LIP Session 4

8/12/2019 LIP Session 4

1/76

THIRD DIVISION

[G.R. No. 148222. August 15, 2003]

PEARL & DEAN (PHIL.), INCRPRA!ED, petitioner, vs. "HE#AR!,INCRPRA!ED, $% NR!H ED"A #AR'E!ING,INCRPRA!ED,respondents.

D E C I " I N

CRNA, J.

In the instant petition for review on certiorariunder Rule 45 of the Rules ofCourt, petitioner Pearl Dean !Phil"# In$" !P D# assails the %a& '', '(()

de$ision*)+of the Court of ppeals reversin- the O$to.er /), )001 de$ision*'+ofthe Re-ional Trial Court of %a2ati, 3ran$h )//, in Civil Case No" 0'5)1 whi$hde$lared private respondents Shoeart In$" !S%I# and North 6dsa %ar2etin-In$" !N6%I# lia.le for infrin-eent of tradear2 and $op&ri-ht, and unfair$opetition"

AC!*AL AN!ECEDEN!"

The %a& '', '(() de$ision of the Court of ppeals */+$ontained a suar&

of this dispute78Plaintiffappellant Pearl and Dean !Phil"#, In$" is a $orporation en-a-ed in theanufa$ture of advertisin- displa& units sipl& referred to as li-ht .o9es" Theseunits utili:e spe$iall& printed posters sandwi$hed .etween plasti$ sheets andilluinated with .a$2 li-hts" Pearl and Dean was a.le to se$ure a Certifi$ate ofCop&ri-ht Re-istration dated ;anuar& '(, )0


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a-reed" On Septe.er )), )0


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twent&four !''4# li-ht .o9es and N6%I too2 down its advertiseents for 8Posterds= fro the li-hted displa& units in S%I?s stores" Claiin- that .oth S%I andN6%I failed to eet all its deands, Pearl and Dean filed this instant $ase forinfrin-eent of tradear2 and $op&ri-ht, unfair $opetition and daa-es"

In den&in- the $har-es hurled a-ainst it, S%I aintained that it independentl&developed its poster panels usin- $oonl& 2nown te$hniAues and availa.lete$hnolo-&, without noti$e of or referen$e to Pearl and Dean?s $op&ri-ht" S%Inoted that the re-istration of the ar2 8Poster ds= was onl& for stationeriessu$h as letterheads, envelopes, and the li2e" 3esides, a$$ordin- to S%I, theword 8Poster ds= is a -eneri$ ter whi$h $annot .e appropriated as atradear2, and, as su$h, re-istration of su$h ar2 is invalid" It also stressedthat Pearl and Dean is not entitled to the reliefs pra&ed for in its $oplaint sin$eits advertisin- displa& units $ontained no $op&ri-ht noti$e, in violation of Se$tion'B of P"D" 40" S%I alle-ed that Pearl and Dean had no $ause of a$tion a-ainst it

and that the suit was purel& intended to ali-n S%I?s -ood nae" On this .asis,S%I, aside fro pra&in- for the disissal of the $ase, also $ounter$laied fororal, a$tual and e9eplar& daa-es and for the $an$ellation of Pearl andDean?s Certifi$ation of Cop&ri-ht Re-istration No" PDR'55< dated ;anuar& '(,)0


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fro )00) to )00'

!.# oral daa-es P),((("((("((

!$# e9eplar& daa-es P),(((,((("((

!d# attorne&?s fees P),(((,((("((plus

!e# $osts of suitG

!'# to deliver, under oath, for ipoundin- in the National i.rar&, allli-ht .o9es of S%I whi$h were fa.ri$ated .& %etro IndustrialServi$es and 6D Rain.ow dvertisin- CorporationG

!/# to deliver, under oath, to the National i.rar&, all fillerpostersusin- the tradear2 8Poster ds=, for destru$tionG and

!4# to peranentl& refrain fro infrin-in- the $op&ri-ht on plaintiff?sli-ht .o9es and its tradear2 8Poster ds="

Defendants? $ounter$lais are here.& ordered disissed for la$2 oferit"

SO ORD6R6D"*4+

On appeal, however, the Court of ppeals reversed the trial $ourt7

Sin$e the li-ht .o9es $annot, .& an& stret$h of the ia-ination, .e $onsideredas either prints, pi$torial illustrations, advertisin- $opies, la.els, ta-s or .o9wraps, to .e properl& $lassified as a $op&ri-hta.le $lass 8O= wor2, we have toa-ree with S%I when it posited that what was $op&ri-hted were the te$hni$aldrawin-s onl&, and not the li-ht .o9es theselves, thus7

4'" Fhen a drawin- is te$hni$al and depi$ts a utilitarian o.Ee$t, a $op&ri-ht over

the drawin-s li2e plaintiffappellant?s will not e9tend to the a$tual o.Ee$t" It hasso .een held under Eurispruden$e, of whi$h the leadin- $ase is 3a2er vs" Selden!)() "S"


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sin-le pa-e, or on two pa-es followin- ea$h other" The defendant 3a2er thenprodu$ed fors whi$h were siilar to the fors illustrated in Selden?s$op&ri-hted .oo2s" The Court held that e9$lusivit& to the a$tual fors is note9tended .& a $op&ri-ht" The reason was that 8to -rant a onopol& in theunderl&in- art when no e9aination of its novelt& has ever .een ade would .e

a surprise and a fraud upon the pu.li$G that is the provin$e of letters patent, notof $op&ri-ht"= nd that is pre$isel& the point" No dou.t aware that its alle-edori-inal desi-n would never pass the ri-orous e9aination of a patentappli$ation, plaintiffappellant fou-ht to foist a fraudulent onopol& on the pu.li$.& $onvenientl& resortin- to a $op&ri-ht re-istration whi$h erel& eplo&s are$ordal s&ste without the .enefit of an indepth e9aination of novelt&"

The prin$iple in Baker vs. Seldenwas li2ewise applied in Muller vs. TriboroughBridge Authority*4/ >" Supp" '0< !S"D"N"" )04'#+" In this $ase, %uller hado.tained a $op&ri-ht over an unpu.lished drawin- entitled 83rid-e pproa$h

the drawin- showed a novel .rid-e approa$h to unsnarl traffi$ $on-estion=" Thedefendant $onstru$ted a .rid-e approa$h whi$h was alle-ed to .e aninfrin-eent of the new desi-n illustrated in plaintiff?s drawin-s" In this $ase itwas held that prote$tion of the drawin- does not e9tend to the unauthori:eddupli$ation of the o.Ee$t drawn .e$ause $op&ri-ht e9tends onl& to thedes$ription or e9pression of the o.Ee$t and not to the o.Ee$t itself" It does notprevent one fro usin- the drawin-s to $onstru$t the o.Ee$t portra&ed in thedrawin-"

