra, fn. 44; Unciano Paramedical College, Inc., et al. vs. Court of Appeals, et al., G.R. No. 100335, April 7, 1993, 221 SCRA 285; Tañada, et al. vs. Guingona, Jr., etc., et al., G.R. No. 113888, August 19, 1994, 235 SCRA 507.

48 De Agbayani vs. Philippine National Bank, et al., L-23127, April 29, 1971, 38 SCRA 429.

49 Rollo, 21-24, 159-163.

50 Rollo, 35.

51 Original Record, 4-7.

52 Ibid., 155-156.

53 Ibid., 12-15.

54 Ibid., 157-158.

55 Ibid., 9-10, 159-160.

56 Rollo, 85-86.

57 City of Manila vs. Cabangis, 10 Phil. 151 (1908); Kabase v. State, 31 Ala. App. 77, 12 So. 2nd, 758, 764.

58 See Phil. Movie Workers Association vs. Premiere Productions, Inc., 92 Phil. 843 (1953).

59 See 3 Jones on Evidence, Sec. 1400.

60 47 Am. Jur. 2d, Searches and Seizures, Sec. 21, 576.

61 79 CJS, Searches and Seizures, Sec. 74, 862.

62 Ibid., id., id., 863.

63 Lucich v. State, Md., 71 A. 2d 432; Smith v. State, 62 A. 2d 287, 191 Md. 329, 5 A.L.R. 2d, 386.

64 U.S. v. Nichols, D.C. Ark., 89 F. Supp. 953, 955.

65 Silver v. State, 110 Tex Crim. Rep. 512, 8 SW (2d) 144, 9 SW (2d) 358, 60 A.L.R. 290.

66 Goodman v. State, 11 A. 2d 635, 639, 178 Md. I.

67 47 Am. Jur. 2d, Searches and Seizures, Sec. 22, 516; Brinegar v. United States, 338 U.S. 160 (1949).

68 79 CJS, Search and Seizures, Sec. 74, 865.

69 Burgos, Sr., et al. vs. Chief of Staff, et al., supra, fn. 37; Quintero vs. National Bureau of Investigation, et al., L-35149, June 23, 1988, 162 SCRA 467; MHP Garments, Inc., et al. vs. Court of Appeals, et al., G.R. No. 86720, September 2, 1994, 236 SCRA 227.

70 State v. Perkins, 285 S.W. 1021, 220 Mo. App. 349.

71 State v. Norris, 109 So. 787, 161 La 988.

72 G.M. Leasing Corp. v. United States, 429 U.S. 338, 97 S Ct. 619, 50 L. Ed. 2d 530.

73 See Central Bank of the Philippines vs. Morfe, et al., L-20119, June 30, 1967, 20 SCRA 507; Luna vs. Plaza, etc., et al., L-27511, November 29, 1968, 26 SCRA 310.

74 Original Record, 277-278; Rollo, 46-47.

75 Ibid., 328; ibid., 51.

76 Rollo, CA-G.R. CV No. 20622, 177-178.

77 Promulgated on October 5, 1985.

78 18 CJS, Copyright and Literary Property, Sec. 90, 212; 18 Am Jur 2d, Copyright and Literary Property, Sec. 106, 391-392.

79 Ibid., id., Sec. 94, 217, 218.

80 Universal Pictures Co. v. Harold Lloyd Corp. (CA9 Cal), 162 F2d 354; Arnstein v. Porter (CA2 Ny), 154 F2d 464.

81 Original Record, 278; Rollo 47.

82 L-32409, February 27, 1971, 37 SCRA 823.

83 Original Record, 279; Rollo, 47.

84 Ibid., 275, 278; ibid., 44, 45.

85 Exhbit Nos. 1, 2, 3 and 4; Original Record, 174-178.

86 Martin, T.C., op cit., Vol. 2, 366.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

 

G.R. No. 111267 September 20, 1996

COLUMBIA PICTURES ENTERTAINMENT, INC., MGM ENTERTAINMENT CO., ORION PICTURES CORPORATION, PARAMOUNT PICTURES CORP., UNIVERSAL CITY STUDIOS, INC., THE WALT DISNEY COMPANY and WARNER BROTHERS, INC., petitioners, vs.HONORABLE COURT OF APPEALS, 14TH DIVISION and JOSE B. JINGCO of SHOWTIME ENTERPRISES, INC., respondents.

 

ROMERO, J.:

Petitioners Columbia Pictures Industries, Inc., MGM Entertainment Co., Orion Pictures Corporation, Paramount Pictures Corp., Universal City Studios, Inc. The Walt Disney Company and Warner Brothers, Inc. question thedecision 1 of the Court of Appeals which affirmed the Order of the Regional Trial Court of Pasig, Branch 168, the dispositive portion of which states:

WHEREFORE, finding that the issuance of the questioned warrants was not supported by probable cause, the "Urgent Motion (to Lift Search Warrant [No. 23] and for the Return of Seized Articles) is hereby GRANTED.

Accordingly, the Videogram Regulatory Board (VRB) and/or any Police Agency or other representatives of the VRB are hereby directed to return to the defendant/movant or his representative all articles/items in their possession seized under and by virtue of Search Warrant No. 23.

SO ORDERED.

The antecedent facts leading to the disputed Order are:

Alfredo G. Ramos, intelligence officer of the Videogram Regulatory Board (VRB), received information that private respondent Jose B. Jinco had in his possession pirated videotapes, posters, advertising materials and other items used or intended to be used for the purpose of sale, lease, distribution, circulation or public exhibition of the said pirated videotapes. Ramos ascertained the information to be true and filed a verified Application for Search Warrant dated July 28, 1986 with prayer for the seizure of the properties described in the search warrant.

On the same date, a hearing was conducted by Judge Florentino A. Flor of the Regional Trial Court of Pasig, Branch 168, wherein Ramos and his two witnesses, Analie Jimenez and Rebecca Benitez-Cruz testified on the need for the issuance of search warrant.

On July 28, 1986, the prayer for the issuance of the search warrant was granted and, on the same date, Search Warrant No. 23 was issued.

On July 2, 1987, private respondent filed a Motion to Quash Search Warrant No. 23 on the grounds that the Search Warrant did not state a specific offense and that, even assuming it stated a specific offense, it covered more than one specific offense. The VRB opposed the Motion to Quash stating that Search Warrant No. 23 was issued for a single specific offense namely, violation of Section 56 and other related sections of Presidential Decree No. 49 as amended by Presidential Decree No. 1988.

On September 30, 1987, the trial court denied the Motion to Quash finding that the Search Warrant was issued for one specific offense. A Motion for Reconsideration was filed but the same was likewise denied.

Private respondent then filed an Urgent Motion To Lift the Search Warrant and For the Return of the Seized Articles alleging that Search Warrant No. 23 is a general warrant, and that it was issued without probable cause.

On May 22, 1989, the assailed order was issued by Judge Benjamin V. Pelayo, now presiding over Branch 168 of the Pasig RTC, granting the Motion to Quash and ordering the return of all seized articles to private respondent.

Petitioners appealed to the Court of Appeals, which affirmed the said Order in toto.

Hence, this petition.

In granting the Motion to Quash, the trial court relied on the Court's ruling in 20th Century Fox Film Corporation v. Court of Appeals, et al. 2 which involved violation of Presidential Decree No. 49, (otherwise known as the Decree on the Protection of Intellectual Property). In said case, video outlets were raided pursuant to search warrants issued by the Regional Trial Court of Makati. However, the search warrants were later lifted by the same court on the ground of lack of probable cause because the master tapes of the alleged pirated tapes were never shown to the lower court. The Court affirmed the lifting of the search warrants holdings that the presentation of the master tapes was necessary for the validity of the search warrants against those who have the pirated films in their possession.

When the trial court granted the Motion to Quash Search Warrant No. 23 on May 22, 1989, it used as its justification the fact that, as the master copies were not presented to the court in its hearing of July 28, 1986, there was no probable cause to issue the said warrant, based on the pronouncements in 20th Century Fox.

Petitioners now question the retroactive application of the 20th Century Fox decision which had not yet been promulgated in 1986 when the search warrant was issued. Petitioners further argue that, contrary to the trial court's finding, the search warrant was not a general warrant since the description of the items to be seized was specific enough. It removed from the serving officer any discretions as to which items to seize inasmuch as it described only those items which had a direct relation to the offense for which the search warrant was issued.

The threshold issued that must first be determined is whether or not petitioners have the legal personality and standing to file the appeal.

Private respondent asserts that the proceedings for the issuance and/or quashal of a search warrant are criminal in nature. Thus, the parties in such a case are the "People" as offended party and the accused. A private complainant is relegated to the role of a witness who does not have the right to appeal except where the civil aspect is deemed instituted with the criminal case.

Petitioners, on the other hand, argue that as the offended parties in the criminal case, they have the right to institute an appeal from the questioned order.

From the records it is clear that, as complainants, petitioners were involved in the proceedings which led to the issuance of Search Warrant No. 23. In People v. Nano, 3 the Court declared that while the general rule is that it is only the Solicitor General who is authorized to bring or defend actions on behalf of the People or the Republic of the Philippines once the case is brought before this Court or the Court of Appeals, if there appears to be grave error committed by the judge or a lack of due process the petition will be deemed filed by the private complainants therein as if were filed by the Solicitor General. In line with this ruling, the Court gives this petition due course and will allow petitioners to argue their case against the questioned order in lieu of the Solicitor General.

As regards the issue of the validity of Search Warrant No. 23, there are two questions to be resolved: first, whether the 20th Century Fox decision promulgated on August 19, 1988 is applicable to the Motion to Quash Search Warrant No. 23 (issued on July 28, 1986).

We hold in the negative.

In the recent Columbia Pictures, et al., v. Court of Appeals, et al. 4 case which resolved the same issue involving the same petitioners but with different respondents, the Court en banc held:

Mindful as we are of the ramifications of the doctrine of stare decisis and the rudiments of fair play, it its our considered view that the 20th Century Fox ruling cannot be retroactively applied to the instant case to justify the quashal of Search case to justify the quashal of Search Warrant No. 87-053. Herein petitioners' consistent position that the order of the lower court of September 5, 1988 denying therein defendants' motion to lift the order of search warrant was properly issued, there having been satisfactory compliance with the then prevailing standards under the law for determination of probable cause, is indeed well taken. The lower court could not possibly have expected more evidence from petitioners in their application for a search warrant other than what the law and jurisprudence, then existing and judicially accepted, required with respect to the finding of probable cause.

xxx xxx xxx

It is consequently clear that judicial interpretation becomes a part of the law as of the date that law was originally passed, subject only to the qualification that when a doctrine of this Court is over-ruled and a different view is adopted, and more so when there is a reversal thereof, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted in good faith. (People v. Jabinal, L-30061, February 27, 1974, 55 SCRA 607; Unciano Paramedical College, Inc., et al. v. Court of Appeals, et al. G.R. No. 100335, April 7, 1993, 221 SCRA 285; Tanada, et al. v. Guingona, Jr., etc., et al., G.R. No. 113888, August 19, 1994, 235 SCRA 507). To hold otherwise would be to deprive the law of its quality of fairness and justice then, if there if no recognition of what had transpired prior to such adjudication. (De Agbayani v. Philippine National Bank, et al. L-23127, April 29, 1971, 38 SCRA 429).

Likewise, the Court ruled therein that presentation of the master tapes in such cases is not an absolute requirement for as search warrant to issue:

More to the point, it is felt that the reasonableness of the added requirement in 20th Century Foxcalling for the production of the master tapes of the copyrighted films for determination of probable cause in copyright infringement cases needs revisiting and clarification.

xxx xxx xxx

In fine, the supposed pronunciamento in said case regarding the necessity for the presentation of the master tapes of the copy-righted films for the validity of search warrants should at most be understood to merely serve as a guidepost in determining the existence of probable cause in copy-right infringement cases where there is doubt as to the true nexus between the master tape and the pirated copies. An objective and careful reading of the decision in said case could lead to no other conclusion than that said directive was hardly intended to be a sweeping and inflexible requirement in all or similar copyright infringement cases. Judicial dicta should always be construed within the factual matrix of their parturition, otherwise a careless interpretation thereof could unfairly fault the writer with the vice of over statement and the reader with the fallacy of undue generalization.

xxx xxx xxx

It is evidently incorrect to suggest, as the ruling in 20th Century Fox may appear to do, that in copyright infringement cases, the presentation of master tapes of the copyright films is always necessary to meet the requirement of probable cause for the issuance of a search warrant. It is true that such master tapes are object evidence, with the merit that in this class of evidence the ascertainment of the controverted fact is made through demonstration involving the direct use of the senses of the presiding magistrate. (City of Manila v. Cabangis, 10 Phil. 151 [1908]; Kabase v. State, 31 Ala, App. 77, 12 So. 2nd, 758, 764). Such auxiliary procedure, however, does not rule out the use of testimonial or documentary evidence, depositions, admissions or other classes of evidence tending to prove the factum probandum, (See Phil. Movie Workers Association v. Premiere Productions, Inc. 92 Phil. 843 [1953]) especially where the production in court of object evidence would result in delay, inconvenience or expenses out of proportion to is evidentiary value. (See 3 Jones on Evidence, Sec. 1400).

The instant case also differs from 20th Century Fox in that what herein private respondent put in issue was the application of the ruling in that case, not the conduct of Judge Flor in the issuance of Search Warrant No. 23. From the records, it is clear that Judge Flor observed all the requirement necessary before the search warrant was issued: he heard the testimonies and studied the dispositions of the witnesses for the petitioners, namely, Ms. Rebecca Benitez-Cruz, Ms. Analie I. Jimenez and the VRB's Intelligence Officer, Alfredo G. Ramos on the existence of probable cause before issuing the warrant.

Under Sec. 3 and 4, Rule 126 of the Rules of Court, the requirements for the issuance of valid search warrant are:

Sec. 3. Requisites for issuing search warrant.

A search warrant shall not issue but upon probable cause in connection with one specific offense to be determined by the judge or such other responsible officer authorized by law after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the thing to be seized.

Sec. 4. Examination of complainant; record. —

The judge must, before issuing the warrant, personally examine in the form of searching questions and answers, in writing and under oath the complainant and any witnesses he may produce on facts personally known to them and attach to the record their sworn statements together with any affidavits submitted.

Having satisfied these requirements, Judge Flor committed no grave abuse of discretion in issuing the warrant.

Private respondent contends that Search Warrant No. 23 also violates the constitutional requirements of particularity of the description of the warrant, being a general warrant and thus, is null and void.

In several cases, this Court had held that:

To be valid, a search warrant must be supported by probable cause to be determined by the judge or some other authorized officer after examining the complainant and the witnesses he may produce. No less important, there must be a specific description of the place to be searched and the things to be seized, to prevent arbitrary and indiscriminate use of the warrant (Sec. 3, Art. IV, 1974 Constitution, now Sec. 2, Art. III of the 1986 Constitution; Sec. 3, Rule 126 of the New Rules of Court; Stonehill v. Diokno, 20 SCRA 383, Lime v. Ponce de Leon, 66 SCRA 299; Uy Kheytin v. Villareal, 42 Phil. 886; People v. Veloso, 48 Phil. 169; People v. Rubio, 57 Phil. 384; Bache & Co., (Phil.) Inc. v. Ruiz, 37 SCRA 823; Roan v. Gonzalez, 145 SCRA 687) 5(emphasis supplied)

When may a search warrant be deemed to satisfy the legal requirements of specificity?

In Bache and Co., (Phil.) Inc. v. Ruiz, we said

A search warrant may be said to particularly describe the things to be seized when the description therein is as specific as the circumstances will ordinarily allow (People v. Rubio, 57 Phil. 384); or when the description expresses a conclusion of fact — not of law — by which the warrant officer may be guided in making the search and seizure (idem., dissent of Abad Santos, J.); or when the things described are limited to those which bear direct relation to the offense for which the warrant is being issued (Sec. 2, Rule 126, Revised Rules of Court). . . . If the articles desired to be seized have any direct relation to an offense committed, the applicant must necessarily have some evidence, other than those articles, to prove the said offense; and the articles subject of search and seizure should come in handy merely to strengthen such evidence. . . .

An examination of Search Warrant No. 23 shows that it was worded in such a manner that the enumerated items to be seized bear a direct relation to the offense of violation of Sec. 56 of Presidential Decree No. 49, as amended, which states:

(1) Transfer or cause to be transferred, directly or indirectly any sound recording or motion picture, or other audio-visual work that has been recorded on a phonograph record, disc, wire, tape, film or other article on which sounds, motion pictures, or other audio-visual works are recorded, with intent to sell, lease, publicly exhibit or cause to be sold, leased or publicly exhibited, or to use for cause to be used for profit, such article on which sounds, motion pictures, or other audio visual works are so transferred, WITHOUT THE WRITTEN CONSENT OF HIS ASSIGNEE; or

(2) Sell, lease, distribute, circulate, exhibit, offer for sale, lease, distribution, circulation or public exhibit, offer for sale, lease, distribution, or possess for the purpose of sale, lease, distribution, circulation or public exhibition, any such article to which the sounds, motion pictures or audio-visual recordings thereon have been so transferred, without the written consent of the owner or his assignee; or

(3) Offer or make available for a fee, rental or any other form of compensation, directly or indirectly, any equipment, machinery, paraphernalia or any material with the knowledge that such equipment, machinery, paraphernalia or material, will be used by another to

reproduce, without the consent of the owners any phonograph record, disc, wire, tape film or other article on which sound, motion pictures, or other audio-visual recordings may be transferred.

In other words, it authorized only the seizure of articles used or intended to be used in the unlawful sale, lease and other acts in violation of the said decree. The search warrant ordered the seizure of the following properties:

(a) Pirated video tapes of the copyright motion pictures/films the titles of which are mentioned in the attached list;

(b) Posters, advertising leaflets, brochures, invoices, journals, ledgers, and books of accounts bearing and/or mentioning the pirated films with titles (as per attached list);

(c) Television sets, video cassettes records, rewinders, tape head cleaners, accessories, equipment and other machines and paraphernalia or material used in the unlawful sale, lease, distribution, or possession for purpose of sale, lease, distribution, circulation or public exhibition of the above-mentioned pirated video tapes which he is keeping and concealing in the premises above-described.

Clearly, the above items could not be anymore specific as the circumstances will allow since they are all used or intended to be used in the unlawful sale or lease of pirated tapes. Therefore, the pending of the appellate court that Search Warrant No. 23 is a "general" warrant of devoid of basis.

WHEREFORE, the assailed decision and resolution of respondent Court of Appeals, and necessarily inclusive of the order of the trial court dated May 22, 1989, are hereby REVERSED and SET ASIDE. The order of the trial court dated July 28, 1986 upholding the validity of Search Warrant No. 23 is hereby REINSTATED.

Costs against private respondent.

SO ORDERED.

Regalado, Puno and Torres, Jr., JJ., concur.

Mendoza, J., is on leave.

Footnotes

1 Rollo, p. 24.

2 162 SCRA 655 (1988).

3 205 SCRA 155 (1992).

4 G.R. No. 110318, August 28, 1996.

5 Bachelor Express Incorporated v. Court of Appeals, G.R. No. 85691, 31 July 1990, 188 SCRA 216; Villa Rey Transit, Inc. v. Court of Appeals, No. L- 25499, 18 February 1970, 31 SCRA 511.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 152950 August 3, 2006

PEOPLE OF THE PHILIPPINES, HON. LOURDES F. GATBALITE, Presiding Judge, Branch 56, Regional Trial Court, Angeles City and ATTY. BENNIE NICDAO, Special Prosecutor, Special Operative Group, Economic Intelligence & Investigation Bureau, Petitioners,vs.CHRISTOPHER CHOI, Respondent.

D E C I S I O N

CORONA, J.:

This petition for review on certiorari 1 seeks the reversal of the decision 2 of the Court of Appeals (CA) dated April 10, 2002 in CA-G.R. SP No. 59587, the dispositive portion of which read:

WHEREFORE, the petition for certiorari and prohibition is GRANTED. Search Warrant No. 99-17 is deemed NULLand VOID and SET ASIDE. Respondent ATTY. BENNY NICDAO is prohibited from using in evidence the articles seized by virtue of Search Warrant No. 99-17 in Crim. Case No. I.S. No. 99-8116.

SO ORDERED. 3

The factual antecedents follow.

On April 27, 1999, Mario P. Nieto, Intelligence Operative of the Economic Intelligence and Investigation Bureau, Department of Finance, applied for a search warrant with the Regional Trial Court (RTC) of Angeles City, Pampanga, Branch 56, 4 against respondent Christopher Choi for violation of Section 168, paragraphs 2 and 3 (a) and (c), in relation to Section 169 of RA 8293, 5 also known as the Intellectual Property Code. 6

After examination of the applicant and his witnesses, namely, Max Cavalera and David Lee Sealey, Judge Lourdes F. Gatbalite issued Search Warrant No. 99-17 dated April 27, 1999 worded as follows:

TO ANY PEACE OFFICER:

G r e e t i n g s:

It appearing to the satisfaction of the undersigned, after examining under oath in the form of searching and probing questions, the applicant, MARIO P. NIETO, Intelligence Operative, Economic Intelligence Investigation Bureau, Department of Finance, and his witnesses Max Cavalera and David Lee Sealey that there are good and sufficient reasons to believe that Christopher Choi of No. 25-13 Columbia Street, Carmenville Subd., Angeles City has in his possession, control and custody [r]eams and packs of fake Marlboro Red Cigarettes, as well as cardboard cases of fake Marlboro Red Cigarettes (each cardboard case contains two (2) [m]aster [c]ases of Marlboro and each [m]aster case contains fifty (50) reams) being distributed, kept and sold thereat in violation of Section 168, par. 2 and 3 (a) and (c) in relation to Section 169 of R.A. 8293;

You are hereby commanded to make an immediate search at anytime of the day or night of the above-premises and forthwith seize and take possession of the aforedescribed items found at the residence/warehouse of Christopher Choi at No. 25-13 Columbia Street, Carmenville Subd., Angeles City.

THEREFORE, seize and bring the said articles to the undersigned to be dealt with in accordance with law.

You are hereby further directed to submit a return within ten (10) days from today.

Given under my hand this 27th day of April, 1999 at Angeles City, Philippines. 7

The search was conducted on the same date. 8

On May 12, 1999, respondent filed a "motion to quash search warrant" 9 and a "supplemental motion to quash" 10on June 22, 1999. Both were denied by Judge Gatbalite in an order dated November 29, 1999. 11 Reconsideration was likewise denied. 12

On June 19, 2000, respondent filed a petition for certiorari and prohibition 13 before the CA. He alleged that Judge Gatbalite committed grave abuse of discretion in refusing to quash the search warrant, arguing that probable cause was not sufficiently established as the examination conducted was not probing and exhaustive and the warrant did not particularly describe the place to be searched. Respondent also prayed that Atty. Bennie Nicdao14 be prohibited from using as evidence the articles seized by virtue of the search warrant. This was granted by the CA in a decision dated April 10, 2002.

According to the CA, in determining whether there was probable cause to believe that the cigarettes purchased by Nieto were fake and in violation of RA 8293, 15 Judge Gatbalite failed to ask searching and probing questions of witness David Lee Sealey. 16 The examination of Sealey went this way:

Court:

Q There was testimony here given by Mr. Mario Nieto and Max Cavalera, that fake Marlboro cigarettes bought by them from Michael Chua, Christopher Choi and Johnny Chang were turned over to you for examination, is that correct?

A Yes, your Honor.

Q After the same had been turned over to you, what did you do with the said merchandise, if you did anything?

A I examined the sample of cigarettes and their packaging bearing the Marlboro Trade Marks which were suspected to be produc[ed] and manufactured by La Suerte or [with] the permission of Philip Morris.

Q What was the result of your examination?

A Based on the packaging of the packs, the color of the box and the printing on the front side of the packs and the cigarettes themselves, I concluded that they are counterfeit or unauthorized product[s].

Q Do you have any knowledge of this person named Christopher Choi?

A None, your Honor.

Q There is an affidavit here marked as exhibit, executed by one David Lee Sealey, do you know this David Lee Sealey?

A Yes, your Honor, I am the one.

Q Whose signature is this appearing on the printed name David Lee Sealey?

A This is my signature, your Honor.

Q Do you affirm and confirm other contents of this affidavit?

A Yes, your Honor.

Court:

That’s all. 17

In addition, the CA ruled that Judge Gatbalite committed grave abuse of discretion when she merely relied on the conclusion of Sealey that the cigarettes he received from Nieto were fake. She should have at least required Sealey to present the alleged fake Marlboro cigarettes and the genuine ones for comparison, instead of relying on his testimony alone. The CA reasoned that this was an absolute requirement under the Supreme Court ruling in20th Century Fox Film Corporation v. Court of Appeals. 18

Hence, this petition.

The People of the Philippines aver that the CA erred in finding that Judge Gatbalite committed grave abuse of discretion in issuing the search warrant allegedly because she failed to determine probable cause pursuant to Sections 4 and 5 of Rule 126 of the Rules of Court. 19 The People assail the finding of the CA that, in issuing the search warrant, Judge Gatbalite purportedly did not comply strictly with the requirement to determine the existence of probable cause by personally examining the applicant and his witnesses through searching questions and answers. The People also assert that the CA erred in applying the doctrine in 20th Century Fox Film Corporation20 since it had already been superseded by Columbia Pictures, Inc. v. Court of Appeals. 21

We rule for the People of the Philippines.

Sections 4 and 5 of Rule 126 state:

Sec. 4. Requisites for issuing search warrant. — A search warrant shall not issue except upon probable cause in connection with one specific offense to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the things to be seized which may be anywhere in the Philippines.

Sec. 5. Examination of complainant; record. — The judge must, before issuing the warrant, personally examine in the form of searching questions and answers, in writing and under oath, the complainant and the witnesses he may produce on facts personally known to them and attach to the record their sworn statements, together with the affidavits submitted.

According to the foregoing provisions, a search warrant can be issued only upon a finding of probable cause. Probable cause means such facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense has been committed and that the objects sought in connection

with the offense are in the place sought to be searched. 22 The determination of the existence of probable cause requires the following:

(1) the judge must examine the complainant and his witnesses personally;

(2) the examination must be under oath and

(3) the examination must be reduced in writing in the form of searching questions and answers. 23

The searching questions propounded to the applicant and the witnesses depend largely on the discretion of the judge. Although there is no hard-and-fast rule governing how a judge should conduct his examination, it is axiomatic that the examination must be probing and exhaustive, not merely routinary, general, peripheral, perfunctory or pro-forma. 24 The judge must not simply rehash the contents of the affidavit but must make his own inquiry on the intent and justification of the application. 25 The questions should not merely be repetitious of the averments stated in the affidavits or depositions of the applicant and the witnesses. 26 If the judge fails to determine probable cause by personally examining the applicant and his witnesses in the form of searching questions before issuing a search warrant, grave abuse of discretion is committed. 27

The determination of probable cause does not call for the application of rules and standards of proof that a judgment of conviction requires after trial on the merits. As the term implies, probable cause is concerned with probability, not absolute or even moral certainty. The standards of judgment are those of a reasonably prudent man, not the exacting calibrations of a judge after a full-blown trial. 28 No law or rule states that probable cause requires a specific kind of evidence. No formula or fixed rule for its determination exists. 29 Probable cause is determined in the light of conditions obtaining in a given situation. 30 The entirety of the questions propounded by the court and the answers thereto must be considered by the judge. 31

In this case, aside from the testimony of Sealey, petitioner judge also heard the testimony of applicant Nieto:

Q: In connection with Search Warrant 99-17, are you the same Mario Nieto who is the applicant in this application for search warrant filed today April 27, 1999?

A: Yes, your Honor.

Q: Do you know this Christopher Choi referred to herein?

A: Yes, your Honor.

Q: Why do you know him?

A: He was introduced to us by Michael Chua, your Honor.

Q: As what?

A: As the supplier for the goods.

Q: Subject of the application?

A: Yes, your Honor, in violation of Section 169 of R.A. 8293.

Q: How did you know him?

A: When I was conducting a test-buy operation against Mr. Michael Chua, Mr. Michael Chua told me that the bulk of supply if we need more supply we can get from the source, a certain Christopher Choi, who lives in the same village and who is actually the supplier for the entire region.

Q: Where did you see him. This Christopher Choi?

A: I went to his house, your Honor.

Q: Where?

A: At No. 25-13 Columbia St., Carmenville Subd., Angeles City, Pampanga.

Q: Upon arriving at the place what did you do?

A: Upon arriving at the place, your Honor, I introduced myself as the one who was referred by a certain Michael Chua who is interested in buying the Marlboro cigarettes from him and he accommodated me and showed me the sample that he has and I was able to procure the samples from him, the samples that like what we did to the others were inspected by certain Mr. David Lee Sealey, the representative and authority from the Philip Morris.

Q: Did you actually buy those samples?

A: Yes, your Honor, I got the samples form Mr. Christopher Choi and I submitted them to Mr. David Lee Sealey.

Q: How many Marlboro cigarettes did you buy?

A: We bought only one ream, P17.00 per pack.

Q: Do you know from what particular place the house of Christopher Choi did he got (sic) those samples?

A: The volume stocks were found inside the house, they are almost everywhere in the house of Christopher Choi.

Q: There is a sketch here attached to your application, can you point it out here?

A: Yes, your Honor, at the warehouse, in the storage room as shown in the lay out of the house, it is adjacent to the residential house as shown in the sketch.

Q: You went to the warehouse?

A: We were shown [the] entire area by the supplier, Christopher Choi. As a matter of fact he was trying to show us how much volume he has and his capacity to supply. 32

Max Cavalera, a witness who accompanied Nieto during the "test-buy" operation, 33 also testified:

Q How about this Christopher Choi?

A As I’ve said earlier, he was one of those identified by the informant storing and selling counterfeit Marlboro cigarettes, so on April 22, 1999 we conducted a surveillance and we were able to confirm that the said cigarettes are being stored at the subject place.

Q At what place?

A At 25-13 Columbia St., Carmenville Subd., Angeles City. On April 23, 1999 at about 8:30 p.m., Mario Nieto and I again went to the subject place to conduct a test-buy operation. [A]fter Mr. Choi had been convinced of our intention to buy cigarettes from him, he brought us to his warehouse where he showed to us several cardboard cases of Marlboro cigarettes. 34

Given the foregoing testimonies and applying the established standards in determining probable cause, we cannot say that Judge Gatbalite committed grave abuse of discretion in issuing the search warrant. Her questions were sufficiently probing, not at all superficial and perfunctory. The testimonies were consistent with each other and the narration of facts was credible. The testimonies and other evidence on record constituted adequate bases to establish probable cause that the alleged offense had been committed.

Since probable cause is dependent largely on the opinion and findings of the judge who conducted the examination and who had the opportunity to question the applicant and his witnesses, 35 the findings of the judge deserve great weight. The reviewing court can overturn such findings only upon proof that the judge disregarded the facts before him or ignored the clear dictates of reason. 36 We thus find no reason to disturb Judge Gatbalite’s findings.

Furthermore, as correctly pointed out by petitioners, 20th Century Fox Film Corporation, insofar as it required the presentation of the master tapes for comparison with the pirated copies for a search warrant to issue, had already been superseded by Columbia Pictures, Inc. v. Court of Appeals:

More to the point, it is felt that the reasonableness of the added requirement in 20th Century Fox calling for the production of the master tapes of the copyrighted films for determination of probable cause in copyright infringement cases needs revisiting and clarification.

xxx xxx xxx

In fine, the supposed pronunciamento in said case regarding the necessity for the presentation of the master tapes of the copyrighted films for the validity of search warrants should at most be understood to merely serve as a guidepost in determining the existence of probable cause in copyright infringement cases where there is doubt as to the true nexus between the master tape and the pirated copies. An objective and careful reading of the decision in said case could lead to no other conclusion than that said directive was hardly intended to be a sweeping and inflexible requirement in all or similar copyright infringement cases. Judicial dicta should always be construed within the factual matrix of their parturition, otherwise a careless interpretation thereof could unfairly fault the writer with the vice of overstatement and the reader with the fallacy of undue generalization.

xxx xxx xxx

It is evidently incorrect to suggest, as the ruling in 20th Century Fox may appear to do, that in copyright infringement cases, the presentation of master tapes of the copyrighted films is always necessary to meet the requirement of probable cause and that, in the absence thereof, there can be no finding of probable cause for the issuance of a search warrant. It is true that such master tapes are object evidence, with the merit that in this class of evidence the ascertainment of the controverted fact is made through demonstrations involving the direct use of the senses of the presiding magistrate. Such auxiliary procedure, however, does not rule out the use of testimonial or documentary evidence, depositions, admissions or other classes of evidence tending to prove the factum probandum,

especially where the production in court of object evidence would result in delay, inconvenience or expenses out of proportion to its evidentiary value.

xxx xxx xxx

Accordingly, to restrict the exercise of discretion by a judge by adding a particular requirement (the presentation of master tapes, as intimated by 20th Century Fox) not provided nor implied in the law for a finding of probable cause is beyond the realm of judicial competence or statesmanship. It serves no purpose but to stultify and constrict the judicious exercise of a court’s prerogatives and to denigrate the judicial duty of determining the existence of probable cause to a mere ministerial or mechanical function. There is, to repeat, no law or rule which requires that the existence of probable cause is or should be determined solely by a specific kind of evidence. Surely, this could not have been contemplated by the framers of the Constitution, and we do not believe that the Court intended the statement in 20th Century Fox regarding master tapes as the dictum for all seasons and reasons in infringement cases. 37 (emphasis supplied)

It is obvious that 20th Century Fox Film Corporation should not be applied to the present case since this involves the offense of unfair competition and not copyright infringement. More importantly, as pronounced by the Court inColumbia Pictures, Inc., the judge’s exercise of discretion should not be unduly restricted by adding a requirement that is not sanctioned by law.

WHEREFORE, the petition is hereby GRANTED. The assailed decision of the Court of Appeals dated April 10, 2002 in CA-G.R. SP No. 59587 is REVERSED and SET ASIDE. Judgment is hereby rendered declaring Search Warrant No. 99-17 as VALID.

SO ORDERED.

RENATO C. CORONAAssociate Justice

WE CONCUR:

REYNATO S. PUNOAssociate Justice

Chairperson

ANGELINA SANDOVAL-GUTIERREZ, ADOLFO S. AZCUNAAssociate Justice Associate Justice

CANCIO C. GARCIAAssociate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNOAssociate JusticeChairperson, Second Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ARTEMIO V. PANGANIBANChief Justice

Footnotes

1 Under Rule 45 of the Rules of Court.

2 Penned by former Presiding Justice Ma. Alicia Austria-Martinez (now Associate Justice of the Supreme Court) and concurred in by Associate Justices Hilarion L. Aquino (retired) and Jose L. Sabio, Jr. of the Former Fourth Division of the Court of Appeals; rollo, pp. 9-15.

3 Id., p. 15.

4 Presided by Judge Lourdes F. Gatbalite.

5 Sec. 168. Unfair Competition, Rights, Regulation and Remedies. -

xxx xxx xxx

168.2. Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.

168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such good or any agent of any vendor engaged in selling such goods with a like purpose;

xxx xxx xxx

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.

Sec. 169. False Designations of Origin; False Description or Representation. - 169.1. Any person who, on or in connection with any goods or services, or any container for goods, uses in

commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which:

(a) Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person;

xxx xxx xxx

6 Application for Search Warrant, rollo, p. 70. The case was docketed as Crim. Case No. I.S. No. 99-8116.

7 Id., p. 71.

8 Id., pp. 27 and 154.

9 Id., pp. 81-87.

10 Id., pp. 78-80.

11 Id., pp. 81-87.

12 Id., p. 88.

13 Id., pp. 89-101.

14 He was the Special Prosecutor of the Special Operations Group of the Economic Intelligence and Investigation Bureau (EIIB) which was attached to the Department of Finance. Under Executive Order No. 191 dated January 7, 2000, the EIIB was deactivated. This has since been absorbed by the Central Management Information Office of the Department of Finance and Atty. Nicdao is no longer with the said office; id., pp. 129-130.

15 Id., p. 14.

16 Manager of Product Development of Philip Morris Asia Limited which is the owner of the Marlboro trademarks; id., p. 120.

17 Id., pp. 12-14.

18 Id., pp. 12 and 14; G.R. Nos. L-76649-51, 19 August 1988, 164 SCRA 655.

19 Id., p. 32.

20 Supra at note 18.

21 329 Phil. 875 (1996).

22 People v. Mamaril, G.R. No. 147607, 22 January 2004, 420 SCRA, 662, 671, citing Pendon v. Court of Appeals, G.R. No. 84873, 16 November 1990, 191 SCRA 429, 437, in turn citing Marinas v. Siochi, 191 Phil. 698 (1981); Ponsica v. Ignalaga, G.R. No. L-72301, 31 July 1987, 152 SCRA 647, 664.

23 Id.

24 People v. Delos Reyes, G.R. No. 140657, 25 October 2004, 441 SCRA 305, 315, citing Roan v. Gonzales, 230 Phil. 90 (1986).

25 Uy v. Bureau of Internal Revenue, G.R. No. 129651, 20 October 2000, 344 SCRA 36, 55, citing Pendon v. Court of Appeals, supra at note 22.

26 Supra at note 24, citing Nolasco v. Paño, G.R. No. L-69803, 8 October 1985, 139 SCRA 152.

27 Id., p. 316, citing Silva v. Presiding Judge, RTC of Negros Oriental, Br. 33, G.R. No. 81756, 21 October 1991, 203 SCRA 140.

28 Microsoft Corporation v. Maxicorp, Inc., G.R. No. 140946, 13 September 2004 , 438 SCRA 224, 236.

29 Id., pp. 236-237, citing La Chemise Lacoste, S.A. v. Hon. Fernandez, 214 Phil. 332 (1984).

30 Id., p. 237, citing Central Bank of the Phils. v. Morfe, 126 Phil. 885 (1967).

31 Supra at note 24, p. 317.

32 Rollo, pp. 40-43, citing TSN dated April 27, 1999, pp. 3-4.

33 Id., p. 48.

34 Id., p. 84.

35 Supra note 28, at 238, citing Luna v. Hon. Plaza, 135 Phil. 329 (1968).

36 Id., citing La Chemise Lacoste, S.A. v. Hon. Fernandez, supra at note 29.

37 Supra note 21, at 910-921, citations omitted.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

FIRST DIVISION

G.R. No. 165306 September 20, 2005

MANLY SPORTWEAR MANUFACTURING, INC., Petitioners, vs.DADODETTE ENTERPRISES AND/OR HERMES SPORTS CENTER, Respondent.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari1 under Rule 45 of the Revised Rules of Civil Procedure assails the July 13, 2004 decision2 of the Court of Appeals3 in CA-G.R. SP No. 79887 and its September 15, 2004 resolution4denying reconsideration thereof.

The facts are as follows:

On March 14, 2003, Special Investigator Eliezer P. Salcedo of the National Bureau of Investigation (NBI) applied for a search warrant before the Regional Trial Court (RTC) of Quezon City, based on the information that Dadodette Enterprises and/or Hermes Sports Center were in possession of goods, the copyright of which belonged to Manly Sportswear Mfg., Inc. (MANLY).5

After finding reasonable grounds that a violation of Sections 172 and 217 of Republic Act (RA) No. 82936 has been committed, Judge Estrella T. Estrada of RTC-Quezon City, Branch 83, issued on March 17, 2003 Search Warrant No. 4044(03).7

Respondents thereafter moved to quash and annul the search warrant contending that the same is invalid since the requisites for its issuance have not been complied with. They insisted that the sporting goods manufactured by and/or registered in the name of MANLY are ordinary and common hence, not among the classes of work protected under Section 172 of RA 8293.

On June 10, 2003, the trial court granted the motion to quash and declared Search Warrant No. 4044(03) null and void based on its finding that the copyrighted products of MANLY do not appear to be original creations and were being manufactured and distributed by different companies locally and abroad under various brands, and therefore unqualified for protection under Section 172 of RA 8293. Moreover, MANLY’s certificates of registrations were issued only in 2002, whereas there were certificates of registrations for the same sports articles which were issued earlier than MANLY’s, thus further negating the claim that its copyrighted products were original creations.8

On August 11, 2003, the trial court denied9 MANLY’s motion for reconsideration. Hence it filed a petition for certiorari10 before the Court of Appeals which was denied for lack of merit. The appellate court found that the trial court correctly granted the motion to quash and that its ruling in the ancillary proceeding did not preempt the findings of the intellectual property court as it did not resolve with finality the status or character of the seized items.

After denial of its motion for reconsideration on September 15, 2004, MANLY filed the instant petition for review on certiorari raising the sole issue of whether or not the Court of Appeals erred in finding that the trial court did not gravely abuse its discretion in declaring in the hearing for the quashal of the search

warrant that the copyrighted products of MANLY are not original creations subject to the protection of RA 8293.

We deny the petition.

The power to issue search warrants is exclusively vested with the trial judges in the exercise of their judicial function.11 As such, the power to quash the same also rests solely with them. After the judge has issued a warrant, he is not precluded to subsequently quash the same, if he finds upon reevaluation of the evidence that no probable cause exists.

Our ruling in Solid Triangle Sales Corp. v. Sheriff, RTC, Q.C., Br. 9312 is instructive, thus:

Inherent in the courts’ power to issue search warrants is the power to quash warrants already issued. In this connection, this Court has ruled that the motion to quash should be filed in the court that issued the warrant unless a criminal case has already been instituted in another court, in which case, the motion should be filed with the latter. The ruling has since been incorporated in Rule 126 of the Revised Rules of Criminal Procedure[.]

In the instant case, we find that the trial court did not abuse its discretion when it entertained the motion to quash considering that no criminal action has yet been instituted when it was filed. The trial court also properly quashed the search warrant it earlier issued after finding upon reevaluation of the evidence that no probable cause exists to justify its issuance in the first place. As ruled by the trial court, the copyrighted products do not appear to be original creations of MANLY and are not among the classes of work enumerated under Section 172 of RA 8293. The trial court, thus, may not be faulted for overturning its initial assessment that there was probable cause in view of its inherent power to issue search warrants and to quash the same. No objection may be validly posed to an order quashing a warrant already issued as the court must be provided with the opportunity to correct itself of an error unwittingly committed, or, with like effect, to allow the aggrieved party the chance to convince the court that its ruling is erroneous.

Moreover, the trial court was acting within bounds when it ruled, in an ancillary proceeding, that the copyrighted products of petitioner are not original creations. This is because in the determination of the existence of probable cause for the issuance or quashal of a warrant, it is inevitable that the court may touch on issues properly threshed out in a regular proceeding. In so doing, it does not usurp the power of, much less preclude, the court from making a final judicial determination of the issues in a full-blown trial. Consequently, MANLY’s assertion that the trial court’s order quashing the warrant preempted the finding of the intellectual property court has no legal basis.

As pertinently held in Solid Triangle Sales Corp. v. Sheriff, RTC, Q.C., Br. 93:13

When the court, in determining probable cause for issuing or quashing a search warrant, finds that no offense has been committed, it does not interfere with or encroach upon the proceedings in the preliminary investigation. The court does not oblige the investigating officer not to file an information for the court’s ruling that no crime exists is only for purposes of issuing or quashing the warrant. This does not, as petitioners would like to believe, constitute a usurpation of the executive function. Indeed, to shirk from this duty would amount to an abdication of a constitutional obligation.

...

... The finding by the court that no crime exists does not preclude the authorized officer conducting the preliminary investigation from making his own determination that a crime has been committed and that

probable cause exists for purposes of filing the information.

As correctly observed by the Court of Appeals, the trial court’s finding that the seized products are not copyrightable was merely preliminary as it did not finally and permanently adjudicate on the status and character of the seized items. MANLY could still file a separate copyright infringement suit against the respondents because the order for the issuance or quashal of a warrant is not res judicata.

Thus, in Vlasons Enterprises Corporation v. Court of Appeals14 we held that:

The proceeding for the seizure of property in virtue of a search warrant does not end with the actual taking of the property by the proper officers and its delivery, usually constructive, to the court. The order for the issuance of the warrant is not a final one and cannot constitute res judicata. Such an order does not ascertain and adjudicate the permanent status or character of the seized property. By its very nature, it is provisional, interlocutory. It is merely the first step in the process to determine the character and title of the property. That determination is done in the criminal action involving the crime or crimes in connection with which the search warrant was issued. Hence, such a criminal action should be prosecuted, or commenced if not yet instituted, and prosecuted. The outcome of the criminal action will dictate the disposition of the seized property…

We have also ruled in Ching v. Salinas, Sr., et al.15 that:

The RTC had jurisdiction to delve into and resolve the issue whether the petitioner’s utility models are copyrightable and, if so, whether he is the owner of a copyright over the said models. It bears stressing that upon the filing of the application for search warrant, the RTC was duty-bound to determine whether probable cause existed, in accordance with Section 4, Rule 126 of the Rules of Criminal Procedure[.]

Further, the copyright certificates issued in favor of MANLY constitute merely prima facie evidence of validity and ownership. However, no presumption of validity is created where other evidence exist that may cast doubt on the copyright validity. Hence, where there is sufficient proof that the copyrighted products are not original creations but are readily available in the market under various brands, as in this case, validity and originality will not be presumed and the trial court may properly quash the issued warrant for lack of probable cause.

Besides, no copyright accrues in favor of MANLY despite issuance of the certificates of registration and deposit16pursuant to Section 2, Rule 7 of the Copyrights Safeguards and Regulations17 which states:

Sec. 2 Effects of Registration and Deposit of Work. The registration and deposit of the work is purely for 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.

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 right or title upon the registered copyright owner or automatically put his work under the protective mantle of the copyright law. It is not a conclusive proof of copyright ownership. As it is, non-registration and deposit of the work within the prescribed period only makes the copyright owner liable to pay a fine.18

WHEREFORE, the petition is DENIED. The July 13, 2004 decision of the Court of Appeals in CA-G.R. SP No. 79887 and resolution dated September 15, 2004, are AFFIRMED.

SO ORDERED.

CONSUELO YNARES-SANTIAGO

Associate Justice

WE CONCUR:

HILARIO G. DAVIDE, JR.

Chief Justice

LEONARDO A. QUISUMBING ANTONIO T. CARPIO

Associate Justice Associate Justice

ADOLFO S. AZCUNA

Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

HILARIO G. DAVIDE, JR.

Chief Justice

Footnotes

1 Rollo, pp. 13-46.

2 CA Rollo, pp. 381-388.

3 Decision penned by Associate Justice Jose Catral Mendoza and concurred in by Associate Justices Godardo A. Jacinto and Edgardo P. Cruz.

4 Rollo, pp. 9-10.

5 CA Rollo, pp. 68-70.

6 The Intellectual Property Code of the Philippines.

7 CA Rollo, pp. 101-102.

8 Id. at 59-62.

9 Id. at 51-54.

10 Id. at 2-50.

11 Section 2, Article III, 1987 Constitution.

12 422 Phil. 72, 83 [2001].