In two other $ases, Imperial Homes Corp. v. Lamont, 45< >" 'd


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$ertifi$ate of re-istration of a ar2 or tradenae shall .e prima $acieeviden$eof the validit& of the re-istration, the re-istrant?s ownership of the ar2 or tradenae, and of the re-istrant?s e9$lusive ri-ht to use the sae in $onne$tion withthe -oods, .usiness or servi$es spe$ified in the $ertifi$ate, su.Ee$t to an&$onditions and liitations stated therein"= !underscoring supplied#

The re$ords show that on ;une '(, )0


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8Poster ds= are a siple $ontra$tion of the -eneri$ ter poster advertisin-" Inthe a.sen$e of an& $onvin$in- proof that 8Poster ds= has a$Auired a se$ondar&eanin- in this Eurisdi$tion, we find that Pearl and Dean?s e9$lusive ri-ht to theuse of 8Poster ds= is liited to what is written in its $ertifi$ate of re-istration,nael&, stationeries"

Defendantsappellants $annot thus .e held lia.le for infrin-eent of thetradear2 8Poster ds="

There .ein- no findin- of either $op&ri-ht or tradear2 infrin-eent on the partof S%I and N6%I, the onetar& award -ranted .& the lower $ourt to Pearl andDean has no le- to stand on"

999 999 999

FH6R6>OR6, preises $onsidered, the assailed de$ision is R6V6RS6D andS6T SID6, and another is rendered DIS%ISSIN@ the $oplaint and$ounter$lais in the a.oveentitled $ase for la$2 of erit" *5+

Dissatisfied with the a.ove de$ision, petitioner P D filed the instantpetition assi-nin- the followin- errors for the Court?s $onsideration7

" TH6 HONOR36 CORT O> PP6S 6RR6D IN RIN@THT NO COPRI@HT IN>RIN@6%6NT FS CO%%ITT6D3 R6SPOND6NTS S% ND N6%IG

3" TH6 HONOR36 CORT O> PP6S 6RR6D IN RIN@THT NO IN>RIN@6%6NT O> P6R D6N?STRD6%RJ 8POST6R DS= FS CO%%ITT6D 3R6SPOND6NTS S% ND N6%IG

C" TH6 HONOR36 CORT O> PP6S 6RR6D INDIS%ISSIN@ TH6 FRD O> TH6 TRI CORT, D6SPIT6TH6 TT6R?S >INDIN@, NOT DISPT6D 3 TH6

HONOR36 CORT O> PP6S, THT S% FS @ITO> 3D >ITH IN ITS N6@OTITION O> DV6RTISIN@CONTRCTS FITH P6R D6N"

D" TH6 HONOR36 CORT O> PP6S 6RR6D IN NOTHODIN@ R6SPOND6NTS S% ND N6%I I36 TO P6R D6N >OR CT, %OR 6K6%PR D%@6S,

TTORN6?S >66S ND COSTS O> SIT"*1+


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I""*E"

In resolvin- this ver& interestin- $ase, we are $hallen-ed on$e a-ain to putinto proper perspe$tive four ain $on$erns of intelle$tual propert& law Lpatents, $op&ri-hts, tradear2s and unfair $opetition arisin- fro infrin-eent

of an& of the first three" Fe shall fo$us then on the followin- issues7

!)# if the en-ineerin- or te$hni$al drawin-s of an advertisin- displa&unit !li-ht .o9# are -ranted $op&ri-ht prote$tion !$op&ri-ht $ertifi$ate ofre-istration# .& the National i.rar&, is the li-ht .o9 depi$ted in su$hen-ineerin- drawin-s ipso fa$to also prote$ted .& su$h $op&ri-htM

!'# or should the li-ht .o9 .e re-istered separatel& and prote$ted .& apatent issued .& the 3ureau of Patents Tradear2s and Te$hnolo-&Transfer !now Intelle$tual Propert& Offi$e# L in addition to the$op&ri-ht of the en-ineerin- drawin-sM

!/# $an the owner of a re-istered tradear2 le-all& prevent others frousin- su$h tradear2 if it is a ere a..reviation of a ter des$riptiveof his -oods, servi$es or .usinessM

N !HE I""*E CP+RIGH! INRINGE#EN!

Petitioner P D?s $oplaint was that S%I infrin-ed on its $op&ri-ht over theli-ht .o9es when S%I had the units anufa$tured .& %etro and 6D Rain.owdvertisin- for its own a$$ount" O.viousl&, petitioner?s position was preisedon its .elief that its $op&ri-ht over the en-ineerin- drawin-s e9tended ipso $actoto the li-ht .o9es depi$ted or illustrated in said drawin-s" In rulin- that therewas no $op&ri-ht infrin-eent, the Court of ppeals held that the $op&ri-ht wasliited to the drawin-s alone and not to the li-ht .o9 itself" Fe a-ree with theappellate $ourt"

>irst, petitioner?s appli$ation for a $op&ri-ht $ertifi$ate L as well as

Cop&ri-ht Certifi$ate No" PDR'5


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!O# Prints, pi$torial illustrations, advertisin- $opies, la.els, ta-s, and .o9 wrapsG

9 9 9 9 9 9 9 9 9

lthou-h petitioner?s $op&ri-ht $ertifi$ate was entitled 8dvertisin- Displa&

nits= !whi$h depi$ted the .o9t&pe ele$tri$al devi$es#, its $lai of $op&ri-htinfrin-eent $annot .e sustained"

Cop&ri-ht, in the stri$t sense of the ter, is purel& a statutor& ri-ht" 3ein- aere statutor& -rant, the ri-hts are liited to what the statute $onfers" It a& .eo.tained and enEo&ed onl& with respe$t to the su.Ee$ts and .& the persons, andon ters and $onditions spe$ified in the statute"*B+ Accordingly! it can coveronly the %orks $alling %ithin the statutory enumeration or description. *


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tradear2s" In the leadin- $ase of )ho vs. Court o$ Appeals!*))+we ruled thatthese three le-al ri-hts are $opletel& distin$t and separate fro one another,and the prote$tion afforded .& one $annot .e used inter$han-ea.l& to $overites or wor2s that e9$lusivel& pertain to the others7

Tradear2, $op&ri-ht and patents are different intelle$tual propert& ri-hts that

$annot .e inter$han-ed with one another" A trademark is any visible signcapable o$ distinguishing the goods*trademark+ or services *service mark+ o$ anenterprise and shall include a stamped or marked container o$ goods" In relationthereto, a trade nae eans the nae or desi-nation identif&in- ordistin-uishin- an enterprise" %eanwhile, the scope o$ a copyright is con$ined toliterary and artistic %orkswhi$h are ori-inal intelle$tual $reations in the literar&and artisti$ doain prote$ted fro the oent of their $reation" ,atentableinventions! on the other hand! re$er to any technical solution o$ a problem in any$ield o$ human activitywhi$h is new, involves an inventive step and is industriall&

appli$a.le"

N !HE I""*E PA!EN! INRINGE#EN!