13 Id. at 86-87.

14 No. L-61688, 28 October 1987, 155 SCRA 186, 191.

15 G.R. No. 161295, 29 June 2005.

16 Section 191, RA No. 8293 provides:

Sec. 191. Registration and Deposit with National Library and the Supreme Court Library – After the first public dissemination of performance by authority of the copyright owner of a work falling under Subsections 172.1, 172.2 and 172.3 of this Act, there shall, for the purpose of completing the records of the National Library and the Supreme Court Library, within three (3) weeks, be registered and deposited with it, by personal delivery or by registered mail, two (2) complete copies or reproductions of the work in such form as the directors of said libraries may prescribe. A certificate of deposit shall be issued for which the prescribed fee shall be collected and the copyright owner shall be exempt from making additional deposit of the works with the National Library and the Supreme Court Library under other laws. If, within three (3) weeks after receipt by the copyright owner of a written demand from the directors for such deposit, the required copies or reproductions are not delivered and the fee is not paid, the copyright owner shall be liable to pay a fine equivalent to the required fee per month of delay and to pay to the National Library and the Supreme Court Library the amount of the retail price of the best edition of the work. Only the above mentioned classes of work shall be accepted for deposit by the National Library and the Supreme Court Library.

17 Issued on 13 August 1999 pursuant to Sec. 228 of RA No. 8293 which provides:

Sec. 228. Public Records – The section or division of the National Library charged with receiving copies and instruments deposited and with keeping records required under this Act and everything in it shall be open to public inspection. The Director of the National Library is empowered to issue such safeguards and regulations as may be necessary to implement this Section and other provisions of this Act.

18 Section 3, Rule 7, Copyrights Safeguards and Regulations.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 161295               June 29, 2005

JESSIE G. CHING, petitioner, vs.WILLIAM M. SALINAS, SR., WILLIAM M. SALINAS, JR., JOSEPHINE L. SALINAS, JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE, JOHN ERIC I. SALINAS, NOEL M. YABUT (Board of Directors and Officers of WILAWARE PRODUCT CORPORATION), respondents.

D E C I S I O N

CALLEJO, SR., J.:

This petition for review on certiorari assails the Decision1 and Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 70411 affirming the January 3, 2002 and February 14, 2002 Orders3 of the Regional Trial Court (RTC) of Manila, Branch 1, which quashed and set aside Search Warrant Nos. 01-2401 and 01-2402 granted in favor of petitioner Jessie G. Ching.

Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co., the maker and manufacturer of a Utility Model, described as "Leaf Spring Eye Bushing for Automobile" made up of plastic.

On September 4, 2001, Ching and Joseph Yu were issued by the National Library Certificates of Copyright Registration and Deposit of the said work described therein as "Leaf Spring Eye Bushing for Automobile."4

On September 20, 2001, Ching requested the National Bureau of Investigation (NBI) for police/investigative assistance for the apprehension and prosecution of illegal manufacturers, producers and/or distributors of the works.5

After due investigation, the NBI filed applications for search warrants in the RTC of Manila against William Salinas, Sr. and the officers and members of the Board of Directors of Wilaware Product Corporation. It was alleged that the respondents therein reproduced and distributed the said models penalized under Sections 177.1 and 177.3 of Republic Act (R.A.) No. 8293. The applications sought the seizure of the following:

a.) Undetermined quantity of Leaf spring eye bushing for automobile that are made up of plastic polypropylene;

b.) Undetermined quantity of Leaf spring eye bushing for automobile that are made up of polyvinyl chloride plastic;

c.) Undetermined quantity of Vehicle bearing cushion that is made up of polyvinyl chloride plastic;

d.) Undetermined quantity of Dies and jigs, patterns and flasks used in the manufacture/fabrication of items a to d;

e.) Evidences of sale which include delivery receipts, invoices and official receipts.6

The RTC granted the application and issued Search Warrant Nos. 01-2401 and 01-2402 for the seizure of the aforecited articles.7 In the inventory submitted by the NBI agent, it appears that the following articles/items were seized based on the search warrants:

Leaf Spring eye bushing

a) Plastic Polypropylene

- C190 27 }

- C240 rear 40 }

- C240 front 41 } BAG 1

b) Polyvinyl Chloride Plastic

- C190 13 }

c) Vehicle bearing cushion

- center bearing cushion 11 }

Budder for C190 mold 8 }

Diesel Mold

a) Mold for spring eye bushing rear 1 set

b) Mold for spring eye bushing front 1 set

c) Mold for spring eye bushing for C190 1 set

d) Mold for C240 rear 1 piece of the set

e) Mold for spring eye bushing for L300 2 sets

f) Mold for leaf spring eye bushing C190 with metal 1 set

g) Mold for vehicle bearing cushion 1 set8

The respondents filed a motion to quash the search warrants on the following grounds:

2. The copyright registrations were issued in violation of the Intellectual Property Code on the ground that:

a) the subject matter of the registrations are not artistic or literary;

b) the subject matter of the registrations are spare parts of automobiles meaning – there (sic) are original parts that they are designed to replace. Hence, they are not original.9

The respondents averred that the works covered by the certificates issued by the National Library are not artistic in nature; they are considered automotive spare parts and pertain to technology. They aver that the models are not original, and as such are the proper subject of a patent, not copyright.10

In opposing the motion, the petitioner averred that the court which issued the search warrants was not the proper forum in which to articulate the issue of the validity of the copyrights issued to him. Citing the ruling of the Court inMalaloan v. Court of Appeals,11 the petitioner stated that a search warrant is merely a judicial process designed by the Rules of Court in anticipation of a criminal case. Until his copyright was nullified in a proper proceeding, he enjoys rights of a registered owner/holder thereof.

On January 3, 2002, the trial court issued an Order12 granting the motion, and quashed the search warrant on its finding that there was no probable cause for its issuance. The court ruled that the work covered by the certificates issued to the petitioner pertained to solutions to technical problems, not literary and artistic as provided in Article 172 of the Intellectual Property Code.

His motion for reconsideration of the order having been denied by the trial court’s Order of February 14, 2002, the petitioner filed a petition for certiorari in the CA, contending that the RTC had no jurisdiction to delve into and resolve the validity of the copyright certificates issued to him by the National Library. He insisted that his works are covered by Sections 172.1 and 172.2 of the Intellectual Property Code. The petitioner averred that the copyright certificates are prima facie evidence of its validity, citing the ruling of the United States Court of Appeals in Wildlife Express Corporation v. Carol Wright Sales, Inc.13 The petitioner asserted that the respondents failed to adduce evidence to support their motion to quash the search warrants. The petitioner noted that respondent William Salinas, Jr. was not being honest, as he was able to secure a similar copyright registration of a similar product from the National Library on January 14, 2002.

On September 26, 2003, the CA rendered judgment dismissing the petition on its finding that the RTC did not commit any grave abuse of its discretion in issuing the assailed order, to wit:

It is settled that preliminarily, there must be a finding that a specific offense must have been committed to justify the issuance of a search warrant. In a number of cases decided by the Supreme Court, the same is explicitly provided, thus:

"The probable cause must be in connection with one specific offense, and the judge must, before issuing the warrant, personally examine in the form of searching questions and answers, in writing and under oath, the complainant and any witness he may produce, on facts personally known to them and attach to the record their sworn statements together with any affidavit submitted.

"In the determination of probable cause, the court must necessarily resolve whether or not an offense exists to justify the issuance or quashal of the search warrant."

In the instant case, the petitioner is praying for the reinstatement of the search warrants issued, but subsequently quashed, for the offense of Violation of Class Designation of Copyrightable Works under Section 177.1 in relation to Section 177.3 of Republic Act 8293, when the objects subject of the same, are patently not copyrightable.

It is worthy to state that the works protected under the Law on Copyright are: literary or artistic works (Sec. 172) and derivative works (Sec. 173). The Leaf Spring Eye Bushing and Vehicle Bearing Cushion fall on neither classification. Accordingly, if, in the first place, the item subject of the petition is not entitled to be protected by the law on copyright, how can there be any violation?14

The petitioner’s motion for reconsideration of the said decision suffered the same fate. The petitioner forthwith filed the present petition for review on certiorari, contending that the revocation of his copyright certificates should be raised in a direct action and not in a search warrant proceeding.

The petitioner posits that even assuming ex argumenti that the trial court may resolve the validity of his copyright in a proceeding to quash a search warrant for allegedly infringing items, the RTC committed a grave abuse of its discretion when it declared that his works are not copyrightable in the first place. He claims that R.A. No. 8293, otherwise known as the Intellectual Property Code of the Philippines, which took effect on January 1, 1998, provides in no uncertain terms that copyright protection automatically attaches to a work by the sole fact of its creation, irrespective of its mode or form of expression, as well as of its content, quality or purpose.15 The law gives a non-inclusive definition of "work" as referring to original intellectual creations in the literary and artistic domain protected from the moment of their creation; and includes original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design and other works of applied art under Section 172.1(h) of R.A. No. 8293.lawphil.net

As such, the petitioner insists, notwithstanding the classification of the works as either literary and/or artistic, the said law, likewise, encompasses works which may have a bearing on the utility aspect to which the petitioner’s utility designs were classified. Moreover, according to the petitioner, what the Copyright Law protects is the author’s intellectual creation, regardless of whether it is one with utilitarian functions or incorporated in a useful article produced on an industrial scale.

The petitioner also maintains that the law does not provide that the intended use or use in industry of an article eligible for patent bars or invalidates its registration under the Law on Copyright. The test of protection for the aesthetic is not beauty and utility, but art for the copyright and invention of original and ornamental design for design patents.16 In like manner, the fact that his utility designs or models for articles of manufacture have been expressed in the field of automotive parts, or based on something already in the public domain does not automatically remove them from the protection of the Law on Copyright.17

The petitioner faults the CA for ignoring Section 218 of R.A. No. 8293 which gives the same presumption to an affidavit executed by an author who claims copyright ownership of his work.

The petitioner adds that a finding of probable cause to justify the issuance of a search warrant means merely a reasonable suspicion of the commission of the offense. It is not equivalent to absolute certainty or a finding of actual and positive cause.18 He assists that the determination of probable cause does not concern the issue of whether or not the alleged work is copyrightable. He maintains that to justify a finding of probable cause in the issuance of a search warrant, it is enough that there exists a reasonable suspicion of the commission of the offense.

The petitioner contends that he has in his favor the benefit of the presumption that his copyright is valid; hence, the burden of overturning this presumption is on the alleged infringers, the respondents herein. But this burden cannot be carried in a hearing on a proceeding to quash the search warrants, as the issue therein is whether there was probable cause for the issuance of the search warrant. The petitioner concludes that the issue of probable cause should be resolved without invalidating his copyright.

In their comment on the petition, the respondents aver that the work of the petitioner is essentially a technical solution to the problem of wear and tear in automobiles, the substitution of materials, i.e., from rubber to plastic matter of polyvinyl chloride, an oil resistant soft texture plastic material strong enough to endure pressure brought about by the vibration of the counter bearing and thus brings bushings. Such work, the respondents assert, is the subject of copyright under Section 172.1 of R.A. No. 8293. The respondents posit that a technical solution in any field of human activity which is novel may be the subject of a patent, and not of a copyright. They insist that the certificates issued by the National Library are only certifications that, at a point in time, a certain work was deposited in the said office. Furthermore, the registration of copyrights does not provide for automatic protection. Citing Section 218.2(b) of R.A. No. 8293, the respondents aver that no copyright is said to exist if a party categorically questions its existence and legality. Moreover, under Section 2, Rule 7 of the Implementing Rules of R.A. No. 8293, the registration and deposit of work is not conclusive as to copyright outlay or the time of copyright or the right

of the copyright owner. The respondents maintain that a copyright exists only when the work is covered by the protection of R.A. No. 8293.

The petition has no merit.

The RTC had jurisdiction to delve into and resolve the issue whether the petitioner’s utility models are copyrightable and, if so, whether he is the owner of a copyright over the said models. It bears stressing that upon the filing of the application for search warrant, the RTC was duty-bound to determine whether probable cause existed, in accordance with Section 4, Rule 126 of the Rules of Criminal Procedure:

SEC. 4. Requisite for issuing search warrant. – A search warrant shall not issue but upon probable cause in connection with one specific offense to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and, particularly, describing the place to be searched and the things to be seized.

In Solid Triangle Sales Corporation v. The Sheriff of RTC QC, Br. 93,19 the Court held that in the determination of probable cause, the court must necessarily resolve whether or not an offense exists to justify the issuance of a search warrant or the quashal of one already issued by the court. Indeed, probable cause is deemed to exist only where facts and circumstances exist which could lead a reasonably cautious and prudent man to believe that an offense has been committed or is being committed. Besides, in Section 3, Rule 126 of the Rules of Criminal Procedure, a search warrant may be issued for the search and seizure of personal property (a) subject of the offense; (b) stolen or embezzled and other proceeds or fruits of the offense; or (c) used or intended to be used as the means of committing an offense.

The RTC is mandated under the Constitution and Rules of Criminal Procedure to determine probable cause. The court cannot abdicate its constitutional obligation by refusing to determine whether an offense has been committed.20 The absence of probable cause will cause the outright nullification of the search warrant.21

For the RTC to determine whether the crime for infringement under R.A. No. 8293 as alleged in an application is committed, the petitioner-applicant was burdened to prove that (a) respondents Jessie Ching and Joseph Yu were the owners of copyrighted material; and (b) the copyrighted material was being copied and distributed by the respondents. Thus, the ownership of a valid copyright is essential.22

Ownership of copyrighted material is shown by proof of originality and copyrightability. By originality is meant that the material was not copied, and evidences at least minimal creativity; that it was independently created by the author and that it possesses at least same minimal degree of creativity.23 Copying is shown by proof of access to copyrighted material and substantial similarity between the two works.24 The applicant must thus demonstrate the existence and the validity of his copyright because in the absence of copyright protection, even original creation may be freely copied.25

By requesting the NBI to investigate and, if feasible, file an application for a search warrant for infringement under R.A. No. 8293 against the respondents, the petitioner thereby authorized the RTC (in resolving the application), to delve into and determine the validity of the copyright which he claimed he had over the utility models. The petitioner cannot seek relief from the RTC based on his claim that he was the copyright owner over the utility models and, at the same time, repudiate the court’s jurisdiction to ascertain the validity of his claim without running afoul to the doctrine of estoppel.

To discharge his burden, the applicant may present the certificate of registration covering the work or, in its absence, other evidence.26 A copyright certificate provides prima facie evidence of originality which is one element of copyright validity. It constitutes prima facie evidence of both validity and ownership27 and the validity of the facts stated in the certificate.28 The presumption of validity to a certificate of copyright registration merely orders the burden of proof. The applicant should not ordinarily be forced, in the first

instance, to prove all the multiple facts that underline the validity of the copyright unless the respondent, effectively challenging them, shifts the burden of doing so to the applicant.29 Indeed, Section 218.2 of R.A. No. 8293 provides:

218.2. In an action under this Chapter:

(a) Copyright shall be presumed to subsist in the work or other subject matter to which the action relates if the defendant does not put in issue the question whether copyright subsists in the work or other subject matter; and

(b) Where the subsistence of the copyright is established, the plaintiff shall be presumed to be the owner of the copyright if he claims to be the owner of the copyright and the defendant does not put in issue the question of his ownership.

A certificate of registration creates no rebuttable presumption of copyright validity where other evidence in the record casts doubt on the question. In such a case, validity will not be presumed.30

To discharge his burden of probable cause for the issuance of a search warrant for violation of R.A. No. 8293, the petitioner-applicant submitted to the RTC Certificate of Copyright Registration Nos. 2001-197 and 2001-204 dated September 3, 2001 and September 4, 2001, respectively, issued by the National Library covering work identified as Leaf Spring Eye Bushing for Automobile and Vehicle Bearing Cushion both classified under Section 172.1(h) of R.A. No. 8293, to wit:

SEC. 172. Literary and Artistic Works. – 172.1. Literary and artistic works, hereinafter referred to as "works," are original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include in particular:

...

(h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art.

Related to the provision is Section 171.10, which provides that a "work of applied art" is an artistic creation with utilitarian functions or incorporated in a useful article, whether made by hand or produced on an industrial scale.

But, as gleaned from the specifications appended to the application for a copyright certificate filed by the petitioner, the said Leaf Spring Eye Bushing for Automobile is merely a utility model described as comprising a generally cylindrical body having a co-axial bore that is centrally located and provided with a perpendicular flange on one of its ends and a cylindrical metal jacket surrounding the peripheral walls of said body, with the bushing made of plastic that is either polyvinyl chloride or polypropylene.31 Likewise, the Vehicle Bearing Cushion is illustrated as a bearing cushion comprising a generally semi-circular body having a central hole to secure a conventional bearing and a plurality of ridges provided therefore, with said cushion bearing being made of the same plastic materials.32 Plainly, these are not literary or artistic works. They are not intellectual creations in the literary and artistic domain, or works of applied art. They are certainly not ornamental designs or one having decorative quality or value.

It bears stressing that the focus of copyright is the usefulness of the artistic design, and not its marketability. The central inquiry is whether the article is a work of art.33 Works for applied art include all original pictorials, graphics, and sculptural works that are intended to be or have been embodied in useful article regardless of factors such as mass production, commercial exploitation, and the potential availability of design patent protection.34

As gleaned from the description of the models and their objectives, these articles are useful articles which are defined as one having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information. Indeed, while works of applied art, original intellectual, literary and artistic works are copyrightable, useful articles and works of industrial design are not.35 A useful article may be copyrightable only if and only to the extent that such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of the utilitarian aspects of the article.

We agree with the contention of the petitioner (citing Section 171.10 of R.A. No. 8293), that the author’s intellectual creation, regardless of whether it is a creation with utilitarian functions or incorporated in a useful article produced on an industrial scale, is protected by copyright law. However, the law refers to a "work of applied art which is an artistic creation." It bears stressing that there is no copyright protection for works of applied art or industrial design which have aesthetic or artistic features that cannot be identified separately from the utilitarian aspects of the article.36 Functional components of useful articles, no matter how artistically designed, have generally been denied copyright protection unless they are separable from the useful article.37

In this case, the petitioner’s models are not works of applied art, nor artistic works. They are utility models, useful articles, albeit with no artistic design or value. Thus, the petitioner described the utility model as follows:

LEAF SPRING EYE BUSHING FOR AUTOMOBILE

Known bushings inserted to leaf-spring eye to hold leaf-springs of automobile are made of hard rubber. These rubber bushings after a time, upon subjecting them to so much or intermittent pressure would eventually wore (sic) out that would cause the wobbling of the leaf spring.

The primary object of this utility model, therefore, is to provide a leaf-spring eye bushing for automobile that is made up of plastic.

Another object of this utility model is to provide a leaf-spring eye bushing for automobiles made of polyvinyl chloride, an oil resistant soft texture plastic or polypropylene, a hard plastic, yet both causes cushion to the leaf spring, yet strong enough to endure pressure brought about by the up and down movement of said leaf spring.

Yet, an object of this utility model is to provide a leaf-spring eye bushing for automobiles that has a much longer life span than the rubber bushings.

Still an object of this utility model is to provide a leaf-spring eye bushing for automobiles that has a very simple construction and can be made using simple and ordinary molding equipment.

A further object of this utility model is to provide a leaf-spring eye bushing for automobile that is supplied with a metal jacket to reinforce the plastic eye bushing when in engaged with the steel material of the leaf spring.

These and other objects and advantages will come to view and be understood upon a reading of the detailed description when taken in conjunction with the accompanying drawings.

Figure 1 is an exploded perspective of a leaf-spring eye bushing according to the present utility model;

Figure 2 is a sectional view taken along line 2-2 of Fig. 1;

Figure 3 is a longitudinal sectional view of another embodiment of this utility model;

Figure 4 is a perspective view of a third embodiment; and

Figure 5 is a sectional view thereof.

Referring now to the several views of the drawings wherein like reference numerals designated same parts throughout, there is shown a utility model for a leaf-spring eye bushing for automobile generally designated as reference numeral 10.

Said leaf-spring eye bushing 10 comprises a generally cylindrical body 11 having a co-axial bore 12 centrally provided thereof.

As shown in Figs. 1 and 2, said leaf-spring eye bushing 10 is provided with a perpendicular flange 13 on one of its ends and a cylindrical metal jacket 14 surrounding the peripheral walls 15 of said body 11. When said leaf-spring bushing 10 is installed, the metal jacket 14 acts with the leaf-spring eye (not shown), which is also made of steel or cast steel. In effect, the bushing 10 will not be directly in contact with steel, but rather the metal jacket, making the life of the bushing 10 longer than those without the metal jacket.

In Figure 2, the bushing 10 as shown is made of plastic, preferably polyvinyl chloride, an oil resistant soft texture plastic or a hard polypropylene plastic, both are capable to endure the pressure applied thereto, and, in effect, would lengthen the life and replacement therefor.

Figure 3, on the other hand, shows the walls 16 of the co-axial bore 12 of said bushing 10 is insertably provided with a steel tube 17 to reinforce the inner portion thereof. This steel tube 17 accommodates or engages with the leaf-spring bolt (not shown) connecting the leaf spring and the automobile’s chassis.

Figures 4 and 5 show another embodiment wherein the leaf eye bushing 10 is elongated and cylindrical as to its construction. Said another embodiment is also made of polypropylene or polyvinyl chloride plastic material. The steel tube 17 and metal jacket 14 may also be applied to this embodiment as an option thereof.38

VEHICLE BEARING CUSHION

Known bearing cushions inserted to bearing housings for vehicle propeller shafts are made of hard rubber. These rubber bushings after a time, upon subjecting them to so much or intermittent pressure would eventually be worn out that would cause the wobbling of the center bearing.

The primary object of this utility model therefore is to provide a vehicle-bearing cushion that is made up of plastic.

Another object of this utility model is to provide a vehicle bearing cushion made of polyvinyl chloride, an oil resistant soft texture plastic material which causes cushion to the propeller’s center bearing, yet strong enough to endure pressure brought about by the vibration of the center bearing.

Yet, an object of this utility model is to provide a vehicle-bearing cushion that has a much longer life span than rubber bushings.

Still an object of this utility model is to provide a vehicle bearing cushion that has a very simple construction and can be made using simple and ordinary molding equipment.

These and other objects and advantages will come to view and be understood upon a reading of the detailed description when taken in conjunction with the accompanying drawings.

Figure 1 is a perspective view of the present utility model for a vehicle-bearing cushion; and

Figure 2 is a sectional view thereof.

Referring now to the several views of the drawing, wherein like reference numeral designate same parts throughout, there is shown a utility model for a vehicle-bearing cushion generally designated as reference numeral 10.

Said bearing cushion 10 comprises of a generally semi-circular body 11, having central hole 12 to house a conventional bearing (not shown). As shown in Figure 1, said body 11 is provided with a plurality of ridges 13 which serves reinforcing means thereof.

The subject bearing cushion 10 is made of polyvinyl chloride, a soft texture oil and chemical resistant plastic material which is strong, durable and capable of enduring severe pressure from the center bearing brought about by the rotating movement of the propeller shaft of the vehicle.39

A utility model is a technical solution to a problem in any field of human activity which is new and industrially applicable. It may be, or may relate to, a product, or process, or an improvement of any of the aforesaid.40Essentially, a utility model refers to an invention in the mechanical field. This is the reason why its object is sometimes described as a device or useful object.41 A utility model varies from an invention, for which a patent for invention is, likewise, available, on at least three aspects: first, the requisite of "inventive step"42 in a patent for invention is not required; second, the maximum term of protection is only seven years43 compared to a patent which is twenty years,44 both reckoned from the date of the application; and third, the provisions on utility model dispense with its substantive examination45 and prefer for a less complicated system.

Being plain automotive spare parts that must conform to the original structural design of the components they seek to replace, the Leaf Spring Eye Bushing and Vehicle Bearing Cushion are not ornamental. They lack the decorative quality or value that must characterize authentic works of applied art. They are not even artistic creations with incidental utilitarian functions or works incorporated in a useful article. In actuality, the personal properties described in the search warrants are mechanical works, the principal function of which is utility sans any aesthetic embellishment.

Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing Cushion as included in the catch-all phrase "other literary, scholarly, scientific and artistic works" in Section 172.1(a) of R.A. No. 8293. Applying the principle of ejusdem generis which states that "where a statute describes things of a particular class or kind accompanied by words of a generic character, the generic word will usually be limited to things of a similar nature with those particularly enumerated, unless there be something in the context of the state which would repel such inference,"46 the Leaf Spring Eye Bushing and Vehicle Bearing Cushion are not copyrightable, being not of the same kind and nature as the works enumerated in Section 172 of R.A. No. 8293.

No copyright granted by law can be said to arise in favor of the petitioner despite the issuance of the certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing and Vehicle Bearing Cushion. Indeed, inJoaquin, Jr. v. Drilon47 and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,48 the Court ruled that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted by the statute, and not simply a pre-existing right regulated by it. Being a statutory grant, the rights are only such as the statute confers, and may be obtained and enjoyed only with respect to the subjects and by the persons, and on terms and conditions specified in the statute. Accordingly, it can cover only the works falling within the statutory enumeration or description.

That the works of the petitioner may be the proper subject of a patent does not entitle him to the issuance of a search warrant for violation of copyright laws. In Kho v. Court of Appeals49 and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,50 the Court ruled that "these copyright and patent rights are completely distinct and separate from one another, and the protection afforded by one cannot be used interchangeably to cover items or works that exclusively pertain to the others." The Court expounded further, thus:

Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods. In relation thereto, a trade name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. Patentable inventions, on the other hand, refer to any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable.

The petitioner cannot find solace in the ruling of the United States Supreme Court in Mazer v. Stein51 to buttress his petition. In that case, the artifacts involved in that case were statuettes of dancing male and female figures made of semi-vitreous china. The controversy therein centered on the fact that although copyrighted as "works of art," the statuettes were intended for use and used as bases for table lamps, with electric wiring, sockets and lampshades attached. The issue raised was whether the statuettes were copyright protected in the United States, considering that the copyright applicant intended primarily to use them as lamp bases to be made and sold in quantity, and carried such intentions into effect. At that time, the Copyright Office interpreted the 1909 Copyright Act to cover works of artistic craftsmanship insofar as their form, but not the utilitarian aspects, were concerned. After reviewing the history and intent of the US Congress on its copyright legislation and the interpretation of the copyright office, the US Supreme Court declared that the statuettes were held copyrightable works of art or models or designs for works of art. The High Court ruled that:

"Works of art (Class G) – (a) – In General. This class includes works of artistic craftsmanship, in so far as their form but not their mechanical or utilitarian aspects are concerned, such as artistic jewelry, enamels, glassware, and tapestries, as well as all works belonging to the fine arts, such as paintings, drawings and sculpture. …"

So we have a contemporaneous and long-continued construction of the statutes by the agency charged to administer them that would allow the registration of such a statuette as is in question here.52

The High Court went on to state that "[t]he dichotomy of protection for the aesthetic is not beauty and utility but art for the copyright and the invention of original and ornamental design for design patents." Significantly, the copyright office promulgated a rule to implement Mazer to wit:

… [I]f "the sole intrinsic function of an article is its utility, the fact that the work is unique and attractively shaped will not qualify it as a work of art."

In this case, the bushing and cushion are not works of art. They are, as the petitioner himself admitted, utility models which may be the subject of a patent.

IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 70411 are AFFIRMED. Search Warrant Nos. 01-2401 and 01-2402 issued on October 15, 2001 are ANNULLED AND SET ASIDE. Costs against the petitioner.

SO ORDERED.

Puno, (Chairman), Austria-Martinez, Tinga, and Chico-Nazario, JJ., concur.

Footnotes

1 Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Eloy R. Bello, Jr. (retired) and Arturo D. Brion, concurring; Rollo, pp. 17-24.

2 Rollo, pp. 31-32.

3 Penned by Acting Presiding Judge Antonio M. Eugenio, Jr.

4 CA Rollo, pp. 28-34.

5 Id. at 47.

6 CA Rollo, p. 54.

7 Id. at 54-61.

8 Id. at 68.

9 CA Rollo, p. 70.

10 Id. at 73-75.

11 G.R. No. 104879, 6 May 1994, 232 SCRA 249.

12 Rollo, pp. 22-23.

13 18 F.3d 502.

14 Rollo, p. 23.

15 Section 172.2, Republic Act No. 8293.

16 Citing Amador, Vicente B., Copyright Under the Intellectual Property Code, 1998 ed., p. 128, citing Mazerv. Stein, 347 U.S. 201 (1954).

17 Norma Ribbon & Trimming v. Little, United States Court of Appeals, Fifth Circuit, No. 94-60389, 27 April 1995.

18 Columbia Pictures, Inc. v. Court of Appeals, G.R. No. 110318, 28 August 1996, 261 SCRA 144.

19 G.R. No. 144309, 23 November 2001, 370 SCRA 491.

20 Ibid.

21 Republic of the Philippines v. Sandiganbayan, G.R. Nos. 112708-09, 29 March 1996, 255 SCRA 438.

22 Feist Publications, Inc. v. Rural Telephone Service Company, 499 U.S. 340; 111 S.Ct. 1282 (1991).

23 Donald Bruce Company v. B.G. Multi-Comm. Corporation, 964 F.Supp. 265 (1997).

24 Apple Barrel Productions, Inc. v. R.D. Beard, 730 F.2d 384 (1984).

25 Durnham Industries, Inc. v. Tomy Corporation, 630 F.2d 905 (1980).

26 Apple Barrel Productions, Inc. v. R.D. Beard, supra.

27 Midway Manufacturing Corporation v. Bandai-America, Inc., 546 F.Supp. 125 (1982); Lakedreams v. Steve Taylor, 932 F.2d 1103 (1991).

28 Durnham Industries, Inc. v. Tomy Corporation, supra.

29 Barnhart, Inc. v. Economy Cover Corporation, 773 F.2d 411 (1985).

30 Ibid; Midway Manufacturing Corporation v. Bandai-America, Inc., supra.

31 Rollo, p. 86.

32 Id. at 94.

33 Pivot Port International, Inc. v. Charlene Products, Inc., 372 F.2d 913 (2004).

34 Gay Toys, Inc. v. Buddy L. Corporation, 703 F.2d 970 (1983).

35 Pivot Port International, Inc. v. Charlene Products, Inc., supra.

36 Ibid; DBC of New York v. Merit Diamond Corporation, 768 F.Supp. 414 (1991).

37 Norris Industries, Inc. v. ITT Corporation, 696 F.2d 918 (1983).

38 Rollo, pp. 84-87.

39 Rollo, pp. 93-94.

40 Section 109.1(a) and (b) in relation to Section 21 of Republic Act No. 8293.

41 Amador, Vicente B., Patents Under The Intellectual Property Code, 2001 ed., p. 751.

42 An invention involves an inventive step if, having regard to prior art, it is not obvious to a person skilled in the art at the time of the filing date or priority date of the application claiming the invention. (Section 26, Republic Act No. 8293).

43 Section 109.3, supra.

44 Section 54, supra.

45 Sections 108 to 111 of Republic Act No. 8293 state the rule on utility models and grant of a patent therefor:

SEC. 108. Applicability of Provisions Relating to Patents. –

108.1 Subject to Section 109, the provisions governing patents shall apply, mutatis mutandis, to the registration of utility models.

108.2. Where the right to a patent conflicts with the right to a utility model registration in the case referred to in Section 29, the said provisions shall apply as if the word "patent" were replaced by the words "patent or utility model registration." (Sec. 55, R.A. No. 165a)

SEC. 109. Special Provisions Relating to Utility Models. –

109.1. (a) An invention qualifies for registration as a utility model if it is new and industrially applicable.

(b) Section 21, "Patentable Inventions," shall apply except the reference to inventive step as a condition of protection.

109.2. Sections 43 to 49 shall not apply in the case of applications for registration of a utility model.

109.3. A utility model registration shall expire, without any possibility of renewal, at the end of the seventh year after the date of the filing of the application.

109.4. In proceedings under Sections 61 to 64, the utility model registration shall be canceled on the following grounds:

(a) That the claimed invention does not qualify for registration as a utility model and does not meet the requirements of registrability, in particular having regard to Subsection 109.1 and Sections 22, 23, 24 and 27;

(b) That the description and the claims do not comply with the prescribed requirements;

(c) That any drawing which is necessary for the understanding of the invention has not been furnished;

(d) That the owner of the utility model registration is not the inventor or his successor in title. (Secs. 55, 56 and 57, R.A. No. 165a)

SEC. 110. Conversion of Patent Applications or Applications for Utility Model Registration. –

110.1 At any time before the grant or refusal of a patent, an applicant for a patent may, upon payment of the prescribed fee, convert his application into an application for registration of a utility model, which

shall be accorded the filing date of the initial application. An application may be converted only once.

110.2 At any time before the grant or refusal of a utility model registration, an applicant for a utility model registration may, upon payment of the prescribed fee, convert his application into a patent application, which shall be accorded the filing date of the initial application. (Sec. 58, R.A. No. 165a)

SEC. 111. Prohibition against Filing of Parallel Applications. – An applicant may not file two (2) applications for the same subject, one for utility model registration and the other for the grant of a patent whether simultaneously or consecutively. (Sec. 59, R.A. No. 165a)

46 See Kapisanan ng mga Manggagawa sa Government Service Insurance System (KMG) v. Commission on Audit, G.R. No. 150769, 31 August 2004, 437 SCRA 371, citing Philippine Basketball Association v. Court of Appeals, 337 SCRA 358 (2000); National Power Corporation v. Angas, G.R. Nos. 60225-26, 8 May 1992, 208 SCRA 542; Cebu Institute of Technology v. Ople, G.R. No. L-58870, 18 December 1987, 156 SCRA 629; Ollada v. Court of Tax Appeals, 99 Phil. 604 (1956); Murphy, Morris & Co. v. Collector of Customs, 11 Phil. 456 (1908).

47 G.R. No. 108946, 28 January 1999, 302 SCRA 225.

48 G.R. No. 148222, 15 August 2003, 409 SCRA 231.

49 G.R. No. 115758, 19 March 2002, 379 SCRA 410.

50 Supra.

51 74 S.Ct. 460; 347 U.S. 201.

52 Great Northern Ry. Co. v. United States, 315 U.S. 262, 275, 62 S.Ct. 529, 534, 86 L.Ed. 836.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 147043               June 21, 2005

NBI - MICROSOFT CORPORATION & LOTUS DEVELOPMENT CORP., petitioners, vs.JUDY C. HWANG, BENITO KEH & YVONNE K. CHUA/BELTRON COMPUTER PHILIPPINES INC., JONATHAN K. CHUA, EMILY K. CHUA, BENITO T. SANCHEZ, NANCY I. VELASCO, ALFONSO CHUA, ALBERTO CHUA, SOPHIA ONG, DEANNA CHUA/TAIWAN MACHINERY DISPLAY & TRADE CENTER, INC., and THE SECRETARY OF JUSTICE, respondents.

D E C I S I O N

CARPIO, J.:

The Case

This is a petition for certiorari1 of the Resolutions2 of the Department of Justice dismissing for "lack of merit and insufficiency of evidence" petitioner Microsoft Corporation’s complaint against respondents for copyright infringement and unfair competition.

The Facts

Petitioner Microsoft Corporation ("Microsoft"), a Delaware, United States corporation, owns the copyright and trademark to several computer software.3 Respondents Benito Keh and Yvonne Keh are the President/Managing Director and General Manager, respectively, of respondent Beltron Computer Philippines, Inc. ("Beltron"), a domestic corporation. Respondents Jonathan K. Chua, Emily K. Chua, Benito T. Sanchez, and Nancy I. Velasco are Beltron’s Directors. On the other hand, respondents Alfonso Chua, Alberto Chua, Judy K. Chua Hwang, Sophia Ong, and Deanna Chua are the Directors of respondent Taiwan Machinery Display & Trade Center, Inc. ("TMTC"), also a domestic corporation.4

In May 1993, Microsoft and Beltron entered into a Licensing Agreement ("Agreement"). Under Section 2(a) of the Agreement, as amended in January 1994, Microsoft authorized Beltron, for a fee, to:

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

(ii) xxx distribute directly or indirectly and license copies of the Product (reproduced as per Section 2(a)(i) and/or acquired from Authorized Replicator or Authorized Distributor) in object code form to end users[.] xxxx5

The Agreement also authorized Microsoft and Beltron to terminate the contract if the other fails to comply with any of the Agreement’s provisions. Microsoft terminated the Agreement effective 22 June 1995 for Beltron’s non-payment of royalties.6

Afterwards, Microsoft learned that respondents were illegally copying and selling Microsoft software. Consequently, Microsoft, through its Philippine agent,7 hired the services of Pinkerton Consulting Services ("PCS"), a private investigative firm. Microsoft also sought the assistance of the National Bureau of

Investigation ("NBI"). On 10 November 1995, PCS employee John Benedic8 Sacriz ("Sacriz") and NBI agent Dominador Samiano, Jr. ("Samiano"), posing as representatives of a computer shop,9 bought computer hardware (central processing unit ("CPU") and computer monitor) and software (12 computer disks ("CDs") in read-only memory ("ROM") format) from respondents. The CPU contained pre-installed10 Microsoft Windows 3.1 and MS-DOS software. The 12 CD-ROMs, encased in plastic containers with Microsoft packaging, also contained Microsoft software.11 At least two of the CD-ROMs were "installers," so-called because they contain several software (Microsoft only or both Microsoft and non-Microsoft).12 Sacriz and Samiano were not given the Microsoft end-user license agreements, user’s manuals, registration cards or certificates of authenticity for the articles they purchased. The receipt issued to Sacriz and Samiano for the CPU and monitor bore the heading "T.M.T.C. (PHILS.) INC. BELTRON COMPUTER."13 The receipt for the 12 CD-ROMs did not indicate its source although the name "Gerlie" appears below the entry "delivered by."14

On 17 November 1995, Microsoft applied for search warrants against respondents in the Regional Trial Court, Branch 23, Manila ("RTC").15 The RTC granted Microsoft’s application and issued two search warrants ("Search Warrant Nos. 95-684 and 95-685").16 Using Search Warrant Nos. 95-684 and 95-685, the NBI searched the premises of Beltron and TMTC and seized several computer-related hardware, software, accessories, and paraphernalia. Among these were 2,831 pieces of CD-ROMs containing Microsoft software.17

Based on the articles obtained from respondents, Microsoft and a certain Lotus Development Corporation ("Lotus Corporation") charged respondents before the Department of Justice ("DOJ") with copyright infringement under Section 5(A) in relation to Section 29 of Presidential Decree No. 49, as amended, ("PD 49")18 and with unfair competition under Article 189(1)19 of the Revised Penal Code. In its Complaint ("I.S. No. 96-193"), which the NBI indorsed, Microsoft alleged that respondents illegally copied and sold Microsoft software.20

In their joint counter-affidavit, respondents Yvonne Keh ("respondent Keh") and Emily K. Chua ("respondent Chua") denied the charges against respondents. Respondents Keh and Chua alleged that: (1) Microsoft’s real intention in filing the complaint under I.S. No. 96-193 was to pressure Beltron to pay its alleged unpaid royalties, thus Microsoft should have filed a collection suit instead of a criminal complaint; (2) TMTC bought the confiscated 59 boxes of MS-DOS CDs from a Microsoft dealer in Singapore (R.R. Donnelly); (3) respondents are not the "source" of the Microsoft Windows 3.1 software pre-installed in the CPU bought by Sacriz and Samiano, but only of the MS-DOS software; (4) Microsoft’s alleged proof of purchase (receipt) for the 12 CD-ROMs is inconclusive because the receipt does not indicate its source; and (5) respondents Benito Keh, Jonathan K. Chua, Alfonso Chua, Alberto Chua, Judy K. Chua Hwang, Sophia Ong, and Deanna Chua are stockholders of Beltron and TMTC in name only and thus cannot be held criminally liable.21

The other respondents did not file counter-affidavits.

Meanwhile, respondents moved to quash Search Warrant Nos. 95-684 and 95-685. The RTC partially granted their motion in its Order of 16 April 1996. Microsoft sought reconsideration but the RTC denied Microsoft’s motion in its Order of 19 July 1996. Microsoft appealed to the Court of Appeals in CA-G.R. CV No. 54600. In its Decision of 29 November 2001, the Court of Appeals granted Microsoft’s appeal and set aside the RTC Orders of 16 April 1996 and 19 July 1996. The Court of Appeals’ Decision became final on 27 December 2001.

The DOJ Resolutions

In the Resolution of 26 October 1999, DOJ State Prosecutor Jocelyn A. Ong ("State Prosecutor Ong") recommended the dismissal of Microsoft’s complaint for lack of merit and insufficiency of evidence. State Prosecutor Ong also recommended the dismissal of Lotus Corporation’s complaint for lack of interest to prosecute and for insufficiency of evidence. Assistant Chief State Prosecutor Lualhati R. Buenafe

("Assistant Chief State Prosecutor Buenafe") approved State Prosecutor Ong’s recommendations.22 The 26 October 1999 Resolution reads in part:

[T]wo (2) issues have to be resolved in this case, namely:

a) Whether or not Beltron Computer and/or its stockholders should be held liable for the offenses charged.

b) Whether or not prima facie case exist[s] against Taiwan Machinery Display and Trade Center, Inc. (TMTC) for violation of the offense charged.

Complainant had alleged that from the time the license agreement was terminated, respondent/s is/are no longer authorized to copy/distribute/sell Microsoft products. However, respondent/s averred that the case is civil in nature, not criminal, considering that the case stemmed only out of the desire of complainant to collect from them the amount of US$135,121.32 and that the contract entered into by the parties cannot be unilaterally terminated.

In the order of Honorable William Bayhon dated July 19, 1996 [denying reconsideration to the Order partially quashing the search warrants], he observed the following:

"It is further argued by counsel for respondent that the act taken by private complainant is to spite revenge against the respondent Beltron for the latter failed to pay the alleged monetary obligation in the amount of US$135,121.32. That respondent has some monetary obligation to complainant which is not denied by the complainant."

["]It appears therefore that prior to the issuance of the subject search warrants, complainant had some business transactions with the respondent [Beltron] along the same line of products. Complainant failed to reveal the true circumstances existing between the two of them as it now appears, indeed the search warrant[s] xxx [are] being used as a leverage to secure collection of the money obligation which the Court cannot allow."

From said order, it can be gleaned that the [RTC] xxx, had admitted that the search warrants applied for by complainant were merely used as a leverage for the collection of the alleged monetary obligation of the respondent/s.

From said order, it can be surmise (sic) that the obligations between the parties is civil in nature not criminal.

Moreover, complainant had time and again harped that respondent/s is/are not authorized to sell/copy/distribute Microsoft products at the time of the execution of the search warrants. Still, this office has no power to pass upon said issue for one has then to interpret the provisions of the contract entered into by the parties, which question, should be raised in a proper civil proceeding.

Accordingly, absen[t] a resolution from the proper court of (sic) whether or not the contract is still binding between the parties at the time of the execution of the search warrants, this office cannot pass upon the issue of whether respondent/s is or are liable for the offense charged.

As to the second issue, we find for the respondent/s. TMTC had provided sufficient evidence such as pro-forma invoice from R.R. Donnelley; Debt Advice of the Bank of Commerce; Official Receipts from the Bureau of Customs; and Import Entry Declaration of the Bureau of Customs to prove that indeed the Microsoft software in their possession were bought from Singapore.

Thus, respondent/s in this case has/have no intent to defraud the public, as provided under Article 189 of the Revised Penal Code, for they bought said Microsoft MS-DOS 6.0 from an alleged licensee of Microsoft in Singapore, with all the necessary papers. In their opinion, what they have are genuine Microsoft software, therefore no unfair competition exist.

Moreover, violation of P.D. 49 does not exist, for respondent/s was/were not the manufacturers of the Microsoft software seized and were selling their products as genuine Microsoft software, considering that they bought it from a Microsoft licensee.

Complainant, on the other hand, considering that it has the burden of proving that the respondent/s is/are liable for the offense charged, has not presented any evidence that the items seized namely the 59 boxes of MS-DOS 6.0 software are counterfeit.

The certification issued on December 12, 1995 by Christopher Austin, Corporate Attorney of the complainant, does not disclose this fact. For the term used by Mr. Austin was that the items seized were unauthorized.

The question now, is whether the products were unauthorized because TMTC has no license to sell Microsoft products, or is it unauthorized because R.R. Donnelley has no authority to sell said products here in the Philippines.

Still, to determine the culpability of the respondents, complainant should present evidence that what is in the possession of the respondent/s is/are counterfeit Microsoft products.

This it failed to do.23

Microsoft sought reconsideration and prayed for an ocular inspection of the articles seized from respondents. However, in the Resolution of 3 December 1999, Assistant Chief State Prosecutor Buenafe, upon State Prosecutor Ong’s recommendation, denied Microsoft’s motion.24

Microsoft appealed to the Office of the DOJ Secretary. In the Resolution of 3 August 2000, DOJ Undersecretary Regis V. Puno dismissed Microsoft’s appeal.25 Microsoft sought reconsideration but its motion was denied in the Resolution of 22 December 2000.26

Hence, this petition. Microsoft contends that:

I. THE DOJ ERRED IN RULING THAT THE LIABILITY OF RESPONDENTS WAS ONLY CIVIL IN NATURE BY VIRTUE OF THE LICENSE AGREEMENT.

II. THE DOJ MISAPPRECIATED THE FACT THAT RESPONDENTS WERE ENGAGED IN THE ILLEGAL IMPORTATION, SALE AND DISTRIBUTION OF COUNTERFEIT SOFTWARE AS EVIDENCED BY THE ITEMS PURCHASED DURING THE TEST-BUY AND THE ITEMS SEIZED FROM RESPONDENTS’ PREMISES.

III. THE DOJ MISAPPRECIATED THE LAW ON COPYRIGHT INFRINGEMENT AND UNFAIR COMPETITION.

IV. ONLY TWO OUT OF THE NINE RESPONDENTS BOTHERED TO FILE COUNTER-AFFIDAVITS; HENCE, THE CHARGES AGAINST SEVEN [RESPONDENTS] REMAIN UNCONTROVERTED.27

In its Comment, filed by the Solicitor General, the DOJ maintains that it did not commit grave abuse of discretion in dismissing Microsoft’s complaint.28

For their part, respondents allege in their Comment that Microsoft is guilty of forum-shopping because its petition in CA-G.R. CV No. 54600 was filed ahead of, and has a "common interest" with, this petition. On the merits, respondents reiterate their claims in their motion to quash Search Warrant Nos. 95-684 and 95-685 that the articles seized from them were either owned by others, purchased from legitimate sources, or not produced by Microsoft. Respondents also insist that the Agreement entitled Beltron to "copy and replicate or reproduce" Microsoft products. On the confiscated 2,831 CD-ROMs, respondents allege that a certain corporation29 left the CD-ROMs with them for safekeeping. Lastly, respondents claim that there is no proof that the CPU Sacriz and Samiano bought from them contained pre-installed Microsoft software because the receipt for the CPU does not indicate "[s]oftware hard disk." 30

In its Reply, Microsoft counters that it is not liable for forum-shopping because its petition in CA-G.R. CV No. 54600 involved the Orders of the RTC partially quashing Search Warrant Nos. 95-684 and 95-685 while this petition concerns the DOJ Resolutions dismissing its complaint against respondents for copyright infringement and unfair competition. On the merits, Microsoft maintains that respondents should be indicted for copyright infringement and unfair competition.31

The Issues

The petition raises the following issues:

(1) Whether Microsoft engaged in forum-shopping; and

(2) Whether the DOJ acted with grave abuse of discretion in not finding probable cause to charge respondents with copyright infringement and unfair competition.