This .rin-s us to the ne9t point7 if, despite its anufa$ture and $oer$ialuse of the light bo"eswithout li$ense fro petitioner, private respondents $annot.e held le-all& lia.le for infrin-eent of P D?s $op&ri-ht over its technicaldra%ings o$ the said light bo"es, should the& .e lia.le instead for infrin-eent ofpatentM Fe do not thin2 so either"

>or soe reason or another, petitioner never se$ured a patent for the li-ht.o9es" It therefore a$Auired no patent ri-hts whi$h $ould have prote$ted itsinvention, if in fa$t it reall& was" nd .e$ause it had no patent, petitioner $ouldnot le-all& prevent an&one fro anufa$turin- or $oer$iall& usin- the$ontraption" In Creser ,recision Systems! Inc. vs. Court o$ Appeals!*)'+we heldthat 8there $an .e no infrin-eent of a patent until a patent has .een issued,sin$e whatever ri-ht one has to the invention $overed .& the patent arises alone$rom the grant o$ patent" 9 9 9 !#n inventor has no $oon law ri-ht to aonopol& of his invention" He has the ri-ht to a2e use of and vend his

invention, .ut if he voluntaril& dis$loses it, su$h as .& offerin- it for sale, theworld is free to $op& and use it with ipunit&" patent, however, -ives theinventor the ri-ht to e9$lude all others" s a patentee, he has the e9$lusive ri-htof a2in-, sellin- or usin- the invention"*)/+On the assuption that petitioner?sadvertisin- units were patenta.le inventions, petitioner revealed the full& to thepu.li$ .& su.ittin- the en-ineerin- drawin-s thereof to the National i.rar&"

To .e a.le to effe$tivel& and le-all& pre$lude others fro $op&in- and
http://sc.judiciary.gov.ph/jurisprudence/2002/mar2002/115758.htmhttp://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/118708.htmhttp://sc.judiciary.gov.ph/jurisprudence/2002/mar2002/115758.htmhttp://sc.judiciary.gov.ph/jurisprudence/1998/feb1998/118708.htm


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profitin- fro the invention, a patent is a priordial reAuireent" No patent, noprote$tion" The ultiate -oal of a patent s&ste is to .rin- new desi-ns andte$hnolo-ies into the pu.li$ doain throu-h dis$losure"*)4+ Ideas, on$edis$losed to the pu.li$ without the prote$tion of a valid patent, are su.Ee$t toappropriation without si-nifi$ant restraint"*)5+

On one side of the $oin is the pu.li$ whi$h will .enefit fro new ideasG onthe other are the inventors who ust .e prote$ted" s held in Bauer - Cie vs.'/onnel,*)1+8The a$t se$ured to the inventor the e9$lusive ri-ht to a2e use,and vend the thin- patented, and $onseAuentl& to prevent others froe9er$isin- li2e privile-es without the $onsent of the patentee" It was passed forthe purpose of en$oura-in- useful invention and prootin- new and usefulinventions .& the prote$tion and stiulation -iven to inventive -enius, and wasintended to se$ure to the pu.li$, after the lapse of the e9$lusive privile-es-ranted the .enefit of su$h inventions and iproveents"=

The law attepts to stri2e an ideal .alan$e .etween the two interests7

8!The p#atent s&ste thus e.odies a $arefull& $rafted .ar-ain for en$oura-in-the $reation and dis$losure of new useful and nono.vious advan$es inte$hnolo-& and desi-n, in return for the e9$lusive ri-ht to pra$ti$e the inventionfor a nu.er of &ears" The inventor a& 2eep his invention se$ret and reap itsfruits indefinitel&" In $onsideration of its dis$losure and the $onseAuent .enefit tothe $ounit&, the patent is -ranted" n e9$lusive enEo&ent is -uaranteed hifor )B &ears, .ut upon the e9piration of that period, the 2nowled-e of theinvention inures to the people, who are thus ena.led to pra$ti$e it and profit .&

its use"=*)B+

The patent law has a threefold purpose7 8first, patent law see2s to fosterand reward inventionG se$ond, it prootes dis$losures of inventions to stiulatefurther innovation and to perit the pu.li$ to pra$ti$e the invention on$e thepatent e9piresG third, the strin-ent reAuireents for patent prote$tion see2 toensure that ideas in the pu.li$ doain reain there for the free use of thepu.li$"=*)


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There is no su$h s$rutin& in the $ase of $op&ri-hts nor an& noti$e pu.lished.efore its -rant to the effe$t that a person is $laiin- the $reation of a wor2" Thelaw $onfers the $op&ri-ht fro the oent of $reation*'(+and the $op&ri-ht$ertifi$ate is issued upon re-istration with the National i.rar& of a sworn e"0

parte$lai of $reation"

Therefore, not havin- -one throu-h the arduous e9aination for patents,the petitioner $annot e9$lude others fro the anufa$ture, sale or $oer$ialuse of the li-ht .o9es on the sole .asis of its $op&ri-ht $ertifi$ate over thete$hni$al drawin-s"

Stated otherwise, what petitioner see2s is e9$lusivit& without an&opportunit& for the patent offi$e !IPO# to s$rutini:e the li-ht .o9?s eli-i.ilit& as apatenta.le invention" The iron& here is that, had petitioner se$ured a patentinstead, its e9$lusivit& would have .een for )B &ears onl&" 3ut throu-h thesiplified pro$edure of $op&ri-htre-istration with the National i.rar& L without

under-oin- the ri-or of defendin- the patenta.ilit& of its invention .efore the IPOand the pu.li$ L the petitioner would .e prote$ted for 5( &ears" This situation$ould not have .een the intention of the law"

In the oft$ited $ase of Baker vs. Selden*')+, the nited States SupreeCourt held that only the e"pression o$ an idea is protected by copyright! not theidea itsel$" In that $ase, the plaintiff held the $op&ri-ht of a .oo2 whi$he9pounded on a new a$$ountin- s&ste he had developed" The pu.li$ationillustrated .lan2 fors of led-ers utili:ed in su$h a s&ste" The defendantreprodu$ed fors siilar to those illustrated in the plaintiff?s $op&ri-hted .oo2"

The S Supree Court ruled that7

8There is no dou.t that a wor2 on the su.Ee$t of .oo22eepin-, thou-h onl&e9planator& of well 2nown s&stes, a& .e the su.Ee$t of a $op&ri-htG .ut, then,it is $laied onl& as a .oo2" 9 9 9" 3ut there is a $lear distin$tion .etween the.oo2s, as su$h, and the art, whi$h it is, intended to illustrate" The erestateent of the proposition is so evident that it reAuires hardl& an& ar-uent tosupport it" The sae distin$tion a& .e predi$ated of ever& other art as well asthat of .oo22eepin-" treatise on the $oposition and use of edi$ines, .ethe& old or newG on the $onstru$tion and use of plou-hs or wat$hes or $hurnsG oron the i9ture and appli$ation of $olors for paintin- or d&ein-G or on the ode ofdrawin- lines to produ$e the effe$t of perspe$tive, would .e the su.Ee$t of$op&ri-htG .ut no one would $ontend that the $op&ri-ht of the treatise would -ivethe e9$lusive ri-ht to the art or anufa$ture des$ri.ed therein" The $op&ri-ht ofthe .oo2, if not pirated fro other wor2s, would .e valid without re-ard to thenovelt& or want of novelt& of its su.Ee$t atter" The novelt& of the art or thin-des$ri.ed or e9plained has nothin- to do with the validit& of the $op&ri-ht" !o


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$losel& than usual with the a$tual wor2 perfored .& the operator who uses theart" 9 9 9 !/ s7to% o t/ $t % $ oo, t/oug/ %tt6 to t/%t o o7g/t, 6$s %o ou%$to% o $% 6us- 6$: to t/ $tts6. !/ o;t o t/ o% s 76$%$to%< t/ o;t o t/ ot/ s us.!/ o: :$ su o7g/t. !/ 6$tt $% o%6 su,

t $% su $t $66, 6tts 7$t%t.> !unders$orin- supplied#

N !HE I""*E !RADE#AR' INRINGE#EN!

This issue $on$erns the use .& respondents of the ar2 8Poster ds= whi$hpetitioner?s president said was a $ontra$tion of 8poster advertisin-"= P D wasa.le to se$ure a tradear2 $ertifi$ate for it, .ut one where the -oods spe$ifiedwere 8stationeries su$h as letterheads, envelopes, $allin- $ards andnewsletters"=*''+Petitioner aditted it did not $oer$iall& en-a-e in or ar2et

these -oods" On the $ontrar&, it dealt in ele$tri$all& operated .a$2lit advertisin-units and the sale of advertisin- spa$es thereon, whi$h, however, were not at allspe$ified in the tradear2 $ertifi$ate"

nder the $ir$ustan$es, the Court of ppeals $orre$tl& $ited #aberge Inc.vs. Intermediate Appellate Court,*'/+where we, invo2in- Se$tion '( of the oldTradear2 aw, ruled that 8the $ertifi$ate of re-istration issued .& the Dire$tor ofPatents $an $onfer !upon petitioner# the e9$lusive ri-ht to use its own s&.olonly to those goods speci$ied in the certi$icate, su.Ee$t to an& $onditions andliitations spe$ified in the $ertifi$ate 9 9 9" One who has adopted and used a

tradear2 on his -oods does not prevent the adoption and use o$ the sametrademark by others $or products %hich are o$ a di$$erent description"=*'4+#aberge! Inc.was $orre$t and was in fa$t re$entl& reiterated in Canon )abushiki)aisha vs. Court o$ Appeals"*'5+

ssuin- arguendothat 8Poster ds= $ould validl& Aualif& as a tradear2,the failure of P D to se$ure a tradear2 re-istration for spe$ifi$ use on theli-ht .o9es eant that there $ould not have .een an& tradear2 infrin-eentsin$e re-istration was an essential eleent thereof"

N !HE I""*E *NAIR C#PE!I!IN

If at all, the $ause of a$tion should have .een for unfair $opetition, asituation whi$h was possi.le even if P D had no re-istration" *'1+ However,while the petitioner?s $oplaint in the RTC also $ited unfair $opetition, the trial$ourt did not find private respondents lia.le therefor" Petitioner did not appealthis parti$ular pointG hen$e, it $annot now revive its $lai of unfair $opetition"
http://sc.judiciary.gov.ph/jurisprudence/2000/july2000/120900.htmhttp://sc.judiciary.gov.ph/jurisprudence/2000/july2000/120900.htmhttp://sc.judiciary.gov.ph/jurisprudence/2000/july2000/120900.htmhttp://sc.judiciary.gov.ph/jurisprudence/2000/july2000/120900.htm


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3ut even disre-ardin- pro$edural issues, we nevertheless $annot holdrespondents -uilt& of unfair $opetition"

3& the nature of thin-s, there $an .e no unfair $opetition under the law on$op&ri-hts althou-h it is appli$a.le to disputes over the use of tradear2s" 6vena nae or phrase in$apa.le of appropriation as a tradear2 or tradenae a&,

.& lon- and e9$lusive use .& a .usiness !su$h that the nae or phrase

.e$oes asso$iated with the .usiness or produ$t in the ind of the pur$hasin-pu.li$#, .e entitled to prote$tion a-ainst unfair $opetition" *'B+ In this $ase,there was no eviden$e that P D?s use of 8Poster ds= was distin$tive or well2nown" s noted .& the Court of ppeals, petitioner?s e9pert witnesses hiselfhad testified that 8 Poster ds? was too -eneri$ a nae" So it was diffi$ult toidentif& it with an& $opan&, honestl& spea2in-"=*'>IR%6D in toto"

" RDERED.

,uno! *Chairman+! ,anganiban! Sandoval01utierre! and Carpio0Morales!22.! $on$ur


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>IRST DIVISION[G.R. No. 131522. @u6 1, 1]

PACI!A I. HABANA, ALICIA L. CINC $% @I!A N. ERNAND,petitioners, vs.ELICIDAD C. RBLE" $% GD?ILL !RADINGC., INC., respondents.

D E C I " I N

PARD, J.

The $ase .efore us is a petition for review on certiorari*)+ to set aside the!a# de$ision of the Court of ppeals*'+, and !.# the resolution den&in- petitioners?otion for re$onsideration,*/+ in whi$h the appellate $ourt affired the trial$ourt?s disissal of the $oplaint for infrin-eent andor unfair $opetition anddaa-es .ut deleted the award for attorne&?s fees"

The fa$ts are as follows7

Petitioners are authors and $op&ri-ht owners of dul& issued $ertifi$ates of$op&ri-ht re-istration $overin- their pu.lished wor2s, produ$ed throu-h their$o.ined resour$es and efforts, entitled CO6@6 6N@ISH >OR TOD!C6T for .revit, 3oo2s ) and ', and FORJ3OOJ >OR CO6@6>R6SH%N 6N@ISH, Series )"

Respondent >eli$idad Ro.les and @oodwill Tradin- Co", In$" are theauthorpu.lisher and distri.utorseller of another pu.lished wor2 entitled8D6V6OPIN@ 6N@ISH PRO>ICI6NC= !D6P for .revit, 3oo2s ) and '!)0


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deanded that the& $ease and desist fro further sellin- and distri.utin- to the-eneral pu.li$ the infrin-ed $opies of respondent Ro.les? wor2s"