The Ruling of the Court

The petition has merit.

Microsoft did not Engage in Forum-Shopping

Forum-shopping takes place when a litigant files multiple suits involving the same parties, either simultaneously or successively, to secure a favorable judgment.32 Thus, it exists where the elements of litis pendentia are present, namely: (a) identity of parties, or at least such parties who represent the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity with respect to the two preceding particulars in the two cases is such that any judgment that may be rendered in the pending case, regardless of which party is successful, would amount to res judicata in the other case.33 Forum-shopping is an act of malpractice because it abuses court processes.34 To check this pernicious practice, Section 5, Rule 7 of the 1997 Rules of Civil Procedure requires the principal party in an initiatory pleading to submit a certification against forum-shopping.35 Failure to comply with this requirement is a cause for the dismissal of the case and, in case of willful forum-shopping, for the imposition of administrative sanctions.

Here, Microsoft correctly contends that it is not liable for forum-shopping. What Microsoft appealed in CA-G.R. CV No. 54600 were the RTC Orders partially quashing Search Warrant Nos. 95-684 and 95-685. In the present case, Microsoft is appealing from the DOJ Resolutions dismissing its complaint against respondents for copyright infringement and unfair competition. Thus, although the parties in CA-G.R. CV No. 54600 and this petition are identical, the rights asserted and the reliefs prayed for are not such that the judgment in CA-G.R. CV No. 54600 does not amount to res judicata in the present case. This renders forum-shopping impossible here.

The DOJ Acted with Grave Abuse of Discretionin not Finding Probable Cause to Charge Respondents with

Copyright Infringement and Unfair Competition

Generally, this Court is loath to interfere in the prosecutor’s discretion in determining probable cause36 — unless such discretion is shown to have been abused.37 This case falls under the exception.

Unlike the higher quantum of proof beyond reasonable doubt required to secure a conviction, it is the lower standard of probable cause which is applied during the preliminary investigation to determine whether the accused should be held for trial. This standard is met if the facts and circumstances incite a reasonable belief that the act or omission complained of constitutes the offense charged. As we explained in Pilapil v. Sandiganbayan:38

The term [probable cause] does not mean "actual and positive cause" nor does it import absolute certainty. It is merely based on opinion and reasonable belief. Thus, a finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense charged. Precisely, there is a trial for the reception of evidence of the prosecution in support of the charge.

PD 49 and Article 189(1)

Section 539 of PD 49 ("Section 5") enumerates the rights vested exclusively on the copyright owner. Contrary to the DOJ’s ruling, the gravamen of copyright infringement is not merely the unauthorized "manufacturing" of intellectual works but rather the unauthorized performance of any of the acts covered by Section 5. Hence, any person who performs any of the acts under Section 5 without obtaining the copyright owner’s prior consent renders himself civilly40 and criminally41 liable for copyright infringement. We held in Columbia Pictures, Inc. v. Court of Appeals:42

Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the doing by any person, without the consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright. (Emphasis supplied)

Significantly, under Section 5(A), a copyright owner is vested with the exclusive right to "copy, distribute, multiply, [and] sell" his intellectual works.

On the other hand, the elements of unfair competition under Article 189(1)43 of the Revised Penal Code are:

(a) That the offender gives his goods the general appearance of the goods of another manufacturer or dealer;

(b) That the general appearance is shown in the (1) goods themselves, or in the (2) wrapping of their packages, or in the (3) device or words therein, or in (4) any other feature of their appearance[;]

(c) That the offender offers to sell or sells those goods or gives other persons a chance or opportunity to do the same with a like purpose[; and]

(d) That there is actual intent to deceive the public or defraud a competitor.44

The element of intent to deceive may be inferred from the similarity of the goods or their appearance.45

On the Sufficiency of Evidence toSupport a Finding of Probable Cause

Against Respondents

In its pleadings filed with the DOJ, Microsoft invoked three clusters of evidence to support its complaint against respondents, namely: (1) the 12 CD-ROMs containing Microsoft software Sacriz and Samiano bought from respondents; (2) the CPU with pre-installed Microsoft software Sacriz and Samiano also purchased from respondents; and (3) the 2,831 CD-ROMs containing Microsoft software seized from respondents.46 The DOJ, on the one hand, refused to pass upon the relevance of these pieces of evidence because: (1) the "obligations between the parties is civil and not criminal" considering that Microsoft merely sought the issuance of Search Warrant Nos. 95-684 and 95-685 to pressure Beltron to pay its obligation under the Agreement, and (2) the validity of Microsoft’s termination of the Agreement must first be resolved by the "proper court." On the other hand, the DOJ ruled that Microsoft failed to present evidence proving that what were obtained from respondents were counterfeit Microsoft products.

This is grave abuse of discretion.47

First. Being the copyright and trademark owner of Microsoft software, Microsoft acted well within its rights in filing the complaint under I.S. No. 96-193 based on the incriminating evidence obtained from respondents. Hence, it was highly irregular for the DOJ to hold, based on the RTC Order of 19 July 1996, that Microsoft sought the issuance of Search Warrant Nos. 95-684 and 95-685, and by inference, the filing of the complaint under I.S. No. 96-193, merely to pressure Beltron to pay its overdue royalties to Microsoft. Significantly, in its Decision in CA-G.R. CV No. 54600 dated 29 November 2001, the Court of Appeals set aside the RTC Order of 19 July 1996. Respondents no longer contested that ruling which became final on 27 December 2001.

Second. There is no basis for the DOJ to rule that Microsoft must await a prior "resolution from the proper court of (sic) whether or not the [Agreement] is still binding between the parties." Beltron has not filed any suit to question Microsoft’s termination of the Agreement. Microsoft can neither be expected nor compelled to wait until Beltron decides to sue before Microsoft can seek remedies for violation of its intellectual property rights.

Furthermore, some of the counterfeit CD-ROMs bought from respondents were "installer" CD-ROMs containing Microsoft software only or both Microsoft and non-Microsoft software. These articles are counterfeit per se because Microsoft does not (and could not have authorized anyone to) produce such CD-ROMs. The copying of the genuine Microsoft software to produce these fake CD-ROMs and their distribution are illegal even if the copier or distributor is a Microsoft licensee. As far as these installer CD-ROMs are concerned, the Agreement (and the alleged question on the validity of its termination) is immaterial to the determination of respondents’ liability for copyright infringement and unfair competition.

Lastly, Section 10(b)48 of the Agreement provides that Microsoft’s "rights and remedies" under the contract are "not xxx exclusive and are in addition to any other rights and remedies provided by law or [the] Agreement." Thus, even if the Agreement still subsists, Microsoft is not precluded from seeking remedies under PD 49 and Article 189(1) of the Revised Penal Code to vindicate its rights.

Third. The Court finds that the 12 CD-ROMs ("installer" and "non-installer") and the CPU with pre-installed Microsoft software Sacriz and Samiano bought from respondents and the 2,831 Microsoft CD-ROMs seized from respondents suffice to support a finding of probable cause to indict respondents for copyright infringement under Section 5(A) in relation to Section 29 of PD 49 for unauthorized copying and selling of protected intellectual works. The installer CD-ROMs with Microsoft software, to repeat, are counterfeit per se. On the other hand, the illegality of the "non-installer" CD-ROMs purchased from respondents and of the Microsoft software pre-installed in

the CPU is shown by the absence of the standard features accompanying authentic Microsoft products, namely, the Microsoft end-user license agreements, user’s manuals, registration cards or certificates of authenticity.

On the 2,831 Microsoft CD-ROMs49 seized from respondents, respondent Beltron, the only respondent who was party to the Agreement, could not have reproduced them under the Agreement as the Solicitor General50 and respondents contend. Beltron’s rights51 under the Agreement were limited to:

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

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

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

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

The counterfeit "non-installer" CD-ROMs Sacriz and Samiano bought from respondents also suffice to support a finding of probable cause to indict respondents for unfair competition under Article 189(1) of the Revised Penal Code for passing off Microsoft products. From the pictures of the CD-ROMs’ packaging,55 one cannot distinguish them from the packaging of CD-ROMs containing genuine Microsoft software. Such replication, coupled with the similarity of content of these fake CD-ROMs and the CD-ROMs with genuine Microsoft software, implies intent to deceive.

Respondents’ contention that the 12 CD-ROMs Sacriz and Samiano purchased cannot be traced to them because the receipt for these articles does not indicate its source is unavailing. The receipt in question should be taken together with Microsoft’s claim that Sacriz and Samiano bought the CD-ROMs from respondents.56 Together, these considerations point to respondents as the vendor of the counterfeit CD-ROMs. Respondents do not give any reason why the Court should not give credence to Microsoft’s claim. For the same reason, the fact that the receipt for the CPU does not indicate "[s]oftware hard disk" does not mean that the CPU had no pre-installed Microsoft software. Respondents Keh and Chua admit in their counter-affidavit that respondents are the "source" of the pre-installed MS-DOS software.

WHEREFORE, we GRANT the petition. We SET ASIDE the Resolutions dated 26 October 1999, 3 December 1999, 3 August 2000, and 22 December 2000 of the Department of Justice.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.

Footnotes

1 Under Rule 65 of the 1997 Rules of Civil Procedure.

2 Dated 26 October 1999, 3 December 1999, 3 August 2000, and 22 December 2000.

3 Microsoft owns the copyright to, among others, the following software: Microsoft Windows, Windows ‘95, Microsoft Excel, Microsoft Word, Microsoft Access, Microsoft Works, Microsoft Powerpoint, Microsoft Office, Microsoft Flight Simulator, and Microsoft FoxPro (Rollo, p. 20).

4 Individual respondents and respondent corporations are referred to as "respondents."

5 Rollo, p. 81.

6 The Agreement provided the following obligations upon its termination (Ibid., pp. 72-73):

"11. OBLIGATIONS UPON TERMINATION

(a) Within ten (10) days after termination or expiration of this Agreement, [BELTRON] shall return to [MICROSOFT] (i) all full or partial copies of each Product including OEM Adaptation Kit(s) and OEM Distribution Kit(s) in [BELTRON’s] possession or under its control for which a royalty has not been paid and (ii) all copies of the Product in source code form. [BELTRON] and each [BELTRON] Subsidiary may, however, retain one copy of each Product in object code form and one copy of the Product documentation to be used solely for support purposes.

(b) From and after termination or expiration, [BELTRON] shall not use internally nor employ any Product as part or portion of any product that [BELTRON] may use, sell, assign, lease, license, or transfer to third parties. [BELTRON] shall cease and desist from all use of any Product name(s) and associated trademark(s) and, upon request, deliver to [MICROSOFT] or its authorized representatives or destroy all material upon which the Product name(s) and the associated trademarks appear.

(c) Termination of this Agreement as a result of [BELTRON’s] default shall result in acceleration of [BELTRON’s] obligation to pay all sums [BELTRON] contracted to pay under this Agreement, including all minimum commitment payments as described in Exhibit B.

(d) End user licenses properly granted pursuant to this Agreement and prior to termination of this Agreement shall not be diminished or abridged by termination or expiration of this Agreement.

(e) Sections 5, 12, 13, 14, 15(a), 16, 17, 18(a), and 18(b) shall survive termination or expiration of this Agreement." (Underlining in the original)

7 The law firm Quisumbing Torres.

8 Also spelled as "Benedict" (Rollo, p. 142).

9 Phardette Computer Shop.

10 The process of pre-installing software into the CPU’s resident hard disk is also called "hard-loading."

11 E.g. Microsoft Windows ‘95, Microsoft Publisher, Microsoft Encarta ‘95, MS-DOS 6.22, Microsoft Money, Microsoft Windows for Workgroups, and Microsoft Word (Rollo, pp. 126, 128-129).

12 A CD-ROM containing Microsoft, Adobe Systems, Inc., and Corel Corporation software and a four-in-one CD-ROM containing the Microsoft software MS-DOS 6.22, Microsoft Money, and Microsoft Windows for Workgroups (Ibid., pp. 127, 129).

13 Ibid., p. 125.

14 Ibid., p. 131.

15 Presided by Judge William M. Bayhon.

16 Rollo, pp. 135-140.

17 The following were seized from respondents (Ibid., pp. 141, 243):

1. MS-DOS 6.2 (Manual) @ 20 pcs. per box - - - - - - 59 boxes

2. Compact Disc - - - - - - 2,831 pcs.

3. Tray - - - - - - 251 pcs.

4. J Case - - - - - - 700 pcs.

5. Label - - - - - - 188 pcs.

6. CD File - - - - - - 1 folder

7. Credit Memo File - - - - - - 1 folder

8. Delivery Receipt - - - - - 11 booklets

9. Monitor SN # IV1502733 - - - - - - 1 unit

10. Keyboard - - - - - - 1 unit

11. Central Processing Unit (CPU) - - - - - - 1 unit

12. Monitor (Dynamic, Leslie G. & Robert-Small - - - - - - 3 units

13. Central Processing Units (MGB, SM, EWC, STI, J. Estrella[,]

System & Data, Leslie G., Benjamin SY, Octagon, Mega) - - - - - 20 units

14. Printer KX P1540 SN# 9KMANEO2931 - - - - - - 1 pc.

15. Monitor 14" SVGA, 15" UVGA (Beltron) - - - - - 2 units

16. CPU 386 DX40 Desk Top, 386DX40-4MB (Slim case) - - - - - 2 units

17. Mouse - - - - - 1 pc.

18. Computer Notebook - - - - - 7 pcs.

19. Central Processing Unit w/ Multi Media - - - - - 12 pcs.

20. Compaq Notebook - - - - - 1 pc.

Microsoft also alleges that a "credit memo" (Ibid., p. 132) and a delivery receipt (Ibid., p. 133) of a Microsoft software (Windows ‘95) for third persons were also seized from respondents (Ibid., p. 28).

18 The Decree on Intellectual Property. PD 49 was repealed by Republic Act No. 8293 ("RA 8293") or the Intellectual Property Code of the Philippines which took effect on 1 January 1998.

19 Repealed by RA 8293.

20 Rollo, pp. 48-60.

21 Ibid., pp. 201-203. Lotus Corporation later desisted from pursuing its complaint against respondents (Ibid., p. 143).

22 Ibid., pp. 142-152.

23 Ibid., pp. 149-151.

24 Ibid., pp. 160-161.

25 Ibid., pp. 180-181.

26 Ibid., pp. 199-200.

27 Ibid., pp. 30-31.

28 Ibid., pp. 292-305.

29 FUS Plastic Machinery Works Co., Ltd.

30 Rollo, pp. 223-237.

31 Ibid., pp. 310-325.

32 Casupanan v. Laroya, 436 Phil. 582 (2002).

33 Spouses Melo v. Court of Appeals, 376 Phil. 204 (1999).

34 Buan v. Lopez, Jr., G.R. No. L-75349, 13 October 1986, 145 SCRA 34 citing E. Razon, Inc. et al. v.Philippine Port Authority, et al., Minute Resolution, G.R. No. 75197, 31 July 1986.

35 Rule 7, Section 5 provides: "Certification against forum shopping. — The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification or non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions."

36 See Acuña v. Deputy Ombudsman for Luzon, G.R. No. 144692, 31 January 2005; Camanag v. Guerrero, G.R. No. 121017, 17 February 1997, 268 SCRA 473.

37 See Filadams Pharma, Inc. v. Court of Appeals, G.R. No. 132422, 30 March 2004, 426 SCRA 460. See also Dr. Baylon v. Ombudsman, 423 Phil. 705 (2001).

38 G.R. No. 101978, 7 April 1993, 221 SCRA 349 (internal citations omitted).

39 This provision states: "Copyright shall consist in the exclusive right[:]

(A) To print, reprint, publish, copy, distribute, multiply, sell, and make photographs, photo-engravings, and pictorial illustrations of the works;

(B) To make any translation or other version or extracts or arrangements or adaptations thereof; to dramatize it if it be a non-dramatic work; to convert it into a non-dramatic work if it be a drama; to complete or execute it if it be a model or design;

(C) To exhibit, perform, represent, produce, or reproduce the work in any manner or by any method whatever for profit or otherwise; if not reproduced in copies for sale, to sell any manuscripts or any records whatsoever thereof;

(D) To make any other use or disposition of the work consistent with the laws of the land." This has been superseded by Section 177 of RA 8293. (Emphasis supplied)

40 Under Section 28, PD 49, now superseded by Section 216 of RA 8293.

41 Section 29, PD 49 provides: "Any person infringing any copyright secured by this Decree or aiding or abetting such infringement shall be deemed guilty of a crime punishable by imprisonment not exceeding one year or by fine not less than Two Hundred Pesos nor more than

Two Thousand Pesos or both, in the discretion of the court." This has been superseded by Section 217 of RA 8293.

42 329 Phil. 875 (1996). Reported as Columbia Pictures, Inc. v. CA.

43 This provision states: "Unfair competition, fraudulent registration of trade-name, trade-mark, or service mark, fraudulent designation of origin, and false description. — The penalty provided in the next preceding article shall be imposed upon:

1. Any person who, in unfair competition and for the purpose of deceiving or defrauding another of his legitimate trade or the public in general, shall sell his goods giving them the general appearance of the goods of another manufacturer or dealer, either as to the goods themselves, or in the wrapping of the packages in which they are contained, or the device or words thereon, or in any other feature of their appearance which would be likely to induce the public to believe that the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer, or shall give other persons a chance or opportunity to do the same with a like purpose. xxxx"

44 L. Reyes, The Revised Penal Code, vol. II, p. 282 (15th ed.).

45 See Rueda Hermanos & Co. v. Feliz Paglinawan & Co., 33 Phil. 196 (1916); L. Reyes, supra note 44, p. 283.

46 Regarding the confiscated 59 boxes of MS-DOS CDs, Microsoft, in this petition, no longer contests the DOJ’s findings that TMTC bought these MS-DOS CDs from a Microsoft dealer in Singapore.

47 Grave abuse of discretion is committed "where power is exercised in an arbitrary or despotic manner xxx as to amount to evasion of positive duty or virtual refusal to perform a duty xxxx" (Garcia-Rueda v. Pascasio, 344 Phil. 323 [1997] citing Comm. of Internal Revenue v. CA, 327 Phil. 1 [1996]).

48 "10. DEFAULT AND TERMINATION

xxxx

(b) Termination due to a breach of Sections 6, 13, 14(b) or (if applicable) S1 shall be effective upon notice. In all other cases termination shall be effective thirty (30) days after notice of termination to the defaulting party if the defaults have not been cured within such thirty (30) day period. The rights and remedies of the parties provided herein shall not be exclusive and are in addition to any other rights and remedies provided by law or this Agreement." (Underlining in the original; italicization supplied) (Rollo, p. 72).

49 Microsoft contends that these CD-ROMs are all "installers" (Rollo, p. 26). For lack of corroborative evidence on record, the Court refrains from passing upon this question without prejudice to Microsoft’s presentation of relevant evidence during the trial.

50 Ibid., pp. 299-300.

51 Microsoft contends, for the first time in this appeal, that the Agreement authorized Beltron to copy only one Microsoft software, i.e., "Microsoft MS-DOS 6.0" (Ibid., p. 33). However, the terms of the Agreement do not bear out this contention.

52 Agreement, Section 1(i) (Rollo, p. 66).

53 A MED is a Microsoft product in "Easy Distribution Package" form available for purchase from an authorized distributor (Agreement, Section 1(e), ibid.).

54 Agreement, Section 1(j) (Ibid.).

55 Rollo, pp. 126, 128, 130.

56 Ibid., pp. 25-26.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

THIRD DIVISION

G.R. No. 156804. March 14, 2005

SONY MUSIC ENTERTAINMENT (PHILS.), INC. and IFPI (SOUTHEAST ASIA), LTD., Petitioners, vs.HON. JUDGE DOLORES L. ESPANOL OF THE REGIONAL TRIAL COURT, BRANCH 90, DASMARIÑAS, CAVITE, ELENA S. LIM, SUSAN L. TAN, DAVID S. LIM, JAMES H. UY, WILSON ALEJANDRO, JR., JOSEPH DE LUNA, MARIA A. VELA CRUZ, DAVID CHUNG, JAMES UY, JOHN DOES AND JANE DOES, AND SOLID LAGUNA CORPORATION, Respondents.

D E C I S I O N

GARCIA, J.:

Assailed and sought to be nullified in this petition for certiorari with application for injunctive relief are the orders issued by the respondent judge on June 25, 20021 and January 6, 2003,2 the first quashing Search Warrant No. 219-00, and the second, denying reconsideration of the first.

From the petition, the comment thereon of private respondents, their respective annexes, and other pleadings filed by the parties, the Court gathers the following relevant facts:

In a criminal complaint filed with the Department of Justice (DOJ), the Videogram Regulatory Board (VRB)3charged herein private respondents James Uy, David Chung, Elena Lim and another officer of respondentSolid Laguna Corporation (SLC) with violation of Presidential Decree (PD) No. 1987.4 As alleged in the complaint, docketed as I.S. No. 2000-1576, the four (4) were engaged in the replication, reproduction and distribution of videograms without license and authority from VRB. On account of this and petitioners’ own complaints for copyright infringement, the National Bureau of Investigation (NBI), through Agent Ferdinand M. Lavin, applied on September 18, 2000, with the Regional Trial Court at Dasmariñas, Cavite, Branch 80, presided by the respondent judge, for the issuance of search warrants against private respondents David Chung, James Uy, John and Jane Does, doing business under the name and style "Media Group" inside the factory and production facility of SLC at Solid corner Camado Sts., Laguna International Industrial Park, Biñan, Laguna.5

During the proceedings on the application, Agent Lavin presented, as witnesses, Rodolfo Pedralvez, a deputized agent of VRB, and Rene C. Baltazar, an investigator retained by the law firm R.V. Domingo & Associates, petitioners’ attorney-in-fact. In their sworn statements, the three stated that petitioners sought their assistance, complaining about the manufacture, sale and distribution of various titles of compact discs (CDs) in violation of petitioners’ right as copyright owners; that acting on the complaint, Agent Lavin and the witnesses conducted an investigation, in the course of which unnamed persons informed them that allegedly infringing or pirated discs were being manufactured somewhere in an industrial park in Laguna; that in the process of their operation, they were able to enter, accompanied by another unnamed source, the premises of SLC and to see various replicating equipment and stacks of CDs; and that they were told by their anonymous source that the discs were being manufactured in the same premises. They also testified that private respondents were (1) engaged in the reproduction or replication of audio and video compacts discs without the requisite authorization from VRB, in violation of Section 6 of PD No. 1987, presenting a VRB certification to such effect; and (2) per petitioners’ certification and a listing of Sony music titles, infringing on petitioners’ copyrights in violation of Section 208 of Republic Act (RA) No. 8293, otherwise known as Intellectual Property Code.6

On the basis of the foregoing sworn statements, the respondent judge issued Search Warrant No. 219-007 for violation of Section 208 of R.A. No. 8293 and Search Warrant No. 220-008 for violation of Section 6 of PD No. 1987.

The following day, elements of the Philippine National Police Criminal Investigation and Detection Group, led by PO2 Reggie Comandante, enforced both warrants and brought the seized items to a private warehouse of Carepak Moving and Storage at 1234 Villonco Road, Sucat, Paranaque City and their custody turned over to VRB.9 An inventory of seized items,10 as well as a "Return of Search Warrant" were later filed with the respondent court.

Meanwhile, the respondents in I.S. No. 2000-1576 belabored to prove before the DOJ Prosecutorial Service that, since 1998 and up to the time of the search, they were licensed by VRB to operate as replicator and duplicator of videograms.

On the stated finding that "respondents can not . . . be considered an unauthorized reproducers of videograms", being "licensed to engage in reproduction in videograms under SLC in which they are the officers and/or or officials", the DOJ, via a resolution dated January 15, 2001,11 dismissed VRB’s complaint in I.S. No. 2000-1576.

On February 6, 2001, private respondents, armed with the DOJ resolution adverted to, moved to quash the search warrants thus issued.12 VRB interposed an opposition for the reason that the DOJ has yet to resolve the motion for reconsideration it filed in I.S. No. 2000-1576.

Eventually, the DOJ denied VRB’s motion for reconsideration, prompting private respondents to move anew for the quashal of the search warrants. In its supplement to motion, private respondents attached copies of SLC’s license as videogram duplicator and replicator.

In an order dated October 30, 2001,13 the respondent judge, citing the January 15, 2001 DOJ resolution in I.S. No. 2000-1576, granted private respondents’ motion to quash, as supplemented, dispositively stating:

"Nonetheless, such being the case, the aforesaid Search Warrants are QUASHED"

Petitioners forthwith sought clarification on whether or not the quashal order referred to both search warrants or to Search Warrant No. 220-00 alone, since it was the latter that was based on the charge of violation of PD No. 1987.14 The respondent judge, in a modificatory order dated January 29, 2002,15 clarified that her previous order quashed only Search Warrant No. 220-00.

Meanwhile, or on November 22, 2001, petitioners filed with the DOJ an affidavit-complaint, docketed thereat as I.S. No. 2001-1158, charging individual private respondents with copyright infringement in violation of Sections 172 and 208 in relation to other provisions of RA No. 8293.16 Attached to the affidavit-complaint were certain documents and records seized from SLC’s premises, such as production and delivery records.

Following their receipt of DOJ-issued subpoenas to file counter-affidavits, private respondents moved, in the search warrant case, that they be allowed to examine the seized items to enable them to intelligently prepare their defense.17 On January 30, 2002, respondent judge issued an order allowing the desired examination, provided it is made under the supervision of the court’s sheriff and in the "presence of the applicant of Search Warrant No. 219-00".18

On February 8, 2002, the parties, represented by their counsels, repaired to the Carepak warehouse. An NBI agent representing Agent Lavin appeared. The examination, however, did not push through on account of petitioners’ counsel insistence on Agent Lavin’s physical presence.19 Private respondents were able to make an examination on the following scheduled setting, February 15, 2002, albeit it was limited,

as the minutes of the inspection discloses, to inspecting only one (1) box containing 35 assorted CDs, testing stampers, diskettes, a calendar, organizers and some folders and documents. The minutes also contained an entry stating - "Other items/machines were not examined because they cannot be identified as they are not properly segregated from other items/machines in the warehouse. The parties agreed to schedule another examination on (to be agreed by the parties) after the items/machines subject of the examination shall have been segregated from the other items/machines by Carepak Moving and Storage , Inc."20

During the preliminary investigation conducted on February 26, 2002 in I.S. No. 2001-1158, however, petitioners’ counsel objected to any further examination, claiming that such exercise was a mere subterfuge to delay proceedings.21

On April 11, 2002, individual private respondents, through counsel, filed a "Motion To Quash Search Warrant (And To Release Seized Properties)" grounded on lack of probable cause to justify issuance of search warrant, it being inter alia alleged that the applicant and his witnesses lacked the requisite personal knowledge to justify the valid issuance of a search warrant; that the warrant did not sufficiently describe the items to be seized; and that the warrant was improperly enforced.22 To this motion to quash, petitioners interposed an opposition dated May 7, 2002 predicated on four (4) grounds.23 On June 26, 2002, respondent SLC filed a Manifestation joining its co-respondents in, and adopting, their motion to quash.24

On June 25, 2002, the respondent judge issued the herein first assailed order quashing Search Warrant No. 219-00 principally on the ground that the integrity of the seized items as evidence had been compromised, commingled as they were with other articles. Wrote the respondent judge:

Based on the report submitted, it appears that on February 15, 2002, an examination was actually conducted.Unfortunately, the alleged seized items were commingled with and not segregated from thousands of other items stored in the warehouse. Only one box . . . were (sic) examined in the presence of both parties with the sheriff, such that another date was set . . . . On February 22, 2002, during the hearing before the Department of Justice (DOJ), [petitioners’ counsel] Atty. Arevalo manifested their objection to the further examination on the alleged ground that all of the items subject of the DOJ complaint have been examined.

Analyzing the report and the incidents relative thereto, it shows that the items subject of the questioned Search Warrant were commingled with other items in the warehouse of Carepak resulting in the failure to identify the machines and other items subject of this Search Warrant, while the other items enumerated in the said Inventory of Seized Items and Certification of Legality, Orderliness and Regularity in the Execution and enforcement of Search Warrants were not examined, hence, the charge imputed against the respondents could not be established as the evidence to show such violation fails to determine the culpability of said respondents, thus, violating their constitutional rights.25

Excepting, petitioners moved for reconsideration, arguing on the main that the quashal order was erroneously based on a ground outside the purview of a motion to quash.26 To this motion, private respondents interposed an opposition, against which petitioners countered with a reply.

On January 6, 2003, respondent judge issued the second assailed order denying petitioners’ motion for reconsideration on the strength of the following premises:

Careful scrutiny of the records of the case reveals that the application of the above-entitled case stemmed from the application for Search Warrant alleging that the respondent was not licensed to duplicate or replicate CDs and VCDs. The Court was misled when the applicants declared that Solid Laguna Corporation (SLC) is not licensed to engage in replicating/duplicating CDs and VCDs, when in truth and in fact, SLC was still a holder of a valid and existing VRB license. Considering the fact that respondent was duly licensed which facts (sic) was not laid bare to this Court when the application for writ was filed by the

private complainant through the National Bureau of Investigation, this Court hereby recalls and quashes the above writ.

Lastly, taking into account that respondents were licensed to engage in replicating/duplicating CDs and VCDs, the issuance of search warrant was of no force and effect as there was absence of probable cause to justify said issuance. xxx27

Hence, petitioners’ present recourse.

In a Resolution dated February 19, 2003,28 the Court issued a temporary restraining order enjoining the respondents from implementing and enforcing the respondent judge’s questioned orders.

Petitioners ascribe on the respondent judge the commission of grave abuse of discretion amounting to lack or in excess of jurisdiction in issuing the first assailed order in that:

1. It was based on a ground that is not a basis for quashal of a search warrant, i.e., private respondents’ failure to examine the seized items, which ground is extraneous to the determination of the validity of the issuance of the search warrant.

2. Public respondent, in effect, conducted a "preliminary investigation" that absolved the private respondents from any liability for copyright infringement.

3. Public respondent recognized the motion to quash search warrant filed by persons who did not have any standing to question the warrant.

Petitioners also deplore the issuance of the second assailed order which they tag as predicated on a ground immaterial to Search Warrant No. 219-00.

Private respondents filed their Comment on May 13, 2003, essentially reiterating their arguments in the "Motion To Quash Search Warrant (And To Release Seized Properties)". Apart therefrom, they aver that petitioners violated the rule on hierarchy of courts by filing the petition directly with this Court. As to be expected, petitioners’ reply to comment traversed private respondents’ position.

Owing to their inability to locate respondent David Chung, petitioners moved and the Court subsequently approved the dropping, without prejudice, of said respondent from the case.29

On February 20, 2004, private respondents filed their Rejoinder, therein inviting attention to petitioner IFPI’s failure to execute the certification on non-forum shopping as required by Rule 7, Section 5 of the Rules of Court and questioning the validity of the Special Powers of Attorney of petitioners’ attorney-in-fact to file this case.

In Resolution of March 31, 2004, the Court gave due course to the petition and directed the submission of memoranda which the parties, after each securing an extension, did submit.

The underlying issue before Us revolves on the propriety of the quashal of Search Warrant No. 219-00 which, in turn, resolves itself into question of the propriety of the warrant’s issuance in the first place.

It has repeatedly been said that one’s house, however, humble is his castle where his person, papers and effects shall be secured and whence he shall enjoy undisturbed privacy except, to borrow from Villanueva vs. Querubin,30"in case of overriding social need and then only under the stringent procedural safeguards." The protection against illegal searches and seizure has found its way into our 1935 and 1973 Constitutions and is now embodied in Article III, Section 2 of the 1987 Constitution, thus -

The right of the people to be secure in their persons, houses, papers and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized,

and in Section 4, Rule 126 of the Rules of Court, viz -

Sec. 4. Requisites for issuing search warrant. – A search warrant shall not issue but upon probable cause . . . to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the things to be seized.

Complementing the aforequoted provisions is Section 5 of the same Rule, reading:

SEC. 5. Examination of the complainant; record. The judge must, before issuing the warrant, personally examine in form of searching questions and answers, in writing and under oath, the complainant and any witnesses he may produce on facts personally known to them and attach to the record their sworn statements together with any affidavits submitted.

To prevent stealthy encroachment upon, or gradual depreciation of the right to privacy, a liberal construction in search and seizure cases is given in favor of the individual. Consistent with this postulate, the presumption of regularity is unavailing in aid of the search process when an officer undertakes to justify it.31 For, the presumptionjuris tantum of regularity cannot, by itself, prevail against the constitutionally protected rights of an individual because zeal in the pursuit of criminals cannot ennoble the use of arbitrary methods that the Constitution itself detests.32

A core requisite before a warrant shall validly issue is the existence of a probable cause, meaning "the existence of such facts and circumstances which would lead a reasonably discreet and prudent man to believe that an offense has been committed and that the objects sought in connection with the offense are in the place to be searched".33 And when the law speaks of facts, the reference is to facts, data or information personally known to the applicant and the witnesses he may present. Absent the element of personal knowledge by the applicant or his witnesses of the facts upon which the issuance of a search warrant may be justified, the warrant is deemed not based on probable cause and is a nullity, its issuance being, in legal contemplation, arbitrary, as held by us inColumbia Pictures, Inc. vs. Court of Appeals.34 Testimony based on what is supposedly told to a witness, being patent hearsay and, as rule, of no evidentiary weight35 or probative value, whether objected to or not,36 would, alone, not suffice under the law on the existence of probable cause.

In our view, the issuance of the search warrant in question did not meet the requirements of probable cause. The respondent judge did not accordingly err in quashing the same, let alone gravely abuse her discretion.

Petitioners argue that the instant petition is on all fours with Columbia,37 wherein the en banc Court upheld the validity of search warrants based on the testimonies of the applicant and his witnesses who conducted an investigation on the unlawful reproduction and distribution of video tapes of copyrighted films.

We are not persuaded.

In Columbia, the issuing court probed the applicant’s and his witnesses’ personal knowledge of the fact of infringement. It was, however, determined by this Court that during the application hearing, therein petitioner’s attorney-in-fact, a witness of the applicant, "stated in his affidavit and further expounded in his deposition that he personally knew of the fact that private respondents had never been authorized by his

clients to reproduce, lease and possess for the purposes of selling any of the copyrighted films."38 Significantly, the Court, in upholding the validity of the writ issued upon complaint of Columbia Pictures, Inc., et al., stated that "there is no allegation of misrepresentation, much less finding thereof by the lower court, on the part of petitioners’ witnesses."39

Therein lies the difference with the instant case.

Here, applicant Agent Lavin and his witnesses, Pedralvez and Baltazar, when queried during the application hearing how they knew that audio and video compact discs were infringing or pirated, relied for the most part on what alleged unnamed sources told them and/or on certifications or lists made by persons who were never presented as witnesses. In net effect, they testified under oath as to the truth of facts they had no personal knowledge of. The following excerpts of the depositions of applicant Lavin and his witnesses suggest as much:

A. Deposition of Agent Lavin

28. Question: What happened next?

Answer: We then went to the Laguna Industrial Park, your Honor . . . We then verified from an informant that David Chung, James Uy . . . under the name and style Media Group were the ones replicating the infringing CDs.

xxx xxx xxx

36. Question: How do you know that all of these VCDs and CDs you purchased or are indeed infringing?

Answer: I have with me the VRB certification that the VCDs are unauthorized copies. I also have with me the Complaint-Affidavit of Sony Music and IFPI that certified that these are infringing copies, as well as the title list of Sony Music wherein some of the CDs purchased are indicated. (Annex "10", Comment, Rollo, p. 841)

B. Deposition of Baltazar

18. Question: What did you see in that address?

Answer: We saw that they had in stock several infringing, pirated and unauthorized CDs. They also had videograms without VRB labels, aside from artworks and labels. John Doe gave us a "Wholesome" CD while Jane Doe gave us "Kenny Rogers Videoke" and "Engelbert Humperdinck Videoke" which the informant told us were being reproduced in that facility. The informant further showed us the rooms where the replicating and/or stamping machine was located.

19. Question: How did you determine that the CDs you purchased are counterfeit, pirated or unauthorized?

Answer: The Attorney-in-fact of Sony Music and IFPI certified in his Complaint-Affidavit that they are unauthorized copies. I also have with me a listing of Sony Music titles and some of the CDs I purchased are in that list.40

C. Deposition of Pedralvez

27. Question: What proof do you have they are producing infringing materials?

Answer: We were given some samples by John Doe and Jane Doe. These are Kenny Rogers Videoke, Engelbert Humperdinck Videoke, and Andrew E. Wholesome CD. The informant told us that the said samples were being reproduced in the facility.

28. Question: How do you know that all of these VCDs you purchased or got are indeed unauthorized?

Answer: The VRB has certified that they are unauthorized copies. (Annex "12", Comment, Rollo, pp. 849-852).

Unlike their counterparts in Columbia who were found to be personally knowledgeable about their facts, Agent Lavin and his witnesses, judging from their above quoted answers, had no personal knowledge that the discs they saw, purchased or received were, in fact, pirated or infringing on petitioners’ copyrights. To us, it is not enough that the applicant and his witnesses testify that they saw stacks of several allegedly infringing, pirated and unauthorized discs in the subject facility. The more decisive consideration determinative of whether or not a probable cause obtains to justify the issuance of a search warrant is that they had personal knowledge that the discs were actually infringing, pirated or unauthorized copies.41

Moreover, unlike in Columbia, misrepresentation on the part of the applicant and his witnesses had been established in this case.

This is not to say that the master tapes should have been presented in evidence during the application hearing, as private respondents, obviously having in mind the holding in 20th Century Fox Film Corp. vs. Court of Appeals,42 would have this Court believe. It is true that the Court, in 20th Century Fox, underscored the necessity, in determining the existence of probable cause in copyright infringement cases, of presenting the master tapes of the copyrighted work. But, as emphatically clarified in Columbia "such auxiliary procedure, however, does not rule out the use of testimonial or documentary evidence, depositions, admissions or other classes of evidence xxx especially where the production in court of object evidence would result in delay, inconvenience or expenses out of proportion to its evidentiary value.43 What this Court is saying is that any evidence presented in lieu of the master tapes, if not readily available, in similar application proceedings must be reliable, and, if testimonial, it must, at the very least, be based on the witness’ personal knowledge.

Petitioners argue, citing People v. Chua Uy,44 that Agent Lavin’s informants’ testimonies are not indispensable as they would only be corroborative.45 Like Columbia, Chua Uy is not a winning card for petitioners, for, in the latter case, there was a reliable testimony to corroborate what the applicant testified to, i.e., the testimony of the police poseur-buyer in a buy-bust operation involving prohibited drugs. The circumstances are different in this case wherein the applicant and his witnesses had no personal knowledge that the discs they purchased were infringing or pirated copies. It cannot be overemphasized that not one of them testified seeing the pirated discs being manufactured at SLC’s premises. What they stated instead was that they were given copies of "Kenny Rogers Videoke", "Engelbert Humperdinck Videoke" and "Andrew E. Wholesome CD" by two anonymous sources, while yet another informant told them that the discs were manufactured at said premises.

Initial hearsay information or tips from confidential informants could very well serve as basis for the issuance of a search warrant, if followed up personally by the recipient and validated,46 as what transpired in Columbia.Unfortunately, the records show that such is not the case before us.

On the issue that the public respondent gravely abused her discretion in conducting what petitioners perceived amounted to a "preliminary investigation", this Court has already ruled in Solid Triangle Sales Corp. vs. Sheriff of RTC Quezon City, Branch 93,47 that "in the determination of probable cause, the court must necessarily resolve whether or not an offense exists to justify the issuance or quashal of the warrant". In the exercise of this mandate - which we can allow as being akin to conducting a preliminary investigation - abuse of discretion cannot plausibly be laid at the doorstep of the issuing court on account

of its prima facie holding that no offense has been committed, even if consequent to such holding a warrant is recalled and the private complainant is incidentally deprived of vital evidence to prove his case. Solid Triangle succinctly explains why:

The proceedings for the issuance/quashal of a search warrant before a court on the one hand, and the preliminary investigation before an authorized officer on the other, are proceedings entirely independent of each other. One is not bound by the other’s finding as regards the existence of a crime. The first is to determine whether a warrant should issue or be quashed, and the second, whether an information should be filed in court.

When the court, in determining probable cause for issuing or quashing a search warrant, finds that no offense has been committed, it does not interfere with or encroach upon the proceedings in the preliminary investigation. The court does not oblige the investigating officer not to file the information for the court’s ruling that no crime exists is only of purposes of issuing or quashing the warrant. This does not, as petitioners would like to believe, constitute a usurpation of the executive function. Indeed, to shirk from this duty would amount to an abdication of a constitutional obligation.48

While the language of the first questioned Order may be viewed as encroaching on executive functions, nonetheless, it remains that the order of quashal is entirely independent of the proceedings in I.S. No. 2001-1158. And needless to stress, the DOJ is by no means concluded by the respondent judge’s findings as regards the existence, or the non-existence, of a crime.

We can, to a point, accord merit to petitioners’ lament that the basis of the first questioned order, i.e., the mingling of the seized items with other items, is extraneous to the determination of the validity of the issuance of the search warrant. It is to be pointed out, though, that public respondent corrected her error when it was raised in petitioners’ motion for reconsideration. There can really be no serious objection to a judge correcting or altogether altering his case disposition on a motion for reconsideration, it being the purpose of such recourse to provide the court an opportunity to cleanse itself of an error unwittingly committed, or, with like effect, to allow the aggrieved party the chance to convince the court that its ruling is erroneous.49 A motion for reconsideration before resort to certiorariis required precisely "to afford the public respondent an opportunity to correct any actual or fancied error attributed to it by way of re-examination of the legal and factual aspects of the case".50

Similarly, as to the matter of the respondent judge’s recognizing the April 11, 2002 motion to quash search warrant51 filed by the individual private respondents, instead of by SLC, as presumptive owner of the seized items, such error was properly addressed when respondent SLC, represented throughout the proceedings below by the same counsel of its co-respondents, formally manifested that it was adopting the same motion as its own.52

It is apropos to point out at this juncture that petitioners have imputed on individual private respondents criminal liability, utilizing as tools of indictment the very articles and papers seized from the premises of SLC. Be that as it may, petitioners should be deemed in estoppel to raise the personality of individual private respondents to interpose a motion to quash. To be sure, it would be unsporting for petitioners to prosecute individual private respondents on the basis of seized articles but on the same breath deny the latter standing to question the legality of the seizure on the postulate that only the party whose rights have been impaired thereby, meaning SLC, can raise that challenge. There can be no quibbling that individual private respondents stand to be prejudiced or at least be inconvenient by any judgment in any case based on the seized properties. In a very real sense, therefore, they are real parties in interest who ought not to be prevented from assailing the validity of Search Warrant 219-00, albeit they cannot plausibly asked for the release and appropriate as their own the seized articles.

Petitioners’ related argument that SLC could not have validly adopted individual private respondents’ motion to quash due to laches is untenable.

The records show that the seizure in question was effected on September 19, 2000. The complaint in I.S. No. 2000-1576 was filed against the officers of SLC, all of whom, except for one, are also private respondents in the instant petition. I.S. No. 2000-1576 was only resolved on January 15, 2001 when the DOJ dismissed the complaint on the ground that SLC was, in fact, duly licensed by the VRB. Shortly thereafter, or on February 6, 2001, less than five (5) months after the seizure, private respondents moved to quash both search warrants.53 The motion clearly indicates private respondents’ desire for the return of the seized items, and there is nothing in the records showing that petitioners objected to the motion on the ground that the movants had no standing to question the warrants.

This bring Us to the second assailed order. As earlier stated, DOJ, in I.S. No. 2000-1576, found respondent SLC to be licensed by VRB to engage in the business of replicating or duplicating videograms.

Petitioners would have the Court believe that the second questioned order was based on a ground immaterial to the charge of infringement. A scrutiny of the text of the said order, however, shows that the respondent judge denied petitioners’ motion for reconsideration because she was misled by the applicant’s and his witnesses’ testimony. It may be that a VRB license is no defense to a charge of violating Section 208 of R.A. No. 8293. It must be stressed in this regard, however, that the core issue here is the validity of the warrant which applicant secured on the basis of, among others, his representation which turned out to be false.

As above discussed, the answers of Agent Lavin and his witnesses to the public respondent’s searching questions, particularly those relating to how they knew that the compact discs they purchased or received were illegal, unauthorized or infringing, were based on certifications and not personal knowledge. The subject warrant, as well as Search Warrant No. 220-00, was issued nonetheless. It may well have been that the issuing judge was, in the end, convinced to issue the warrants by means of the erroneous VRB certification presented during the joint application hearing, overriding whatever misgivings she may have had with the applicant’s and his witnesses’ other answers. This Court, however, cannot engage in such speculation and sees no need to.

Summing up, the issuance of Search Warrant No. 219-00 was, at bottom, predicated on the sworn testimonies of persons without personal knowledge of facts they were testifying on and who relied on a false certification issued by VRB. Based as it were on hearsay and false information, its issuance was without probable cause and, therefore, invalid.

Given the foregoing perspective, the peripheral issues of (a) whether or not petitioner IFPI (South East Asia), Ltd. failed to comply with the rules requiring the filing of a certification on non-forum shopping; and (b) whether or not IFPI’s board of directors ratified its conditional authorization for its attorney-in-fact to represent IFPI in this petition, need not detain us long. In our review of the records, R.V. Domingo & Associates, whose authority to represent the petitioners in this petition continues, had duly executed the sworn certification on non- forum shopping.

In the same manner, this Court, having taken cognizance of this petition, need not belabor the issue of whether or not petitioners have cavalierly breached the rule on hierarchy of courts. Suffice it to state that, while the Court looks with disfavor on utter disregard of its rules,54 it is within its power to suspend its own rules or to except a particular case from its operation whenever the ends of justice so requires, as here.