However, respondents i-nored the deands, hen$e, on ;ul& B, )0


18/76

pla-iaris, in$orporation and reprodu$tion of the portions of the .oo2 ofpetitionersG that there was an a-reeent .etween @oodwill and the respondentRo.les that Ro.les -uaranteed @oodwill that the aterials utili:ed in theanus$ript were her own or that she had se$ured the ne$essar& perissionfro $ontri.utors and sour$esG that the author assued sole responsi.ilit& and

held the pu.lisher without an& lia.ilit&"On Nove.er '


19/76

On %a& )4, )00/, petitioners filed their noti$e of appeal with the trial$ourt*)'+, and on ;ul& )0, )00/, the $ourt dire$ted its .ran$h $ler2 of $ourt toforward all the re$ords of the $ase to the Court of ppeals"*)/+

In the appeal, petitioners ar-ued that the trial $ourt $opletel& disre-ardedtheir eviden$e and full& su.s$ri.ed to the ar-uents of respondent Ro.les that

the .oo2s in issue were purel& the produ$t of her resear$hes and studies andthat the $opied portions were inspired .& forei-n authors and as su$h notsu.Ee$t to $op&ri-ht" Petitioners also assailed the findin-s of the trial $ourt thatthe& were aniated .& .ad faith in institutin- the $oplaint" *)4+

On ;une 'B, )00B, the Court of ppeals rendered Eud-ent in favor ofrespondents Ro.les and @oodwill Tradin- Co", In$" The relevant portions of thede$ision state7

8It ust .e noted, however, that siilarit& of the alle-edl& infrin-ed wor2 to the

author?s or proprietor?s $op&ri-hted wor2 does not of itself esta.lish $op&ri-htinfrin-eent, espe$iall& if the siilarit& results fro the fa$t that .oth wor2s dealwith the sae su.Ee$t or have the sae $oon sour$e, as in this $ase"

ppellee Ro.les has full& e9plained that the portion or aterial of the .oo2$laied .& appellants to have .een $opied or lifted fro forei-n .oo2s" She hasdul& proven that ost of the topi$s or aterials $ontained in her .oo2, withparti$ular referen$e to those atters $laied .& appellants to have .eenpla-iari:ed were topi$s or atters appearin- not onl& in appellants and her.oo2s .ut also in earlier .oo2s on Colle-e 6n-lish, in$ludin- forei-n .oo2s, e"i"

6dund 3ur2e?s 8Spee$h on Con$iliation=, 3oeri-s? 8Copeten$e in 6n-lish=and 3rou-hton?s, 86dund 3ur2e?s Colle$tion"=

9 9 9

8ppellant?s relian$e on the last para-raph on Se$tion )) is ispla$ed" It ust.e ephasi:ed that the& failed to prove that their .oo2s were ade sour$es .&appellee"=*)5+

The Court of ppeals was of the view that the award of attorne&s? fees was

not proper, sin$e there was no .ad faith on the part of petitioners Ha.ana et al"in institutin- the a$tion a-ainst respondents"

On ;ul& )', )00B, petitioners filed a otion for re$onsideration,*)1+however, the Court of ppeals denied the sae in a Resolution*)B+ datedNove.er '5, )00B"

Hen$e, this petition"


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In this appeal, petitioners su.it that the appellate $ourt erred in affirin-the trial $ourt?s de$ision"

Petitioners raised the followin- issues7 !)# whether or not, despite theapparent te9tual, theati$ and seAuential siilarit& .etween D6P and C6T,respondents $oitted no $op&ri-ht infrin-eentG !'# whether or not there was

animus $urandion the part of respondent when the& refused to withdraw the$opies of C6T fro the ar2et despite noti$e to withdraw the saeG and !/#whether or not respondent Ro.les a.used a writer?s ri-ht to fair use, in violationof Se$tion )) of Presidential De$ree No" 40"*)


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The law also provided for the liitations on $op&ri-ht, thus7

8Se$" )


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8The proposition is pea$e" Not pea$e throu-h the ediu of warG notpea$e to .e hunted throu-h the la.&rinth of intri$ate and endlessne-otiationsG not pea$e to arise out of universal dis$ord, foented froprin$iple, in all parts of the epireG not pea$e to depend on the Euridi$aldeterination of perple9in- Auestions, or the pre$ise ar2in- of the

.oundar& of a $ople9 -overnent" It is siple pea$eG sou-ht in its natural$ourse, and in its ordinar& haunts" It is pea$e sou-ht in the spirit of pea$e,and laid in prin$iples purel& pa$ifi$"

6dund 3ur2e, 8 Spee$h on Criti$is"=*'4+

On pa-e )(( of the .oo2 D6P*'5+, also in the topi$ of parallel stru$ture andrepetition, the sae e9aple is found in toto. The onl& differen$e is thatpetitioners a$2nowled-ed the author 6dund 3ur2e, and respondents did not"

In several other pa-es*'1+the treatent and anner of presentation of thetopi$s of D6P are siilar if not a rehash of that $ontained in C6T"

Fe .elieve that respondent Ro.les? a$t of liftin- fro the .oo2 of petitionerssu.stantial portions of dis$ussions and e9aples, and her failure toa$2nowled-e the sae in her .oo2 is an infrin-eent of petitioners? $op&ri-hts"

Fhen is there a su.stantial reprodu$tion of a .oo2M It does not ne$essaril&reAuire that the entire $op&ri-hted wor2, or even a lar-e portion of it, .e $opied"If so u$h is ta2en that the value of the ori-inal wor2 is su.stantiall& diinished,there is an infrin-eent of $op&ri-ht and to an inEurious e9tent, the wor2 is

appropriated"*'B+

In deterinin- the Auestion of infrin-eent, the aount of atter $opiedfro the $op&ri-hted wor2 is an iportant $onsideration" To $onstituteinfrin-eent, it is not ne$essar& that the whole or even a lar-e portion of thewor2 shall have .een $opied" If so u$h is ta2en that the value of the ori-inal issensi.l& diinished, or the la.ors of the ori-inal author are su.stantiall& and toan inEurious e9tent appropriated .& another, that is suffi$ient in point of law to$onstitute pira$&"*'


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The respondents? $lai that the $opied portions of the .oo2 C6T are alsofound in forei-n .oo2s and other -raar .oo2s, and that the siilarit&.etween her st&le and that of petitioners $an not .e avoided sin$e the& $oefro the sae .a$2-round and orientation a& .e true" However, in this

Eurisdi$tion under Se$ )


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this $ase" How $an siilaridenti$al e9aples not .e $onsidered as a ar2 of$op&in-M

Fe $onsider as an indicia of -uilt or wron-doin- the a$t of respondentRo.les of pullin- out fro @oodwill .oo2stores the .oo2 D6P upon learnin- ofpetitioners? $oplaint while pharisai$all& den&in- petitioners? deand" It was

further noted that when the .oo2 D6P was reissued as a revised version, all thepa-es $ited .& petitioners to $ontain portion of their .oo2 Colle-e 6n-lish forToda& were eliinated"

In $ases of infrin-eent, $op&in- alone is not what is prohi.ited" The$op&in- ust produ$e an 8inEurious effe$t=" Here, the inEur& $onsists in thatrespondent Ro.les lifted fro petitioners? .oo2 aterials that were the result ofthe latter?s resear$h wor2 and $opilation and isrepresented the as herown" She $ir$ulated the .oo2 D6P for $oer$ial use and did not a$2nowled-epetitioners as her sour$e"

Hen$e, there is a $lear $ase of appropriation of $op&ri-hted wor2 for her.enefit that respondent Ro.les $oitted" Petitioners? wor2 as authors is theprodu$t of their lon- and assiduous resear$h and for another to represent it asher own is inEur& enou-h" In $op&ri-htin- .oo2s the purpose is to -ive prote$tionto the intelle$tual produ$t of an author" This is pre$isel& what the law on$op&ri-ht prote$ted, under Se$tion )


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Repu.li$ of the Philippines"*PRE#E C*R!%anilaTHIRD DIVISION

G.R. Nos. FF451 August 1, 188

20!H CEN!*R+ IL# CRPRA!IN, petitioner, vs"C*R! APPEAL", ED*ARD #. BARRE!, RA*L "AG*LL $% R!*NELEDE"#A, respondents"

Siguion 4eyna! Montecillo - 'ngsiako La% '$$ice $or petitioner.

B.C. Salaar - Associates $or respondents.

G*!IERRE, @R., J."

The petitioner Auestions the appli$ation of the $onstitutional provision a-ainstille-al sear$hes and sei:ures to raids $ondu$ted in $onne$tion with the-overnentQs antifil pira$& $apai-n" The ain issue hin-es on whether ornot the Eud-e properl& lifted the sear$h warrants he issued earlier upon theappli$ation of the National 3ureau of Investi-ation on the .asis of the $oplaintfiled .& the petitioner"

In a letter$oplaint dated u-ust '1, )0


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inventor& of the ites sei:ed was ade and left with the private respondents"

$tin- on a otion to lift sear$h warrants and release sei:ed properties filed .&the private respondents, the lower $ourt issued an order dated O$to.er


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Se$tion ', rti$le III of the present Constitution whi$h su.stantiall& reprodu$esSe$tion /, rti$le IV of the )0B/ Constitution on ille-al sear$hes and sei:uresprovides7

The ri-ht of the people to .e se$ure in their persons, houses, papers, andeffe$ts a-ainst unreasona.le sear$hes and sei:ures of whatever nature and foran& purpose shall .e inviola.le, and no sear$h warrant or warrant of arrest shallissue e9$ept upon pro.a.le $ause to .e deterined personall& .& the Eud-eafter e9aination under oath or affiration of the $oplainant and the witnesseshe a& produ$e, and parti$ularl& des$ri.in- the pla$e to .e sear$hed and thepersons or thin-s to .e sei:ed"

This $onstitutional ri-ht prote$ts a $iti:en a-ainst wanton and unreasona.leinvasion of his priva$& and li.ert& as to his person, papers and effe$ts" Fe havee9plained in the $ase of ,eople v. Burgos !)44 SCR )# $itin- 5illanueva v.

6uerubin!4< SCR /45# wh& the ri-ht is so iportant7

It is deferen$e to oneQs personalit& that lies at the $ore of this ri-ht, .ut it $ould.e also loo2ed upon as a re$o-nition of a $onstitutionall& prote$ted area,priaril& oneQs hoe, .ut not ne$essaril& thereto $onfined" !Cf" Hoffa v" nitedStates, /


28/76

In the $ase of Burgos! Sr. v. Chie$ o$ Sta$$! A#, !)// SCR P, supra#"

In the instant $ase, the lower $ourt lifted the three Auestioned sear$h warrantsa-ainst the private respondents on the -round that it a$ted on the appli$ation forthe issuan$e of the said sear$h warrants and -ranted it on theisrepresentations of appli$ant N3I and its witnesses that infrin-eent of

$op&ri-ht or a pira$& of a parti$ular fil have .een $oitted" Thus the lower$ourt stated in its Auestioned order dated ;anuar& ',)0o9 Corporation will testif& on the video$assettes that were pirated, so that he did not have personal 2nowled-e of thealle-ed pira$&" The witness 3a$ani also said that the video $assettes werepirated without statin- the anner it was pirated and that it was tt&" Doin-o

that has 2nowled-e of that fa$t"

On the part of tt&" Doin-o, he said that the retapin- of the alle-edl& piratedtapes was fro aster tapes alle-edl& .elon-in- to the Twentieth Centur& >o9,.e$ause, a$$ordin- to hi, it is of his personal 2nowled-e"

t the hearin- of the %otion for Re$onsideration, Senior N3I -ent tt&" l.inoRe&es testified that when the $oplaint for infrin-eent was .rou-ht to the N3I,the aster tapes of the alle-edl& pirated tapes were shown to hi and he ade

$oparisons of the tapes with those pur$hased .& their an 3a$ani" Fh& theaster tapes or at least the fil reels of the alle-edl& pirated tapes were notshown to the Court durin- the appli$ation -ives soe is-ivin-s as to the truthof that .are stateent of the N3I a-ent on the witness stand"

-ain as the appli$ation and sear$h pro$eedin-s is a prelude to the filin- of$riinal $ases under PD 40, the $op&ri-ht infrin-eent law, and althou-h whatis reAuired for the issuan$e thereof is erel& the presen$e of pro.a.le $ause,


29/76

that pro.a.le $ause ust .e satisfa$tor& to the Court, for it is a tie honoredpre$ept that pro$eedin-s to put a an to tas2 as an offender under our lawsshould .e interpreted in strictissimi 7urisa-ainst the -overnent and li.erall& infavor of the alle-ed offender"

999 999 999

This do$trine has never .een overturned, and as a atter of fa$t it had .eenenshrined in the 3ill of Ri-hts in our )0B/ Constitution"

So that la$2in- in persuasive effe$t, the alle-ation that aster tapes wereviewed .& the N3I and were $opared to the pur$hased and sei:ed video tapesfro the respondentsQ esta.lishents, it should .e disissed as not supported.& $opetent eviden$e and for that atter the pro.a.le $ause hovers in that-re& de.ata.le twili-ht :one .etween .la$2 and white resolva.le in favor of

respondents herein"

3ut the -larin- fa$t is that QCo$oon,Q the first video tape entioned in the sear$hwarrant, was not even dul& re-istered or $op&ri-hted in the Philippines" !nne9C of Opposition p" )5' re$ord#" So, that la$2in- in the reAuisite presentation tothe Court of an alle-ed aster tape for purposes of $oparison with thepur$hased eviden$e of the video tapes alle-edl& pirated and those sei:ed frorespondents, there was no wa& to deterine whether there reall& was pira$&, or$op&in- of the fil of the $oplainant Twentieth Centur& >o9" !pp" /B/0, Rollo#