WHEREFORE, the instant petition is hereby DISMISSED and the temporary restraining order issued on February 19, 2003 is consequently RECALLED.

Costs against petitioners.

SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, and Corona, JJ., concur.

Carpio-Morales, J., on leave.

Footnotes

1 Rollo, pp. 60-62.

2 Rollo, pp. 64-65.

3 Now the Optical Media Board.

4 An Act Creating the Videogram Regulatory Board.

5 Petition, pp. 4-5.

6 Petition, p. 37; Annex "V", Petition, Rollo, pp. 669-678.

7 Annex "D", Petition, Rollo, p. 67.

8 Annex "E", Petition, Rollo, pp. 69-70.

9 Petition, pp. 5-6.

10 Annex "F", Petition, Rollo, pp. 72-77.

11 Annex "1", Comment, Rollo, pp. 746-749.

12 Comment, p. 5; Rollo 712.

13 Annex "G", Petition, Rollo. 79-81.

14 Annex "H", Petition, Rollo, pp. 83-88.

15 Annex "K", Petition, Rollo, p. 160.

16 Annex "I", Petition, Rollo, pp. 92-111.

17 Annex "J", Petition, Rollo, pp. 113-116.

18 Annex "L", Petition, Rollo, p. 162.

19 Comment, p.8, Rollo, p. 715; Reply, p. 33, Rollo, p. 940.

20 Annex "M", Petition, Rollo, pp. 164-166.

21 Reply, pp. 33-34; Rollo, pp. 940-941.

22 Annex "N", Petition, Rollo, pp. 168-183.

23 Annex "O", Petition, Rollo, 223-249.

24 Annex "Q", Petition, Rollo, p. 258.

25 Supra, Note 1, Words in bracket and underlining supplied.

26 Annex "R", Petition, Rollo, p.12.

27 Supra, Note 2.

28 Rollo, p. 675.

29 Rollo, p. 976.

30 48 SCRA 345 [1972].

31 People vs. Benhur Mamaril, 420 SCRA 662 [2004] citing Mata vs. Bayona, 128 SCRA 388 [1984].

32 Tambasen vs. People, 246 SCRA 184 [ [1995].

33 People vs. Aruta, 288 SCRA 262 [1998].

34 261 SCRA 144 [1996], citing 79 CJS, Search and Seizures, Sec. 74, 862.

35 AMEX vs. Court of Appeals, 308 SCRA 65 [1999].

36 People vs. Miclat, 386 SCRA 515 [2002]; People vs. Villaviray, 262 SCRA 13 [1996]; People vs. Valdez, 347 SCRA 594 [2000].

37 Supra.

38 At p. 173.

39 At p. 74.

40 Annex "11", Comment, Rollo, pp. 846-848.

41 Paper Industries Corp. of the Philippines vs. Asuncion, 307 SCRA 253 [1999]).

42 164 SCRA 655, [1988].

43 At p. 175.

44 380 SCRA 700 [2002].

45 Petitioners’ Memorandum, p.19.

46 Cupcupin vs. People, 392 SCRA 203 [2002].

47 370 SCRA 491 [2001]

48 At pp. 504-505.

49 Phil. Advertising Counselors vs. Revilla, 52 SCRA 246 [1973].

50 Pure Foods Corp. vs. NLRC, 171 SCRA 415 [1989] cited in Sevillana vs. I.T.(International) Corp., 356 SCRA 451 [2001]

51 Supra, Note 22.

52 Supra, Note 24.

53 Supra, See Note 12.

54 Loquias vs. Office of the Ombudsman, 338 SCRA 62 [2000].

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. 140946             September 13, 2004

MICROSOFT CORPORATION and LOTUS DEVELOPMENT CORPORATION, petitioners, vs.MAXICORP, INC., respondent.

D E C I S I O N

CARPIO, J.:

The Case

This petition for review on certiorari1 seeks to reverse the Court of Appeals’ Decision2 dated 23 December 1998 and its Resolution dated 29 November 1999 in CA-G.R. SP No. 44777. The Court of Appeals reversed the Order3of the Regional Trial Court, Branch 23, Manila ("RTC"), denying respondent Maxicorp, Inc.’s ("Maxicorp") motion to quash the search warrant that the RTC issued against Maxicorp. Petitioners are the private complainants against Maxicorp for copyright infringement under Section 29 of Presidential Decree No. 49 ("Section 29 of PD 49")4 and for unfair competition under Article 189 of the Revised Penal Code ("RPC").5

Antecedent Facts

On 25 July 1996, National Bureau of Investigation ("NBI") Agent Dominador Samiano, Jr. ("NBI Agent Samiano") filed several applications for search warrants in the RTC against Maxicorp for alleged violation of Section 29 of PD 49 and Article 189 of the RPC. After conducting a preliminary examination of the applicant and his witnesses, Judge William M. Bayhon issued Search Warrants Nos. 96-451, 96-452, 96-453 and 96-454, all dated 25 July 1996, against Maxicorp.

Armed with the search warrants, NBI agents conducted on 25 July 1996 a search of Maxicorp’s premises and seized property fitting the description stated in the search warrants.

On 2 September 1996, Maxicorp filed a motion to quash the search warrants alleging that there was no probable cause for their issuance and that the warrants are in the form of "general warrants." The RTC denied Maxicorp’s motion on 22 January 1997. The RTC also denied Maxicorp’s motion for reconsideration.

The RTC found probable cause to issue the search warrants after examining NBI Agent Samiano, John Benedict Sacriz ("Sacriz"), and computer technician Felixberto Pante ("Pante"). The three testified on what they discovered during their respective visits to Maxicorp. NBI Agent Samiano also presented certifications from petitioners that they have not authorized Maxicorp to perform the witnessed activities using petitioners’ products.

On 24 July 1997, Maxicorp filed a petition for certiorari with the Court of Appeals seeking to set aside the RTC’s order. On 23 December 1998, the Court of Appeals reversed the RTC’s order denying Maxicorp’s motion to quash the search warrants. Petitioners moved for reconsideration. The Court of Appeals denied petitioners’ motion on 29 November 1999.

The Court of Appeals held that NBI Agent Samiano failed to present during the preliminary examination conclusive evidence that Maxicorp produced or sold the counterfeit products. The Court of Appeals pointed out that the sales receipt NBI Agent Samiano presented as evidence that he bought the products from Maxicorp was in the name of a certain "Joel Diaz."

Hence, this petition.

The Issues

Petitioners seek a reversal and raise the following issues for resolution:

1. WHETHER THE PETITION RAISES QUESTIONS OF LAW;

2. WHETHER PETITIONERS HAVE LEGAL PERSONALITY TO FILE THE PETITION;

3. WHETHER THERE WAS PROBABLE CAUSE TO ISSUE THE SEARCH WARRANTS;

4. WHETHER THE SEARCH WARRANTS ARE "GENERAL WARRANTS."

The Ruling of the Court

The petition has merit.

On Whether the Petition Raises Questions of Law

Maxicorp assails this petition as defective since it failed to raise questions of law. Maxicorp insists that the arguments petitioners presented are questions of fact, which this Court should not consider in a Rule 45 petition for review. Petitioners counter that all the issues they presented in this petition involve questions of law. Petitioners point out that the facts are not in dispute.

A petition for review under Rule 45 of the Rules of Court should cover questions of law.6 Questions of fact are not reviewable. As a rule, the findings of fact of the Court of Appeals are final and conclusive and this Court will not review them on appeal,7 subject to exceptions as when the findings of the appellate court conflict with the findings of the trial court.8

The distinction between questions of law and questions of fact is settled. A question of law exists when the doubt or difference centers on what the law is on a certain state of facts. A question of fact exists if the doubt centers on the truth or falsity of the alleged facts. Though this delineation seems simple, determining the true nature and extent of the distinction is sometimes problematic. For example, it is incorrect to presume that all cases where the facts are not in dispute automatically involve purely questions of law.

There is a question of law if the issue raised is capable of being resolved without need of reviewing the probative value of the evidence.9 The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.10 If the query requires a re-evaluation of the credibility of witnesses, or the existence or relevance of surrounding circumstances and their relation to each other, the issue in that query is factual.11 Our ruling inPaterno v. Paterno12 is illustrative on this point:

Such questions as whether certain items of evidence should be accorded probative value or weight, or rejected as feeble or spurious, or whether or not the proofs on one side or the other are clear and convincing and adequate to establish a proposition in issue, are without doubt questions of fact. Whether or not the body of proofs presented by a party, weighed and analyzed

in relation to contrary evidence submitted by adverse party, may be said to be strong, clear and convincing; whether or not certain documents presented by one side should be accorded full faith and credit in the face of protests as to their spurious character by the other side; whether or not inconsistencies in the body of proofs of a party are of such gravity as to justify refusing to give said proofs weight – all these are issues of fact.

It is true that Maxicorp did not contest the facts alleged by petitioners. But this situation does not automatically transform all issues raised in the petition into questions of law. The issues must meet the tests outlined in Paterno.

Of the three main issues raised in this petition – the legal personality of the petitioners, the nature of the warrants issued and the presence of probable cause – only the first two qualify as questions of law. The pivotal issue of whether there was probable cause to issue the search warrants is a question of fact. At first glance, this issue appears to involve a question of law since it does not concern itself with the truth or falsity of certain facts. Still, the resolution of this issue would require this Court to inquire into the probative value of the evidence presented before the RTC. For a question to be one of law, it must not involve an examination of the probative value of the evidence presented by the litigants or any of them.13

Yet, this is precisely what the petitioners ask us to do by raising arguments requiring an examination of the TSNs and the documentary evidence presented during the search warrant proceedings. In short, petitioners would have us substitute our own judgment to that of the RTC and the Court of Appeals by conducting our own evaluation of the evidence. This is exactly the situation which Section 1, Rule 45 of the Rules of Court prohibits by requiring the petition to raise only questions of law. This Court is not a trier of facts. It is not the function of this court to analyze or weigh evidence.14 When we give due course to such situations, it is solely by way of exception. Such exceptions apply only in the presence of extremely meritorious circumstances.15

Indeed, this case falls under one of the exceptions because the findings of the Court of Appeals conflict with the findings of the RTC.16 Since petitioners properly raised the conflicting findings of the lower courts, it is proper for this Court to resolve such contradiction.

On Whether Petitioners have the Legal Personality to File this Petition

Maxicorp argues that petitioners have no legal personality to file this petition since the proper party to do so in a criminal case is the Office of the Solicitor General as representative of the People of the Philippines. Maxicorp states the general rule but the exception governs this case.17 We ruled in Columbia Pictures Entertainment, Inc. v. Court of Appeals18 that the petitioner-complainant in a petition for review under Rule 45 could argue its case before this Court in lieu of the Solicitor General if there is grave error committed by the lower court or lack of due process. This avoids a situation where a complainant who actively participated in the prosecution of a case would suddenly find itself powerless to pursue a remedy due to circumstances beyond its control. The circumstances in Columbia Pictures Entertainment are sufficiently similar to the present case to warrant the application of this doctrine.

On Whether there was Probable Cause to Issue the Search Warrants

Petitioners argue that the Court of Appeals erred in reversing the RTC based on the fact that the sales receipt was not in the name of NBI Agent Samiano. Petitioners point out that the Court of Appeals disregarded the overwhelming evidence that the RTC considered in determining the existence of probable cause. Maxicorp counters that the Court of Appeals did not err in reversing the RTC. Maxicorp maintains that the entire preliminary examination that the RTC conducted was defective.

The Court of Appeals based its reversal on two factual findings of the RTC. First, the fact that the sales receipt presented by NBI Agent Samiano as proof that he bought counterfeit goods from Maxicorp was in

the name of a certain "Joel Diaz." Second, the fact that petitioners’ other witness, John Benedict Sacriz, admitted that he did not buy counterfeit goods from Maxicorp.

We rule that the Court of Appeals erred in reversing the RTC’s findings.

Probable cause means "such reasons, supported by facts and circumstances as will warrant a cautious man in the belief that his action and the means taken in prosecuting it are legally just and proper."19 Thus, probable cause for a search warrant requires such facts and circumstances that would lead a reasonably prudent man to believe that an offense has been committed and the objects sought in connection with that offense are in the place to be searched.20

The judge determining probable cause must do so only after personally examining under oath the complainant and his witnesses. The oath required must refer to "the truth of the facts within the personal knowledge of the petitioner or his witnesses, because the purpose thereof is to convince the committing magistrate, not the individual making the affidavit and seeking the issuance of the warrant, of the existence of probable cause."21 The applicant must have personal knowledge of the circumstances. "Reliable information" is insufficient.22 Mere affidavits are not enough, and the judge must depose in writing the complainant and his witnesses.23

The Court of Appeals’ reversal of the findings of the RTC centers on the fact that the two witnesses for petitioners during the preliminary examination failed to prove conclusively that they bought counterfeit software from Maxicorp. The Court of Appeals ruled that this amounted to a failure to prove the existence of a connection between the offense charged and the place searched.

The offense charged against Maxicorp is copyright infringement under Section 29 of PD 49 and unfair competition under Article 189 of the RPC. To support these charges, petitioners presented the testimonies of NBI Agent Samiano, computer technician Pante, and Sacriz, a civilian. The offenses that petitioners charged Maxicorp contemplate several overt acts. The sale of counterfeit products is but one of these acts. Both NBI Agent Samiano and Sacriz related to the RTC how they personally saw Maxicorp commit acts of infringement and unfair competition.

During the preliminary examination, the RTC subjected the testimonies of the witnesses to the requisite examination. NBI Agent Samiano testified that he saw Maxicorp display and offer for sale counterfeit software in its premises. He also saw how the counterfeit software were produced and packaged within Maxicorp’s premises. NBI Agent Samiano categorically stated that he was certain the products were counterfeit because Maxicorp sold them to its customers without giving the accompanying ownership manuals, license agreements and certificates of authenticity.

Sacriz testified that during his visits to Maxicorp, he witnessed several instances when Maxicorp installed petitioners’ software into computers it had assembled. Sacriz also testified that he saw the sale of petitioners’ software within Maxicorp’s premises. Petitioners never authorized Maxicorp to install or sell their software.

The testimonies of these two witnesses, coupled with the object and documentary evidence they presented, are sufficient to establish the existence of probable cause. From what they have witnessed, there is reason to believe that Maxicorp engaged in copyright infringement and unfair competition to the prejudice of petitioners. Both NBI Agent Samiano and Sacriz were clear and insistent that the counterfeit software were not only displayed and sold within Maxicorp’s premises, they were also produced, packaged and in some cases, installed there.

The determination of probable cause does not call for the application of rules and standards of proof that a judgment of conviction requires after trial on the merits. As implied by the words themselves, "probable cause" is concerned with probability, not absolute or even moral certainty. The prosecution need not

present at this stage proof beyond reasonable doubt. The standards of judgment are those of a reasonably prudent man,24 not the exacting calibrations of a judge after a full-blown trial.

No law or rule states that probable cause requires a specific kind of evidence. No formula or fixed rule for its determination exists.25 Probable cause is determined in the light of conditions obtaining in a given situation.26Thus, it was improper for the Court of Appeals to reverse the RTC’s findings simply because the sales receipt evidencing NBI Agent Samiano’s purchase of counterfeit goods is not in his name.

For purposes of determining probable cause, the sales receipt is not the only proof that the sale of petitioners’ software occurred. During the search warrant application proceedings, NBI Agent Samiano presented to the judge the computer unit that he purchased from Maxicorp, in which computer unit Maxicorp had pre-installed petitioners’ software.27 Sacriz, who was present when NBI Agent Samiano purchased the computer unit, affirmed that NBI Agent Samiano purchased the computer unit.28 Pante, the computer technician, demonstrated to the judge the presence of petitioners’ software on the same computer unit.29 There was a comparison between petitioners’ genuine software and Maxicorp’s software pre-installed in the computer unit that NBI Agent Sambiano purchased.30 Even if we disregard the sales receipt issued in the name of "Joel Diaz," which petitioners explained was the alias NBI Agent Samiano used in the operation, there still remains more than sufficient evidence to establish probable cause for the issuance of the search warrants.

This also applies to the Court of Appeals’ ruling on Sacriz’s testimony. The fact that Sacriz did not actually purchase counterfeit software from Maxicorp does not eliminate the existence of probable cause. Copyright infringement and unfair competition are not limited to the act of selling counterfeit goods. They cover a whole range of acts, from copying, assembling, packaging to marketing, including the mere offering for sale of the counterfeit goods. The clear and firm testimonies of petitioners’ witnesses on such other acts stand untarnished. The Constitution and the Rules of Court only require that the judge examine personally and thoroughly the applicant for the warrant and his witnesses to determine probable cause. The RTC complied adequately with the requirement of the Constitution and the Rules of Court.

Probable cause is dependent largely on the opinion and findings of the judge who conducted the examination and who had the opportunity to question the applicant and his witnesses.31 For this reason, the findings of the judge deserve great weight. The reviewing court should overturn such findings only upon proof that the judge disregarded the facts before him or ignored the clear dictates of reason.32 Nothing in the records of the preliminary examination proceedings reveal any impropriety on the part of the judge in this case. As one can readily see, here the judge examined thoroughly the applicant and his witnesses. To demand a higher degree of proof is unnecessary and untimely. The prosecution would be placed in a compromising situation if it were required to present all its evidence at such preliminary stage. Proof beyond reasonable doubt is best left for trial.

On Whether the Search Warrants are in the Nature of General Warrants

A search warrant must state particularly the place to be searched and the objects to be seized. The evident purpose for this requirement is to limit the articles to be seized only to those particularly described in the search warrant. This is a protection against potential abuse. It is necessary to leave the officers of the law with no discretion regarding what articles they shall seize, to the end that no unreasonable searches and seizures be committed.33

In addition, under Section 4, Rule 126 of the Rules of Criminal Procedure, a search warrant shall issue "in connection with one specific offense." The articles described must bear a direct relation to the offense for which the warrant is issued.34 Thus, this rule requires that the warrant must state that the articles subject of the search and seizure are used or intended for use in the commission of a specific offense.

Maxicorp argues that the warrants issued against it are too broad in scope and lack the specificity required with respect to the objects to be seized. After examining the wording of the warrants issued, the Court of Appeals ruled in favor of Maxicorp and reversed the RTC’s Order thus:

Under the foregoing language, almost any item in the petitioner’s store can be seized on the ground that it is "used or intended to be used" in the illegal or unauthorized copying or reproduction of the private respondents’ software and their manuals.35

The Court of Appeals based its reversal on its perceived infirmity of paragraph (e) of the search warrants the RTC issued. The appellate court found that similarly worded warrants, all of which noticeably employ the phrase "used or intended to be used," were previously held void by this Court.36 The disputed text of the search warrants in this case states:

a) Complete or partially complete reproductions or copies of Microsoft software bearing the Microsoft copyrights and/or trademarks owned by MICROSOFT CORPORATION contained in CD-ROMs, diskettes and hard disks;

b) Complete or partially complete reproductions or copies of Microsoft instruction manuals and/or literature bearing the Microsoft copyrights and/or trademarks owned by MICROSOFT CORPORATION;

c) Sundry items such as labels, boxes, prints, packages, wrappers, receptacles, advertisements and other paraphernalia bearing the copyrights and/or trademarks owned by MICROSOFT CORPORATION;

d) Sales invoices, delivery receipts, official receipts, ledgers, journals, purchase orders and all other books of accounts and documents used in the recording of the reproduction and/or assembly, distribution and sales, and other transactions in connection with fake or counterfeit products bearing the Microsoft copyrights and/or trademarks owned by MICROSOFT CORPORATION;

e) Computer hardware, including central processing units including hard disks, CD-ROM drives, keyboards, monitor screens and diskettes, photocopying machines and other equipment or paraphernalia used or intended to be used in the illegal and unauthorized copying or reproduction of Microsoft software and their manuals, or which contain, display or otherwise exhibit, without the authority of MICROSOFT CORPORATION, any and all Microsoft trademarks and copyrights; and

f) Documents relating to any passwords or protocols in order to access all computer hard drives, data bases and other information storage devices containing unauthorized Microsoft software.37 (Emphasis supplied)

It is only required that a search warrant be specific as far as the circumstances will ordinarily allow.38 The description of the property to be seized need not be technically accurate or precise. The nature of the description should vary according to whether the identity of the property or its character is a matter of concern.39 Measured against this standard we find that paragraph (e) is not a general warrant. The articles to be seized were not only sufficiently identified physically, they were also specifically identified by stating their relation to the offense charged. Paragraph (e) specifically refers to those articles used or intended for use in the illegal and unauthorized copying of petitioners’ software. This language meets the test of specificity.40

The cases cited by the Court of Appeals are inapplicable. In those cases, the Court found the warrants too broad because of particular circumstances, not because of the mere use of the phrase "used or intended to be used." InColumbia Pictures, Inc. v. Flores, the warrants ordering the seizure of

"television sets, video cassette recorders, rewinders and tape cleaners x x x" were found too broad since the defendant there was a licensed distributor of video tapes.41 The mere presence of counterfeit video tapes in the defendant’s store does not mean that the machines were used to produce the counterfeit tapes. The situation in this case is different. Maxicorp is not a licensed distributor of petitioners. In Bache & Co. (Phil.), Inc., et al. v. Judge Ruiz, et al., the Court voided the warrants because they authorized the seizure of records pertaining to "all business transactions" of the defendant.42 And in 20th Century Fox Film Corp. v. Court of Appeals, the Court quashed the warrant because it merely gave a list of articles to be seized, aggravated by the fact that such appliances are "generally connected with the legitimate business of renting out betamax tapes."43

However, we find paragraph (c) of the search warrants lacking in particularity. Paragraph (c) states:

c) Sundry items such as labels, boxes, prints, packages, wrappers, receptacles, advertisements and other paraphernalia bearing the copyrights and/or trademarks owned by MICROSOFT CORPORATION;

The scope of this description is all-embracing since it covers property used for personal or other purposes not related to copyright infringement or unfair competition. Moreover, the description covers property that Maxicorp may have bought legitimately from Microsoft or its licensed distributors. Paragraph (c) simply calls for the seizure of all items bearing the Microsoft logo, whether legitimately possessed or not. Neither does it limit the seizure to products used in copyright infringement or unfair competition.

Still, no provision of law exists which requires that a warrant, partially defective in specifying some items sought to be seized yet particular with respect to the other items, should be nullified as a whole. A partially defective warrant remains valid as to the items specifically described in the warrant.44 A search warrant is severable, the items not sufficiently described may be cut off without destroying the whole warrant.45 The exclusionary rule found in Section 3(2) of Article III of the Constitution renders inadmissible in any proceeding all evidence obtained through unreasonable searches and seizure. Thus, all items seized under paragraph (c) of the search warrants, not falling under paragraphs a, b, d, e or f, should be returned to Maxicorp.

WHEREFORE, we PARTIALLY GRANT the instant petition. The Decision of the Court of Appeals dated 23 December 1998 and its Resolution dated 29 November 1999 in CA-G.R. SP No. 44777 are REVERSED and SET ASIDE except with respect to articles seized under paragraph (c) of Search Warrants Nos. 96-451, 96-452, 96-453 and 96-454. All articles seized under paragraph (c) of the search warrants, not falling under paragraphs a, b, d, e or f, are ordered returned to Maxicorp, Inc. immediately.

SO ORDERED.

Davide, Jr., Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.

Footnotes

1 Under Rule 45 of the 1997 Rules of Civil Procedure.

2 Penned by Associate Justice Hector L. Hofileña with Associate Justices Jorge S. Imperial and Omar U. Amin concurring.

3 Penned by Judge William M. Bayhon.

4 Presidential Decree on Intellectual Property. Section 29 punishes copyright infringement.

5 Article 189 punishes unfair competition.

6 Section 1, Rule 45 of the 1997 Rules of Civil Procedure.

7 Amigo v. Teves, 96 Phil. 252 (1954).

8 Ramos, et al. v. Pepsi-Cola Bottling Co. of the Phils., et al., 125 Phil. 701 (1967).

9 Arroyo, et al. v. El Beaterio del Santissimo Rosario De Molo, et al., 132 Phil. 9 (1968).

10 Cheesman v. Intermediate Appellate Court, G.R. No. 74833, 21 January 1991, 193 SCRA 93.

11 Bernardo v. Court of Appeals, G.R. No. 101680, 7 December 1992, 216 SCRA 224.

12 G.R. No. 63680, 23 March 1990, 183 SCRA 630.

13 Manila Bay Club Corp. v. CA, 315 Phil. 805 (1995).

14 Nicolas v. Court of Appeals, No. L-37631, 12 October 1987, 154 SCRA 635.

15 As laid out in Ramos, et al. v. Pepsi-Cola Bottling Co. of the Phils., et al., 125 Phil. 701 (1967):

(a) when the conclusion is a finding grounded entirely on speculations, surmises or conjectures;

(b) when the inference made is manifestly mistaken, absurd or impossible;

(c) where there is a grave abuse of discretion;

(d) when the judgment is based on a misapprehension of facts;

(e) when the findings of fact of the trial court and the Court of Appeals are conflicting;

(f) where the findings of fact are contradicted by the evidence of record.

16 Ibid.

17 People v. Nano, G.R. No. 94639, 13 January 1992, 205 SCRA 155.

18 G.R. No. 111267, 20 September 1996, 262 SCRA 219.

19 United States v. Addison, 28 Phil. 566 (1914).

20 Burgos, Sr., et al. v. The Chief of Staff, AFP, et al., 218 Phil. 754 (1984).

21 Alvarez v. Court of First Instance of Tayabas, 64 Phil. 33 (1937).

22 Ibid.

23 Roan v. Hon. Gonzales, 230 Phil. 90 (1986).

24 People v. Sy Juco, 64 Phil. 667 (1937).

25 La Chemise Lacoste, S.A. v. Hon. Fernandez, etc., et al., 214 Phil. 332 (1984).

26 Central Bank of the Phils. v. Morfe, et al., 126 Phil. 885 (1967).

27 TSN of proceedings on application for search warrants, rollo, p. 50.

28 Ibid., p. 59.

29 Ibid., p. 52.

30 Ibid., p. 61.

31 Luna v. Hon. Plaza, etc., et al., 135 Phil. 329 (1968).

32 Supra note 25.

33 Uy Kheytin v. Villareal, 42 Phil. 886 (1920).

34 BACHE & Co. (Phil.), Inc., et al. v. Judge Ruiz, et al., 147 Phil. 794 (1971).

35 Rollo, p. 38.

36 Columbia Pictures, Inc. v. Flores, G.R. No. 78631, 29 June 1993, 223 SCRA 761; 20th Century Fox Film Corp. v. Court of Appeals, Nos. L-76649-51, 19 August 1988, 164 SCRA 655; BACHE & Co. (Phil.), Inc., et al. v. Judge Ruiz, et al., 147 Phil. 794 (1971).

37 Rollo, p. 64.

38 People v. Rubio, 57 Phil. 384 (1932).

39 Kho v. Hon. Makalintal, 365 Phil. 511 (1999).

40 Columbia Pictures Entertainment, Inc. v. Court of Appeals, supra note 18.

41 Supra note 36.

42 Supra note 34.

43 Supra note 36.

44 People v. Salanguit, G.R. Nos. 133254-55, 19 April 2001, 356 SCRA 683.

45 Uy v. Bureau of Internal Revenue, G.R. No. 129651, 20 October 2000, 344 SCRA 36.

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION

G.R. No. 148222               August 15, 2003

PEARL & DEAN (PHIL.), INCORPORATED, Petitioner, vs.SHOEMART, INCORPORATED, and NORTH EDSA MARKETING, INCORPORATED, Respondents.

D E C I S I O N

CORONA, J.:

In the instant petition for review on certiorari under Rule 45 of the Rules of Court, petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001 decision1 of the Court of Appeals reversing the October 31, 1996 decision2of the Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516 which declared private respondents Shoemart Inc. (SMI) and North Edsa Marketing Inc. (NEMI) liable for infringement of trademark and copyright, and unfair competition.

FACTUAL ANTECEDENTS

The May 22, 2001 decision of the Court of Appeals3 contained a summary of this dispute:

"Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising display units simply referred to as light boxes. These units utilize specially printed posters sandwiched between plastic sheets and illuminated with back lights. Pearl and Dean was able to secure a Certificate of Copyright Registration dated January 20, 1981 over these illuminated display units. The advertising light boxes were marketed under the trademark "Poster Ads". The application for registration of the trademark was filed with the Bureau of Patents, Trademarks and Technology Transfer on June 20, 1983, but was approved only on September 12, 1988, per Registration No. 41165. From 1981 to about 1988, Pearl and Dean employed the services of Metro Industrial Services to manufacture its advertising displays.

Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM City North Edsa. Since SM City North Edsa was under construction at that time, SMI offered as an alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. On September 11, 1985, Pearl and Dean’s General Manager, Rodolfo Vergara, submitted for signature the contracts covering SM Cubao and SM Makati to SMI’s Advertising Promotions and Publicity Division Manager, Ramonlito Abano. Only the contract for SM Makati, however, was returned signed. On October 4, 1985, Vergara wrote Abano inquiring about the other contract and reminding him that their agreement for installation of light boxes was not only for its SM Makati branch, but also for SM Cubao. SMI did not bother to reply.

Instead, in a letter dated January 14, 1986, SMI’s house counsel informed Pearl and Dean that it was rescinding the contract for SM Makati due to non-performance of the terms thereof. In his reply dated February 17, 1986, Vergara protested the unilateral action of SMI, saying it was without basis. In the same letter, he pushed for the signing of the contract for SM Cubao.

Two years later, Metro Industrial Services, the company formerly contracted by Pearl and Dean to fabricate its display units, offered to construct light boxes for Shoemart’s chain of stores. SMI approved the proposal and ten (10) light boxes were subsequently fabricated by Metro Industrial for SMI. After its contract with Metro Industrial was terminated, SMI engaged the services of EYD Rainbow Advertising Corporation to make the light boxes. Some 300 units were fabricated in 1991. These were delivered on a staggered basis and installed at SM Megamall and SM City.

Sometime in 1989, Pearl and Dean, received reports that exact copies of its light boxes were installed at SM City and in the fastfood section of SM Cubao. Upon investigation, Pearl and Dean found out that aside from the two (2) reported SM branches, light boxes similar to those it manufactures were also installed in two (2) other SM stores. It further discovered that defendant-appellant North Edsa Marketing Inc. (NEMI), through its marketing arm, Prime Spots Marketing Services, was set up primarily to sell advertising space in lighted display units located in SMI’s different branches. Pearl and Dean noted that NEMI is a sister company of SMI.

In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991 to both SMI and NEMI enjoining them to cease using the subject light boxes and to remove the same from SMI’s establishments. It also demanded the discontinued use of the trademark "Poster Ads," and the payment to Pearl and Dean of compensatory damages in the amount of Twenty Million Pesos (P20,000,000.00).

Upon receipt of the demand letter, SMI suspended the leasing of two hundred twenty-four (224) light boxes and NEMI took down its advertisements for "Poster Ads" from the lighted display units in SMI’s stores. Claiming that both SMI and NEMI failed to meet all its demands, Pearl and Dean filed this instant case for infringement of trademark and copyright, unfair competition and damages.

In denying the charges hurled against it, SMI maintained that it independently developed its poster panels using commonly known techniques and available technology, without notice of or reference to Pearl and Dean’s copyright. SMI noted that the registration of the mark "Poster Ads" was only for stationeries such as letterheads, envelopes, and the like. Besides, according to SMI, the word "Poster Ads" is a generic term which cannot be appropriated as a trademark, and, as such, registration of such mark is invalid. It also stressed that Pearl and Dean is not entitled to the reliefs prayed for in its complaint since its advertising display units contained no copyright notice, in violation of Section 27 of P.D. 49. SMI alleged that Pearl and Dean had no cause of action against it and that the suit was purely intended to malign SMI’s good name. On this basis, SMI, aside from praying for the dismissal of the case, also counterclaimed for moral, actual and exemplary damages and for the cancellation of Pearl and Dean’s Certification of Copyright Registration No. PD-R-2558 dated January 20, 1981 and Certificate of Trademark Registration No. 4165 dated September 12, 1988.

NEMI, for its part, denied having manufactured, installed or used any advertising display units, nor having engaged in the business of advertising. It repleaded SMI’s averments, admissions and denials and prayed for similar reliefs and counterclaims as SMI."

The RTC of Makati City decided in favor of P & D:

Wherefore, defendants SMI and NEMI are found jointly and severally liable for infringement of copyright under Section 2 of PD 49, as amended, and infringement of trademark under Section 22 of RA No. 166, as amended, and are hereby penalized under Section 28 of PD 49, as amended, and Sections 23 and 24 of RA 166, as amended. Accordingly, defendants are hereby directed:

(1) to pay plaintiff the following damages:

(a) actual damages - P16,600,000.00,representing profitsderived by defendants

as a result of infringe-ment of plaintiff’s copyrightfrom 1991 to 1992

(b) moral damages - P1,000.000.00

(c) exemplary damages - P1,000,000.00

(d) attorney’s fees - P1,000,000.00

plus

(e) costs of suit;

(2) to deliver, under oath, for impounding in the National Library, all light boxes of SMI which were fabricated by Metro Industrial Services and EYD Rainbow Advertising Corporation;

(3) to deliver, under oath, to the National Library, all filler-posters using the trademark "Poster Ads", for destruction; and

(4) to permanently refrain from infringing the copyright on plaintiff’s light boxes and its trademark "Poster Ads".

Defendants’ counterclaims are hereby ordered dismissed for lack of merit.

SO ORDERED.4

On appeal, however, the Court of Appeals reversed the trial court:

Since the light boxes cannot, by any stretch of the imagination, be considered as either prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a copyrightable class "O" work, we have to agree with SMI when it posited that what was copyrighted were the technical drawings only, and not the light boxes themselves, thus:

42. When a drawing is technical and depicts a utilitarian object, a copyright over the drawings like plaintiff-appellant’s will not extend to the actual object. It has so been held under jurisprudence, of which the leading case is Baker vs. Selden (101 U.S. 841 (1879). In that case, Selden had obtained a copyright protection for a book entitled "Selden’s Condensed Ledger or Bookkeeping Simplified" which purported to explain a new system of bookkeeping. Included as part of the book were blank forms and illustrations consisting of ruled lines and headings, specially designed for use in connection with the system explained in the work. These forms showed the entire operation of a day or a week or a month on a single page, or on two pages following each other. The defendant Baker then produced forms which were similar to the forms illustrated in Selden’s copyrighted books. The Court held that exclusivity to the actual forms is not extended by a copyright. The reason was that "to grant a monopoly in the underlying art when no examination of its novelty has ever been made would be a surprise and a fraud upon the public; that is the province of letters patent, not of copyright." And that is precisely the point. No doubt aware that its alleged original design would never pass the rigorous examination of a patent application, plaintiff-appellant fought to foist a fraudulent monopoly on the public by conveniently resorting to a copyright registration which merely employs a recordal system without the benefit of an in-depth examination of novelty.

The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had obtained a copyright over an unpublished drawing

entitled "Bridge Approach – the drawing showed a novel bridge approach to unsnarl traffic congestion". The defendant constructed a bridge approach which was alleged to be an infringement of the new design illustrated in plaintiff’s drawings. In this case it was held that protection of the drawing does not extend to the unauthorized duplication of the object drawn because copyright extends only to the description or expression of the object and not to the object itself. It does not prevent one from using the drawings to construct the object portrayed in the drawing.

In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz Homes, Inc. v. Maddox, 379 F. 2d 84, it was held that there is no copyright infringement when one who, without being authorized, uses a copyrighted architectural plan to construct a structure. This is because the copyright does not extend to the structures themselves.

In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright over the technical drawings of the latter’s advertising display units.

xxx xxx xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate Appellate Court that the protective mantle of the Trademark Law extends only to the goods used by the first user as specified in the certificate of registration, following the clear mandate conveyed by Section 20 of Republic Act 166, as amended, otherwise known as the Trademark Law, which reads:

SEC. 20. Certification of registration prima facie evidence of validity.- A certificate of registration of a mark or trade-name shall be prima facie evidence of the validity of the registration, the registrant’s ownership of the mark or trade-name, and of the registrant’s exclusive right to use the same in connection with the goods, business or services specified in the certificate, subject to any conditions and limitations stated therein." (underscoring supplied)

The records show that on June 20, 1983, Pearl and Dean applied for the registration of the trademark "Poster Ads" with the Bureau of Patents, Trademarks, and Technology Transfer. Said trademark was recorded in the Principal Register on September 12, 1988 under Registration No. 41165 covering the following products: stationeries such as letterheads, envelopes and calling cards and newsletters.

With this as factual backdrop, we see no legal basis to the finding of liability on the part of the defendants-appellants for their use of the words "Poster Ads", in the advertising display units in suit. Jurisprudence has interpreted Section 20 of the Trademark Law as "an implicit permission to a manufacturer to venture into the production of goods and allow that producer to appropriate the brand name of the senior registrant on goods other than those stated in the certificate of registration." The Supreme Court further emphasized the restrictive meaning of Section 20 when it stated, through Justice Conrado V. Sanchez, that:

Really, if the certificate of registration were to be deemed as including goods not specified therein, then a situation may arise whereby an applicant may be tempted to register a trademark on any and all goods which his mind may conceive even if he had never intended to use the trademark for the said goods. We believe that such omnibus registration is not contemplated by our Trademark Law.

While we do not discount the striking similarity between Pearl and Dean’s registered trademark and defendants-appellants’ "Poster Ads" design, as well as the parallel use by which said words were used in the parties’ respective advertising copies, we cannot find defendants-appellants liable for infringement of trademark. "Poster Ads" was registered by Pearl and Dean for specific use in its stationeries, in contrast to defendants-appellants who used the same words in their advertising display units. Why Pearl and Dean limited the use of its trademark to stationeries is simply beyond us. But, having already done so, it must stand by the consequence of the registration which it had caused.

xxx xxx xxx

We are constrained to adopt the view of defendants-appellants that the words "Poster Ads" are a simple contraction of the generic term poster advertising. In the absence of any convincing proof that "Poster Ads" has acquired a secondary meaning in this jurisdiction, we find that Pearl and Dean’s exclusive right to the use of "Poster Ads" is limited to what is written in its certificate of registration, namely, stationeries.

Defendants-appellants cannot thus be held liable for infringement of the trademark "Poster Ads".

There being no finding of either copyright or trademark infringement on the part of SMI and NEMI, the monetary award granted by the lower court to Pearl and Dean has no leg to stand on.

xxx xxx xxx

WHEREFORE, premises considered, the assailed decision is REVERSED and SET ASIDE, and another is rendered DISMISSING the complaint and counterclaims in the above-entitled case for lack of merit.5

Dissatisfied with the above decision, petitioner P & D filed the instant petition assigning the following errors for the Court’s consideration:

A. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO COPYRIGHT INFRINGEMENT WAS COMMITTED BY RESPONDENTS SM AND NEMI;

B. THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT NO INFRINGEMENT OF PEARL & DEAN’S TRADEMARK "POSTER ADS" WAS COMMITTED BY RESPONDENTS SM AND NEMI;

C. THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE AWARD OF THE TRIAL COURT, DESPITE THE LATTER’S FINDING, NOT DISPUTED BY THE HONORABLE COURT OF APPEALS, THAT SM WAS GUILTY OF BAD FAITH IN ITS NEGOTIATION OF ADVERTISING CONTRACTS WITH PEARL & DEAN.

D. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING RESPONDENTS SM AND NEMI LIABLE TO PEARL & DEAN FOR ACTUAL, MORAL & EXEMPLARY DAMAGES, ATTORNEY’S FEES AND COSTS OF SUIT.6

ISSUES

In resolving this very interesting case, we are challenged once again to put into proper perspective four main concerns of intellectual property law — patents, copyrights, trademarks and unfair competition arising from infringement of any of the first three. We shall focus then on the following issues:

(1) if the engineering or technical drawings of an advertising display unit (light box) are granted copyright protection (copyright certificate of registration) by the National Library, is the light box depicted in such engineering drawings ipso facto also protected by such copyright?

(2) or should the light box be registered separately and protected by a patent issued by the Bureau of Patents Trademarks and Technology Transfer (now Intellectual Property Office) — in addition to the copyright of the engineering drawings?

(3) can the owner of a registered trademark legally prevent others from using such trademark if it is a mere abbreviation of a term descriptive of his goods, services or business?

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioner P & D’s complaint was that SMI infringed on its copyright over the light boxes when SMI had the units manufactured by Metro and EYD Rainbow Advertising for its own account. Obviously, petitioner’s position was premised on its belief that its copyright over the engineering drawings extended ipso facto to the light boxes depicted or illustrated in said drawings. In ruling that there was no copyright infringement, the Court of Appeals held that the copyright was limited to the drawings alone and not to the light box itself. We agree with the appellate court.

First, petitioner’s application for a copyright certificate — as well as Copyright Certificate No. PD-R2588 issued by the National Library on January 20, 1981 — clearly stated that it was for a class "O" work under Section 2 (O) of PD 49 (The Intellectual Property Decree) which was the statute then prevailing. Said Section 2 expressly enumerated the works subject to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of creation, subsist with respect to any of the following works:

x x x           x x x          x x x

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;

x x x           x x x          x x x

Although petitioner’s copyright certificate was entitled "Advertising Display Units" (which depicted the box-type electrical devices), its claim of copyright infringement cannot be sustained.

Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to the subjects and by the persons, and on terms and conditions specified in the statute.7 Accordingly, it can cover only the works falling within the statutory enumeration or description.8

P & D secured its copyright under the classification class "O" work. This being so, petitioner’s copyright protection extended only to the technical drawings and not to the light box itself because the latter was not at all in the category of "prints, pictorial illustrations, advertising copies, labels, tags and box wraps." Stated otherwise, even as we find that P & D indeed owned a valid copyright, the same could have referred only to the technical drawings within the category of "pictorial illustrations." It could not have possibly stretched out to include the underlying light box. The strict application9 of the law’s enumeration in Section 2 prevents us from giving petitioner even a little leeway, that is, even if its copyright certificate was entitled "Advertising Display Units." What the law does not include, it excludes, and for the good reason: the light box was not a literary or artistic piece which could be copyrighted under the copyright law. And no less clearly, neither could the lack of statutory authority to make the light box copyrightable be remedied by the simplistic act of entitling the copyright certificate issued by the National Library as "Advertising Display Units."

In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the public without license from P & D, then no doubt they would have been guilty of copyright infringement. But this was not the case. SMI’s and NEMI’s acts complained of by P & D were to have units similar or identical to the light box illustrated in the technical drawings manufactured by Metro and EYD Rainbow Advertising, for leasing out to different advertisers. Was this an infringement of petitioner’s copyright over the technical drawings? We do not think so.

During the trial, the president of P & D himself admitted that the light box was neither a literary not an artistic work but an "engineering or marketing invention."10 Obviously, there appeared to be some

confusion regarding what ought or ought not to be the proper subjects of copyrights, patents and trademarks. In the leading case of Kho vs. Court of Appeals,11 we ruled that these three legal rights are completely distinct and separate from one another, and the protection afforded by one cannot be used interchangeably to cover items or works that exclusively pertain to the others:

Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods. In relation thereto, a trade name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. Patentable inventions, on the other hand, refer to any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

This brings us to the next point: if, despite its manufacture and commercial use of the light boxes without license from petitioner, private respondents cannot be held legally liable for infringement of P & D’s copyright over itstechnical drawings of the said light boxes, should they be liable instead for infringement of patent? We do not think so either.

For some reason or another, petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which could have protected its invention, if in fact it really was. And because it had no patent, petitioner could not legally prevent anyone from manufacturing or commercially using the contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,12 we held that "there can be no infringement of a patent until a patent has been issued, since whatever right one has to the invention covered by the patent arises alone from the grant of patent. x x x (A)n inventor has no common law right to a monopoly of his invention. He has the right to make use of and vend his invention, but if he voluntarily discloses it, such as by offering it for sale, the world is free to copy and use it with impunity. A patent, however, gives the inventor the right to exclude all others. As a patentee, he has the exclusive right of making, selling or using the invention.13 On the assumption that petitioner’s advertising units were patentable inventions, petitioner revealed them fully to the public by submitting the engineering drawings thereof to the National Library.

To be able to effectively and legally preclude others from copying and profiting from the invention, a patent is a primordial requirement. No patent, no protection. The ultimate goal of a patent system is to bring new designs and technologies into the public domain through disclosure.14 Ideas, once disclosed to the public without the protection of a valid patent, are subject to appropriation without significant restraint.15

On one side of the coin is the public which will benefit from new ideas; on the other are the inventors who must be protected. As held in Bauer & Cie vs. O’Donnel,16 "The act secured to the inventor the exclusive right to make use, and vend the thing patented, and consequently to prevent others from exercising like privileges without the consent of the patentee. It was passed for the purpose of encouraging useful invention and promoting new and useful inventions by the protection and stimulation given to inventive genius, and was intended to secure to the public, after the lapse of the exclusive privileges granted the benefit of such inventions and improvements."

The law attempts to strike an ideal balance between the two interests:

"(The p)atent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure of new useful and non-obvious advances in technology and design, in return for the exclusive right to practice the invention for a number of years. The inventor may keep his invention secret and reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit to the community, the

patent is granted. An exclusive enjoyment is guaranteed him for 17 years, but upon the expiration of that period, the knowledge of the invention inures to the people, who are thus enabled to practice it and profit by its use."17

The patent law has a three-fold purpose: "first, patent law seeks to foster and reward invention; second, it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the free use of the public."18

It is only after an exhaustive examination by the patent office that a patent is issued. Such an in-depth investigation is required because "in rewarding a useful invention, the rights and welfare of the community must be fairly dealt with and effectively guarded. To that end, the prerequisites to obtaining a patent are strictly observed and when a patent is issued, the limitations on its exercise are equally strictly enforced. To begin with, a genuine invention or discovery must be demonstrated lest in the constant demand for new appliances, the heavy hand of tribute be laid on each slight technological advance in art."19

There is no such scrutiny in the case of copyrights nor any notice published before its grant to the effect that a person is claiming the creation of a work. The law confers the copyright from the moment of creation20 and the copyright certificate is issued upon registration with the National Library of a sworn ex-parte claim of creation.

Therefore, not having gone through the arduous examination for patents, the petitioner cannot exclude others from the manufacture, sale or commercial use of the light boxes on the sole basis of its copyright certificate over the technical drawings.

Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the patent office (IPO) to scrutinize the light box’s eligibility as a patentable invention. The irony here is that, had petitioner secured a patent instead, its exclusivity would have been for 17 years only. But through the simplified procedure of copyright-registration with the National Library — without undergoing the rigor of defending the patentability of its invention before the IPO and the public — the petitioner would be protected for 50 years. This situation could not have been the intention of the law.