999 999 999

The lower $ourt, therefore, lifted the three !/# Auestioned sear$h warrants in thea.sen$e of pro.a.le $ause that the private respondents violated P"D" 40" sfound out .& the $ourt, the N3I a-ents who a$ted as witnesses did not havepersonal 2nowled-e of the su.Ee$t atter of their testion& whi$h was thealle-ed $oission of the offense .& the private respondents" Onl& thepetitionerQs $ounsel who was also a witness durin- the appli$ation for theissuan$e of the sear$h warrants stated that he had personal 2nowled-e that the$onfis$ated tapes owned .& the private respondents were pirated tapes ta2en

fro aster tapes .elon-in- to the petitioner" However, the lower $ourt did not-ive u$h $reden$e to his testion& in view of the fa$t that the aster tapes ofthe alle-edl& pirated tapes were not shown to the $ourt durin- the appli$ation"

ll these fa$tors were ta2en into $onsideration .& the lower $ourt when it liftedthe three Auestioned sear$h warrants" There is no truth, therefore, to thepetitionerQs alle-ation that the lower $ourt .ased its ;anuar& ', )0


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presented durin- the appli$ation for sear$h warrants, thus leadin- it to $on$ludethat it had .een isled .& the appli$ant and his witnesses" !p" )B, Rollo#

The presentation of the aster tapes of the $op&ri-hted fils fro whi$h thepirated fils were alle-edl& $opied, was ne$essar& for the validit& of sear$hwarrants a-ainst those who have in their possession the pirated fils" ThepetitionerQs ar-uent to the effe$t that the presentation of the aster tapes atthe tie of appli$ation a& not .e ne$essar& as these would .e erel&evidentiar& in nature and not deterinative of whether or not a pro.a.le $ausee9ists to Eustif& the issuan$e of the sear$h warrants is not eritorious" The $ourt$annot presue that dupli$ate or $opied tapes were ne$essaril& reprodu$edfro aster tapes that it owns"

The appli$ation for sear$h warrants was dire$ted a-ainst video tape outletswhi$h alle-edl& were en-a-ed in the unauthori:ed sale and rentin- out of

$op&ri-hted fils .elon-in- to the petitioner pursuant to P"D" 40"

The essen$e of a $op&ri-ht infrin-eent is the siilarit& or at least su.stantialsiilarit& of the purported pirated wor2s to the $op&ri-hted wor2" Hen$e, theappli$ant ust present to the $ourt the $op&ri-hted fils to $opare the withthe pur$hased eviden$e of the video tapes alle-edl& pirated to deterinewhether the latter is an unauthori:ed reprodu$tion of the forer" This lin2a-e ofthe $op&ri-hted fils to the pirated fils ust .e esta.lished to satisf& thereAuireents of pro.a.le $ause" %ere alle-ations as to the e9isten$e of the$op&ri-hted fils $annot serve as .asis for the issuan$e of a sear$h warrant"

>urtherore, we note that the sear$h warrants des$ri.ed the arti$les sou-ht to.e sei:ed as follows7

999 999 999

999 999 999

$# Television sets, Video Cassettes Re$orders, rewinders, tape head $leaners,a$$essories, eAuipents and other a$hines used or intended to .e used in the

unlawful reprodu$tion, sale, rentallease distri.ution of the a.oveentionedvideo tapes whi$h she is 2eepin- and $on$ealin- in the preises a.ovedes$ri.ed" !p" '1, Rollo#

In the $ase of Burgos v. Chie$ o$ Sta$$! A#, supra, we stated7

999 999 999


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nother fa$tor whi$h a2es the sear$h warrants under $onsideration$onstitutionall& o.Ee$tiona.le is that the& are in the nature of -eneral warrants"The sear$h warrants des$ri.e the arti$les sou-ht to .e sei:ed in this wise7

l+ ll printin- eAuipent, paraphernalia, paper, in2, photo eAuipent, t&pewriters,$a.inets, ta.les $ouni$ationsre$ordin- eAuipent, tape re$orders,di$taphone and the li2e used andor $onne$ted in the printin- of the QF6>OR%Q newspaper and an& and all do$uent$ouni$ations, letters andfa$siile of prints related to F6 >OR% newspaper"

'+ Su.versive do$uents, paphlets, leaflets, .oo2s, and other pu.li$ations toproote the o.Ee$tives and purposes of the su.versive or-ani:ations 2nown as%oveent for >ree Philippines, i-hta>ire %oveent and pril 1 %oveentGand

/+ %otor vehi$les used in the distri.ution$ir$ulation of the QF6 >OR% andother su.versive aterials and propa-anda, ore parti$ularl&,

)+ To&otaCorolla, $olored &ellow with Plate No" NJ


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ndou.tedl&, a siilar $on$lusion $an .e dedu$ed fro the des$ription of thearti$les sou-ht to .e $onfis$ated under the Auestioned sear$h warrants"

Television sets, video $assette re$orders, reinders and tape $leaners arearti$les whi$h $an .e found in a video tape store en-a-ed in the le-itiate.usiness of lendin- or rentin- out .etaa9 tapes" In short, these arti$les andapplian$es are -enerall& $onne$ted with, or related to a le-itiate .usiness notne$essaril& involvin- pira$& of intelle$tual propert& or infrin-eent of $op&ri-htlaws" Hen$e, in$ludin- these arti$les without spe$ifi$ation andor parti$ularit&that the& were reall& instruents in violatin- an ntiPira$& law a2es Thesear$h warrant too -eneral whi$h $ould result in the $onfis$ation of all itesfound in an& video store" In fa$t, this a$tuall& happened in the instant $ase"Thus, the lower $ourt, in its Auestioned order dated O$to.er


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does not $onstituteres 7udicata.