In the oft-cited case of Baker vs. Selden21, the United States Supreme Court held that only the expression of an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the copyright of a book which expounded on a new accounting system he had developed. The publication illustrated blank forms of ledgers utilized in such a system. The defendant reproduced forms similar to those illustrated in the plaintiff’s copyrighted book. The US Supreme Court ruled that:

"There is no doubt that a work on the subject of book-keeping, though only explanatory of well known systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x. But there is a clear distinction between the books, as such, and the art, which it is, intended to illustrate. The mere statement of the proposition is so evident that it requires hardly any argument to support it. The same distinction may be predicated of every other art as well as that of bookkeeping. A treatise on the composition and use of medicines, be they old or new; on the construction and use of ploughs or watches or churns; or on the mixture and application of colors for painting or dyeing; or on the mode of drawing lines to produce the effect of perspective, would be the subject of copyright; but no one would contend that the copyright of the treatise would give the exclusive right to the art or manufacture described therein. The copyright of the book, if not pirated from other works, would be valid without regard to the novelty or want of novelty of its subject matter. The novelty of the art or thing described or explained has nothing to do with the validity of the copyright. To give to the author of the book an exclusive property in the art described therein, when no examination of its novelty has ever been officially made, would be a surprise and a fraud upon the public. That is the province of letters patent, not of copyright. The claim to an invention of discovery of an art or manufacture must be subjected to the examination

of the Patent Office before an exclusive right therein can be obtained; and a patent from the government can only secure it.

The difference between the two things, letters patent and copyright, may be illustrated by reference to the subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of great value in the healing art. If the discoverer writes and publishes a book on the subject (as regular physicians generally do), he gains no exclusive right to the manufacture and sale of the medicine; he gives that to the public. If he desires to acquire such exclusive right, he must obtain a patent for the mixture as a new art, manufacture or composition of matter. He may copyright his book, if he pleases; but that only secures to him the exclusive right of printing and publishing his book. So of all other inventions or discoveries.

The copyright of a book on perspective, no matter how many drawings and illustrations it may contain, gives no exclusive right to the modes of drawing described, though they may never have been known or used before. By publishing the book without getting a patent for the art, the latter is given to the public.

x x x

Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book intended to convey instruction in the art, any person may practice and use the art itself which he has described and illustrated therein. The use of the art is a totally different thing from a publication of the book explaining it. The copyright of a book on bookkeeping cannot secure the exclusive right to make, sell and use account books prepared upon the plan set forth in such book. Whether the art might or might not have been patented, is a question, which is not before us. It was not patented, and is open and free to the use of the public. And, of course, in using the art, the ruled lines and headings of accounts must necessarily be used as incident to it.

The plausibility of the claim put forward by the complainant in this case arises from a confusion of ideas produced by the peculiar nature of the art described in the books, which have been made the subject of copyright. In describing the art, the illustrations and diagrams employed happened to correspond more closely than usual with the actual work performed by the operator who uses the art. x x x The description of the art in a book, though entitled to the benefit of copyright, lays no foundation for an exclusive claim to the art itself. The object of the one is explanation; the object of the other is use. The former may be secured by copyright. The latter can only be secured, if it can be secured at all, by letters patent." (underscoring supplied)

ON THE ISSUE OF TRADEMARK INFRINGEMENT

This issue concerns the use by respondents of the mark "Poster Ads" which petitioner’s president said was a contraction of "poster advertising." P & D was able to secure a trademark certificate for it, but one where the goods specified were "stationeries such as letterheads, envelopes, calling cards and newsletters."22 Petitioner admitted it did not commercially engage in or market these goods. On the contrary, it dealt in electrically operated backlit advertising units and the sale of advertising spaces thereon, which, however, were not at all specified in the trademark certificate.

Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs. Intermediate Appellate Court,23where we, invoking Section 20 of the old Trademark Law, ruled that "the certificate of registration issued by the Director of Patents can confer (upon petitioner) the exclusive right to use its own symbol only to those goods specified in the certificate, subject to any conditions and limitations specified in the certificate x x x. One who has adopted and used a trademark on his goods does not prevent the adoption and use of the same trademark by others for products which are of a different description."24 Faberge, Inc. was correct and was in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.25

Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure of P & D to secure a trademark registration for specific use on the light boxes meant that there could not have been any trademark infringement since registration was an essential element thereof.1âwphi1

ON THE ISSUE OF UNFAIR COMPETITION

If at all, the cause of action should have been for unfair competition, a situation which was possible even if P & D had no registration.26 However, while the petitioner’s complaint in the RTC also cited unfair competition, the trial court did not find private respondents liable therefor. Petitioner did not appeal this particular point; hence, it cannot now revive its claim of unfair competition.

But even disregarding procedural issues, we nevertheless cannot hold respondents guilty of unfair competition.

By the nature of things, there can be no unfair competition under the law on copyrights although it is applicable to disputes over the use of trademarks. Even a name or phrase incapable of appropriation as a trademark or tradename may, by long and exclusive use by a business (such that the name or phrase becomes associated with the business or product in the mind of the purchasing public), be entitled to protection against unfair competition.27 In this case, there was no evidence that P & D’s use of "Poster Ads" was distinctive or well-known. As noted by the Court of Appeals, petitioner’s expert witnesses himself had testified that " ‘Poster Ads’ was too generic a name. So it was difficult to identify it with any company, honestly speaking."28 This crucial admission by its own expert witness that "Poster Ads" could not be associated with P & D showed that, in the mind of the public, the goods and services carrying the trademark "Poster Ads" could not be distinguished from the goods and services of other entities.

This fact also prevented the application of the doctrine of secondary meaning. "Poster Ads" was generic and incapable of being used as a trademark because it was used in the field of poster advertising, the very business engaged in by petitioner. "Secondary meaning" means that a word or phrase originally incapable of exclusive appropriation with reference to an article in the market (because it is geographically or otherwise descriptive) might nevertheless have been used for so long and so exclusively by one producer with reference to his article that, in the trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his property.29 The admission by petitioner’s own expert witness that he himself could not associate "Poster Ads" with petitioner P & D because it was "too generic" definitely precluded the application of this exception.

Having discussed the most important and critical issues, we see no need to belabor the rest.

All told, the Court finds no reversible error committed by the Court of Appeals when it reversed the Regional Trial Court of Makati City.

WHEREFORE, the petition is hereby DENIED and the decision of the Court of Appeals dated May 22, 2001 is AFFIRMED in toto.

SO ORDERED.

Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

Footnotes

1 Penned by Associate Justice Salvador J. Valdez, Jr. and concurred in by Associate Justices Wenceslao L. Agnir and Juan Q. Enriquez Jr.

2 Penned by Judge Napoleon E. Inoturan.

3 Seventeenth Division; CA G.R. 55303.

4 Records, pp. 620-621.

5 Rollo, pp. 17-19, 21-22, 23-24, 26.

6 Rollo, p. 34.

7 18 C.J.S. 161.

8 Joaquin vs. Drilon, 302 SCRA 225 [1999].

9 Ibid.

10 Pp. 11-13, TSN, February 3, 1993.

11 G.R. No. 115758, March 19, 2002.

12 286 SCRA 13 [1998].

13 Id., at p. 21, citing Anchor Hocking Glass Corp. vs. White Cap Co., 47 F. Supp. A 451, and Bauer & Cie vs. O’Donnel, 229 US 1.

14 Bonito Boats, Inc. vs. Thunder Craft Boats, Inc., 489 US 141 [1989].

15 Id., at p. 156.

16 Ibid., at p. 10.

17 Bonito Boats, Inc. vs. Thunder Craft Boats, Inc., ibid., p. 150, citing U.S. vs. Dubilier Condenser Corp., 289 U.S. 178.

18 Aronson vs. Quick Point Pencil Co., 440 U.S. 257, 262 [1979], citing Kewanee Oil Co. vs. Bicron Corp., 416 U.S. 470 [1994], cited Amador, patents, p. 496.

19 Sears Roebuck vs. Stiffel, 376 US 225, 229 [1964].

20 Section 2, PD 49 (The Intellectual Property Decree).

21 101 US 102-105 [1879].

22 Exhibit "B," Original Records, p. 63.

23 215 SCRA 316 [1992].

24 Id., at p. 326.

25 336 SCRA 266 [2000].

26 Ogura vs. Chua, 59 Phil. 471.

27 Sapalo, The Law on Trademark Infringement and Unfair Competition, 2000 ed., p. 185.

28 Decision, p. 16, citing TSN, December 3, 1992, pp. 19-20.

29 Sapalo, at p. 92.

The Lawphil Project - Arellano Law Foundation

SECOND DIVISION

[G.R. No. 132604.  March 6, 2002]

VENANCIO SAMBAR, doing business under the name and style of CVS Garment Enterprises, petitioner, vs. LEVI STRAUSS & CO., and LEVI STRAUSS (PHIL.), INC., respondents.

D E C I S I O N

QUISUMBING, J.:

This petition for review on certiorari prays for the reversal of the decision dated January 30, 1998, of the Court of Appeals in CA-G.R. CV No. 51553.  That decision affirmed the decision in Civil Case No. 88-2220 of the Regional Trial Court, Branch 66, Makati City, making permanent the writ of preliminary injunction, ordering CVS Garment and Industrial Company (CVSGIC) and petitioner Venancio Sambar to pay private respondents jointly and solidarily the sum of P50,000 as temperate and nominal damages, P10,000 as exemplary damages, and P25,000 as attorney’s fees and litigation costs, and ordering the Director of the National Library to cancel Copyright Registration No. 1-1998 in the name of Venancio Sambar.

The facts are as follows:

On September 28, 1987, private respondents, through a letter from their legal officer, demanded that CVS Garment Enterprises (CVSGE) desist from using their stitched arcuate design on the Europress jeans which CVSGE advertised in the Manila Bulletin.

Atty. Benjamin Gruba, counsel of CVSGE, replied that the arcuate design on the back pockets of Europress jeans was different from the design on the back pockets of Levi’s jeans.  He further asserted that his client had a copyright on the design it was using.

Thereafter, private respondents filed a complaint against Sambar, doing business under the name and style of CVSGE.  Private respondents also impleaded the Director of the National Library.  Summons was sent to Sambar in his business address at 161-B Iriga corner Retiro, La Loma, Quezon City.

Atty. Gruba claimed that he erroneously received the original summons as he mistook it as addressed to his client, CVSGIC.  He returned the summons and the pleadings and manifested in court that CVSGE, which was formerly doing business in the premises, already stopped operation and CVSGIC took over CVSGE’s occupation of the premises.  He also claimed he did not know the whereabouts of Sambar, the alleged owner of CVSGE.

Thereafter, private respondents amended their complaint to include CVSGIC.  When private respondents learned the whereabouts of Sambar and CVSGE, the case was revived.

Private respondents alleged in their complaint that Levi Strauss and Co. (LS&Co.), an internationally known clothing manufacturer, owns the arcuate design trademark which was registered under U.S. Trademark Registration No. 404, 248 on November 16, 1943, and in the Principal Register of trademarks with the Philippine Patent Office under Certificate of Registration No. 20240 issued on October 8, 1973; that through a Trademark Technical Data and Technical Assistance Agreement with Levi Strauss (Phil.) Inc. (LSPI) in 1972, LS&Co. granted LSPI a non-exclusive license to use the arcuate trademark in its manufacture and sale of Levi’s pants, jackets and shirts in the Philippines; that in 1983, LS&Co. also appointed LSPI as its agent and attorney-in-fact to protect its trademark in the Philippines; and that sometime in 1987, CVSGIC and Venancio Sambar, without the consent and authority of private

respondents and in infringement and unfair competition, sold and advertised, and despite demands to cease and desist, continued to manufacture, sell and advertise denim pants under the brand name “Europress” with back pockets bearing a design similar to the arcuate trademark of private respondents, thereby causing confusion on the buying public, prejudicial to private respondents’ goodwill and property right.

In its answer, CVSGIC admitted it manufactured, sold and advertised and was still manufacturing and selling denim pants under the brand name of “Europress”, bearing a back pocket design of two double arcs meeting in the middle.  However, it denied that there was infringement or unfair competition because the display rooms of department stores where Levi’s and Europress jeans were sold, were distinctively segregated by billboards and other modes of advertisement.  CVSGIC avers that the public would not be confused on the ownership of such known trademark as Levi’s, Jag, Europress, etc.. Also, CVSGIC claimed that it had its own original arcuate design, as evidenced by Copyright Registration No. 1-1998, which was very different and distinct from Levi’s design.  CVSGIC prayed for actual, moral and exemplary damages by way of counterclaim.

Petitioner Venancio Sambar filed a separate answer.  He denied he was connected with CVSGIC.  He admitted that Copyright Registration No. 1-1998 was issued to him, but he denied using it.  He also said he did not authorize anyone to use the copyrighted design.  He counterclaimed for moral and exemplary damages and payment of attorney’s fees.

After hearing, the trial court issued a writ of preliminary injunction enjoining CVSGIC and petitioner from manufacturing, advertising and selling pants with the arcuate design on their back pockets. CVSGIC and petitioner did not appear during the October 13 and 27, 1993 hearings, when they were to present evidence.  Consequently, the trial court ruled that they waived their right to present evidence.

On May 3, 1995, the trial court rendered its decision.  The dispositive portion reads:

IN VIEW OF THE FOREGOING, judgment is hereby rendered:

a) making the writ of preliminary injunction permanent;

b) ordering the defendants CVS Garment and Industrial Company and Venancio Sambar to pay the plaintiffs jointly and solidarily the sum of P50,000.00 as temperate and nominal damages, the sum of P10,000.00 as exemplary damages, and the sum of P25,000.00 as attorney’s fees and litigation expenses and to pay the costs.

SO ORDERED.[1]

Private respondents moved for a reconsideration praying for the cancellation of petitioner’s copyright registration. The trial court granted reconsideration in its July 14, 1995 order, thus:

IN VIEW OF THE FOREGOING, judgment is hereby rendered:

a)  making the writ of preliminary injunction permanent;

b)  ordering the defendants CVS Garment and Industrial Company and Venancio Sambar to pay the plaintiffs jointly and solidarily the sum of P50,000.00 as temperate and nominal damages, the sum of P10,000.00 as exemplary damages, and the sum of P25,000.00 as attorney’s fees and litigation expenses and to pay the costs;

c)  ordering the Director of the National Library to cancel the Copyright Registration No. 1-1998 issued in the name of Venancio Sambar.[2]

Petitioner appealed to the Court of Appeals which on January 30, 1998 decided in favor of private respondents as follows:

WHEREFORE, the judgment appealed from is AFFIRMED in toto.

SO ORDERED.[3]

In this instant petition, petitioner avers that the Court of Appeals erred in:

I.   ...RULING THAT THERE WAS AN INFRINGEMENT OF RESPONDENT’S ARCUATE MARK.

II. ...RULING THAT PETITIONER IS JOINTLY AND SOLIDARILY LIABLE WITH CVS GARMENTS INDUSTRIAL CORPORATION FOR INFRINGEMENT OF RESPONDENT’S ARCUATE MARK.

III.            ...IN ORDERING, THERE BEING NO INFRINGEMENT OR UNFAIR COMPETITION, THE AWARD OF DAMAGES AND CANCELLATION OF COPYRIGHT REGISTRATION NO. 1-1998 ISSUED IN THE NAME OF PETITIONER.[4]

Briefly, we are asked to resolve the following issues:

1.  Did petitioner infringe on private respondents’ arcuate design?

2. Must we hold petitioner solidarily liable with CVS Garments Industrial Corporation?

3. Are private respondents entitled to nominal, temperate and exemplary damages and cancellation of petitioner’s copyright?

On the first issue, petitioner claims that he did not infringe on private respondents’ arcuate design because there was no colorable imitation which deceived or confused the public.  He cites Emerald Garment Manufacturing Corporation vs. Court of Appeals, G.R. No. 100098, 251 SCRA 600 (1995), as authority.  He disagreed with the Court of Appeals that there were confusing similarities between Levi’s and Europress’ arcuate designs, despite the trial court’s observation of differences in them.  Petitioner maintains that although the backpocket designs had similarities, the public was not confused because Levi’s jeans had other marks not found in Europress jeans.  Further, he says Levi’s long history and popularity made its trademark easily identifiable by the public.

In its comment, private respondents aver that the Court of Appeals did not err in ruling that there was infringement in this case.  The backpocket design of Europress jeans, a double arc intersecting in the middle was the same as Levi’s’ mark, also a double arc intersecting at the center.  Although the trial court found differences in the two designs, these differences were not noticeable.  Further, private respondents said, infringement of trademark did not require exact similarity.  Colorable imitation enough to cause confusion among the public, was sufficient for a trademark to be infringed.  Private respondents explained that in a market research they conducted with 600 respondents, the result showed that the public was confused by Europress trademark vis the Levi’s trademark.

We find that the first issue raised by petitioner is factual.  The basic rule is that factual questions are beyond the province of this Court in a petition for review.  Although there are exceptions to this rule, this case is not one of them.[5] Hence, we find no reason to disturb the findings of the Court of Appeals that Europress’ use of the arcuate design was an infringement of the Levi’s design.

On the second issue, petitioner claims that private respondents did not show that he was connected with CVSGIC, nor did they prove his specific acts of infringement to make him liable for damages.  Again, this is a factual matter and factual findings of the trial court, concurred in by the Court of Appeals, are final and binding on this Court.[6] Both the courts below found that petitioner had a copyright over Europress’ arcuate design and that he consented to the use of said design by CVSGIC.  We are bound by this finding, especially in the absence of a showing that it was tainted with arbitrariness or palpable error. [7] It must be stressed that it was immaterial whether or not petitioner was connected with CVSGIC.   What is

relevant is that petitioner had a copyright over the design and that he allowed the use of the same by CVSGIC.

Petitioner also contends that the Court of Appeals erred when it said that he had the burden to prove that he was not connected with CVSGIC and that he did not authorize anyone to use his copyrighted design.  According to petitioner, these are important elements of private respondents’ cause of action against him, hence, private respondents had the ultimate burden of proof.

Pertinent is Section 1, Rule 131 of the Rules of Court [8] which provides that the burden of proof is the duty of a party to prove the truth of his claim or defense, or any fact in issue by the amount of evidence required by law.  In civil cases, the burden of proof may be on either the plaintiff or the defendant.   It is on the latter, if in his answer he alleges an affirmative defense, which is not a denial of an essential ingredient in the plaintiff’s cause of action, but is one which, if established, will be a good defense – i.e., an “avoidance” of the claim, which prima facie, the plaintiff already has because of the defendant’s own admissions in the pleadings.[9]

Petitioner’s defense in this case was an affirmative defense.  He did not deny that private respondents owned the arcuate trademark nor that CVSGIC used on its products a similar arcuate design.  What he averred was that although he owned the copyright on the Europress arcuate design, he did not allow CVSGIC to use it.  He also said he was not connected with CVSGIC.  These were not alleged by private respondents in their pleadings, and petitioner therefore had the burden to prove these.

Lastly, are private respondents entitled to nominal, temperate and exemplary damages and cancellation of petitioner’s copyright?

Petitioner insists that he had not infringed on the arcuate trademark, hence, there was no basis for nominal and temperate damages.  Also, an award of nominal damages precludes an award of temperate damages.  He cites Ventanilla vs. Centeno, G.R. No. L-14333, 1 SCRA 215 (1961) on this.  Thus, he contends, assuming arguendo that there was infringement, the Court of Appeals still erred in awarding both nominal and temperate damages.

Petitioner likewise said that the grant of exemplary damages was inconsistent with the trial court’s finding that the design of Europress jeans was not similar to Levi’s design and that no pecuniary loss was suffered by respondents to entitle them to such damages.

Lastly, petitioner maintains that as Europress’ arcuate design is not a copy of that of Levi’s, citing the trial court’s findings that although there are similarities, there are also differences in the two designs, cancellation of his copyright was not justified.

On this matter, private respondents assert that the lower courts found that there was infringement and Levi’s was entitled to damages based on Sections 22 and 23 of RA No. 166 otherwise known as the Trade Mark Law,[10] as amended, which was the law then governing.  Said sections define infringement and prescribe the remedies therefor.  Further, private respondents aver it was misleading for petitioner to claim that the trial court ruled that private respondents did not suffer pecuniary loss, suggesting that the award of damages was improper.  According to the private respondents, the trial court did not make any such ruling.  It simply stated that there was no evidence that Levi’s had suffered decline in its sales because of the use of the arcuate design by Europress jeans.  They offer that while there may be no direct proof that they suffered a decline in sales, damages may still be measured based on a reasonable percentage of the gross sales of the respondents, pursuant to Section 23 of the Trademark law. [11]

Finally, regarding the cancellation of petitioner’s copyright, private respondents deny that the trial court ruled that the arcuate design of Europress jeans was not the same as Levi’s arcuate design jeans. On the contrary, the trial court expressly ruled that there was similarity.  The cancellation of petitioner’s copyright was justified because petitioner’s copyright can not prevail over respondents’ registration in the Principal Register of Bureau of Patents, Trademarks, and Technology Transfer.  According to private respondents, the essence of copyright registration is originality and a copied design is inherently non-copyrightable.  They insist that registration does not confer originality upon a copycat version of a prior design.

From the foregoing discussion, it is clear that the matters raised by petitioner in relation to the last issue are purely factual, except the matter of nominal and temperate damages.  Petitioner claims that damages are not due private respondents and his copyright should not be cancelled because he had not infringed on Levi’s trademark.  Both the trial court and the Court of Appeals found there was infringement.  Thus, the award of damages and cancellation of petitioner’s copyright are appropriate.[12] Award of damages is clearly provided in Section 23, [13] while cancellation of petitioner’s copyright finds basis on the fact that the design was a mere copy of that of private respondents’ trademark.  To be entitled to copyright, the thing being copyrighted must be original, created by the author through his own skill, labor and judgment, without directly copying or evasively imitating the work of another.[14]

However, we agree with petitioner that it was error for the Court of Appeals to affirm the award of nominal damages combined with temperate damages[15] by the Regional Trial Court of Makati.  What respondents are entitled to is an award for temperate damages, not nominal damages.  For although the exact amount of damage or loss can not be determined with reasonable certainty, the fact that there was infringement means they suffered losses for which they are entitled to moderate damages. [16] We find that the award of P50,000.00 as temperate damages fair and reasonable, considering the circumstances herein as well as the global coverage and reputation of private respondents Levi Strauss & Company and Levi Strauss (Phil.), Inc.

WHEREFORE, the decision dated January 30, 1998, of the Court of Appeals, in CA-G.R. CV No. 51553 AFFIRMING the judgment of the Regional Trial Court of Makati, Branch 66, dated July 14, 1995, is hereby MODIFIED so that nominal damages are deleted but the amount of P50,000 is hereby awarded only as TEMPERATE DAMAGES.  In all other respects, said judgment is hereby AFFIRMED, to wit: 

a)  the writ of preliminary injunction is made permanent;

b)  the defendants CVS Garment and Industrial Company and Venancio Sambar are ordered also to pay the plaintiffs jointly and solidarily the sum of P10,000.00 as exemplary damages, and the sum ofP25,000.00 as attorney’s fees and litigation expenses, and to pay the costs; and

c) the Director of the National Library is ordered to cancel the Copyright Registration No. 1-1998 issued in the name of Venancio Sambar.

SO ORDERED.

Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr.,  JJ., concur.

[1] RTC Records, p. 260.[2] Id. at 274-275.[3] Rollo, p. 20.[4] Id. at 34.[5] Salcedo vs. People, G.R. No. 137143, 347 SCRA 499, 504-505 (2000).[6] Id. at 1.[7] David vs. Manila Bulletin Publishing Company, Inc., G.R. No. 139272, 347 SCRA 68, 69 (2000).[8] Section 1, Rule 131: Burden of Proof. - Burden of proof is the duty of a party to present evidence on the facts in issue necessary to establish his claim or defense by the amount of evidence required by law.[9] Paras. Rules of Court 448 (Third Edition, 2000).[10] Section 22. Infringement, what constitutes. Any person who shall use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name

in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source of such business; or reproduce, counterfeit, copy or colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or services, shall be liable to a civil action by the registrant for any or all the remedies herein provided.

Section 23. Actions, and damages and injunction for infringement. - Any person entitled to the exclusive use of a registered mark or trade-name may recover damages in a civil action from any person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his said rights, or the profit which the defendant actually made out of the infringement, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant of the value of the services in connection with which the mark or trade-name was used in the infringement of the rights of the complaining party. In cases where actual intent to mislead the public or to defraud the complaining party shall be shown, in the discretion of the court, the damages may be doubled.

The complaining party, upon proper showing, may also be granted injunction.[11] Ibid.[12] Heirs of Crisanta Y. Gabriel-Almoradie vs. Court of Appeals, G.R. No. 91385, 229 SCRA 15, 30 & 34 (1994).[13] See note 10.[14] Hoffman vs. Le Traunik, 209 Federal Reporter 375, 379 (1913).[15] Ventanilla vs. Centeno, No. L-14333, 1 SCRA 215, 216 (1961).[16] Art. 2224, Civil Code: Temperate or moderate damages, which are more than nominal but less than compensatory damages, may be recovered where the court finds that some pecuniary loss has been suffered but its amount can not, from the nature of the case, be proved with certainty.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 130360      August 15, 2001

WILSON ONG CHING KlAN CHUAN, petitioner, vs.HON. COURT OF APPEALS and LORENZO TAN, respondents.

QUISUMBING, J.:

This petition for review1 seeks to annul the decision2 dated August 27, 1997 of the Court of Appeals which set aside the resolutions3 dated October 13 and December 15, 1993 as well as the order dated March 1, 1994 of the Regional Trial Court of Quezon City, Branch 94.4

Petitioner Wilson Ong Ching Kian Chuan ("Ong"), imports vermicelli from China National Cereals Oils and Foodstuffs Import and Export Corporation, based in Beijing, China, under the firm name C.K.C. Trading. He repacks it in cellophane wrappers with a design of two-dragons and the TOWER trademark on the uppermost portion. Ong acquired a Certificate of Copyright Registration from the National Library on June 9, 1993 on the said design.

Ong discovered that private respondent Lorenzo Tan repacked his vermicelli he imports from the same company but based in Qingdao, China in a "nearly" identical wrapper. On September 16, 1993, Ong filed against Tan a verified complaint for infringement of copyright with damages and prayer for temporary restraining order or writ of preliminary injunction with the Regional Trial Court in Quezon City. Ong alleged that he was the holder of a Certificate of Copyright Registration over the cellophane wrapper with the two-dragon design, and that Tan used an identical wrapper in his business. In his prayer for a preliminary injunction in addition to damages, he asked that Tan be restrained from using the wrapper. He said he would post a bond to guarantee the payment of damages resulting from the issuance of the writ of preliminary injunction.1âwphi1.nêt

The trial court issued a temporary restraining order on the same date the complaint was filed. Tan filed an opposition to Ong's application for a writ of preliminary injunction with counter-application for the issuance of a similar writ against Ong. Tan alleged that Ong was not entitled to an injunction. According to Tan, Ong did not have a clear right over the use of the trademark Pagoda and Lungkow vermicelli as these were registered in the name of CHINA NATIONAL CEREALS OIL AND FOODSTUFFS IMPORT AND EXPORT CORPORATION, SHANDONG CEREALS AND OILS BRANCH (hereafter Ceroilfood Shandong), based in Qingdao, China. Further, Tan averred that he was the exclusive distributor in the Philippines of the Pagoda and Lungkow vermicelli and was solely authorized to use said trademark. He added that Ong merely copied the two-dragon design from Ceroilfood Shandong which had the Certificates of Registration issued by different countries. He concluded that Ong's Certificate of Copyright Registration was not valid for lack of originality.

On September 30, 1993, Ong countered Tan's opposition to the issuance of the writ of preliminary injunction.

On October 13, 1993, the could issued the writ in Ong's favor upon his filing of a P100,000.00 bond.5

Tan filed a motion to dissolve the writ of preliminary injunction, but the trial court denied it on December 15, 1993.6The motion for reconsideration was also denied on March 1, 1994.

Tan elevated the case to the Court of Appeals via a special civil action for certiorari with a prayer for the issuance of a TRO and/or writ of preliminary injunction. Ong filed an opposition to Tan's prayer for an issuance of TRO and/or writ of preliminary injunction on the ground that the trial court did not commit a grave abuse of discretion in issuing the writ in his favor.

After oral argument, the Court of Appeals rendered a decision on August 8, 1994, setting aside the trial court's order. It decreed:

WHEREFORE, in the petition is GIVEN, DUE COURSE, and, GRANTED. The order dated October 13, 1993 and related orders, as well as the writ of preliminary injunction issued by the respondent court, are SET ASIDE as issued with grave abuse of discretion. No costs.

SO ORDERED.7

Ong filed a motion for reconsideration and on January 3, 1995, the Court of Appeals modified its August 8, 1994 order as follows:

WHEREFORE the phrase "the order dated October 13, 1993 and related orders, as well as the writ of preliminary injunction issued by the respondent court, are SET ASIDE as issued with grave abuse of discretion" is hereby deleted in our resolution dated 08 August 1994. In all other respects, said resolution must be maintained.

However, let a writ of preliminary injunction be issued enjoining the herein respondents and any and all persons acting for and in their behalf from enforcing and/or implementing the Writ of Preliminary Injunction issued on October 15, 1993 pursuant to the Resolution dated October 13, 1993 of the PUBLIC RESPONDENT in Civil Case No. Q-93-17628 entitled "WILSON ONG CHING KIAN CHUAN, ETC. vs. LORENZO TAN, ETC." upon petitioner's filing of a bond of P200,000.00.

The Branch Clerk of Court of the RTC, Branch 94, Quezon City is directed to elevate the records of Civil Case No. 293-17128 within TEN (10) DAYS from notice.

The parties are given THIRTY (30) DAYS from notice to file their memorandum or any pertinent manifestation on the matter, after which the case shall be considered submitted for decision.

SO ORDERED.8

Pursuant to the Court of Appeals' resolution on January 16, 1996, the parties submitted their memoranda. On August 27, 1997, the appellate court promulgated its decision, decreeing as follows:

WHEREFORE, the resolutions dated October 13, 1993 and December 15, 1993 as well as the order dated March 1, 1994 - all in Civil Case No. Q-93-17628 are hereby SET ASIDE and our injunction heretofore issued made permanent.

IT IS SO ORDERED.9

On October 17, 1997, Ong filed the instant petition for review, claiming that the Court of Appeals committed grave and serious errors tantamount to acting with grave abuse of discretion and/or acting without or in excess of its jurisdiction:

I. ...WHEN IT ISSUED A PERMANENT PRELIMINARY INJUNCTION IN FAVOR OF THE PRIVATE RESPONDENT WHEN THE LATTER'S RIGHT TO SUCH A RELIEF IS NOT CLEAR, DOUBTFUL AND HAS NO LEGAL OR FACTUAL BASIS.

A. CERTIFICATE OF COPYRIGHT REGISTRATION JUSTIFY ISSUANCE OF WRIT OF PRELIMINARY INJUNCTION UNDER P.D. NO. 49.

B. ISSUANCE OF PRELIMINARY INJUNCTION MUST BE BASED ON CLEAR AND UNMISTAKABLE RIGHT WHICH PETITIONER HAD AND WHICH RIGHT WAS INVADED BY THE PRIVATE RESPONDENT.

C. COURT OF APPEALS' DECISION OF AUGUST 8, 1994 AND ITS RESOLUTION OF JANUARY 3, 1995 RESULTS IN CONFUSION.

II. ...BY 'INTERFERING' WITH THE JUDICIAL DISCRETION OF THE TRIAL COURT.

A. RESPONDENT COURT OF APPEALS' INTERFERENCE WITH THE DISCRETION OF TRIAL COURT CONSTITUTES GRAVE ABUSE OF DISCRETION.

III. ...BY ISSUING A WRIT OF PRELIMINARY INJUNCTION IN FAVOR OF THE PRIVATE RESPONDENT AND DISREGARDING THE WRIT OF PRELIMINARY INJUNCTION ISSUED BY THE TRIAL COURT WHOM (SIC), UNDER THE JANUARY 13, 1995 RESOLUTION OF RESPONDENT COURT OF APPEALS, WAS JUDICIALLY HELD NOT TO HAVE COMMITTED ANY GRAVE ABUSE OF DISCRETION IN THE ISSUANCE OF THE OCTOBER 13, 1993 AND 'RELATED ORDERS'.

A. ISSUANCE OF WRIT OF PRELIMINARY INJUNCTION ADDRESSED TO THE SOUND DISCRETION OF THE TRIAL COURT.

IV. ...WHEN IT MADE ITS OWN FINDINGS AND CONCLUSIONS, PRE-EMPTING THE TRIAL COURT AND PRE-JUDGING THE CASE, THUS LEAVING THE TRIAL COURT WITH NOTHING TO RULE UPON.

"A. COURT OF APPEALS PREJUDGED THE CASE REMANDED TO THE TRIAL COURT

The issues for our determination are: Was the issuance of the writ of preliminary injunction proper? Was there grave abuse of discretion committed by the Court of Appeals when it set aside the order of the trial court, then issued a judgment touching on the merits?

Petitioner avers that the CA erred in issuing a preliminary injunction in private respondent's favor. He says, firstly, that he is more entitled to it. He states that as holder of the Certificate of Copyright Registration of the twin-dragon design, he has the protection of P.D. No. 49.10 Said law allows an injunction in case of infringement. Petitioner asserts that private respondent has no registered copyright and merely relies on the trademark of his principal abroad, which insofar as Philippine laws is concerned, cannot prevail over petitioner's copyright.

Private respondent, for his part, avers that petitioner has no "clear right" over the use of the copyrighted wrapper since the PAGODA trademark and label were first adopted and used and have been duly registered by Ceroilfood Shandong not only in China but in nearly 20 countries and regions worldwide. Petitioner was not the original creator of the label, but merely copied the design of Ceroilfood Shandong. Private respondent presented copies of the certificates of copyright registration in the name of Ceroilfood Shandong issued by at least twenty countries and regions worldwide which although unauthenticated are,

according to him, sufficient to provide a sampling of the evidence needed in the determination of the grant of preliminary injunction.11 Private respondent alleges, that the trademark PAGODA BRAND was registered in China on October 31, 197912 while the trademark LUNGKOW VERMICELLI WITH TWO-DRAGON DEVICE was registered on August 15, 1985.13

To resolve this controversy, we have to return to basics. A person to be entitled to a copyright must be the original creator of the work. He must have created it by his own skill, labor and judgment without directly copying or evasively imitating the work of another.14 The grant of preliminary injunction in a case rests on the sound discretion of the court with the caveat that it should be made with extreme caution.15 Its grant depends chiefly on the extent of doubt on the validity of the copyright, existence of infringement, and the damages sustained by such infringement.16 In our view, the copies of the certificates of copyright registered in the name of Ceroilfood Shandong sufficiently raise reasonable doubt. With such a doubt preliminary injunction is unavailing.17 In Medina vs. City Sheriff, Manila, 276 SCRA 133, 139 (1997), where the complainant's title was disputed, we held that injunction was not proper.

Petitioner Ong argues that the Court of Appeals erred and contradicted itself in its January 3, 1995 Resolution, where it deleted the phrase "the order dated October 13, 1993 and related orders, as well as the writ of preliminary injunction issued by the respondent court, are SET ASIDE as issued with grave abuse of discretion" in its August 8, 1994 decision, and at the same time issued a writ of preliminary injunction in Tan's favor.

Ong's claim (that the Court of Appeals In deleting the aforequoted phrase in the August 8, 1994 decision abandoned its earlier finding of grave abuse of discretion on the part of the trial court), however, is without logical basis. The appellate court merely restated In its own words the issue raised in the petition: from a) whether the RTC committed grave abuse of discretion, to b) whether Tan was entitled to an injunctive relief. Then it clarified that the relief sought is a prohibition against Ong and his agents from enforcing the writ of preliminary injunction. Properly understood, an order enjoining the enforcement of a writ of preliminary injunction issued by the RTC in a certiorari proceeding under Rule 65 of the Rules of Court effectively, sets aside the RTC order for being issued with grave abuse of discretion.

To be entitled to an injunctive writ, petitioner must show, inter alia, the existence of a clear and unmistakable right and an urgent and paramount necessity for the writ to prevent serious damage.18 From the above discussion, we find that petitioner's right has not been clearly and unmistakably demonstrated. That right is what is in dispute and has yet to be determined. In Developers Group of Companies, Inc. vs. Court of Appeals, 219 SCRA 715, 722-723 (1993), we held that in the absence of proof of a legal right   and the injury sustained by the plaintiff, an order of the trial court granting the issuance of an injunctive writ will be set aside, for having been issued with grave abuse of discretion. Conformably, there was no abuse of discretion by the Court of Appeals when it issued its own order to restrain the enforcement of the preliminary injunction issued by the trial court.

Finally, we note that the complaint initially filed with the RTC was for infringement of copyright. The trial court's resolution subject of Tan's petition under Rule 65 before the CA concerns the correctness of the grant of the writ of preliminary injunction. The only issue brought before the CA involved the grave abuse of discretion allegedly committed by the trial court in granting the writ of preliminary injunction. The Court of Appeals in declaring that the wrapper of petitioner is a copy of Ceroilfood Shandong's wrapper went beyond that issue touched on the merits of the infringement case, which remains to be decided by the trial court.19 In our view, it was premature for the Court of Appeals to declare that the design of petitioner's wrapper is a copy of the wrapper allegedly registered by Ceroilfood Shandong. That matter remains for decision after appropriate proceedings at the trial court.

WHEREFORE, the instant petition is PARTIALLY GRANTED. The prayer for a writ of preliminary injunction to prohibit Tan from using the cellophane wrapper with two-dragon device is denied, but the finding of the respondent appellate court that Ong's copyrighted wrapper is a copy of that of Ceroilfood Shandong is SET ASIDEfor being premature. The Regional Trial Court of Quezon City, Branch 94, is

directed to proceed with the trial to determine the merits of Civil Case No. 33779 expeditiously. Let the records of this case be REMANDED to said trial court promptly.

No pronouncement as to costs.1âwphi1.nêt

SO ORDERED

Bellosillo, Mendoza, Buena, De Leon, JJ. concur.

Footnotes

1 Rollo, pp. 11-20.

2 Id. at 34-38.

3 Id. at 50-55.

4 Id. at 34-49.

5 Id. at 50-53.

6 Id. at 54-55.

7 Id. at 23.

8 Id. at 72-73.

9 Id. at 48.

10 PD 49, Chapter 1, Sec. 2. The rights granted by this Decree shall, from the moment of creation, subsist, with respect to any of the following classes of works:

xxx

(0) Prints, pictorial, illustrations, advertising copies, labels, tags, and box wraps.

Chapter II, Article VI. Sec. 28. Any person infringing a copyright shall be liable:

(a) To an injunction restraining such infringement.

11 Syndicated Media Access Corporation. et al. vs. CA, et al., 219 SCRA 794, 798 (1993).

12 CA Rollo, p. 51.

13 Ibid.

14 Hoffman vs. Le Traunik, 209 Federal Reporter 375, 379.

15 Bataclan vs. CA. et al., 175 SCRA 764, 770 (1989).

16 18 CJS 241, citing Boosey vs. Empire Music Co., 224 F 646 and Sweet vs. Bromley. 154 F 754.

17 18 CJS 242.

18 Arcega vs. CA. et al., 275 SCRA 176, 180 (1997).

19 See Developers Group of Companies Inc. vs. CA. 219 SCRA 715, 722 (1993).

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 131502               June 8, 2000

WILSON ONG CHING KIAN CHUNG and THE DIRECTOR OF THE NATIONAL LIBRARY, petitioners, vs.CHINA NATIONAL CEREALS OIL AND FOODSTUFFS IMPORT AND EXPORT CORP., CEROILFOOD SHANDONG CEREAL AND OILS and BENJAMIN IRAO, JR., respondents.

BUENA, J.:

This is an appeal by way of a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure of the Decision 1 in Civil Case No. 94-68836 dated November 20, 1997 of the Regional Trial Court, Branch 33, Manila, which rendered a judgment on the pleadings against herein petitioners, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs, and against defendant:

1. Decreeing the cancellation or annulment of the Copyrighted Registration No. 0-93-491 of defendant WILSON ONG;

2. Directing defendant Director of the National Library to effect the cancellation or annulment of the Copyrighted Registration No. 0-93-491 of defendant WILSON ONG; and

Damages cannot be awarded to Plaintiffs as no evidence was presented to substantiate their claims.

With costs against defendant WILSON ONG.

SO ORDERED. 2

The antecedent facts are undisputed.

On September 16, 1993, petitioner Wilson Ong Ching Kian Chuan, doing business under the firm name of C.K.C. Trading, filed a Complaint for Infringement of Copyright with prayer for writ of injunction before the Regional Trial Court, Branch 94 of Quezon City (hereinafter Quezon City Court) against Lorenzo Tan, doing business under the firm name Mcmaster International Sales, and docketed as Q-93-17628. On the same day, said court issued a temporary restraining order enjoining the defendant, his distributors and retailers from selling vermicelli (sotanghon) "using the plaintiffs copyrighted cellophane wrapper with the two-dragons designed label, and setting the hearing of the injunctive relief for September 21, 1993".1âwphi1.nêt

On October 13, 1993, the Quezon City Court issued a Resolution which granted a writ of preliminary injunction in favor of the petitioner, denied therein defendant's application for a writ of preliminary injunction and, issues having been joined, set the case for pre-trial on November 12, 1993. On December 15, 1993, the Quezon City Court denied defendant's motion for dissolution of the writ off preliminary injunction.

On January 5, 1994, the China National Cereals Oils & Foodstuffs Import and Export Corporation (CEROILFOOD SHANDONG), and Benjamin Irao, Jr., as representative and attorney-in-fact of CEROILFOOD SHANDONG, herein respondents, filed a complaint 3 for Annulment/Cancellation of Copyrighted Certificate No. Q-93-491 and damages with prayer for restraining order/writ of preliminary injunction before the Regional Trial Court of Manila, (hereinafter Manila Court) against Wilson Ong Ching Kian Chuan, doing business under the firm name and style C.K.C. Trading and the Director of the National Library, docketed as Civil Case No. 94-68836.

On January 7, 1994, judge Rodolfo G. Palattao of the Manila Court issued a temporary restraining order 4enjoining petitioner from using his copyrighted labels and selling his vermicelli products which is similar to that of respondents'. On January 14, 1994, petitioner filed a motion to dissolve temporary restraining order 5 praying that the complaint be dismissed on the following grounds: 1) litis pendentia, 2.) the issue involved is one of copyright under PD No. 49 and does not involve trademarks under Republic Act 166, 3.) courts of co-equal and coordinate jurisdiction cannot interfere with the orders of other courts having the same power and jurisdiction, 4.) plaintiff CEROILFOOD SHANDONG, being a foreign corporation and with no license to do business in the Philippines, has no legal capacity to sue, and 5.) courts should not issue injunctions which would in effect dispose of the main case without trial.

On January 27, 1994, the Manila Court issued an Order 6 granting a writ of preliminary injunction in favor of respondents and denying petitioner's motion to dismiss.

On January 31, 1994, petitioner filed before the Court of Appeals a petition for certiorari docketed as CA - G.R. SP No. 33178, seeking for the annulment of the January 27, 1994 Order of the Manila Court.

On July 22, 1994, after the parties have expounded their respective positions by way of their comment, reply and rejoinder, the Court of Appeals rendered its Decision, 7 the dispositive portion of which reads:

WHEREFORE, the instant petition is hereby GRANTED, and as prayed for by petitioner, the Order dated January 27, 1994 issued in Civil Case 94-68836 by Branch 33, Regional Trial Court, National Capital Judicial Region, Manila, is hereby ANNULLED and SET ASIDE, although the prayer for dismissal of the complaint in Manila may be pursued before said court during the proceedings.

In the same Decision, the Court of Appeals ruled that the case was dismissible on grounds of litis pendentia, multiplicity of suits, and forum shopping.

On September 5, 1994, the Court of Appeals denied respondents' motion for reconsideration. 8 The Court of Appeals' Decision became final on October 3, 1994. Entry of Judgment 9 was made on November 15, 1994.

On November 21, 1994, petitioner filed a motion 10 praying for the dismissal of the Manila case on the strength of the findings of the Court of Appeals, particularly on "forum shopping." In an Order 11 dated March 8, 1995, the Manila Court held in abeyance the resolution of the motion to dismiss until further reception of evidence, stating therein that the dispositive portion of the Court of Appeals Decision did not order the dismissal of the case. In the meantime, respondents filed a motion to declare petitioners in default for failing to file an Answer despite the March 8 Order, which motion was opposed by petitioners, there being at that time a pending motion to dismiss which the court a quo refused to resolve on the merits.

In an Order 12 dated July 19, 1996, the Manila court denied the motion to declare petitioners in default, admittedmotu proprio the motion to dismiss filed by petitioner as its answer, and directed the parties to submit their respective pre-trial briefs.

On September 17, 1996, petitioner filed a "Motion for the Issuance of a Writ of Execution" 1 praying that a motion for execution dismissing the Manila case be issued, and citing Atty. Benjamin Irao, Jr., counsel of CEROILFOOD SHANDONG and his co-counsel, Atty. Antonio Albano, guilty of forum shopping, pursuant to the Decision of the Court of Appeals in CA-G.R. SP. No. 33178.

On January 23, 1997, respondents filed before the Manila court a Supplement To Motion For Judgment On The Pleadings, claiming that petitioner failed to tender an issue. 14

On November 20, 1997, Judge Rodolfo G. Palattao of the Manila Court rendered a Judgment on the Pleadings in favor of respondents, and ruled that litis pendentia, multiplicity of suits, and forum shopping were not present in the case.

Hence, the present appeal on pure questions of law.

Petitioners raise the following issues:

I

Whether or not the legal pronouncements of the Court of Appeals in CA-G.R. SP No. 33178 that the Manila case is dismissible on grounds of litis pendentia, multiplicity of suits and forum shopping constitute the "Law of the Case."

II

Whether or not the Regional Trial Judge of Branch 33, Manila erred in not applying the law of the case.

III

Whether or not the court a quo can review the legal conclusions of an appellate court in the same case, on issues squarely submitted to and passed upon by the appellate court under identical set of facts and circumstances obtaining in the court a quo.

IV

Whether or not the court a quo erred in motu proprio considering a motion to dismiss as the answer to the complaint and, thereafter, render a judgment on the pleadings on the ground that the motion to dismiss did not tender an issue. 15

In support thereof, petitioners quote the ruling of the Court of Appeals on the issue of whether there was litis pendentia and multiplicity of suits in the present case, as follows:

The Manila court should have considered also that Civil Case Q-93-17628 involves practically the same parties, same subject-matter and same relief as in Civil Case 0-94-68836. Petitioner filed the first case on September 16, 1993, for INFRINGEMENT OF HIS REGISTERED COPYRIGHT, which covers the cellophane wrapper that he uses in packaging the vermicelli which he imports from the CHINA NATIONAL CEREALS OILS & FOODSTUFFS IMPORT AND EXPORT CORPORATION BASED IN BEIJING, CHINA, the main or the principal of private respondent CEROILFOOD SHANDONG, the latter being the "branch" of CEROILFOOD in Quingdao, China, and of which in Civil Case Q-93-17628, LORENZO TAN avers in his answer he is the "exclusive and sole distributor." In Civil Case 94-68836 subsequently filed in Manila, on January 5, 1994, LORENZO TAN admitted that he is the "sole distributor" of plaintiff China National Cereals Oil and Foodstuffs Import and Export Corporation of the latter's PAGODA BRAND vermicelli

products. Atty. Benjamin Irao, Jr., the attorney of private respondents, also the attorney-in-fact of Ceroilfood Shandong, admitted that his principal "does not do business in the Philippines," and named LORENZO TAN as his principal's "exclusive distributor" of said product in the Philippines. Thus, Lorenzo Tan in both Civil Cases Q-93-17628 and 94-68836 appears as principal defendant in the first, and as sole distributor of Cereal Food Shandong, in the second. Indicatively, he is defending and complaining substantively the same rights and interests in both cases, and in effect there is identity of parties representing the same interests. While it is against TAN with whom the QC RTC issued an injunction, that writ should also apply to CEROILFOOD SHANDONG, as Tan is its exclusive and sole distributor in the Philippines, as private respondent corporation does business in the Philippines through TAN who imports his vermicelli wholly from said foreign corporation. And most importantly, TAN asserts rights to the trademark PAGODA, also allegedly owned by CEROILFOOD between TAN and CEROILFOOD SHANDONG that he is its corporate distributor. Also in 93-17628, petitioner's prayer for injunction is based on his registered copyright certificate, while TAN averred in his answer thereon that petitioner's copyright should be annulled and cancelled, and also prayed for injunction. In 94-68836, private respondent CEROILFOOD SHANDONG, as plaintiff, also prayed for "ANNULMENT AND CANCELLATION OF COPYRIGHT CERTIFICATE No. 0-93-491 WITH DAMAGES AND PRAYER FOR RESTRAINING ORDER/WRIT OF PRELIMINARY INJUNCTION." As can well be seen from those pertinent allegations/averments/prayers in both cases, they are identical with each other. They involved one and the same CERTIFICATE OF COPYRIGHT REGISTRATION. Though the first case is for INFRINGEMENT of copyright registration, while the second is for ANNULMENT AND CANCELLATION of the same copyright, since the first involves a breach, infraction, transgression, and the second for invalidation, discontinuance, termination and suppression of the same copyright certificate, what the first seeks to preserve is the exclusive use of the copyright, and the second seeks to terminate the very use of the same copyright by the registrant/owner. Though the quest of petitioner and private respondents in the two cases are aimed towards different ends — the first to uphold the validity and effectiveness of the same copyright, the second is merely a consequence of the first, — the real matter in controversy can be fully determined and resolved before the Quezon City court, and would render the Manila case a surplus age and also constitutes multiplicity of suits and dismissible on that ground, although such dismissal should be considered as without prejudice to the continuance of the proceedings before the Quezon City court. (pp. 8-10, CA Decision, Annex "B" of the Petition)

On the issue of forum shopping, the Court of Appeals ruled further, thus:

Finally, the Manila court should also have considered forum shopping as a third drawback to private respondent's cause. It is a term originally used to denominate a litigant's privilege of choosing the venue of his action where the law allows him to do so, or of an "election of remedies" of one of two or more co-existing rights. In either of which situations, the litigant actually shops for a forum of his action. However, instead of making a choice of the forum of their actions, litigants through the encouragement of their lawyers, file their actions on all available courts, or invoke irrelevant remedies simultaneously, or even file actions one after the other, a practice which had not only resulted conflicting adjudications among different courts, confusion inimical to an orderly administration of justice and created extreme inconvenience to some of the parties to the action. And thus it has been held in Villanueva vs. Andres, 172 SCRA 876, that forum shopping applies whenever as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari), in another forum. . . .

Observedly, Attys. IRAO and ALBANO, who are TAN's lawyers in Quezon City, are also private respondents' lawyers in Manila. ATTY. IRAO who entered his appearance as counsel for private respondents in the Manila case, is also the "authorized representative and attorney-in-fact" of private respondent corporation in the Manila case. While Atty. Irao "withdrew" as counsel of TAN in the Quezon City, that did not remove the case filed in Manila outside the sphere of the rule on "forum shopping." (pp. 10-11, CA Decision, Annex "B" of the Petition).

Petitioners contend that the foregoing conclusions of fact and law of the Court of Appeals are correct and should not be disturbed, especially since the decision of the Court of Appeals had already become final and entered in the Books of Judgment; that the parties to the case and the Regional Trial Judge in Branch 33, Manila are bound by the said conclusions of fact and law and the same should not be reopened on remand of the case; and that it is not within the Trial Judge's discretion to take exception to, much less overturn, any factual or legal conclusions laid down by the Court of Appeals in its verdict and to dispose of the case in a manner diametrically opposed thereto, citing the case of PNB vs. Noah's Ark Sugar Refinery, 226 SCRA 36, 48.

Petitioners further allege that the acts of the trial judge suffer from procedural infirmity: and that it makes no sense for the trial judge to refuse to resolve the motion to dismiss on the merits; to motu proprio consider the motion to dismiss as the answer to the complaint; and to later rule that the motion to dismiss did not tender an issue and, therefore, a judgment on the pleadings is in order. Petitioners also aver that a motion to dismiss is not a responsive pleading (citing Prudence Realty Development Corporation vs. CA, 231 SCRA 379); that at the time the trial judge considered the motion to dismiss to be the answer to the complaint, he knew very well, or at least should have known that the motion to dismiss did not tender an issue for indeed, it is not within the province of the motion to admit or deny the allegations of the complaint, and there being no legitimate answer and no real joinder of issues, the rendition of the subject Judgment on the Pleadings becomes suspect. According to petitioners, in deviating from the usual procedure, the court a quo gave undue benefit and advantage to the respondents at the expense of herein petitioners; and that the explanation given by the trial judge that the dispositive portion of the Court of Appeals decision did not expressly order him to dismiss the case is flimsy and untenable.

On the other hand, respondents assert that the doctrine of law of the case is not applicable to the present case because the Court of Appeals never ordered the dismissal of the case and that the Order of the Manila Court dated January 27, 1994 was annulled and set aside only insofar as the preliminary injunction is concerned. Respondents cite the case of Magdalena Estate, Inc. vs. Caluag, 11 SCRA 333 which ruled that the deficiencies in the dispositive part of the decision cannot be supplied by any finding or opinion found in the body of the decision. Respondents also allege that while petitioner Wilson Ong had belatedly faulted the Court below in considering his motion to dismiss as his answer, he never questioned the correctness of the findings of the court a quo in the assailed decision.

After a review of the records of the case and an examination of the pleadings filed by the parties, the Court finds the petition to be meritorious.

Being interrelated, the first, second and third issues shall be discussed jointly.1awphil

Indeed, the court a quo erred in not resolving the petitioner's motion to dismiss in accordance with the decision of the Court of Appeals which found that "The Manila court should have considered also that Civil Case Q-93-17628 involves practically the same parties, same subject-matter and same relief as in Civil Case 94-68836"; that "the real matter in controversy can be fully determined and resolved before the Quezon City court and would render the Manila case a surplusage and also constitutes multiplicity of suits and dismissible on that ground, although such dismissal should be considered as without prejudice to the continuance of the proceedings before the Quezon City court"; and that "the Manila court should also have considered forum shopping as a third drawback to private respondents' cause."

While the Court of Appeals stated in the dispositive portion of its decision that "the prayer for dismissal of the complaint in Manila may be pursued before said court during the proceedings," it is clear from the body of the Court of Appeals Decision that the case before the Manila court should be dismissed on grounds of litis pendentia, and forum shopping.

While the general rule is that the portion of a decision that becomes the subject of execution is that ordained or decreed in the dispositive part thereof, there are exceptions to this rule.

The exceptions where the dispositive part of the judgment does not always prevail over the body of the opinion are:

(a) where there is ambiguity or uncertainty, the body of the opinion may be referred to for purposes of construing the judgment because the dispositive part of a decision must find support from the decision'sratio decidendi; 16

(b) where extensive and explicit discussion and settlement of the issue is found in the body of the decision.17

Considering the circumstances of the instant case, the Court finds that the exception to the general rule applies to the instant case. Since the statement of the Court of Appeals regarding the prayer for the dismissal of the case seemingly gave the Manila court the discretion to dismiss not to dismiss Civil Case No. 94-68836, the Manila court should have referred to the body of the decision for purposes of construing the issue of whether or not the complaint should be dismissed, because the dispositive part of a decision must find support from the decision'sratio decidendi. Findings of the court are to be considered in the interpretation of the dispositive portion of the judgment. 18 Moreover, extensive and explicit discussion and settlement of the issues are found in the body of the Court of Appeals decision so that it is grave error for the court a quo to rule again, as it did, on the issues of litis pendentia and forum shopping in its decision, and to overturn that of the Court of Appeals, thus:

The argument of Defendant Ong in his motion for execution that the case at bench should now be dismissed on the grounds of forum shopping and litis pendentia as allegedly ruled by the Court of Appeals, does not impress this Court. For while the appellate court urged this Court to consider litis pendentia and forum shopping in the trial resolution of the case at bench, nowhere in its (CA) decision could it be deduced that this Court is mandated to dismiss the case on these precise grounds. The dispositive portion of the decision does not contain such a mandate. 19

In Viva Productions, Inc. vs. Court of Appeals, 20 this Court set aside the decision of the Makati court and declared null and void all orders of the RTC of Makati after ruling that:

Thus we find grave abuse of discretion on the part of the Makati court, being a mere co-equal of the Parañaque court, in not giving due deference to the latter before which the issue of the alleged violation of the sub-judice rule had already been raised and submitted. In such instance, the Makati court, if it was wary of dismissing the action outrightly under administrative Circular No. 04-94, should have, at least ordered the consolidation of its case with that of the Parañaque court, which had first acquired 31 of the Revised Rules of Court. (emphasis ours.)

The Quezon City court and the Manila court have concurrent jurisdiction over the case. However, when the Quezon City court acquired jurisdiction over the case, it excluded all other courts of concurrent jurisdiction from acquiring jurisdiction over the same. The Manila court is, therefore, devoid of jurisdiction over the complaint filed resulting in the herein assailed decision which must perforce be declared null and void. To hold otherwise would be to risk instances where courts of concurrent jurisdiction might have conflicting orders. 21

WHEREFORE, the assailed decision of the Regional Trial Court of Manila, Branch 33 in Civil Case No. 94-68836 is ANNULLED and SET ASIDE. Said case is ordered dismissed without prejudice to the continuance of the proceedings before the Quezon City court where Civil Case No. Q-93-17628 is pending.

SO ORDERED.

Bellosillo, Mendoza, Quisumbing and De Leon, Jr., JJ., concur.

Footnotes

1 Penned by Judge Rodolfo G. Palattao.

2 Decision, Original Records, pp. 724-141.

3 Original Records, pp. 1-17.

4 Dated January 7, 1994, Original Records, pp. 55-61.

5 Original Records, pp. 34-41.

6 Order dated January 27, 1994, Original Records, pp. 396-405.

7 In SP 33178, Rollo, pp, 94-104.

8 Rollo, p. 106.

9 Rollo, p. 107.

10 Original Records, pp. 445-446.

11 Original Records, p. 513.

12 Ibid., p. 641-643.

13 Ibid., pp. 653-656.

14 Original Records, pp. 695-699.

15 Memorandum for Petitioners, pp. 7-8; Rollo, pp. 181-182.

16 Heirs of Juan Fresto vs. Galang, 78 SCRA 534 [1977]; Pastor Jr. vs. CA, 122 SCRA 885 [1983]; Mutual Security Insurance Corp. vs. CA 153 SCRA 678 [1987].

17 Auyong Hian vs. CTA, 59 SCRA 110 [1974]; Millare vs. Millare, 106 Phil. 293 [1959].

18 Aguirre vs. Aguirre, 58 SCRA 461 [1974].

19 Decision of RTC Manila, Branch 33, Civil Case No. 94-68836, p. 14; Rollo, p. 37.

20 269 SCRA 664 [1997].

21 Viva Production, Inc. vs. Court of Appeals, 269 SCRA 664, 673; Templo vs. dela Cruz, 60 SCRA 295 [1974].

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

A.M. No. 10-7-17-SC               October 15, 2010

IN THE MATTER OF THE CHARGES OF PLAGIARISM, ETC., AGAINST ASSOCIATE JUSTICE MARIANO C. DEL CASTILLO.

D E C I S I O N

PER CURIAM:

This case is concerned with charges that, in preparing a decision for the Court, a designated member plagiarized the works of certain authors and twisted their meanings to support the decision.

The Background Facts

Petitioners Isabelita C. Vinuya and about 70 other elderly women, all members of the Malaya Lolas Organization, filed with the Court in G.R. No. 162230 a special civil action of certiorari with application for preliminary mandatory injunction against the Executive Secretary, the Secretary of Foreign Affairs, the Secretary of Justice, and the Office of the Solicitor General.

Petitioners claimed that in destroying villages in the Philippines during World War II, the Japanese army systematically raped them and a number of other women, seizing them and holding them in houses or cells where soldiers repeatedly ravished and abused them.

Petitioners alleged that they have since 1998 been approaching the Executive Department, represented by the respondent public officials, requesting assistance in filing claims against the Japanese military officers who established the comfort women stations. But that Department declined, saying that petitioners’ individual claims had already been fully satisfied under the Peace Treaty between the Philippines and Japan.

Petitioners wanted the Court to render judgment, compelling the Executive Department to espouse their claims for official apology and other forms of reparations against Japan before the International Court of Justice and other international tribunals.

On April 28, 2010, the Court rendered judgment dismissing petitioners’ action. Justice Mariano C. del Castillo wrote the decision for the Court. The Court essentially gave two reasons for its decision: it cannot grant the petition because, first, the Executive Department has the exclusive prerogative under the Constitution and the law to determine whether to espouse petitioners’ claim against Japan; and, second, the Philippines is not under any obligation in international law to espouse their claims.

On June 9, 2010, petitioners filed a motion for reconsideration of the Court’s decision. More than a month later on July 18, 2010, counsel for petitioners, Atty. Herminio Harry Roque, Jr., announced in his online blog that his clients would file a supplemental petition "detailing plagiarism committed by the court" under the second reason it gave for dismissing the petition and that "these stolen passages were also twisted to support the court’s erroneous conclusions that the Filipino comfort women of World War Two have no further legal remedies." The media gave publicity to Atty. Roque’s announcement.

On July 19, 2010, petitioners filed the supplemental motion for reconsideration that Atty. Roque announced. It accused Justice Del Castillo of "manifest intellectual theft and outright plagiarism"1 when he wrote the decision for the Court and of "twisting the true intents of the plagiarized sources … to suit the arguments of the assailed Judgment."2 They charged Justice Del Castillo of copying without acknowledgement certain passages from three foreign articles:

a. A Fiduciary Theory of Jus Cogens by Evan J. Criddle and Evan Fox-Descent, Yale Journal of International Law (2009);

b. Breaking the Silence: Rape as an International Crime by Mark Ellis, Case Western Reserve Journal of International Law (2006); and

c. Enforcing Erga Omnes Obligations by Christian J. Tams, Cambridge University Press (2005).

Petitioners claim that the integrity of the Court’s deliberations in the case has been put into question by Justice Del Castillo’s fraud. The Court should thus "address and disclose to the public the truth about the manifest intellectual theft and outright plagiarism"3 that resulted in gross prejudice to the petitioners.

Because of the publicity that the supplemental motion for reconsideration generated, Justice Del Castillo circulated a letter to his colleagues, subsequently verified, stating that when he wrote the decision for the Court he had the intent to attribute all sources used in it. He said in the pertinent part:

It must be emphasized that there was every intention to attribute all sources, whenever due. At no point was there ever any malicious intent to appropriate another’s work as our own. We recall that this ponencia was thrice included in the Agenda of the Court en banc. It was deliberated upon during the Baguio session on April 13, 2010, April 20, 2010 and in Manila on April 27, 2010. Each time, suggestions were made which necessitated major revisions in the draft. Sources were re-studied, discussions modified, passages added or deleted. The resulting decision comprises 34 pages with 78 footnotes.

x x x x

As regards the claim of the petitioners that the concepts as contained in the above foreign materials were "twisted," the same remains their opinion which we do not necessarily share.4

On July 27, 2010, the Court En Banc referred the charges against Justice Del Castillo to its Committee on Ethics and Ethical Standards, chaired by the Chief Justice, for investigation and recommendation. The Chief Justice designated retired Justice Jose C. Vitug to serve as consultant of the Committee. He graciously accepted.

On August 2, 2010, the Committee directed petitioners to comment on Justice Del Castillo’s verified letter. When this was done, it set the matter for hearing.

In the meantime, on July 19, 2010, Evan Criddle wrote on his blog that he and his co-author Evan Fox-Descent (referred to jointly as Criddle-Descent) learned of alleged plagiarism involving their work but Criddle’s concern, after reading the supplemental motion for reconsideration, was the Court’s conclusion that prohibitions against sexual slavery are not jus cogens or internationally binding norms that treaties cannot diminish.

On July 23, 2010, Dr. Mark Ellis wrote the Court expressing concern that in mentioning his work, the Court "may have misread the argument [he] made in the article and employed them for cross purposes." Dr. Ellis said that he wrote the article precisely to argue for appropriate legal remedy for victims of war crimes.

On August 8, 2010, after the referral of the matter to the Committee for investigation, the Dean of the University of the Philippines (U.P.) College of Law publicized a Statement from his faculty, claiming that the Vinuya decision was "an extraordinary act of injustice" and a "singularly reprehensible act of dishonesty and misrepresentation by the Highest Court of the land." The statement said that Justice Del Castillo had a "deliberate intention to appropriate the original authors’ work," and that the Court’s decision amounted to "an act of intellectual fraud by copying works in order to mislead and deceive."5

On August 18, 2010 Mr. Christian J. Tams wrote Chief Justice Renato C. Corona that, although relevant sentences in the Court’s decision were taken from his work, he was given generic reference only in the footnote and in connection with a citation from another author (Bruno Simma) rather than with respect to the passages taken from his work. He thought that the form of referencing was inappropriate. Mr. Tams was also concerned that the decision may have used his work to support an approach to erga omnes concept (obligations owed by individual States to the community of nations) that is not consistent with what he advocated.

On August 26, 2010, the Committee heard the parties’ submissions in the summary manner of administrative investigations. Counsels from both sides were given ample time to address the Committee and submit their evidence. The Committee queried them on these.

Counsels for Justice Del Castillo later asked to be heard with the other parties not in attendance so they could make submissions that their client regarded as sensitive and confidential, involving the drafting process that went into the making of the Court’s decision in the Vinuya case. Petitioners’ counsels vigorously objected and the Committee sustained the objection. After consulting Justice Del Castillo, his counsels requested the Committee to hear the Justice’s court researcher, whose name need not be mentioned here, explain the research work that went into the making of the decision in the Vinuya case. The Committee granted the request.

The researcher demonstrated by Power Point presentation how the attribution of the lifted passages to the writings of Criddle-Descent and Ellis, found in the beginning drafts of her report to Justice Del Castillo, were unintentionally deleted. She tearfully expressed remorse at her "grievous mistake" and grief for having "caused an enormous amount of suffering for Justice Del Castillo and his family."6

On the other hand, addressing the Committee in reaction to the researcher’s explanation, counsel for petitioners insisted that lack of intent is not a defense in plagiarism since all that is required is for a writer to acknowledge that certain words or language in his work were taken from another’s work. Counsel invoked the Court’s ruling in University of the Philippines Board of Regents v. Court of Appeals and Arokiaswamy William Margaret Celine,7arguing that standards on plagiarism in the academe should apply with more force to the judiciary.

After the hearing, the Committee gave the parties ten days to file their respective memoranda. They filed their memoranda in due course. Subsequently after deliberation, the Committee submitted its unanimous findings and recommendations to the Court.

The Issues

This case presents two issues:

1. Whether or not, in writing the opinion for the Court in the Vinuya case, Justice Del Castillo plagiarized the published works of authors Tams, Criddle-Descent, and Ellis.

2. Whether or not Justice Del Castillo twisted the works of these authors to make it appear that such works supported the Court’s position in the Vinuya decision.

The Court’s Rulings

Because of the pending motion for reconsideration in the Vinuya case, the Court like its Committee on Ethics and Ethical Standards will purposely avoid touching the merits of the Court’s decision in that case or the soundness or lack of soundness of the position it has so far taken in the same. The Court will deal, not with the essential merit or persuasiveness of the foreign author’s works, but how the decision that Justice Del Castillo wrote for the Court appropriated parts of those works and for what purpose the decision employed the same.

At its most basic, plagiarism means the theft of another person’s language, thoughts, or ideas. To plagiarize, as it is commonly understood according to Webster, is "to take (ideas, writings, etc.) from (another) and pass them off as one’s own."8 The passing off of the work of another as one’s own is thus an indispensable element of plagiarism.

The Passages from Tams

Petitioners point out that the Vinuya decision lifted passages from Tams’ book, Enforcing Erga Omnes Obligations in International Law (2006) and used them in Footnote 69 with what the author thought was a mere generic reference. But, although Tams himself may have believed that the footnoting in this case was not "an appropriate form of referencing,"9 he and petitioners cannot deny that the decision did attribute the source or sources of such passages. Justice Del Castillo did not pass off Tams’ work as his own. The Justice primarily attributed the ideas embodied in the passages to Bruno Simma, whom Tams himself credited for them. Still, Footnote 69 mentioned, apart from Simma, Tams’ article as another source of those ideas.

The Court believes that whether or not the footnote is sufficiently detailed, so as to satisfy the footnoting standards of counsel for petitioners is not an ethical matter but one concerning clarity of writing. The statement "See Tams, Enforcing Obligations Erga Omnes in International Law (2005)" in the Vinuya decision is an attribution no matter if Tams thought that it gave him somewhat less credit than he deserved. Such attribution altogether negates the idea that Justice Del Castillo passed off the challenged passages as his own.

That it would have been better had Justice Del Castillo used the introductory phrase "cited in" rather than the phrase "See" would make a case of mere inadvertent slip in attribution rather than a case of "manifest intellectual theft and outright plagiarism." If the Justice’s citations were imprecise, it would just be a case of bad footnoting rather than one of theft or deceit. If it were otherwise, many would be target of abuse for every editorial error, for every mistake in citing pagination, and for every technical detail of form.

The Passages from Ellis and Criddle-Descent

Petitioners also attack the Court’s decision for lifting and using as footnotes, without attribution to the author, passages from the published work of Ellis. The Court made the following statement on page 27 of its decision, marked with Footnote 65 at the end:

We fully agree that rape, sexual slavery, torture, and sexual violence are morally reprehensible as well as legally prohibited under contemporary international law. 65 xxx

Footnote 65 appears down the bottom of the page. Since the lengthy passages in that footnote came almost verbatim from Ellis’ article,10 such passages ought to have been introduced by an acknowledgement that they are from that article. The footnote could very well have read:

65 In an article, Breaking the Silence: Rape as an International Crime, Case Western Reserve Journal of International Law (2006), Mark Ellis said: The concept of rape as an international crime is relatively new. This is not to say that rape has never been historically prohibited, particularly in war. But modern-day sensitivity to the crime of rape did not emerge until after World War II. In the Nuremberg Charter, the word rape was not mentioned. The article on crimes against humanity explicitly set forth prohibited acts, but rape was not mentioned by name. (For example, the Treaty of Amity and Commerce between Prussia and the United States provides that in time of war all women and children "shall not be molested in their persons." The Treaty of Amity and Commerce, Between his Majesty the King of Prussia and the United States of America, art. 23, Sept. 10, 1785, U.S.-Pruss., 8 Treaties & Other Int'l Agreements Of The U.S. 78, 85. The 1863 Lieber Instructions classified rape as a crime of "troop discipline." (Mitchell, The Prohibition of Rape in International Humanitarian Law as a Norm of Jus cogens: Clarifying the Doctrine, 15 Duke J. Comp. Int’l. L. 219, 224). It specified rape as a capital crime punishable by the death penalty (Id. at 236). The 1907 Hague Convention protected women by requiring the protection of their "honour." ("Family honour and rights, the lives of persons, and private property, as well as religious convictions and practice, must be respected." Convention (IV) Respecting the Laws & Customs of War on Land, art. 46, Oct. 18, 1907. General Assembly resolution 95 (I) of December 11, 1946 entitled, "Affirmation of the Principles of International Law recognized by the Charter of the Nürnberg Tribunal"; General Assembly document A/64/Add.1 of 1946; See Agreement for the Prosecution and Punishment of the Major War Criminals of the European Axis, Aug. 8, 1945, 59 Stat. 1544, 82 U.N.T.S. 279. Article 6(c) of the Charter established crimes against humanity as the following:

CRIMES AGAINST HUMANITY: namely, murder, extermination, enslavement, deportation, and other inhumane acts committed against any civilian population, before or during the war, or persecutions on political, racial or religious grounds in execution of or in connection with any crime within the Jurisdiction of the Tribunal, whether or not in violation of the domestic law of the country where perpetrated.

The Nuremberg Judgment did not make any reference to rape and rape was not prosecuted. (Judge Gabrielle Kirk McDonald, The International Criminal Tribunals Crime and Punishment in the International Arena,7 ILSA J. Int’l. Comp. L. 667, 676.) However, International Military Tribunal for the Far East prosecuted rape crimes, even though its Statute did not explicitly criminalize rape. The Far East Tribunal held General Iwane Matsui, Commander Shunroku Hata and Foreign Minister Hirota criminally responsible for a series of crimes, including rape, committed by persons under their authority. (The Tokyo Judgment: Judgment Of The International Military Tribunal For The Far East 445-54 (1977).

The first mention of rape as a specific crime came in December 1945 when Control Council Law No. 10 included the term rape in the definition of crimes against humanity. Law No. 10, adopted by the four occupying powers in Germany, was devised to establish a uniform basis for prosecuting war criminals in German courts. (Control Council for Germany, Law No. 10: Punishment of Persons Guilty of War Crimes, Crimes Against Peace and Against Humanity, Dec. 20, 1945, 3 Official Gazette Control Council for Germany 50, 53 (1946))

The 1949 Geneva Convention Relative to the Treatment of Prisoners of War was the first modern-day international instrument to establish protections against rape for women. Geneva Convention Relative to the Protection of Civilian Persons in Time of War, Aug. 12, 1949, art. 27, 6 U.S.T. 3316, 75 U.N.T.S. 287 (entry into force Oct. 20, 1950) [hereinafter Fourth Geneva Convention].Furthermore, the ICC, the ICTY, and the International Criminal Tribunal for Rwanda (ICTR) have significantly advanced the crime of rape by enabling it to be prosecuted as genocide, a war crime, and a crime against humanity.

But, as it happened, the acknowledgment above or a similar introduction was missing from Footnote 65.

Next, petitioners also point out that the following eight sentences and their accompanying footnotes appear in text on pages 30-32 of the Vinuya decision:

xxx In international law, the term "jus cogens" (literally, "compelling law") refers to norms that command peremptory authority, superseding conflicting treaties and custom. Jus cogens norms are considered peremptory in the sense that they are mandatory, do not admit derogation, and can be modified only by general international norms of equivalent authority.711avvphi1

Early strains of the jus cogens doctrine have existed since the 1700s,72 but peremptory norms began to attract greater scholarly attention with the publication of Alfred von Verdross's influential 1937 article, Forbidden Treaties in International Law.73 The recognition of jus cogens gained even more force in the 1950s and 1960s with the ILC’s preparation of the Vienna Convention on the Law of Treaties (VCLT).74 Though there was a consensus that certain international norms had attained the status of jus cogens,75 the ILC was unable to reach a consensus on the proper criteria for identifying peremptory norms.

After an extended debate over these and other theories of jus cogens, the ILC concluded ruefully in 1963 that "there is not as yet any generally accepted criterion by which to identify a general rule of international law as having the character of jus cogens."76 In a commentary accompanying the draft convention, the ILC indicated that "the prudent course seems to be to x x x leave the full content of this rule to be worked out in State practice and in the jurisprudence of international tribunals."77 Thus, while the existence of jus cogens in international law is undisputed, no consensus exists on its substance,77 beyond a tiny core of principles and rules.78

Admittedly, the Vinuya decision lifted the above, including their footnotes, from Criddle-Descent’s article, A Fiduciary Theory of Jus Cogens.11 Criddle-Descent’s footnotes were carried into the Vinuya decision’s own footnotes but no attributions were made to the two authors in those footnotes.

The Explanation

Unless amply explained, the above lifting from the works of Ellis and Criddle-Descent could be construed as plagiarism. But one of Justice Del Castillo’s researchers, a court-employed attorney, explained how she accidentally deleted the attributions, originally planted in the beginning drafts of her report to him, which report eventually became the working draft of the decision. She said that, for most parts, she did her research electronically. For international materials, she sourced these mainly from Westlaw, an online research service for legal and law-related materials to which the Court subscribes.

In the old days, the common practice was that after a Justice would have assigned a case for study and report, the researcher would source his materials mostly from available law books and published articles on print. When he found a relevant item in a book, whether for one side of the issue or for the other, he would place a strip of paper marker on the appropriate page, pencil mark the item, and place the book on his desk where other relevant books would have piled up. He would later paraphrase or copy the marked out passages from some of these books as he typed his manuscript on a manual typewriter. This occasion would give him a clear opportunity to attribute the materials used to their authors or sources.

With the advent of computers, however, as Justice Del Castillo’s researcher also explained, most legal references, including the collection of decisions of the Court, are found in electronic diskettes or in internet websites that offer virtual libraries of books and articles. Here, as the researcher found items that were relevant to her assignment, she downloaded or copied them into her "main manuscript," a smorgasbord plate of materials that she thought she might need. The researcher’s technique in this case is not too far different from that employed by a carpenter. The carpenter first gets the pieces of lumber he would need, choosing the kinds and sizes suitable to the object he has in mind, say a table. When ready, he would measure out the portions he needs, cut them out of the pieces of lumber he had collected, and construct his table. He would get rid of the scraps.

Here, Justice Del Castillo’s researcher did just that. She electronically "cut" relevant materials from books and journals in the Westlaw website and "pasted" these to a "main manuscript" in her computer that contained the issues for discussion in her proposed report to the Justice. She used the Microsoft Word

program.12 Later, after she decided on the general shape that her report would take, she began pruning from that manuscript those materials that did not fit, changing the positions in the general scheme of those that remained, and adding and deleting paragraphs, sentences, and words as her continuing discussions with Justice Del Castillo, her chief editor, demanded. Parenthetically, this is the standard scheme that computer-literate court researchers use everyday in their work.

Justice Del Castillo’s researcher showed the Committee the early drafts of her report in the Vinuya case and these included the passages lifted from the separate articles of Criddle-Descent and of Ellis with proper attributions to these authors. But, as it happened, in the course of editing and cleaning up her draft, the researcher accidentally deleted the attributions.

First Finding

The Court adopts the Committee’s finding that the researcher’s explanation regarding the accidental removal of proper attributions to the three authors is credible. Given the operational properties of the Microsoft program in use by the Court, the accidental decapitation of attributions to sources of research materials is not remote.

For most senior lawyers and judges who are not computer literate, a familiar example similar to the circumstances of the present case would probably help illustrate the likelihood of such an accident happening. If researcher X, for example, happens to be interested in "the inalienable character of juridical personality" in connection with an assignment and if the book of the learned Civilist, Arturo M. Tolentino, happens to have been published in a website, researcher X would probably show interest in the following passage from that book:

xxx Both juridical capacity and capacity to act are not rights, but qualities of persons; hence, they cannot be alienated or renounced.15

xxx

_____________________________15 3 Von Tuhr 296; 1 Valverde 291.

Because the sentence has a footnote mark (#15) that attributes the idea to other sources, it is evident that Tolentino did not originate it. The idea is not a product of his intellect. He merely lifted it from Von Tuhr and Valverde, two reputable foreign authors.

When researcher X copies and pastes the above passage and its footnote into a manuscript-in-the-making in his computer, the footnote number would, given the computer program in use, automatically change and adjust to the footnoting sequence of researcher X’s manuscript. Thus, if the preceding footnote in the manuscript when the passage from Tolentino was pasted on it is 23, Tolentino’s footnote would automatically change from the original Footnote 15 to Footnote 24.

But then, to be of use in his materials-gathering scheme, researcher X would have to tag the Tolentino passage with a short description of its subject for easy reference. A suitable subject description would be: "The inalienable character of juridical personality.23" The footnote mark, 23 From Tolentino, which researcher X attaches to the subject tag, serves as reminder to him to attribute the passage in its final form to Tolentino. After the passage has been tagged, it would now appear like this:

The inalienable character of juridical personality.23

xxx Both juridical capacity and capacity to act are not rights, but qualities of persons; hence, they cannot be alienated or renounced.24

xxx

_____________________________23 From Tolentino.24 3 Von Tuhr 296; 1 Valverde 291.

The tag is of course temporary and would later have to go. It serves but a marker to help researcher X maneuver the passage into the right spot in his final manuscript.

The mistake of Justice Del Castillo’s researcher is that, after the Justice had decided what texts, passages, and citations were to be retained including those from Criddle-Descent and Ellis, and when she was already cleaning up her work and deleting all subject tags, she unintentionally deleted the footnotes that went with such tags—with disastrous effect.

To understand this, in Tolentino’s example, the equivalent would be researcher X’s removal during cleanup of the tag, "The inalienable character of juridical personality.23," by a simple "delete" operation, and the unintended removal as well of the accompanying footnote (#23). The erasure of the footnote eliminates the link between the lifted passage and its source, Tolentino’s book. Only the following would remain in the manuscript:

xxx Both juridical capacity and capacity to act are not rights, but qualities of persons; hence, they cannot be alienated or renounced.43

_____________________________43 3 Von Tuhr 296; 1 Valverde 291.

As it happened, the Microsoft word program does not have a function that raises an alarm when original materials are cut up or pruned. The portions that remain simply blend in with the rest of the manuscript, adjusting the footnote number and removing any clue that what should stick together had just been severed.

This was what happened in the attributions to Ellis and Criddle-Descent. The researcher deleted the subject tags and, accidentally, their accompanying footnotes that served as reminder of the sources of the lifted passages. With 119 sources cited in the decision, the loss of the 2 of them was not easily detectable.

Petitioners point out, however, that Justice Del Castillo’s verified letter of July 22, 2010 is inconsistent with his researcher’s claim that the omissions were mere errors in attribution. They cite the fact that the Justice did not disclose his researcher’s error in that letter despite the latter’s confession regarding her mistake even before the Justice sent his letter to the Chief Justice. By denying plagiarism in his letter, Justice Del Castillo allegedly perjured himself and sought to whitewash the case.13

But nothing in the July 22 letter supports the charge of false testimony. Justice Del Castillo merely explained "that there was every intention to attribute all sources whenever due" and that there was never "any malicious intent to appropriate another’s work as our own," which as it turns out is a true statement. He recalled how the Court deliberated upon the case more than once, prompting major revisions in the draft of the decision. In the process, "(s)ources were re-studied, discussions modified, passages added or deleted." Nothing in the letter suggests a cover-up. Indeed, it did not preclude a researcher’s inadvertent error.

And it is understandable that Justice Del Castillo did not initially disclose his researcher’s error. He wrote the decision for the Court and was expected to take full responsibility for any lapse arising from its

preparation. What is more, the process of drafting a particular decision for the Court is confidential, which explained his initial request to be heard on the matter without the attendance of the other parties.

Notably, neither Justice Del Castillo nor his researcher had a motive or reason for omitting attribution for the lifted passages to Criddle-Descent or to Ellis. The latter authors are highly respected professors of international law. The law journals that published their works have exceptional reputations. It did not make sense to intentionally omit attribution to these authors when the decision cites an abundance of other sources. Citing these authors as the sources of the lifted passages would enhance rather than diminish their informative value. Both Justice Del Castillo and his researcher gain nothing from the omission. Thus, the failure to mention the works of Criddle-Decent and Ellis was unquestionably due to inadvertence or pure oversight.

Petitioners of course insist that intent is not material in committing plagiarism since all that a writer has to do, to avoid the charge, is to enclose lifted portions with quotation marks and acknowledge the sources from which these were taken.14 Petitioners point out that the Court should apply to this case the ruling in University of the Philippines Board of Regents v. Court of Appeals and Arokiaswamy William Margaret Celine.15 They argue that standards on plagiarism in the academe should apply with more force to the judiciary.

But petitioners’ theory ignores the fact that plagiarism is essentially a form of fraud where intent to deceive is inherent. Their theory provides no room for errors in research, an unrealistic position considering that there is hardly any substantial written work in any field of discipline that is free of any mistake. The theory places an automatic universal curse even on errors that, as in this case, have reasonable and logical explanations.

Indeed, the 8th edition of Black’s Law Dictionary defines plagiarism as the "deliberate and knowing presentation of another person's original ideas or creative expressions as one's own."16 Thus, plagiarism presupposes intent and a deliberate, conscious effort to steal another’s work and pass it off as one’s own.

Besides, the Court said nothing in U.P. Board of Regents that would indicate that an intent to pass off another’s work as one’s own is not required in plagiarism. The Court merely affirmed the academic freedom of a university to withdraw a master’s degree that a student obtained based on evidence that she misappropriated the work of others, passing them off as her own. This is not the case here since, as already stated, Justice Del Castillo actually imputed the borrowed passages to others.

Second Finding

The Court also adopts the Committee’s finding that the omission of attributions to Criddle-Descent and Ellis did not bring about an impression that Justice Del Castillo himself created the passages that he lifted from their published articles. That he merely got those passages from others remains self-evident, despite the accidental deletion. The fact is that he still imputed the passages to the sources from which Criddle-Descent and Ellis borrowed them in the first place.

This is best illustrated in the familiar example above. After the deletion of the subject tag and, accidentally, its footnote which connects to the source, the lifted passage would appear like this:

xxx Both juridical capacity and capacity to act are not rights, but qualities of persons; hence, they cannot be alienated or renounced.43

_____________________________43 3 Von Tuhr 296; 1 Valverde 291.

Although the unintended deletion severed the passage’s link to Tolentino, the passage remains to be attributed to Von Tuhr and Valverde, the original sources that Tolentino himself cites. The text and its footnote reference cancel out any impression that the passage is a creation of researcher X. It is the same with the passages from Criddle-Descent and Ellis. Because such passages remained attributed by the footnotes to the authors’ original sources, the omission of attributions to Criddle-Descent and Ellis gave no impression that the passages were the creations of Justice Del Castillo. This wholly negates the idea that he was passing them off as his own thoughts.

True the subject passages in this case were reproduced in the Vinuya decision without placing them in quotation marks. But such passages are much unlike the creative line from Robert Frost,17 "The woods are lovely, dark, and deep, but I have promises to keep, and miles to go before I sleep, and miles to go before I sleep." The passages here consisted of common definitions and terms, abridged history of certain principles of law, and similar frequently repeated phrases that, in the world of legal literature, already belong to the public realm.

To paraphrase Bast and Samuels,18 while the academic publishing model is based on the originality of the writer’s thesis, the judicial system is based on the doctrine of stare decisis, which encourages courts to cite historical legal data, precedents, and related studies in their decisions. The judge is not expected to produce original scholarship in every respect. The strength of a decision lies in the soundness and general acceptance of the precedents and long held legal opinions it draws from.

Third Finding

Petitioners allege that the decision twisted the passages from Tams, Criddle-Descent, and Ellis. The Court adopts the Committee’s finding that this is not so. Indeed, this allegation of twisting or misrepresentation remains a mystery to the Court. To twist means "to distort or pervert the meaning of."19 For example, if one lifts the lyrics of the National Anthem, uses it in his work, and declares that Jose Palma who wrote it "did not love his country," then there is "twisting" or misrepresentation of what the anthem’s lyrics said. Here, nothing in the Vinuya decision said or implied that, based on the lifted passages, authors Tams, Criddle-Descent, and Ellis supported the Court’s conclusion that the Philippines is not under any obligation in international law to espouse Vinuya et al.’s claims.

The fact is that, first, since the attributions to Criddle-Descent and Ellis were accidentally deleted, it is impossible for any person reading the decision to connect the same to the works of those authors as to conclude that in writing the decision Justice Del Castillo "twisted" their intended messages. And, second, the lifted passages provided mere background facts that established the state of international law at various stages of its development. These are neutral data that could support conflicting theories regarding whether or not the judiciary has the power today to order the Executive Department to sue another country or whether the duty to prosecute violators of international crimes has attained the status of jus cogens.

Considering how it was impossible for Justice Del Castillo to have twisted the meaning of the passages he lifted from the works of Tams, Criddle-Descent, and Ellis, the charge of "twisting" or misrepresentation against him is to say the least, unkind. To be more accurate, however, the charge is reckless and obtuse.

No Misconduct

On occasions judges and justices have mistakenly cited the wrong sources, failed to use quotation marks, inadvertently omitted necessary information from footnotes or endnotes. But these do not, in every case, amount to misconduct. Only errors that are tainted with fraud, corruption, or malice are subject of disciplinary action.20This is not the case here. Justice Del Castillo’s acts or omissions were not shown to have been impelled by any of such disreputable motives.21 If the rule were otherwise, no judge or justice, however competent, honest, or dedicated he may be, can ever hope to retire from the judiciary with an unblemished record.22

No Inexcusable Negligence

Finally, petitioners assert that, even if they were to concede that the omission was the result of plain error, Justice Del Castillo is nonetheless guilty of gross inexcusable negligence. They point out that he has full control and supervision over his researcher and should not have surrendered the writing of the decision to the latter.23

But this assumes that Justice Del Castillo abdicated the writing of the Vinuya decision to his researcher, which is contrary to the evidence adduced during the hearing. As his researcher testified, the Justice set the direction that the research and study were to take by discussing the issues with her, setting forth his position on those issues, and reviewing and commenting on the study that she was putting together until he was completely satisfied with it.24 In every sense, Justice Del Castillo was in control of the writing of the report to the Court, which report eventually became the basis for the decision, and determined its final outcome.

Assigning cases for study and research to a court attorney, the equivalent of a "law clerk" in the United States Supreme Court, is standard practice in the high courts of all nations. This is dictated by necessity. With about 80 to 100 cases assigned to a Justice in our Court each month, it would be truly senseless for him to do all the studies and research, going to the library, searching the internet, checking footnotes, and watching the punctuations. If he does all these by himself, he would have to allocate at least one to two weeks of work for each case that has been submitted for decision. The wheels of justice in the Supreme Court will grind to a halt under such a proposition.

What is important is that, in this case, Justice Del Castillo retained control over the writing of the decision in theVinuya case without, however, having to look over his researcher’s shoulder as she cleaned up her draft report to ensure that she hit the right computer keys. The Justice’s researcher was after all competent in the field of assignment given her. She finished law from a leading law school, graduated third in her class, served as Editor-in Chief of her school’s Law Journal, and placed fourth in the bar examinations when she took it. She earned a master’s degree in International Law and Human Rights from a prestigious university in the United States under the Global-Hauser program, which counsel for petitioners concedes to be one of the top post graduate programs on International Law in the world. Justice Del Castillo did not exercise bad judgment in assigning the research work in the Vinuya case to her.

Can errors in preparing decisions be prevented? Not until computers cease to be operated by human beings who are vulnerable to human errors. They are hypocrites who believe that the courts should be as error-free as they themselves are.

Incidentally, in the course of the submission of petitioners’ exhibits, the Committee noted that petitioners’ Exhibit J, the accusing statement of the Faculty of the U.P. College of Law on the allegations of plagiarism and misinterpretation, was a mere dummy. The whole of the statement was reproduced but the signatures portion below merely listed the names of 38 faculty members, in solid rows, with the letters "Sgd" or "signed" printed beside the names without exception. These included the name of retired Supreme Court Justice Vicente V. Mendoza, a U.P. professor.

Because the Committee declined to admit a mere dummy of Exhibit J, it directed Atty. Roque to present the signed copy within three days of the August 26 hearing.25 He complied. As it turned out, the original statement was signed by only a minority of the faculty members on the list. The set of signatories that appeared like solid teeth in the dummy turned out to be broken teeth in the original. Since only 37 out of the 81 on the list signed the document, it does not appear to be a statement of the Faculty but of just some of its members. And retired Justice V. V. Mendoza did not sign the statement, contrary to what the dummy represented. The Committee wondered why the Dean submitted a dummy of the signed document when U.P. has an abundance of copying machines.

Since the above circumstances appear to be related to separate en banc matter concerning the supposed Faculty statement, there is a need for the Committee to turn over the signed copy of the same to the en banc for its consideration in relation to that matter.

WHEREFORE, in view of all of the above, the Court:

1. DISMISSES for lack of merit petitioner Vinuya, et al.’s charges of plagiarism, twisting of cited materials, and gross neglect against Justice Mariano C. del Castillo;

2. DIRECTS the Public Information Office to send copies of this decision to Professors Evan J. Criddle and Evan Fox-Descent, Dr. Mark Ellis, and Professor Christian J. Tams at their known addresses;

3. DIRECTS the Clerk of Court to provide all court attorneys involved in legal research and reporting with copies of this decision and to enjoin them to avoid editing errors committed in the Vinuya case while using the existing computer program especially when the volume of citations and footnoting is substantial; and

4. Finally, DIRECTS the Clerk of Court to acquire the necessary software for use by the Court that can prevent future lapses in citations and attributions.

Further, the Court DIRECTS the Committee on Ethics and Ethical Standards to turn over to the en banc the dummy as well as the signed copy of petitioners’ Exhibit J, entitled "Restoring Integrity," a statement by the Faculty of the University of the Philippines College of Law for the en banc’s consideration in relation to the separate pending matter concerning that supposed Faculty statement.

SO ORDERED.

RENATO C. CORONAChief Justice

ANTONIO T. CARPIOAssociate Justice

CONCHITA CARPIO MORALESAssociate Justice

PRESBITERO J. VELASCO, JR.Associate Justice

ANTONIO EDUARDO B. NACHURAAssociate Justice

TERESITA J. LEONARDO-DE CASTROAssociate Justice

ARTURO D. BRIONAssociate Justice

DIOSDADO M. PERALTAAssociate Justice

LUCAS P. BERSAMINAssociate Justice

MARIANO C. DEL CASTILLOAssociate Justice

ROBERTO A. ABADAssociate Justice

MARTIN S. VILLARAMA, JR.Associate Justice

JOSE PORTUGAL PEREZAssociate Justice

JOSE CATRAL MENDOZAAssociate Justice

MARIA LOURDES P. A. SERENOAssociate Justice

Footnotes

1 Supplemental Motion for Reconsideration, petitioner’s Exhibit A, p. 5.

2 Id. at 3.

3 Supplemental Motion for Reconsideration, supra note 1, at 5.

4 Justice Del Castillo’s Verified Letter, p. 3, Exhibit G of the petitioners.

5 Statement of the University of the Philippines College of Law Faculty dated July 27, 2010, Exhibit J of the petitioners.

6 Transcript of Stenographic Notes taken on August 26, 2010, p. 31.

7 G.R. No. 134625, August 31, 1999, 313 SCRA 404.

8 Webster’s New World College Dictionary, Third Edition, Macmillan USA, p. 1031.

9 Exhibit I for the petitioners.

10 Breaking the Silence of Rape as an International Crime, 38 Case W. Res. J. Int’l. L. 225 (2006).

11 34 Yale J. Int’l. L. 331 (2009).

12 Memorandum for Justice Del Castillo, paragraphs 25-35.

13 Petitioner’s Memorandum, pp. 26-27.

14 Supra note 6, at 41.

15 Supra note 7.

16 Black's Law Dictionary (8th ed. 2004).

17 Stopping by the Woods on a Snowy Evening (1923).

18 Bast and Samuels, Plagiarism and Legal Scholarship in the Age of Information Sharing: The Need for Intellectual Honesty, 57 CATH. U. L. REV 777, 800 (2008).

19 Webster’s New World College Dictionary, 3rd Edition, p. 1445.

20 Atty. Alberto P. Quinto v. Judge Gregorio S. Vios, Municipal Trial Court, Kapatagan, Lanao del Norte, A.M. No. MTJ-04-1551, May 21, 2004, 429 SCRA 1; Tolentino v. Camano, Jr., A.M. No. RTJ 10-1522, January 20, 2000, 322 SCRA 559.

21 Daracan v. Natividad, A.M. No. RTC-99-1447, September 27, 2000, 341 SCRA 161.

22 Guerrero v. Villamor, A.M. No. RTJ-90-483, September 25, 1998, 296 SCRA 88; Tan v. Adre, A.M. No. RTJ-05-1898, January 31, 2005, 450 SCRA 145.

23 Supra note 13, at 25.

24 Supra note 6, at 27-30.

25 Order dated August 26, 2010, Committee Records, pp. 382-383.

The Lawphil Project - Arellano Law Foundation

DISSENTING OPINION

SERENO, J.:

What is black can be called "white" but it cannot turn white by the mere calling. The unfortunate ruling of the majority Decision that no plagiarism was committed stems from its failure to distinguish between the determination of the objective, factual existence of plagiarism in the Vinuya decision1 and the determination of the liability that results from a finding of plagiarism. Specifically, it made "malicious intent", which heretofore had not been relevant to a finding of plagiarism, an essential element.

The majority Decision will thus stand against the overwhelming conventions on what constitutes plagiarism. In doing so, the Decision has created unimaginable problems for Philippine academia, which will from now on have to find a disciplinary response to plagiarism committed by students and researchers on the justification of the majority Decision.

It has also undermined the protection of copyrighted work by making available to plagiarists "lack of malicious intent" as a defense to a charge of violation of copy or economic rights of the copyright owner committed through lack of attribution. Under Section 184 of R.A. 8293 ("An Act Describing the Intellectual Property Code and Establishing the Intellectual Property Office, Providing for Its Powers and Functions, and for Other Purposes"), or the Intellectual Property Code of the Philippines, there is no infringement of copyright in the use of another's work in:

(b) the making of quotations from a published work if they are compatible with fair use and only to the extent justified for the purpose, including quotations from newspaper articles and periodicals in the form of press summaries: Provided that the source and the name of the author, if appearing on the work, are mentioned. (Emphasis supplied)

Because the majority Decision has excused the lack of attribution to the complaining authors in the Vinuyadecision to editorial errors and lack of malicious intent to appropriate ─ and that therefore there was no plagiarism ─ lack of intent to infringe copyright in the case of lack of attribution may now also become a defense, rendering the above legal provision meaningless.2

TABLES OF COMPARISON

The tables of comparison below were first drawn based on the tables made by petitioners in their Supplemental Motion for Reconsideration. This was then compared with Annex "A" of Justice Mariano del Castillo's letter, which is his tabular explanation for some of the copied excerpts.3 The alleged plagiarism of the cited excerpts were then independently verified and re-presented below, with the necessary

revisions accurately reflecting the alleged plagiarized works and the pertinent portions of the decision. A few excerpts in the table of petitioners are not included, as they merely refer to in-text citations.

TABLE A: Comparison of Christian J. Tams’s book, entitled Enforcing Erga Omnes Obligations in International Law (2005), hereinafter called "Tams’s work" and the Supreme Court’s 28 April 2010 Decision in Vinuya, et. al. v. Executive Secretary.

Christian J. Tams, Enforcing Erga Omnes Obligations in International Law (2005).

Vinuya, et. al. v. Executive Secretary, G.R. No. 162230, 28 April 2010.

1. xxx The Latin phrase ‘erga omnes’ thus has become one of the rallying cries of those sharing a belief in the emergence of a value-based international public order based on law. xxx

As often, the reality is neither so clear nor so bright. One problem is readily admitted by commentators: whatever the relevance of obligations erga omnes as a legal concept, its full potential remains to be realised in practice. xxx Bruno Simma’s much-quoted observation encapsulates this feeling of disappointment: ‘Viewed realistically, the world of obligations erga omnes is still the world of the ‘‘ought’’ rather than of the ‘‘is’’.

(pp. 3-4 of the Christian Tams’s book)

*The Latin phrase, ‘erga omnes,’ has since become one of the rallying cries of those sharing a belief in the emergence of a value-based international public order. However, as is so often the case, the reality is neither so clear nor so bright. Whatever the relevance of obligations erga omnes as a legal concept, its full potential remains to be realized in practice.[FN69] (p. 30, Body of the 28 April 2010 Decision)

[FN69] Bruno Simma’s much-quoted observation encapsulates this feeling of disappointment: ‘Viewed realistically, the world of obligations erga omnes is still the world of the "ought" rather than of the "is"’ The Charter of the United Nations: A Commentary 125 (Simma, ed. 1995). See Tams, Enforcing Obligations Erga omnes in International Law (2005).

*The decision mentioned Christian Tams’s book in footnote 69.

TABLE B: Comparison of Evan J. Criddle & Evan Fox-Decent’s article in the Yale Journal of International Law, entitled A Fiduciary Theory of Jus Cogens (2009), hereinafter called "Criddle’s & Fox-Decent’s work" and the Supreme Court’s 28 April 2010 Decision in Vinuya, et al. v. Executive Secretary.

Evan J. Criddle & Evan Fox-Decent, A Fiduciary Theory of Jus Cogens, 34 Yale J. Int'l L. 331 (2009).

Vinuya, et. al. v. Executive Secretary, G.R. No. 162230, 28 April 2010

1. In international law, the term "jus cogens" (literally, "compelling law") refers to norms that command peremptory authority, superseding conflicting treaties and custom. xxx Jus cogens norms are considered peremptory in the sense that they are mandatory, do not admit derogation, and can be modified only by general international norms of equivalent authority.[FN2]

[FN2] See Vienna Convention on the Law of Treaties art. 53, opened for signature May 23, 1969, 1155 U.N.T.S. 331, 8 I.L.M. 679

In international law, the term "jus cogens" (literally, "compelling law") refers to norms that command peremptory authority, superseding conflicting treaties and custom. Jus cogens norms are considered peremptory in the sense that they are mandatory, do not admit derogation, and can be modified only by general international norms of equivalent authority.[FN70] (pp. 30-31, Body of the 28 April 2010 Decision)

[FN70] See Vienna Convention on the Law of Treaties art. 53, opened for signature May 23,

[hereinafter VCLT].

(pp. 331-332 of the Yale Law Journal of Int’l Law)

1969, 1155 U.N.T.S. 331, 8 I.L.M. 679 [hereinafter VCLT].

2. Peremptory norms began to attract greater scholarly attention with the publication of Alfred von Verdross's influential 1937 article, Forbidden Treaties in International Law.[FN10]

[FN10] For example, in the 1934 Oscar Chinn Case, Judge Schücking's influential dissent stated that neither an interna-tional court nor an arbitral tribunal should apply a treaty provision in contradiction to bonos mores. Oscar Chinn Case, 1934 P.C.I.J. (ser. A/B) No. 63, at 149-50 (Dec. 12) (Schücking, J., dissenting).

(p. 334 of the Yale Law Journal of Int’l Law)

xxx but peremptory norms began to attract greater scholarly attention with the publication of Alfred von Verdross's influential 1937 article, Forbidden Treaties in International Law. [FN72] (p. 31, Body of the 28 April 2010 Decision)

[FN72] Verdross argued that certain discrete rules of international custom had come to be recognized as having a compulsory character notwithstanding contrary state agreements. At first, Verdross's vision of international jus cogens encountered skepticism within the legal academy. These voices of resistance soon found themselves in the minority, however, as the jus cogens concept gained enhanced recognition and credibility following the Second World War. (See Lauri Hannikainen, Peremptory Norms (Jus cogens) in International Law: Historical Development, Criteria, Present Status 150 (1988) (surveying legal scholarship during the period 1945-69 and reporting that "about eighty per cent [of scholars] held the opinion that there are peremptory norms existing in international law").

3. Classical publicists such as Hugo Grotius, Emer de Vattel, and Christian Wolff drew upon the Roman law distinction between jus dispositivum (voluntary law) and jus scriptum (obligatory law) to differentiate consensual agreements between states from the "necessary" principles of international law that bind all states as a point of conscience regardless of consent.[FN6]

[FN6] See Hugonis Grotii, De Jure Belli et Pacis [On the Law of War and Peace] (William Whewell ed. & trans., John W. Parker, London 2009) (1625); Emer de Vattel, Le Droit des Gens ou Principes de la Loi Naturelle [The Law of Nations or Principles of Natural Law] §§ 9, 27 (1758) (distinguishing "le Droit des Gens Naturel, ou Nécessaire" from "le Droit Volontaire"); Christian Wolff, Jus Gentium Methodo Scientifica Pertractorum [A Scientific Method for Understanding the Law of Nations] ¶ 5

[FN71] Classical publicists such as Hugo Grotius, Emer de Vattel, and Christian Wolff drew upon the Roman law distinction between jus dispositivum (voluntary law) and jus scriptum (obligatory law) to differentiate consensual agreements between states from the "necessary" principles of international law that bind all states as a point of conscience regardless of consent.

(p. 31, Footnote 71 of the 28 April 2010 Decision)

(James Brown Scott ed., Joseph H. Drake trans., Clarendon Press 1934) (1764).

(p. 334 of the Yale Law Journal of Int’l Law)

4. Early twentieth-century publicists such as Lassa Oppenheim and William Hall asserted confidently that states could not abrogate certain "universally recognized principles" by mutual agreement.[FN9]Outside the academy, judges on the Permanent Court of International Justice affirmed the existence of peremptory norms in international law by referencing treaties contra bonos mores (contrary to public policy) in a series of individual concurring and dissenting opinions.[FN10]xxx

[FN9] William Hall, A Treatise on International Law 382-83 (8th ed. 1924) (asserting that "fundamental principles of international law" may "invalidate [], or at least render voidable," conflicting international agreements); 1 Lassa Oppen-heim, International Law 528 (1905).

[FN10] For example, in the 1934 Oscar Chinn Case, Judge Schücking's influential dissent stated that neither an interna-tional court nor an arbitral tribunal should apply a treaty provision in contradiction to bonos mores. Oscar Chinn Case, 1934 P.C.I.J. (ser. A/B) No. 63, at 149-50 (Dec. 12) (Schücking, J., dissenting).

(pp. 334-5 of the Yale Law Journal of Int’l Law)

[FN71] xxx Early twentieth-century publicists such as Lassa Oppenheim and William Hall asserted that states could not abrogate certain "universally recognized principles" by mutual agreement. xxx Judges on the Permanent Court of International Justice affirmed the existence of peremptory norms in international law by referencing treaties contra bonos mores (contrary to public policy) in a series of individual concurring and dissenting opinions. xxx

(p. 31, Footnote 71 of the 28 April 2010 Decision)

5. [FN9] William Hall, A Treatise on International Law 382-83 (8th ed. 1924) (asserting that "fundamental principles of international law" may "invalidate [], or at least render voidable," conflicting international agreements) xxx

(Footnote 9 of the Yale Law Journal of Int’l Law)

[FN71] xxx (William Hall, A Treatise on International Law 382-83 (8th ed. 1924) (asserting that "fundamental principles of international law" may "invalidate [], or at least render voidable," conflicting international agreements) xxx

(p. 31, Footnote 71 of the 28 April 2010 Decision)

6. [FN10] For example, in the 1934 Oscar Chinn Case, Judge Schücking's influential dissent stated that neither an international court nor an arbitral tribunal should apply a treaty provision in contradiction to bonos mores. Oscar Chinn Case, 1934 P.C.I.J. (ser. A/B) No. 63, at 149-50 (Dec. 12) (Schücking, J.,

[FN71] xxx (For example, in the 1934 Oscar Chinn Case, Judge Schücking's influential dissent stated that neither an international court nor an arbitral tribunal should apply a treaty provision in contradiction to bonos mores. Oscar Chinn Case, 1934 P.C.I.J. (ser. A/B) No. 63, at 149-50 (Dec. 12) (Schücking,

dissenting).

(Footnote 9 of the Yale Law Journal of Int’l Law)

J., dissenting).

(p. 31, Footnote 71 of the 28 April 2010 Decision)

7. Verdross argued that certain discrete rules of international custom had come to be recognized as having a compulsory character notwithstanding contrary state agreements.[FN12]

[FN12] [Von Verdross, supra note 5.]

(pp. 335 of the Yale Law Journal of Int’l Law)

[FN72] Verdross argued that certain discrete rules of international custom had come to be recognized as having a compulsory character notwithstanding contrary state agreements. xxx

(p. 31, Footnote 72 of the 28 April 2010 Decision)

8. At first, Verdross's vision of international jus cogens encountered skepticism within the legal academy. xxx These voices of resistance soon found themselves in the minority, however, as the jus cogens concept gained enhanced recognition and credibility following the Second World War.

(pp. 335-6 of the Yale Law Journal of Int’l Law)

[FN72] xxx At first, Verdross's vision of international jus cogens encountered skepticism within the legal academy. These voices of resistance soon found themselves in the minority, however, as the jus cogens concept gained enhanced recognition and credibility following the Second World War. xxx

(p. 31, Footnote 72 of the 28 April 2010 Decision)

9. [FN18] See Lauri Hannikainen, Peremptory Norms (Jus Cogens) in International Law: Historical Development, Criteria, Present Status 150 (1988) (surveying legal scholarship during the period 1945-69 and reporting that "about eighty per cent [of scholars] held the opinion that there are peremptory norms existing in international law").

(Footnote 18 of the Yale Law Journal of Int’l Law)

[FN72] xxx (See Lauri Hannikainen, Peremptory Norms (Jus cogens) in International Law: Historical Development, Criteria, Present Status 150 (1988) (surveying legal scholarship during the period 1945-69 and reporting that "about eighty per cent [of scholars] held the opinion that there are peremptory norms existing in international law").

(p. 31, Footnote 72 of the 28 April 2010 Decision)

10. xxx the 1950s and 1960s with the United Nations International Law Commission's (ILC) preparation of the Vienna Convention on the Law of Treaties (VCLT).[FN20]

[FN20] VCLT, supra note 2.

(p. 336 of the Yale Law Journal of Int’l Law)

xxx the 1950s and 1960s with the ILC’s preparation of the Vienna Convention on the Law of Treaties (VCLT).[FN73]

(p. 31, Body of the 28 April 2010 Decision)

[FN73] In March 1953, the ILC's Special Rapporteur, Sir Hersch Lauterpacht, submitted for the ILC's consideration a partial draft convention on treaties which stated that "[a] treaty, or any of its provisions, is void if its performance involves an act which is illegal under international law and if it is declared so to be by the International Court of Justice." Hersch Lauterpacht, Law of Treaties: Report

by Special Rapporteur, [1953] 2 Y.B. Int'l L. Comm'n 90, 93, U.N. Doc. A/CN.4/63.

11. In March 1953, Lauterpacht submitted for the ILC's consideration a partial draft convention on treaties which stated that "[a] treaty, or any of its provisions, is void if its performance involves an act which is illegal under international law and if it is declared so to be by the International Court of Justice."[FN21]

[FN21] Hersch Lauterpacht, Law of Treaties: Report by Special Rapporteur, [1953] 2 Y.B. Int'l L. Comm'n 90, 93, U.N. Doc. A/CN.4/63.

(p. 336 of the Yale Law Journal of Int’l Law)

[FN73] In March 1953, the ILC's Special Rapporteur, Sir Hersch Lauterpacht, submitted for the ILC's consideration a partial draft convention on treaties which stated that "[a] treaty, or any of its provisions, is void if its performance involves an act which is illegal under international law and if it is declared so to be by the International Court of Justice." Hersch Lauterpacht, Law of Treaties: Report by Special Rapporteur, [1953] 2 Y.B. Int'l L. Comm'n 90, 93, U.N. Doc. A/CN.4/63.

(p. 31, Footnote 73 of the 28 April 2010 Decision)

12. Lauterpacht's colleagues on the ILC generally accepted his assessment that certain international norms had attained the status of jus cogens. [FN23] Yet despite general agreement over the existence of international jus cogens, the ILC was unable to reach a consensus regarding either the theoretical basis for peremptory norms' legal authority or the proper criteria for identifying peremptory norms.

[FN23] See Hannikainen, supra note 18, at 160-61 (noting that none of the twenty five members of the ILC in 1963 denied the existence of jus cogens or contested the inclusion of an article on jus cogens in the VCLT); see, e.g., Summary Records of the 877th Meeting, [1966] 1 Y.B. Int'l L. Comm'n 227, 230-231, U.N. Doc. A/CN.4/188 (noting that the "emergence of a rule of jus cogens banning aggressive war as an international crime" was evidence that international law contains "minimum requirement[s] for safeguarding the existence of the international community").

(p. 336 of the Yale Law Journal of Int’l Law)

Though there was a consensus that certain international norms had attained the status of jus cogens, [FN74] the ILC was unable to reach a consensus on the proper criteria for identifying peremptory norms.

(p. 31, Body of the 28 April 2010 Decision)

[FN74] See Summary Records of the 877th Meeting, [1966] 1 Y.B. Int'l L. Comm'n 227, 230-231, U.N. Doc. A/CN.4/188 (noting that the "emergence of a rule of jus cogens banning aggressive war as an international crime" was evidence that international law contains "minimum requirement[s] for safeguarding the existence of the international community").

13. [FN23] xxx see, e.g., Summary Records of the 877th Meeting, [1966] 1 Y.B. Int'l L. Comm'n 227, 230-231, U.N. Doc. A/CN.4/188 (noting that the "emergence of a rule of jus cogens banning aggressive war as an international crime" was evidence that international law contains "minimum requirement[s] for safeguarding the existence of the

[FN74] See Summary Records of the 877th Meeting, [1966] 1 Y.B. Int'l L. Comm'n 227, 230-231, U.N. Doc. A/CN.4/188 (noting that the "emergence of a rule of jus cogens banning aggressive war as an international crime" was evidence that international law contains "minimum requirement[s] for safeguarding the existence

international community").

(Footnote 23 of the Yale Law Journal of Int’l Law)

of the international community").

(p. 31, Footnote 74 of the 28 April 2010 Decision)

14. After an extended debate over these and other theories of jus cogens, the ILC concluded ruefully in 1963 that "there is not as yet any generally accepted criterion by which to identify a general rule of international law as having the character of jus cogens."[FN27] xxx In commentary accompanying the draft convention, the ILC indicated that "the prudent course seems to be to . . . leave the full content of this rule to be worked out in State practice and in the jurisprudence of international tribunals."[FN29] xxx

[FN27] Second Report on the Law of Treaties, [1963] 2 Y.B. Int'l L. Comm'n 1, 52, U.N. Doc. A/CN.4/156.

[FN29] Second Report on the Law of Treaties, supra note 27, at 53.

(p. 337-8 of the Yale Law Journal of Int’l Law)

After an extended debate over these and other theories of jus cogens, the ILC concluded ruefully in 1963 that "there is not as yet any generally accepted criterion by which to identify a general rule of international law as having the character of jus cogens."[FN75] In a commentary accompanying the draft convention, the ILC indicated that "the prudent course seems to be to x x x leave the full content of this rule to be worked out in State practice and in the jurisprudence of international tribunals."[FN76] xxx

(p. 32, Body of the 28 April 2010 Decision)

[FN75] Second Report on the Law of Treaties, [1963] 2 Y.B. Int'l L. Comm'n 1, 52, U.N. Doc. A/CN.4/156.

[76] Id. at 53.

15. In some municipal cases, courts have declined to recognize international norms as peremptory while expressing doubt about the proper criteria for identifying jus cogens.[FN72]

[FN72] See, e.g., Sampson v. Federal Republic of Germany, 250 F.3d 1145, 1149 (7th Cir. 2001) (expressing concern that jus cogens should be invoked "[o]nly as a last resort").

(p. 346 of the Yale Law Journal of Int’l Law)

[FN77] xxx In some municipal cases, courts have declined to recognize international norms as peremptory while expressing doubt about the proper criteria for identifying jus cogens. (See, e.g., Sampson v. Federal Republic of Germany, 250 F.3d 1145, 1149 (7th Cir. 2001) (expressing concern that jus cogens should be invoked "[o]nly as a last resort")). xxx

(p. 32, Footnote 77 of the 28 April 2010 Decision)

16. In other cases, national courts have accepted international norms as peremptory, but have hesitated to enforce these norms for fear that they might thereby compromise state sovereignty.[FN73] xxx In Congo v. Rwanda, for example, Judge ad hoc John Dugard observed that the ICJ had refrained from invoking the jus cogens concept in several previous cases where peremptory norms manifestly clashed with other principles of general international law.[FN74] Similarly, the European Court of Human Rights has addressed jus cogens only once, in Al-Adsani v. United Kingdom, when it famously rejected

[FN77] xxx In other cases, national courts have accepted international norms as peremptory, but have hesitated to enforce these norms for fear that they might thereby compromise state sovereignty. (See, e.g., Bouzari v. Iran, [2004] 71 O.R.3d 675 (Can.) (holding that the prohibition against torture does not entail a right to a civil remedy enforceable in a foreign court)).

In Congo v. Rwanda, for example, Judge ad hoc John Dugard observed that the ICJ had refrained from invoking the jus cogensconcept in several previous cases where peremptory

the argument that jus cogens violations would deprive a state of sovereign immunity.

[FN73] See, e.g., Bouzari v. Iran, [2004] 71 O.R.3d 675 (Can.) (holding that the prohibition against torture does not entail a right to a civil remedy enforceable in a foreign court).

[FN74] See Armed Activities on the Territory of the Congo (Dem. Rep. Congo v. Rwanda) (Judgment of Feb. 3, 2006), at 2 (dissenting opinion of Judge Dugard) xxx.

(pp. 346-7 of the Yale Law Journal of Int’l Law)

norms manifestly clashed with other principles of general international law. (See Armed Activities on the Territory of the Congo (Dem. Rep. Congo v. Rwanda) (Judgment of February 3, 2006), at 2 (Dissenting Opinion of Judge Dugard))

Similarly, the European Court of Human Rights has addressed jus cogens only once, in Al-Adsani v. United Kingdom, when it famously rejected the argument that jus cogens violations would deprive a state of sovereign immunity. Al-Adsani v. United Kingdom, 2001-XI Eur. Ct. H.R. 79, 61).

(p. 32, Footnote 77 of the 28 April 2010 Decision)

TABLE C: Comparison of Mark Ellis’s article in the Case Western Reserve Journal of International Law, entitled Breaking the Silence: Rape as an International Crime (2006-7), hereafter called "Ellis’s work" and the Supreme Court’s 28 April 2010 Decision in Vinuya, et al. v. Executive Secretary.

Mark Ellis, Breaking the Silence: Rape as an International Crime, 38 Case W. Res. J. Int'l L. 225 (2006-2007).

Vinuya, et. al. v. Executive Secretary, G.R. No. 162230, 28 April 2010.

1. The concept of rape as an international crime is relatively new. This is not to say that rape has never been historically prohibited, particularly in war.[FN7] The 1863 Lieber Instructions, which codified customary inter-national law of land warfare, classified rape as a crime of "troop discipline."[FN8] It specified rape as a capital crime punishable by the death penalty.[FN9] The 1907 Hague Convention protected women by requiring the protection of their "honour."[FN10] But modern-day sensitivity to the crime of rape did not emerge until after World War II.

[FN7] For example, the Treaty of Amity and Commerce Prussia and the United States provides that in time of war all women and children "shall not be molested in their persons." The Treaty of Amity and Commerce, Between his Majesty the King of Prussia and the United States of America, art. 23, Sept. 10, 1785, U.S.-Pruss., 8 TREATIES & OTHER INT'L AGREEMENTS OF THE U.S. 78, 85, available at xxx.

[FN8] David Mitchell, The Prohibition of Rape in

[FN65] The concept of rape as an international crime is relatively new. This is not to say that rape has never been historically prohibited, particularly in war. But modern-day sensitivity to the crime of rape did not emerge until after World War II. xxx (For example, the Treaty of Amity and Commerce between Prussia and the United States provides that in time of war all women and children "shall not be molested in their persons." The Treaty of Amity and Commerce, Between his Majesty the King of Prussia and the United States of America, art. 23, Sept. 10, 1785, U.S.-Pruss., 8 Treaties & Other Int'l Agreements Of The U.S. 78, 85[)]. The 1863 Lieber Instructions classified rape as a crime of "troop discipline." (Mitchell, The Prohibition of Rape in International Humanitarian Law as a Norm of Jus cogens: Clarifying the Doctrine, 15 DUKE J. COMP. INT’L. L. 219, 224). It specified rape as a capital crime punishable by the death penalty (Id. at 236). The 1907 Hague Convention protected women by requiring the protection of their "honour." ("Family honour and rights, the lives of persons, and private property, as well as religious convictions and practice, must be respected." Convention (IV)

International Humanitarian Law as a Norm of Jus Cogens: Clarifying the Doctrine, 15 DUKE J. COMP. INT'L L. 219, 224.

[FN9] Id. at 236.

[FN10] "Family honour and rights, the lives of persons, and private property, as well as religious convictions and practice, must be respected." Convention (IV) Respecting the Laws & Customs of War on Land, art. 46, Oct. 18, 1907, available at http://www.yale.edu/lawweb/avalon/lawofwar/hague04.htm #art46.

(p. 227 of the Case Western Law Reserve Journal of Int’l Law)

Respecting the Laws & Customs of War on Land, art. 46, Oct. 18, 1907[)]. xxx.

(p. 27, Footnote 65 of the 28 April 2010 Decision)

2. After World War II, when the Allies established the Nuremberg Charter, the word rape was not mentioned. The article on crimes against humanity explicitly set forth prohibited acts, but rape was not mentioned by name.[FN11]

[FN11] See generally, Agreement for the Prosecution and Punishment of the Major War Criminals of the Euro-pean Axis, Aug. 8, 1945, 59 Stat. 1544, 82 U.N.T.S. 279.

(p. 227 of the Case Western Law Reserve Journal of Int’l Law)

[FN65] xxx In the Nuremberg Charter, the word rape was not mentioned. The article on crimes against humanity explicitly set forth prohibited acts, but rape was not mentioned by name. xxx See Agreement for the Prosecution and Punishment of the Major War Criminals of the European Axis, Aug. 8, 1945, 59 Stat. 1544, 82 U.N.T.S. 279. xxx.

(p. 27, Footnote 65 of the 28 April 2010 Decision)

3. The Nuremberg Judgment did not make any reference to rape and rape was not prosecuted.[FN13] xxx.

It was different for the Charter of the International Military Tribunal for the Far East.[FN15] xxx The Tribunal prosecuted rape crimes, even though its Statute did not explicitly criminalize rape.[FN17] The Far East Tribunal held General Iwane Matsui, Commander Shunroku Hata and Foreign Minister Hirota criminally responsible for a series of crimes, including rape, committed by persons under their authority.[FN18]

[FN13] Judge Gabrielle Kirk McDonald, The International Criminal Tribunals Crime and Punishment in the International Arena, 7 ILSA J. INT'L COMP L. 667, at 676.

[FN65] xxx The Nuremberg Judgment did not make any reference to rape and rape was not prosecuted. (Judge Gabrielle Kirk McDonald, The International Criminal Tribunals Crime and Punishment in the International Arena,7 ILSA J. Int’l. Comp. L. 667, 676.) However, International Military Tribunal for the Far East prosecuted rape crimes, even though its Statute did not explicitly criminalize rape. The Far East Tribunal held General Iwane Matsui, Commander Shunroku Hata and Foreign Minister Hirota criminally responsible for a series of crimes, including rape, committed by persons under their authority. (The Tokyo Judgment: Judgment Of The International Military Tribunal For The Far East 445-54 (1977). xxx

(p. 27, Footnote 65 of the 28 April 2010

[FN15] See Charter of the International Tribunal for the Far East, Jan. 19, 1946, T.I.A.S. 1589.

[FN17] See McDonald, supra note 13, at 676.

[FN18] THE TOKYO JUDGMENT: JUDGMENT OF THE INTERNATIONAL MILITARY TRIBUNAL FOR THE FAR EAST 445-54 (B.V.A. Roling and C.F. Ruter eds., 1977).

(p. 228 of the Case Western Law Reserve Journal of Int’l Law)

Decision)

4. The first mention of rape as a specific crime came in December 1945 when Control Council Law No. 10 included the term rape in the definition of crimes against humanity.[FN22] Law No. 10, adopted by the four occupying powers in Germany, was devised to establish a uniform basis for prosecuting war criminals in German courts.

[FN22] Control Council for Germany, Law No. 10: Punishment of Persons Guilty of War Crimes, Crimes Against Peace and Against Humanity, Dec. 20, 1945, 3 Official Gazette Control Council for Germany 50, 53 (1946), available at http://www1.umn.edu/humanrts/instree/ccno10.htm (last visited Nov. 20, 2003). This law set forth a uniform legal basis in Germany for the prosecution of war criminals and similar offenders, other than those dealt with under the International Military Tribunal. See id. at 50.

(pp. 228-9 of the Case Western Law Reserve Journal of Int’l Law)

[FN65] xxx The first mention of rape as a specific crime came in December 1945 when Control Council Law No. 10 included the term rape in the definition of crimes against humanity. Law No. 10, adopted by the four occupying powers in Germany, was devised to establish a uniform basis for prosecuting war criminals in German courts. (Control Council for Germany, Law No. 10: Punishment of Persons Guilty of War Crimes, Crimes Against Peace and Against Humanity, Dec. 20, 1945, 3 Official Gazette Control Council for Germany 50, 53 (1946)) xxx

(p. 27, Footnote 65 of the 28 April 2010 Decision)

5. The 1949 Geneva Convention Relative to the Treatment of Prisoners of War was the first modern-day international instrument to establish protections against rape for women.[FN23] However, the most important development in breaking the silence of rape as an international crime has come through the jurisprudence of the ICTY and the International Criminal Tribunal for Rwanda (ICTR). Both of these Tribunals have significantly advanced the crime of rape by enabling it to be prosecuted as genocide, a war crime, and a crime against humanity. xxx.

[FN23] Geneva Convention Relative to the

[FN65] xxx The 1949 Geneva Convention Relative to the Treatment of Prisoners of War was the first modern-day international instrument to establish protections against rape for women. Geneva Convention Relative to the Protection of Civilian Persons in Time of War, Aug. 12, 1949, art. 27, 6 U.S.T. 3316, 75 U.N.T.S. 287 (entry into force Oct. 20, 1950) [hereinafter Fourth Geneva Convention]. Furthermore, the ICC, the ICTY, and the International Criminal Tribunal for Rwanda (ICTR) have significantly advanced the crime of rape by enabling it to be prosecuted as genocide, a war crime, and a

Protection of Civilian Persons in Time of War, Aug. 12, 1949, art. 27, 6 U.S.T. 3316, 75 U.N.T.S. 287 (entry into force Oct. 20, 1950) [hereinafter Fourth Geneva Convention].

(p. 229 of the Case Western Law Reserve Journal of Int’l Law)

crime against humanity. xxx.

(p. 27, Footnote 65 of the 28 April 2010 Decision)

Forms of Plagiarism

There are many ways by which plagiarism can be committed.4 For the purpose of this analysis, we used the standard reference book prescribed for Harvard University students, "Writing with Sources" by Gordon Harvey.

Harvey identifies four forms of plagiarism5: (a) uncited data or information;6 (b) an uncited idea, whether a specific claim or general concept;7 (c) an unquoted but verbatim phrase or passage;8 and (d) an uncited structure or organizing strategy.9 He then explains how each form or mode of plagiarism is committed. Plagiarism is committed in mode (a) by "plagiarizing information that is not common knowledge."10 Mode (b) is committed when "distinctive ideas are plagiarized," "even though you present them in a different order and in different words, because they are uncited."11

Even if there has been a prior citation, succeeding appropriations of an idea to make it appear as your own is plagiarism, because the "[previous] citation in [an earlier] passage is a deception." Mode (c) is committed when "you … borrowed several distinctive phrases verbatim, without quotation marks…" Mode (d) is committed when, though the words and details are original, "(y)ou have, however, taken the structural framework or outline directly from the source passage … even though, again, your language differs from your source and your invented examples are original."12

These forms of plagiarism can exist simultaneously in one and the same passage. There may be a complete failure to use quotation marks in one part of the sentence or paragraph while combining that part with phrases employing an uncited structure or organizing strategy. There may be patchwork plagiarizing committed by collating different works or excerpts from the same work without proper attribution.13

These acts of plagiarism can also be committed in footnotes in the same way and at the same degree of unacceptability as plagiarized passages in the body. This is especially frowned upon in footnotes that are discursive or "content" footnotes or endnotes. Harvey explains that a discursive footnote or endnote is "a note that includes comments, not just publication information . . . when you want to tell your reader something extra to the strict development of your argument, or incorporate extra information about sources."14

Violations of Rules against Plagiarism in the Vinuya Decision

Below are violations of the existing rules against plagiarism that can be found in the Vinuya decision. The alphanumeric tags correspond to the table letter and row numbers in the tables provided above.

A.1 Failure to use quotation marks to indicate that the entire paragraph in the body of the decision on page 30 was not the ponente’s original paragraph, but was lifted verbatim from Tams’s work. The attribution to Tams is wholly insufficient because without the quotation marks, there is nothing to alert the reader that the paragraph was lifted verbatim from Tams. The footnote leaves

the reader with the impression that the said paragraph is the author’s own analysis of erga omnes.

The "See Tams, Enforcing Obligations Erga omnes in International Law (2005)" line in footnote 69 of the Vinuyadecision does not clearly indicate that the statement on Simma’s observation was lifted directly from Tams’s work; it only directs the reader to Tams’s work should the reader wish to read further discussions on the matter.

B.1 Failure to use quotation marks to indicate that the two sentences were not the ponente’s, but were lifted verbatim from two non-adjoining sentences found on pages 331 and 332 of the Yale Law Journal of International Law article of Criddle & Fox-Decent and with absolutely no attribution to the latter.

B.2 Failure to use quotation marks to indicate that the sentence fragment on peremptory norms was not the ponente’s original writing, but was lifted verbatim from page 334 of the Yale Law Journal of International Law article of Criddle & Fox-Decent with absolutely no attribution to the authors.

B.3 Failure to use quotation marks to indicate that the first sentence in discursive footnote number 71 was not the ponente’s idea, but was lifted verbatim from Criddle & Fox-Decent’s work at page 334.

B.4 Failure to use quotation marks to indicate that the third sentence in discursive footnote number 71 was not the ponente’s idea, but was lifted from Criddle & Fox-Decent’s work at 334-335.

B.5 Failure to indicate that one footnote source in discursive footnote 71 was lifted verbatim from discursive footnote 9 of Tams; thus, even the idea being propounded in this discursive part of footnote 71 was presented as the ponente’s, instead of Criddle’s & Fox-Decent’s.

B.6 Failure to indicate that the last discursive sentence in footnote 71 and the citations thereof were not the ponente’s, but were lifted verbatim from footnote 9 of Criddle & Fox-Decent’s work.

B.7 Failure to indicate that the first discursive sentence of footnote 72 was not the ponente’s, but was lifted verbatim from page 335 of Criddle & Fox-Decent’s work.

B.8 Failure to indicate that the second discursive sentence of footnote 72 was not the ponente’s, but was lifted verbatim from pages 335-336 of Criddle and Fox-Decent’s work.

B.9 Failure to indicate that the citation and the discursive passage thereon in the last sentence of footnote 72 was not the ponente’s, but was lifted verbatim from discursive footnote 18 of Criddle & Fox-Decent’s work.

B.10 Failure to use quotation marks to indicate that a phrase in the body of the decision on page 31 was not the ponente’s, but was lifted verbatim from page 336 of Criddle & Fox-Decent’s work.

B.11 Failure to indicate that the entirety of discursive footnote 73 was not the ponente’s, but was lifted verbatim from page 336 of Criddle & Fox-Decent’s work.

B.12 Failure to indicate that the idea of lack of "consensus on whether certain international norms had attained the status of jus cogens" was a paraphrase of a sentence combined with a verbatim lifting of a phrase that appears on page 336 of Criddle & Fox-Decent’s work and was not the ponente’s own conclusion. This is an example of patchwork plagiarism.

B.13 Failure to indicate that the entirety of discursive footnote 74 on page 31 of the Decision was not the ponente’s comment on the source cited, but was lifted verbatim from footnote 23 of Criddle & Fox-Decent’s work.

B.14 Failure to indicate through quotation marks and with the proper attribution to Criddle that the first two sentences of page 32 were not the ponente’s, but were lifted verbatim from two non-adjoining sentences on pages 337-338 of Criddle & Fox-Decent’s work.

B.15 Failure to indicate through quotation marks and the right citation that the discursive sentence in the second paragraph of footnote 77, and the citation therein, were not the ponente’s, but were lifted verbatim from page 346 of the body of Criddle & Fox-Decent’s work in the instance of the discursive sentence, and from footnote 72 of Criddle & Fox-Decent’s work in the instance of the case cited and the description thereof.

B.16 Failure to indicate that the choice of citation and the discursive thereon statement in the second sentence of the second paragraph of discursive footnote 77 was not the ponente’s, but was lifted verbatim from footnote 72 of Criddle & Fox-Decent’s work.

B.17 Failure to indicate through quotation marks and the right citations that the entirety of the discursive third to fifth paragraphs of footnote 77 were not the product of the ponente’s own analysis and choice of sources, but were lifted verbatim from footnotes 73 and 77 on pages 346-347 of Criddle & Fox-Decent’s work.

C.1 to C.6 Failure to use quotation marks and the right citations to indicate that half of the long discursive footnote 65, including the sources cited therein, was actually comprised of the rearrangement, and in some parts, rephrasing of 18 sentences found on pages 227-228 of Mr. Ellis’s work in Case Western Law Reserve Journal of International Law.

This painstaking part-by-part analysis of the Vinuya decision is prompted by the fact that so many, including international academicians, await the Court’s action on this plagiarism charge ─ whether it will in all candor acknowledge that there is a set of conventions by which all intellectual work is to be judged and thus fulfill its role as an honest court; or blind itself to the unhappy work of its member.

The text of the Decision itself reveals the evidence of plagiarism. The tearful apology of the legal researcher to the family of the ponente and her acknowledgment of the gravity of the act of omitting attributions is an admission that something wrong was committed. Her admission that the correct attributions went missing in the process of her work is an admission of plagiarism. The evidence in the text of the Vinuya Decision and the acknowledgment by the legal researcher are sufficient for the determination of plagiarism.

The Place of the Plagiarized

Portions in the Vinuya Decision

The suspect portions of the majority decision start from the discursive footnotes of the first full paragraph of page 27. In that paragraph, the idea sought to be developed was that while rape and sexual slavery may be morally reprehensible and impermissible by international legal norms, petitioners have failed to make the logical leap to conclude that the Philippines is thus under international legal duty to prosecute Japan for the said crime. The plagiarized work found in discursive footnote 65 largely consists of the exposition by Mr. Ellis of the development of the concept of rape as an international crime. The impression obtained by any reader is that the ponente has much to say about how this crime evolved in international law, and that he is an expert on this matter.

There are two intervening paragraphs before the next suspect portion of the decision. The latter starts from the second paragraph on page 30 and continues all the way up to the first paragraph of page 32. The discussion on the erga omnes obligation of states almost cannot exist, or at the very least cannot be sustained, without the plagiarized works of Messrs. Tams, Criddle and Decent-Fox. There is basis to say that the plagiarism of this portion is significant.

How the Majority DecisionTreated the Specific Allegations of Plagiarism

The majority Decision narrates and explains:

"The researcher demonstrated by Power Point presentation how the attribution of the lifted passages to the writings of Criddle-Descent and Ellis, found in the beginning drafts of her report to Justice Del Castillo, were unintentionally deleted. She tearfully expressed remorse at her "grievous mistake" and grief for having "caused an enormous amount of suffering for Justice Del Castillo and his family."

On the other hand, addressing the Committee in reaction to the researcher’s explanation, counsel for petitioners insisted that lack of intent is not a defense in plagiarism since all that is required is for a writer to acknowledge that certain words or language in his work were taken from another’s work. Counsel invoked the Court’s ruling in University of the Philippines Board of Regents v. Court of Appeals and Arokiaswamy William Margaret Celine, arguing that standards on plagiarism in the academe should apply with more force to the judiciary.

x x x           x x x          x x x

"… although Tams himself may have believed that the footnoting in his case was not "an appropriate form of referencing," he and petitioners cannot deny that the decision did attribute the source or sources of such passages. Justice Del Castillo did not pass off Tam’s work as his own. The Justice primarily attributed the ideas embodied in the passages to Bruno Simma, whom Tam himself credited for them. Still, Footnote 69 mentioned, apart from Simma, Tam’s article as another source of those ideas.

The Court believes that whether or not the footnote is sufficiently detailed, so as to satisfy the footnoting standards of counsel for petitioners is not an ethical matter but one concerning clarity of writing. The statement "See Tams, Enforcing Obligations Erga Omnes in International Law (2005)" in the Vinuya decision is an attribution no matter if Tams thought that it gave him somewhat less credit than he deserved. Such attribution altogether negates the idea that Justice Del Castillo passed off the challenged passages as his own.

That it would have been better had Justice Del Castillo used the introductory phrase "cited in" rather than the phrase "See" would make a case of mere inadvertent slip in attribution rather than a case of "manifest intellectual theft and outright plagiarism." If the Justice’s citations were imprecise, it would just be a case of bad footnoting rather than one of theft or deceit. If it were otherwise, many would be target of abuse for every editorial error, for every mistake in citing pagination, and for every technical detail of form."

x x x

"Footnote 65 appears down the bottom of the page. Since the lengthily passages in that footnote came almost verbatim from Ellis’ article, such passages ought to have been introduced by an acknowledgement that they are from that article. The footnote could very well have read:

65 In an article, Breaking the Silence: Rape as an International Crime, Case Western Reserve Journal of International Law (2006), Mark Ellis said.) x x x

"But, as it happened, the acknowledgment above or a similar introduction was missing from Footnote 65.

x x x

"Admittedly, the Vinuya decision lifted the above, including their footnotes, from Criddle-Descent’s article, A Fiduciary Theory of Jus Cogens. Criddle-Descent’s footnotes were carried into the Vinuya decision’s own footnotes but no attributions were made to the two authors in those footnotes.

"Unless amply explained, the above lifting from the works of Ellis and Criddle-Descent could be construed as plagiarism. But one of Justice Del Castillo’s researchers, a court-employed attorney, explained how she accidentally deleted the attributions, originally planted in the beginning drafts of her report to him, which report eventually became the working draft of the decision. She said that, for most parts, she did her research electronically. For international materials, she sourced these mainly from Westlaw, an online research service for legal and law-related materials to which the Court subscribes.

x x x

"With the advent of computers, however as Justice Del Castillo’s researcher also explained, most legal references, including the collection of decisions of the Court, are found in electronic diskettes or in internet websites that offer virtual libraries of books and articles. Here, as the researcher found items that were relevant to her assignment, she downloaded or copied them into her "main manuscript," a smorgasbord plate of materials that she thought she might need. The researcher’s technique in this case is not too far different from that employed by a carpenter. The carpenter first gets the pieces of lumber he would need, choosing the kinds and sizes suitable to the object he has in mind, say a table. When ready, he would measure out the portions he needs, cut them out of the pieces of lumber he had collected, and construct his table. He would get rid of the scraps.

"Here, Justice Del Castillo’s researcher did just that. She electronically "cut" relevant materials from books and journals in the Westlaw website and "pasted" these to a "main manuscript" in her computer that contained the Microsoft Word program. Later, after she decided on the general shape that her report would take, she began pruning from that manuscript those materials that did not fit, changing the positions in the general scheme of those that remained, and adding and deleting paragraphs, sentences, and words as her continuing discussions with Justice Del Castillo, her chief editor, demanded. Parenthetically, this is the standard scheme that computer-literate court researchers use everyday in their work.

"Justice Del Castillo’s researcher showed the Committee the early drafts of her report in the Vinuya case and these included the passages lifted from the separate articles of Criddle-Descent and of Ellis with proper attributions to these authors. But, as it happened, in the course of editing and cleaning up her draft, the researcher accidentally deleted the attributions.

"The Court adopts the Committee’s finding that the researcher’s explanation regarding the accidental removal of proper attributions to the three authors is credible. Given the operational properties of the Microsoft program in use by the Court, the accidental decapitation of attributions to sources of research materials is not remote."

Contrary to the view of my esteemed colleagues, the above is not a fair presentation of what happens in electronically generated writings aided by electronic research.

First, for a decision to make full attribution for lifted passages, one starts with block quote formatting or the "keying-in" of quotation marks at the beginning and at the end of the lifted passages. These keyed-in computer commands are not easily accidentally deleted, but should be deliberately inputted where there is an intention to quote and attribute.

Second, a beginning acknowledgment or similar introduction to a lengthy passage copied verbatim should not be accidentally deleted; it must be deliberately placed.

Third, the above explanation regarding the lines quoted in A.1 in the majority Decision may touch upon what happened in incident A.1, but it does not relate to what happened in incidents B.1 to C.6 of the Tables of Comparison, which are wholesale lifting of excerpts from both the body and the footnotes of the referenced works, without any attribution, specifically to the works of Criddle & Fox-Decent and of Ellis. While mention was made of Tams’s work, no mention was made at all of the works of Criddle & Fox-Decent and of Ellis even though the discussions and analyses in their discursive footnotes were used wholesale.

Fourth, the researcher’s explanation regarding the accidental deletion of 2 footnotes out of 119 does not plausibly account for the extensive amount of text used with little to no modifications from the works of Criddle & Fox-Decent and Ellis. As was presented in Tables B and C, copied text occurs in 22 instances in pages 27, 31, and 32 of the Vinuya decision. All these instances of non-attribution cannot be remedied by the reinstatement of 2 footnotes.

Fifth, the mention of Tams in "See Tams, Enforcing Obligations Erga omnes in International Law (2005)" in footnote 69 of the Vinuya decision was not a mere insufficiency in "clarity of writing," but a case of plagiarism under the rule prohibiting the use of misleading citations.

Sixth, the analogy that was chosen ─ that of a carpenter who discards materials that do not fit into his carpentry work ─ is completely inappropriate. In the scheme of "cutting and pasting" that the researcher did during her work, it is standard practice for the original sources of the downloaded and copied materials to be regarded as integral parts of the excerpts, not extraneous or ill-fitting. A computer-generated document can accommodate as many quotation marks, explanatory notes, citations and attributions as the writer desires and in multiple places. The limits of most desktop computer drives, even those used in the Supreme Court, are in magnitudes of gigabytes and megabytes, capable of accommodating 200 to 400 books per gigabyte (with each book just consuming roughly 3 to 5 megabytes). The addition of a footnote to the amount of file space taken up by an electronic document is practically negligible. It is not as if the researcher lacked any electronic space; there was simply no attribution.

Seventh, contrary to what is implied in the statement on Microsoft Word’s lack of an alarm and in paragraph 4 of the decretal portion of the majority Decision, no software exists that will automatically type in quotation marks at the beginning and end of a passage that was lifted verbatim; these attribution marks must be made with deliberate effort by the human researcher. Nor can a software program generate the necessary citations without input from the human researcher. Neither is there a built-in software alarm that sounds every time attribution marks or citations are deleted. The best guarantee for works of high intellectual integrity is consistent, ethical practice in the writing habits of court researchers and judges. All lawyers are supposed to be knowledgeable on the standard of ethical practice, if they took their legal research courses in law school and their undergraduate research courses seriously. This knowledge can be easily picked up and updated by browsing many free online sources on the subject of writing standards. In addition, available on the market are software programs that can detect some, but not all, similarities in the phraseology of a work-in-progress with those in selected published materials; however, these programs cannot supply the citations on their own. Technology can help diminish instances of plagiarism by allowing supervisors of researchers to make partial audits of their work, but it is still the human writer who must decide to give the proper attribution and act on this decision.

Plagiarism and Judicial Plagiarism

Plagiarism is an act that does not depend merely on the nature of the object, i.e. what is plagiarized, but also hinges on the process, i.e. what has been done to the object. The elements of this process are the act of copying the plagiarized work and the subsequent omission in failing to attribute the work to its author.15 Plagiarism thus does not consist solely of using the work of others in one's own work, but of the former in conjunction with the failure to attribute said work to its rightful owner and thereby, as in the case of written work, misrepresenting the work of another as one's own. As the work is another's and used without attribution, the plagiarist derives the benefit of use from the plagiarized work without expending the requisite effort for the same ─ at a cost (as in the concept of "opportunity cost") to its author who could otherwise have gained credit for the work and whatever compensation for its use is deemed appropriate and necessary.

If the question of plagiarism, then, turns on a failure of attribution, judicial plagiarism in the case at bar "arises when judges author opinions that employ materials from copyrighted sources such as law journals or books, but neglect to give credit to the author."16 Doing so effectively implies the staking of a claim on the copied work as the judge's own.17 Note that there is no requirement of extent of copying or a minimum number of instances of unattributed usage for an act to be considered a plagiarist act, nor is the intent to deceive or to copy without attribution a prerequisite of plagiarism. In Dursht's exhaustive analysis of judicial plagiarism she cites the case ofNewman v. Burgin18 wherein the court said that plagiarism may be done "through negligence or recklessness without intent to deceive."19 Dursht in addition notes that intent may also be taken as the intent to claim authorship of the copied work, whether or not there was intent to deceive, citing Napolitano v. Trustees of Princeton Univ.20

George describes the following among the types of judicial plagiarism:

Borrowed Text: When quoting a legal periodical, law review, treatise or other such source, the judicial writer must surround the borrowed text with quotation marks or use a block quote. . . . Additionally, the source should be referenced in the text . . .

Using another's language verbatim without using quotation marks or a block quote is intentional, as opposed to unintentional, plagiarism.

Reference errors: The judge may fail to put quotation marks around a clause, phrase or paragraph that is a direct quote from another's writing even though he cites the author correctly. This is plagiarism even though it may be inadvertent.21

While indeed the notion of having committed judicial plagiarism may be unsettling to contemplate, as it may raise in the mind of a judge the question of his or her own culpability22, it is a grievous mistake to overlook the possibility of the commission of judicial plagiarism or the fact that judicial plagiarism is categorized by its very definition as a subset of plagiarism. That a judge, in lifting words from a source and failing to attribute said words to said source in the writing of a decision, committed specifically judicial plagiarism does not derogate from the nature of the act as a plagiarist act. Nor does any claim of inadvertence or lack of intent in the commission of a plagiarist act change the characterization of the act as plagiarism.

Penalties for Plagiarism andJudicial Plagiarism

In the academe, plagiarism is generally dealt with severely when found out; many universities have policies on plagiarism detailing the sanctions that may be imposed on students who are found to have plagiarized in their coursework and other academic requirements. These run the gamut from an automatic failing grade in the course for which the offending work was submitted, or in more egregious cases, outright expulsion from the university. Sanctions for plagiarism in the academe operate through "the denial of certification or recognition of achievement"23 to the extent of rescinding or denying degrees. In the case of law students who do manage to obtain their degrees, their admission to the bar may be

hindered due to questions about their "character or fitness to practice law."24 Indeed, plagiarism, due to the severity of the penalties it may incur, is often identified with the punishment of "academic death."25 The academe justifies the harshness of the sanctions it imposes with the seriousness of the offense: plagiarism is seen not only to undermine the credibility and importance of scholarship, but also to deprive the rightful author of what is often one of the most valuable currencies in the academe: credit for intellectual achievement ─ an act of debasing the coinage, as it were. Thus the rules of many academic institutions sanctioning plagiarism as a violation of academic ethics and a serious offense often classed under the broader heading of "academic dishonesty."

The imposition of sanctions for acts of judicial plagiarism, however, is not as clear-cut. While George recognizes the lack of attribution as the fundamental mark of judicial plagiarism, she notes in the same breath that the act is "without legal sanction."26 Past instances of censure notwithstanding (as in examples of condemnation of plagiarism cited by Lebovits et al27, most particularly the censure of the actions of the judge who plagiarized a law-review article in Brennan28; the admonition issued by the Canadian Federal Court of Appeal in the case ofApotex29) there is still no strictly prevailing consensus regarding the need or obligation to impose sanctions on judges who have committed acts of judicial plagiarism. This may be due in a large part to the absence of expectations of originality in the decisions penned by judges, as courts are required to "consider and usually . . . follow precedent."30 In so fulfilling her obligations, it may become imperative for the judge to use "the legal reasoning and language [of others e.g. a supervising court or a law review article] for resolution of the dispute."31Although these obligations of the judicial writer must be acknowledged, care should be taken to consider that said obligations do not negate the need for attribution so as to avoid the commission of judicial plagiarism. Nor do said obligations diminish the fact that judicial plagiarism "detracts directly from the legitimacy of the judge's ruling and indirectly from the judiciary's legitimacy"32 or that it falls far short of the high ethical standards to which judges must adhere33. The lack of definitiveness in sanctions for judicial plagiarism may also be due to the reluctance of judges themselves to confront the issue of plagiarism in the context of judicial writing; the apprehension caused by "feelings of guilt" being due to "the possibility that plagiarism has unknowingly or intentionally been committed" and a "traditional" hesitance to consider plagiarism as "being applicable to judicial writings."34

Findings of judicial plagiarism do not necessarily carry with them the imposition of sanctions, nor do they present unequivocal demands for rehearing or the reversal of rulings. In Liggett Group, Inc., et al v Harold M. Engle, M.D. et al35, a U.S. tobacco class action suit, "[the] plaintiffs' counsel filed a motion for rehearing alleging that the appellate opinion copied large portions of the defendants' briefs. . . . without attribution." The result of this, the plaintiffs claimed, was the creation of the "appearance of impropriety," the abdication of judicative duties, the relinquishing of independence to defendants, the failure to maintain impartiality, and therefore, as an act of judicial plagiarism, was "a misrepresentation of the facts found by the trial court and denied plaintiffs due process of law."36 The three-judge panel denied the motion. In addition, "courts generally have been reluctant to reverse for the verbatim adoption of prepared findings."37 In Anderson v. City of Bessemer City, North Carolina38 it was held that even though the trial judge's findings of fact may have been adopted verbatim from the prevailing party, the findings "may be reversed only if clearly erroneous."39

On Guilt and Hypocrisy

It is not hypocrisy, contrary to what is implied in a statement in the majority Decision, to make a finding of plagiarism when plagiarism exists. To conclude thus is to condemn wholesale all the academic thesis committees, student disciplinary tribunals and editorial boards who have made it their business to ensure that no plagiarism is tolerated in their institutions and industry. In accepting those review and quality control responsibilities, they are not making themselves out to be error-free, but rather, they are exerting themselves to improve the level of honesty in the original works generated in their institution so that the coinage and currency of intellectual life – originality and the attribution of originality – is maintained. The incentive system of intellectual creation is made to work so that the whole society benefits from the encouraged output.

In the case of judicial plagiarism, it is entirely possible for judges to have violated the rules against plagiarism out of ignorance or from the sheer fact that in order to cope with their caseloads, they have to rely on researchers for part of the work. That would have been a very interesting argument to consider. But ignorance is not pleaded here, nor is the inability to supervise a legal researcher pleaded to escape liability on the part of the ponente. Rather, the defense was that no plagiarism existed. This conclusion however is unacceptable for the reasons stated above.

As noted above, writers have ventured to say that the reluctance to address judicial plagiarism may stem from fear, nay, guilt.40 Fear that the judge who says plagiarism was committed by another is himself guilty of plagiarism. But that is neither here nor there. We must apply the conventions against judicial plagiarism because we must, having taken on that obligation when the Court took cognizance of the plagiarism complaint, not because any one of us is error-free. In fact, the statement on hypocrisy in the majority Decision betrays prejudgment of the complainants as hypocrites, and a complaint against a sitting judge for plagiarism would appear impossible to win.

In a certain sense, there should have been less incentive to plagiarize law review articles because the currency of judges is stare decisis. One wonders how the issue should have been treated had what was plagiarized been a court ruling, but that is not at issue here. The analysis in this opinion is therefore confined to the peculiar situation of a judge who issues a decision that plagiarizes law review articles, not to his copying of precedents or parts of the pleadings of the parties to a case.

As earlier said, a determination of the existence of plagiarism in decision-making is not conclusive on the disciplinary measure to be imposed. Different jurisdictions have different treatments. At the very least however, the process of rectification must start from an acknowledgment and apology for the offense. After such have been done, then consideration of the circumstances that mitigate the offense are weighed. But not before then.

The Unfortunate Result of the Majority Decision

Unless reconsidered, this Court would unfortunately be remembered as the Court that made "malicious intent" an indispensable element of plagiarism and that made computer-keying errors an exculpatory fact in charges of plagiarism, without clarifying whether its ruling applies only to situations of judicial decision-making or to other written intellectual activity. It will also weaken this Court’s disciplinary authority ─ the essence of which proceeds from its moral authority ─ over the bench and bar. In a real sense, this Court has rendered tenuous its ability to positively educate and influence the future of intellectual and academic discourse.

The Way Forward

Assuming that the Court had found that judicial plagiarism had indeed been committed in the Vinuya decision, the Court could then have moved to the next logical question: what then is the legal responsibility of the ponente of the Vinuya decision for having passed on to the Court en banc a ponencia that contains plagiarized parts?

There would have been at that point two possible choices for the Court vis-à-vis the ponente ─ to subject him to disciplinary measures or to excuse him. In order to determine whether the acts committed would have warranted discipline, the Court should have laid down the standard of diligence and responsibility that a judge has over his actions, as well as the disciplinary measures that are available and appropriate.

The Court could also have chosen to attribute liability to the researcher who had admitted to have caused the plagiarism. In In re Hinden, disciplinary measures were imposed on an attorney who plagiarized law review articles.41

Response to the Decretal Portion of the Majority Decision

In view of the above, it is my opinion:

1. That Justice Mariano C. del Castillo and his unnamed researcher have committed plagiarism in the drafting and passing on of the ponencia in the Vinuya decision;

2. That this Court should request Justice del Castillo to acknowledge the plagiarism and apologize to the complaining authors for his mistake;

3. That this Court should cause the issuance of a corrected version of the Vinuya decision in the form of a "Corrigendum";

4. That court attorneys should be provided with the appropriate manuals on writing and legal citation, and should be informed that the excerpts complained of and described in Tables A, B, and C of this opinion are acts of plagiarism and not mere editing errors or computer-generated mistakes;

5. That the refusal of the majority to pronounce that plagiarism was committed by Justice del Castillo means that any judicial opinion on his liability or that of his researcher would be academic and speculative, a ruling which this Dissenting Opinion will not venture to make a pronouncement on; and

6. That a copy of this Dissenting Opinion should be circulated by the Public Information Office in the same manner as the Majority Decision to the complaining authors Christian J. Tams, Mark Ellis, Evan Criddle and Evan Fox-Decent.

MARIA LOURDES P. A. SERENOAssociate Justice

Footnotes

1 Isabelita C. Vinuya, et al. v. The Honorable Executive Secretary, et al., G.R. No. 1622309, April 28, 2010.

2 Judges cannot be liable for copyright infringement in their judicial work (Section 184.1(k), R.A. 8293).

3 Justice Mariano del Castillo’s letter addressed to Chief Justice Renato C. Corona and Colleagues, dated July 22, 2010.

4 Gordon Harvey, Writing with Sources: A Guide for Harvard Students (Hackett Publishing Company, 2nd ed. [c] 2008).

5 Id. at 32.

6 Id. at 33.

7 Id.

8 Id. at 34.

9 Id. at 32-35.

10 Id. at 32.

11 Id. at 33.

12 Harvey, supra at 32.

13 Id. at 32.

14 Id. at 26.

15 Stuart P. Green, Plagiarism, Norms, and the Limits of Theft Law: Observations on the Use of Criminal Sanctions in Enforcing Intellectual Property Rights, 54 Hastings L. J. 167, at 173.

16 Jaime S. Dursht, Judicial Plagiarism: It May Be Fair Use but Is It Ethical?, 18 Cardozo L. Rev. 1253, at 1.

17 Joyce C. George, Judicial Plagiarism, Judicial Opinion Writing Handbook, <http://books.google.com.ph/books?id=7jBZ4yjmgXUC&pg=PR1&hl=en&lpg=PR1#v=onepage&q&f=false> (accessed on 10/12/2010).

18 Newman v Burgin, 930 F.2d 955 (1st Cir.) as cited in Dursht, supra at 4 and note 60.

19 Newman v. Burgin, id. at 962 as cited in Dursht, id. at 4 and note 61.

20 453 A.2d 279 (N.J. Super. Ct. Ch. Div. 1982) as cited in Dursht, supra at 1 and note 6.

21 George, supra at 715.

22 Id. at 707-708.

23 Dursht, supra note 16 at 5.

24 In re Widdison, 539 N.W.2d 671 (S.D. 1995) at 865, as cited in Dursht, id. at 5 and note 92.

25 Rebecca Moore Howard, Plagiarisms, Authorships, and the Academic Death Penalty, 57 College English 7 (Nov., 1995), at 788-806, as cited in the JSTOR, http://www.jstor.org./stable/378403 (accessed on 02/05/2009, 17:56) 789.

26 George, supra note 17 at 715.

27 Klinge v. Ithaca College, 634 N.Y.S.2d 1000 (Sup. Ct. 1995), Napolitano v. Trustees of Princeton Univ., 453 A.2d 279, 284 (N.J. Super. Ct. Ch. Div. 1987), and In re Brennan, 447 N.W.2d 712, 713-14 (Mich. 1949), as cited in Gerald Lebovits, Alifya V. Curtin & Lisa Solomon, Ethical Judicial Opinion Writing, 21 The Georgetown Journal of Legal Ethics 264, note 190.

28 See In re Brennan, 447 N.W.2d 712, 713-14 (Mich. 1989) as cited in Lebovits, et al., supra at note 191.

29 Apotex Inc. v. Janssen-Ortho Inc., 2009, as cited in Emir Aly Crowne-Mohammed, 22 No. 4 Intell. Prop. & Tech. L.J. 15, 1.

30 Richard A. Posner, The Little Book of Plagiarism, 22 (2007), and Terri LeClercq, Failure to Teach: Due Process and Law School Plagiarism, 49 J. Legal Educ., 240 (1999), as cited in Carol M. Bast and Linda B. Samuels, Plagiarism and Legal Scholarship in the Age of Information Sharing: The Need for Intellectual Honesty, 57 Cath. U.L. Rev. 777, note 85.

31 George, supra note 17 at 708.

32 Lebovits, supra at 265.

33 See generally Dursht; supra note 16; and Lebovits, supra.

34 George, supra note 17 at 707

35 Liggett Group, Inc. v. Engle, 853 So. 2d 434 (Fla. Dist. Ct. App. 2003), as cited in Bast and Samuels, supra at note 102.

36 Id.

37 Counihan v. Allstate Ins. Co., 194 F.3d at 363, as cited in Roger J. Miner, Judicial Ethics in the Twenty-First Century: Tracing the Trends, 32 Hofstra Law Rev. 1135, note 154.

38 Anderson v. City of Bessemer, 470 U.S. 564, 572 (1985) as cited in Miner, id.

39 United States v. El Paso Natural Gas Co., p. 656, and United States v. Marine Bancorporation, p. 615, as cited in George, supra note 17 at 719.

40 See Stuart P. Green, Plagiarism, Norms, and the Limits of Theft Law: Observations on the Use of Criminal Sanctions in Enforcing Intellectual Property Rights, 54 Hastings L. J. 167; and Peter Shaw, Plagiary, 51 Am. Scholar 325, 328 (1982); and Green, supra at 180 as cited in George, supra at note 1

41 In re Hinden, 654 A.2d 864 (1995) (U.S.A.).

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 170338             December 23, 2008

VIRGILIO O. GARCILLANO, petitioner, vs.THE HOUSE OF REPRESENTATIVES COMMITTEES ON PUBLIC INFORMATION, PUBLIC ORDER AND SAFETY, NATIONAL DEFENSE AND SECURITY, INFORMATION AND COMMUNICATIONS TECHNOLOGY, and SUFFRAGE AND ELECTORAL REFORMS, respondents.

x - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. 179275             December 23, 2008

SANTIAGO JAVIER RANADA and OSWALDO D. AGCAOILI, petitioners, vs.THE SENATE OF THE REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE SENATE PRESIDENT THE HONORABLE MANUEL VILLAR, respondents.

x - - - - - - - - - - - - - - - - - - - - - - x

MAJ. LINDSAY REX SAGGE, petitioner-in-intervention

x - - - - - - - - - - - - - - - - - - - - - - x

AQUILINO Q. PIMENTEL, JR., BENIGNO NOYNOY C. AQUINO, RODOLFO G. BIAZON, PANFILO M. LACSON, LOREN B. LEGARDA, M.A. JAMBY A.S. MADRIGAL, and ANTONIO F. TRILLANES, respondents-intervenors

D E C I S I O N

NACHURA, J.:

More than three years ago, tapes ostensibly containing a wiretapped conversation purportedly between the President of the Philippines and a high-ranking official of the Commission on Elections (COMELEC) surfaced. They captured unprecedented public attention and thrust the country into a controversy that placed the legitimacy of the present administration on the line, and resulted in the near-collapse of the Arroyo government. The tapes, notoriously referred to as the "Hello Garci" tapes, allegedly contained the President’s instructions to COMELEC Commissioner Virgilio Garcillano to manipulate in her favor results of the 2004 presidential elections. These recordings were to become the subject of heated legislative hearings conducted separately by committees of both Houses of Congress.1

In the House of Representatives (House), on June 8, 2005, then Minority Floor Leader Francis G. Escudero delivered a privilege speech, "Tale of Two Tapes," and set in motion a congressional investigation jointly conducted by the Committees on Public Information, Public Order and Safety, National Defense and Security, Information and Communications Technology, and Suffrage and Electoral Reforms (respondent House Committees). During the inquiry, several versions of the wiretapped conversation emerged. But on July 5, 2005, National Bureau of Investigation (NBI) Director Reynaldo

Wycoco, Atty. Alan Paguia and the lawyer of former NBI Deputy Director Samuel Ong submitted to the respondent House Committees seven alleged "original" tape recordings of the supposed three-hour taped conversation. After prolonged and impassioned debate by the committee members on the admissibility and authenticity of the recordings, the tapes were eventually played in the chambers of the House.2

On August 3, 2005, the respondent House Committees decided to suspend the hearings indefinitely. Nevertheless, they decided to prepare committee reports based on the said recordings and the testimonies of the resource persons.3

Alarmed by these developments, petitioner Virgilio O. Garcillano (Garcillano) filed with this Court a Petition for Prohibition and Injunction, with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction4docketed as G.R. No. 170338. He prayed that the respondent House Committees be restrained from using these tape recordings of the "illegally obtained" wiretapped conversations in their committee reports and for any other purpose. He further implored that the said recordings and any reference thereto be ordered stricken off the records of the inquiry, and the respondent House Committees directed to desist from further using the recordings in any of the House proceedings.5

Without reaching its denouement, the House discussion and debates on the "Garci tapes" abruptly stopped.

After more than two years of quiescence, Senator Panfilo Lacson roused the slumbering issue with a privilege speech, "The Lighthouse That Brought Darkness." In his discourse, Senator Lacson promised to provide the public "the whole unvarnished truth – the what’s, when’s, where’s, who’s and why’s" of the alleged wiretap, and sought an inquiry into the perceived willingness of telecommunications providers to participate in nefarious wiretapping activities.

On motion of Senator Francis Pangilinan, Senator Lacson’s speech was referred to the Senate Committee on National Defense and Security, chaired by Senator Rodolfo Biazon, who had previously filed two bills6 seeking to regulate the sale, purchase and use of wiretapping equipment and to prohibit the Armed Forces of the Philippines (AFP) from performing electoral duties.7

In the Senate’s plenary session the following day, a lengthy debate ensued when Senator Richard Gordon aired his concern on the possible transgression of Republic Act (R.A.) No. 42008 if the body were to conduct a legislative inquiry on the matter. On August 28, 2007, Senator Miriam Defensor-Santiago delivered a privilege speech, articulating her considered view that the Constitution absolutely bans the use, possession, replay or communication of the contents of the "Hello Garci" tapes. However, she recommended a legislative investigation into the role of the Intelligence Service of the AFP (ISAFP), the Philippine National Police or other government entities in the alleged illegal wiretapping of public officials.9

On September 6, 2007, petitioners Santiago Ranada and Oswaldo Agcaoili, retired justices of the Court of Appeals, filed before this Court a Petition for Prohibition with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction,10 docketed as G.R. No. 179275, seeking to bar the Senate from conducting its scheduled legislative inquiry. They argued in the main that the intended legislative inquiry violates R.A. No. 4200 and Section 3, Article III of the Constitution.11

As the Court did not issue an injunctive writ, the Senate proceeded with its public hearings on the "Hello Garci" tapes on September 7,12 1713 and October 1,14 2007.

Intervening as respondents,15 Senators Aquilino Q. Pimentel, Jr., Benigno Noynoy C. Aquino, Rodolfo G. Biazon, Panfilo M. Lacson, Loren B. Legarda, M.A. Jamby A.S. Madrigal and Antonio F. Trillanes filed their Comment16 on the petition on September 25, 2007.

The Court subsequently heard the case on oral argument.17

On October 26, 2007, Maj. Lindsay Rex Sagge, a member of the ISAFP and one of the resource persons summoned by the Senate to appear and testify at its hearings, moved to intervene as petitioner in G.R. No. 179275.18

On November 20, 2007, the Court resolved to consolidate G.R. Nos. 170338 and 179275.19

It may be noted that while both petitions involve the "Hello Garci" recordings, they have different objectives–the first is poised at preventing the playing of the tapes in the House and their subsequent inclusion in the committee reports, and the second seeks to prohibit and stop the conduct of the Senate inquiry on the wiretapped conversation.

The Court dismisses the first petition, G.R. No. 170338, and grants the second, G.R. No. 179275.

- I -

Before delving into the merits of the case, the Court shall first resolve the issue on the parties’ standing, argued at length in their pleadings.

In Tolentino v. COMELEC,20 we explained that "‘[l]egal standing’ or locus standi refers to a personal and substantial interest in a case such that the party has sustained or will sustain direct injury because of the challenged governmental act x x x," thus,

generally, a party will be allowed to litigate only when (1) he can show that he has personally suffered some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.21

The gist of the question of standing is whether a party has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions."22

However, considering that locus standi is a mere procedural technicality, the Court, in recent cases, has relaxed the stringent direct injury test. David v. Macapagal-Arroyo23 articulates that a "liberal policy has been observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute actions involving the constitutionality or validity of laws, regulations and rulings."24 The fairly recent Chavez v. Gonzales25 even permitted a non-member of the broadcast media, who failed to allege a personal stake in the outcome of the controversy, to challenge the acts of the Secretary of Justice and the National Telecommunications Commission. The majority, in the said case, echoed the current policy that "this Court has repeatedly and consistently refused to wield procedural barriers as impediments to its addressing and resolving serious legal questions that greatly impact on public interest, in keeping with the Court’s duty under the 1987 Constitution to determine whether or not other branches of government have kept themselves within the limits of the Constitution and the laws, and that they have not abused the discretion given to them."26

In G.R. No. 170338, petitioner Garcillano justifies his standing to initiate the petition by alleging that he is the person alluded to in the "Hello Garci" tapes. Further, his was publicly identified by the members of the respondent committees as one of the voices in the recordings.27 Obviously, therefore, petitioner Garcillano stands to be directly injured by the House committees’ actions and charges of electoral fraud. The Court recognizes his standing to institute the petition for prohibition.

In G.R. No. 179275, petitioners Ranada and Agcaoili justify their standing by alleging that they are concerned citizens, taxpayers, and members of the IBP. They are of the firm conviction that any attempt to use the "Hello Garci" tapes will further divide the country. They wish to see the legal and proper use of

public funds that will necessarily be defrayed in the ensuing public hearings. They are worried by the continuous violation of the laws and individual rights, and the blatant attempt to abuse constitutional processes through the conduct of legislative inquiries purportedly in aid of legislation.28

Intervenor Sagge alleges violation of his right to due process considering that he is summoned to attend the Senate hearings without being apprised not only of his rights therein through the publication of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation, but also of the intended legislation which underpins the investigation. He further intervenes as a taxpayer bewailing the useless and wasteful expenditure of public funds involved in the conduct of the questioned hearings.29

Given that petitioners Ranada and Agcaoili allege an interest in the execution of the laws and that intervenor Sagge asserts his constitutional right to due process,30 they satisfy the requisite personal stake in the outcome of the controversy by merely being citizens of the Republic.

Following the Court’s ruling in Francisco, Jr. v. The House of Representatives,31 we find sufficient petitioners Ranada’s and Agcaoili’s and intervenor Sagge’s allegation that the continuous conduct by the Senate of the questioned legislative inquiry will necessarily involve the expenditure of public funds.32 It should be noted that inFrancisco, rights personal to then Chief Justice Hilario G. Davide, Jr. had been injured by the alleged unconstitutional acts of the House of Representatives, yet the Court granted standing to the petitioners therein for, as in this case, they invariably invoked the vindication of their own rights–as taxpayers, members of Congress, citizens, individually or in a class suit, and members of the bar and of the legal profession–which were also supposedly violated by the therein assailed unconstitutional acts.33

Likewise, a reading of the petition in G.R. No. 179275 shows that the petitioners and intervenor Sagge advance constitutional issues which deserve the attention of this Court in view of their seriousness, novelty and weight as precedents. The issues are of transcendental and paramount importance not only to the public but also to the Bench and the Bar, and should be resolved for the guidance of all.34

Thus, in the exercise of its sound discretion and given the liberal attitude it has shown in prior cases climaxing in the more recent case of Chavez, the Court recognizes the legal standing of petitioners Ranada and Agcaoili and intervenor Sagge.

- II -

The Court, however, dismisses G.R. No. 170338 for being moot and academic. Repeatedly stressed in our prior decisions is the principle that the exercise by this Court of judicial power is limited to the determination and resolution of actual cases and controversies.35 By actual cases, we mean existing conflicts appropriate or ripe for judicial determination, not conjectural or anticipatory, for otherwise the decision of the Court will amount to an advisory opinion. The power of judicial inquiry does not extend to hypothetical questions because any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities.36 Neither will the Court determine a moot question in a case in which no practical relief can be granted. A case becomes moot when its purpose has become stale.37 It is unnecessary to indulge in academic discussion of a case presenting a moot question as a judgment thereon cannot have any practical legal effect or, in the nature of things, cannot be enforced.38

In G.R. No. 170338, petitioner Garcillano implores from the Court, as aforementioned, the issuance of an injunctive writ to prohibit the respondent House Committees from playing the tape recordings and from including the same in their committee report. He likewise prays that the said tapes be stricken off the records of the House proceedings. But the Court notes that the recordings were already played in the House and heard by its members.39 There is also the widely publicized fact that the committee reports on the "Hello Garci" inquiry were completed and submitted to the House in plenary by the respondent committees.40 Having been overtaken by these events, the Garcillano petition has to be dismissed for

being moot and academic. After all, prohibition is a preventive remedy to restrain the doing of an act about to be done, and not intended to provide a remedy for an act already accomplished.41

- III -

As to the petition in G.R. No. 179275, the Court grants the same. The Senate cannot be allowed to continue with the conduct of the questioned legislative inquiry without duly published rules of procedure, in clear derogation of the constitutional requirement.

Section 21, Article VI of the 1987 Constitution explicitly provides that "[t]he Senate or the House of Representatives, or any of its respective committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure." The requisite of publication of the rules is intended to satisfy the basic requirements of due process.42 Publication is indeed imperative, for it will be the height of injustice to punish or otherwise burden a citizen for the transgression of a law or rule of which he had no notice whatsoever, not even a constructive one.43 What constitutes publication is set forth in Article 2 of the Civil Code, which provides that "[l]aws shall take effect after 15 days following the completion of their publication either in the Official Gazette, or in a newspaper of general circulation in the Philippines."44

The respondents in G.R. No. 179275 admit in their pleadings and even on oral argument that the Senate Rules of Procedure Governing Inquiries in Aid of Legislation had been published in newspapers of general circulation only in 1995 and in 2006.45 With respect to the present Senate of the 14th Congress, however, of which the term of half of its members commenced on June 30, 2007, no effort was undertaken for the publication of these rules when they first opened their session.

Recently, the Court had occasion to rule on this very same question. In Neri v. Senate Committee on Accountability of Public Officers and Investigations,46 we said:

Fourth, we find merit in the argument of the OSG that respondent Committees likewise violated Section 21 of Article VI of the Constitution, requiring that the inquiry be in accordance with the "duly published rules of procedure." We quote the OSG’s explanation:

The phrase "duly published rules of procedure" requires the Senate of every Congress to publish its rules of procedure governing inquiries in aid of legislation because every Senate is distinct from the one before it or after it. Since Senatorial elections are held every three (3) years for one-half of the Senate’s membership, the composition of the Senate also changes by the end of each term. Each Senate may thus enact a different set of rules as it may deem fit. Not having published its Rules of Procedure, the subject hearings in aid of legislation conducted by the 14th Senate, are therefore, procedurally infirm.

Justice Antonio T. Carpio, in his Dissenting and Concurring Opinion, reinforces this ruling with the following rationalization:

The present Senate under the 1987 Constitution is no longer a continuing legislative body. The present Senate has twenty-four members, twelve of whom are elected every three years for a term of six years each. Thus, the term of twelve Senators expires every three years, leaving less than a majority of Senators to continue into the next Congress. The 1987 Constitution, like the 1935 Constitution, requires a majority of Senators to "constitute a quorum to do business." Applying the same reasoning in Arnault v. Nazareno, the Senate under the 1987 Constitution is not a continuing body because less than majority of the Senators continue into the next Congress. The consequence is that the Rules of Procedure must be republished by the Senate after every expiry of the term of twelve Senators.47

The subject was explained with greater lucidity in our Resolution48 (On the Motion for Reconsideration) in the same case, viz.:

On the nature of the Senate as a "continuing body," this Court sees fit to issue a clarification. Certainly, there is no debate that the Senate as an institution is "continuing," as it is not dissolved as an entity with each national election or change in the composition of its members. However, in the conduct of its day-to-day business the Senate of each Congress acts separately and independently of the Senate of the Congress before it. The Rules of the Senate itself confirms this when it states:

RULE XLIVUNFINISHED BUSINESS

SEC. 123. Unfinished business at the end of the session shall be taken up at the next session in the same status.

All pending matters and proceedings shall terminate upon the expiration of one (1) Congress, but may be taken by the succeeding Congress as if present for the first time.

Undeniably from the foregoing, all pending matters and proceedings, i.e., unpassed bills and even legislative investigations, of the Senate of a particular Congress are considered terminated upon the expiration of that Congress and it is merely optional on the Senate of the succeeding Congress to take up such unfinished matters, not in the same status, but as if presented for the first time. The logic and practicality of such a rule is readily apparent considering that the Senate of the succeeding Congress (which will typically have a different composition as that of the previous Congress) should not be bound by the acts and deliberations of the Senate of which they had no part. If the Senate is a continuing body even with respect to the conduct of its business, then pending matters will not be deemed terminated with the expiration of one Congress but will, as a matter of course, continue into the next Congress with the same status.

This dichotomy of the continuity of the Senate as an institution and of the opposite nature of the conduct of its business is reflected in its Rules. The Rules of the Senate (i.e. the Senate’s main rules of procedure) states:

RULE LIAMENDMENTS TO, OR REVISIONS OF, THE RULES

SEC. 136. At the start of each session in which the Senators elected in the preceding elections shall begin their term of office, the President may endorse the Rules to the appropriate committee for amendment or revision.

The Rules may also be amended by means of a motion which should be presented at least one day before its consideration, and the vote of the majority of the Senators present in the session shall be required for its approval.

RULE LIIDATE OF TAKING EFFECT

SEC. 137. These Rules shall take effect on the date of their adoption and shall remain in force until they are amended or repealed.

Section 136 of the Senate Rules quoted above takes into account the new composition of the Senate after an election and the possibility of the amendment or revision of the Rules at the start of each session in which the newly elected Senators shall begin their term.

However, it is evident that the Senate has determined that its main rules are intended to be valid from the date of their adoption until they are amended or repealed. Such language is conspicuously absent from theRules. The Rules simply state "(t)hese Rules shall take effect seven (7) days after publication in two (2) newspapers of general circulation." The latter does not explicitly provide for the continued effectivity of such rules until they are amended or repealed. In view of the difference in the language of the two sets of Senate rules, it cannot be presumed that the Rules (on legislative inquiries) would continue into the next Congress. The Senate of the next Congress may easily adopt different rules for its legislative inquiries which come within the rule on unfinished business.

The language of Section 21, Article VI of the Constitution requiring that the inquiry be conducted in accordance with the duly published rules of procedure is categorical. It is incumbent upon the Senate to publish the rules for its legislative inquiries in each Congress or otherwise make the published rules clearly state that the same shall be effective in subsequent Congresses or until they are amended or repealed to sufficiently put public on notice.

If it was the intention of the Senate for its present rules on legislative inquiries to be effective even in the next Congress, it could have easily adopted the same language it had used in its main rules regarding effectivity.

Respondents justify their non-observance of the constitutionally mandated publication by arguing that the rules have never been amended since 1995 and, despite that, they are published in booklet form available to anyone for free, and accessible to the public at the Senate’s internet web page.49

The Court does not agree. The absence of any amendment to the rules cannot justify the Senate’s defiance of the clear and unambiguous language of Section 21, Article VI of the Constitution. The organic law instructs, without more, that the Senate or its committees may conduct inquiries in aid of legislation only in accordance with duly published rules of procedure, and does not make any distinction whether or not these rules have undergone amendments or revision. The constitutional mandate to publish the said rules prevails over any custom, practice or tradition followed by the Senate.

Justice Carpio’s response to the same argument raised by the respondents is illuminating:

The publication of the Rules of Procedure in the website of the Senate, or in pamphlet form available at the Senate, is not sufficient under the Tañada v. Tuvera ruling which requires publication either in the Official Gazette or in a newspaper of general circulation. The Rules of Procedure even provide that the rules "shall take effect seven (7) days after publication in two (2) newspapers of general circulation," precluding any other form of publication. Publication in accordance with Tañada is mandatory to comply with the due process requirement because the Rules of Procedure put a person’s liberty at risk. A person who violates the Rules of Procedure could be arrested and detained by the Senate.

The invocation by the respondents of the provisions of R.A. No. 8792,50 otherwise known as the Electronic Commerce Act of 2000, to support their claim of valid publication through the internet is all the more incorrect. R.A. 8792 considers an electronic data message or an electronic document as the functional equivalent of a written document only for evidentiary purposes.51 In other words, the law merely recognizes the admissibility in evidence (for their being the original) of electronic data messages and/or electronic documents.52 It does not make the internet a medium for publishing laws, rules and regulations.

Given this discussion, the respondent Senate Committees, therefore, could not, in violation of the Constitution, use its unpublished rules in the legislative inquiry subject of these consolidated cases. The conduct of inquiries in aid of legislation by the Senate has to be deferred until it shall have caused the publication of the rules, because it can do so only "in accordance with its duly published rules of procedure."

Very recently, the Senate caused the publication of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation in the October 31, 2008 issues of Manila Bulletin and Malaya. While we take judicial notice of this fact, the recent publication does not cure the infirmity of the inquiry sought to be prohibited by the instant petitions. Insofar as the consolidated cases are concerned, the legislative investigation subject thereof still could not be undertaken by the respondent Senate Committees, because no published rules governed it, in clear contravention of the Constitution.

With the foregoing disquisition, the Court finds it unnecessary to discuss the other issues raised in the consolidated petitions.

WHEREFORE, the petition in G.R. No. 170338 is DISMISSED, and the petition in G.R. No. 179275 is GRANTED. Let a writ of prohibition be issued enjoining the Senate of the Republic of the Philippines and/or any of its committees from conducting any inquiry in aid of legislation centered on the "Hello Garci" tapes.

SO ORDERED.

ANTONIO EDUARDO B. NACHURAAssociate Justice

WE CONCUR:

REYNATO S. PUNOChief Justice

LEONARDO A. QUISUMBINGAssociate Justice

CONSUELO YNARES-SANTIAGOAssociate Justice

ANTONIO T. CARPIOAssociate Justice

MA. ALICIA AUSTRIA-MARTINEZAssociate Justice

*RENATO C. CORONAAssociate Justice

CONCHITA CARPIO MORALESAssociate Justice

ADOLFO S. AZCUNAAssociate Justice

DANTE O. TINGAAssociate Justice

MINITA V. CHICO-NAZARIOAssociate Justice

PRESBITERO J. VELASCO, JR.Associate Justice

RUBEN T. REYESAssociate Justice

TERESITA J. LEONARDO-DE CASTROAssociate Justice

ARTURO D. BRIONAssociate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

REYNATO S. PUNOChief Justice

Footnotes

* On leave.

1 Rollo (G.R. No. 179275), p. 168.

2 Rollo (G.R. No. 170338), pp. 7-9.

3 Id. at 9.

4 Id. at 1-38.

5 Id. at 36-38.

6 Rollo (G.R. No. 179275), pp. 215-220.

7 Id. at 169.

8 An Act to Prohibit and Penalize Wire Tapping and Other Related Violations of the Privacy of Communications and for Other Purposes.

9 Rollo (G.R. No. 179275), pp. 169-170.

10 Id. at 3-17.

11 Id. at 7-13.

12 Id. at 24.

13 Id. at 44.

14 Memorandum of Respondents-Intervenors, p. 6.

15 Rollo (G.R. No. 179275), pp. 68-70.

16 Id. at 71-90.

17 Id. at 62. The Court identified the following issues for discussion in the October 2, 2007 Oral Argument:

1. Whether the petitioners have locus standi to bring this suit.

2. Whether the Rules of Procedure of the Senate and the Senate Committees governing the conduct of inquiries in aid of legislation have been published, in accordance with Section 21, Article VI of the Constitution. Corollarily:

(a) Whether these Rules must be published by every Congress.

(b) What mode/s of publication will comply with the constitutional requirement.

3. Whether the inquiry, which is centered on the so-called "Garci tapes," violates Section 3, Article III of the Constitution and/or Republic Act No. 4200. (Id. at 66.)

18 Motion for Leave to Intervene and Petition-in-Intervention filed on October 26, 2007.

19 Resolution dated November 20, 2007.

20 465 Phil. 385, 402 (2004).

21 Tolentino v. Commission on Elections, id.

22 Province of Batangas v. Romulo, G.R. No. 152774, May 27, 2004, 429 SCRA 736, 755.

23 G.R. Nos. 171396, 171409, 171485, 171483, 171400, 171489 and 171424, May 3, 2006, 489 SCRA 160.

24 David v. Macapagal-Arroyo, id. at 218.

25 G.R. No. 168338, February 15, 2008, 545 SCRA 441.

26 Id.

27 Reply in G.R. No. 170338, pp. 36-37.

28 Rollo (G.R. No. 179275), p. 4.

29 Petition-in-Intervention, p. 3.

30 David v. Macapagal-Arroyo, supra note 23, at 223.

31 460 Phil. 830 (2003).

32 Francisco, Jr. v. The House of Representatives, id. at 897.

33 Francisco, Jr. v. The House of Representatives, supra note 31, at 895.

34 Kilosbayan, Inc. v. Guingona, Jr., G.R. No. 113375, May 5, 1994, 232 SCRA 110, 139.

35 Dumlao v. COMELEC, 184 Phil. 369, 377 (1980). This case explains the standards that have to be followed in the exercise of the power of judicial review, namely: (1) the existence of an appropriate case; (2) an interest personal and substantial by the party raising the constitutional question; (3) the plea that the function be exercised at the earliest opportunity; and (4) the necessity that the constitutional question be passed upon in order to decide the case.

36 La Bugal-B’laan Tribal Association, Inc. v. Ramos, 465 Phil. 860, 889-890 (2004).

37 Rufino v. Endriga, G.R. Nos. 139554 and 139565, July 21, 2006, 496 SCRA 13, 46.

38 Lanuza, Jr. v. Yuchengco, G.R. No. 157033, March 28, 2005, 454 SCRA 130, 138.

39 Rollo (G.R. No. 170338), p. 9.

40 See news article "Separate findings, no closure" by Michael Lim Umbac published in The Philippine Daily Inquirer on March 29, 2006; News item "5 House committees in ‘Garci’ probe file report on Monday" published in The Manila Bulletin on March 25, 2006.

41 Simon, Jr. v. Commission on Human Rights, G.R. No. 100150, January 5, 1994, 229 SCRA 117, 135-136; Agustin v. De la Fuente, 84 Phil. 515, 517 (1949).

42 Bernas, The 1987 Constitution of the Philippines, A Commentary, 1996 ed., p. 679.

43 Tañada v. Tuvera, 220 Phil. 422, 432-433 (1985).

44 As amended on June 18, 1987 by Executive Order No. 200 entitled "Providing for the Publication of Laws Either in the Official Gazette or in a Newspaper of General Circulation in the Philippines as a Requirement for their Effectivity".

45 Rollo (G.R. No. 179275), p. 179; Memorandum of Respondents-Intervenors, pp. 9-10.

46 G.R. No. 180643, March 25, 2008, 549 SCRA 77, 135-136.

47 Id. at 297-298.

48 Dated September 4, 2008.

49 TSN, Oral Arguments, March 4, 2008, (G.R. No. 179275), pp. 413-414.

50 Entitled "An Act Providing for the Recognition and Use of Electronic Commercial and Non-Commercial Transactions and Documents, Penalties for Unlawful Use Thereof and For Other Purposes," approved on June 14, 2000.

51 MCC Industrial Sales Corporation v. Ssangyong Corporation, G.R. No. 170633, October 15, 2007, 536 SCRA 408. (Emphasis supplied.)

52 Sections 6, 7 and 10 of R.A. No. 8792 read:

Sec. 6. Legal Recognition of Data Messages. - Information shall not be denied legal effect, validity or enforceability solely on the grounds that it is in the data message purporting to give rise to such legal effect, or that it is merely referred to in that electronic data message.

Sec. 7. Legal Recognition of Electronic Documents. – Electronic documents shall have the legal effect, validity or enforceability as any other document or legal writing, and –

(a) Where the law requires a document to be in writing, that requirement is met by an electronic document if the said electronic document maintains its integrity and reliability, and can be authenticated so as to be usable for subsequent reference, in that –

(i) The electronic document has remained complete and unaltered, apart from the addition of any endorsement and any authorized change, or any change which arises in the normal course of communication, storage and display; and

(ii) The electronic document is reliable in the light of the purpose for which it was generated and in the light of all the relevant circumstances.

(b) Paragraph (a) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the document not being presented or retained in its original form.

(c) Where the law requires that a document be presented or retained in its original form, that requirement is met by an electronic document if –

(i) There exists a reliable assurance as to the integrity of the document from the time when it was first generated in its final form; and

(ii) That document is capable of being displayed to the person to whom it is to be presented: Provided, That no provision of this Act shall apply to vary any and all requirements of existing laws on formalities required in the execution of documents for their validity.

For evidentiary purposes, an electronic document shall be the functional equivalent of a written document under existing laws.

This Act does not modify any statutory rule relating to the admissibility of electronic data messages or electronic documents, except the rules relating to authentication and best evidence.

Sec. 10. Original Documents. – (1) Where the law requires information to be presented or retained in its original form, that requirement is met by an electronic data message or electronic document if:

(a) The integrity of the information from the time when it was first generated in its final form, as an electronic data message or electronic document is shown by evidence aliunde or otherwise; and

(b) Where it is required that information be presented, that the information is capable of being displayed to the person to whom it is to be presented.

(2) Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the information not being presented or retained in its original form.

(3) For the purposes of subparagraph (a) of paragraph (1):

(a) the criteria for assessing integrity shall be whether the information has remained complete and unaltered, apart from the addition of any endorsement and any change which arises in the normal course of communication, storage and display; and

(b) the standard of reliability required shall be assessed in the light of the purpose for which the information was generated and in the light of all relevant circumstances.

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