$areful review of the re$ord of the $ase shows that the respondent Court didnot $oit a -rave a.use of dis$retion when it issued the Auestioned orders"@rave a.use of dis$retionQ iplies su$h $apri$ious and whisi$al e9er$ise of

Eud-ent as is eAuivalent to la$2 of Eurisdi$tion, or, in other words, where thepower is e9er$ised in an ar.itrar& or despoti$ anner .& reason of passion orpersonal hostilit&, and it ust .e so patent and -ross as to aount to an evasionof positive dut& or to a virtual refusal to perfor the dut& enEoined or to a$t at allin $onteplation of law"Q 3ut far fro .ein- despoti$ or ar.itrar&, the assailedorders were otivated .& a no.le desire of re$tif&inan error, u$h so when theerroneous findin-s $ollided with the $onstitutional ri-hts of the privaterespondents" In fa$t, the petitioner did not even $ontest the ri-hteousness andle-alit& of the Auestioned orders .ut instead $on$entrated on the alle-ed denialof due pro$ess of law" !pp" 4445, Rollo#

The proliferation of pirated tapes of fils not onl& deprives the -overnent ofu$h needed revenues .ut is also an indi$ation of the widespread .rea2down ofnational order and dis$ipline" Courts should not ipose an& unne$essar&road.lo$2s in the wa& of the antifil pira$& $apai-n" However, the $apai-n$annot i-nore or violate $onstitutional safe-uards" To sa& that the pro.le ofpirated fils $an .e solved onl& .& the use of un$onstitutional short$uts is todeni-rate the lon- histor& and e9perien$e .ehind the sear$hes and sei:ures$lause of the 3ill of Ri-hts" The trial $ourt did not $oit reversi.le error"

FH6R6>OR6, the instant petition is DIS%ISS6D" The Auestioned de$ision andresolution of the Court of ppeals are >>IR%6D"

SO ORD6R6D"

#ernan! C.2.! #eliciano! Bidin and Cortes! 22.! concur


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6N 3NC[G.R. No. 110318. August 28, 1F]

CL*#BIA PIC!*RE", INC., RIN PIC!*RE" CRPRA!IN,PARA#*N! PIC!*RE" CRPRA!IN, !?EN!IE!H CEN!*R+ IL# CRPRA!IN, *NI!ED AR!I"!" CRPRA!IN,*NIER"AL CI!+ "!*DI", INC., !HE ?AL! DI"NE+ C#PAN+,$% ?ARNER BR!HER", INC., petitioners, vs. C*R! APPEAL", "*N"HINE H#E IDE, INC. $% DANIL A.PELINDARI, respondents.

D E C I " I N

REGALAD, J.

3efore us is a petition for review on certiorariof the de$ision of the Court ofppeals*)+proul-ated on ;ul& '', )00' and its resolution*'+of %a& )(, )00/den&in- petitioners? otion for re$onsideration, .oth of whi$h sustained theorder*/+of the Re-ional Trial Court, 3ran$h )//, %a2ati, %etro %anila, datedNove.er '', )0


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a.ove des$ri.ed" In the hearin- of the appli$ation, N3I Senior -ent auro C"Re&es, upon Auestions .& the $ourt a 8uo, reiterated in su.stan$e hisaverents in his affidavit" His testion& was $orro.orated .& another witness,%r" Rene C" 3alta:ar" tt&" Ri$o V" Doin-o?s deposition was also ta2en" Onthe .asis of the affidavits and depositions of N3I Senior -ent auro C" Re&es,

Rene C" 3alta:ar and tt&" Ri$o V" Doin-o, Sear$h Farrant No


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I

In$eptivel&, we shall settle the pro$edural $onsiderations on the atter ofand the $hallen-e to petitioners? le-al standin- in our $ourts, the& .ein- forei-n$orporations not li$ensed to do .usiness in the Philippines"

Private respondents aver that .ein- forei-n $orporations, petitioners shouldhave su$h li$ense to .e a.le to aintain an a$tion in Philippine $ourts" In so$hallen-in- petitioners? personalit& to sue, private respondents point to the fa$tthat petitioners are the $op&ri-ht owners or owners of e9$lusive ri-hts ofdistri.ution in the Philippines of $op&ri-hted otion pi$tures or fils, and also tothe appointent of tt&" Ri$o V" Doin-o as their attorne&infa$t, as .ein-$onstitutive of 8doin- .usiness in the Philippines= under Se$tion )!f# !)# and !'#,Rule ) of the Rules of the 3oard of Investents" s forei-n $orporations doin-.usiness in the Philippines, Se$tion )// of 3atas Pa.ansa 3l-" 1


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shall have the li$ense reAuired .& law, and until it $oplies with the law intransa$tin- .usiness here, it shall not .e peritted to aintain an& suit in lo$al$ourts"*)(+s thus interpreted, an& forei-n $orporation not doin- .usiness in thePhilippines a& aintain an a$tion in our $ourts upon an& $ause of a$tion,provided that the su.Ee$t atter and the defendant are within the Eurisdi$tion of

the $ourt" It is not the a.sen$e of the pres$ri.ed li$ense .ut 8doin- .usiness= inthe Philippines without su$h li$ense whi$h de.ars the forei-n $orporation froa$$ess to our $ourts" In other words, althou-h a forei-n $orporation is withoutli$ense to transa$t .usiness in the Philippines, it does not follow that it has no$apa$it& to .rin- an a$tion" Su$h li$ense is not ne$essar& if it is not en-a-ed in.usiness in the Philippines"*))+

Statutor& provisions in an& Eurisdi$tions are deterinative of what$onstitutes 8doin- .usiness= or 8transa$tin- .usiness= within that foru, in whi$h$ase said provisions are $ontrollin- there" In others where no su$h definition or

Aualifi$ation is laid down re-ardin- a$ts or transa$tions fallin- within its purview,the Auestion rests priaril& on fa$ts and intent" It is thus held that all the$o.ined a$ts of a forei-n $orporation in the State ust .e $onsidered, andever& $ir$ustan$e is aterial whi$h indi$ates a purpose on the part of the$orporation to en-a-e in soe part of its re-ular .usiness in the State" *)'+

No -eneral rule or -overnin- prin$iples $an .e laid down as to what$onstitutes 8doin-= or 8en-a-in- in= or 8transa$tin-= .usiness" 6a$h $ase ust.e Eud-ed in the li-ht of its own pe$uliar environental $ir$ustan$es" *)/+Thetrue tests, however, see to .e whether the forei-n $orporation is $ontinuin- the

.od& or su.stan$e of the .usiness or enterprise for whi$h it was or-ani:ed orwhether it has su.stantiall& retired fro it and turned it over to another"*)4+

s a -eneral proposition upon whi$h an& authorities a-ree in prin$iple,su.Ee$t to su$h odifi$ations as a& .e ne$essar& in view of the parti$ularissue or of the ters of the statute involved, it is re$o-ni:ed that a forei-n$orporation is 8doin-,= 8transa$tin-,= 8en-a-in- in,= or 8$arr&in- on= .usiness inthe State when, and ordinaril& onl& when, it has entered the State .& its a-entsand is there en-a-ed in $arr&in- on and transa$tin- throu-h the soesu.stantial part of its ordinar& or $ustoar& .usiness, usuall& $ontinuous in the

sense that it a& .e distin-uished fro erel& $asual, sporadi$, or o$$asionaltransa$tions and isolated a$ts"*)5+

The Corporation Code does not itself define or $ate-ori:e what a$ts$onstitute doin- or transa$tin- .usiness in the Philippines" ;urispruden$e has,however, held that the ter iplies a $ontinuit& of $oer$ial dealin-s andarran-eents, and $onteplates, to that e9tent, the perforan$e of a$ts orwor2s or the e9er$ise of soe of the fun$tions norall& in$ident to or in


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pro-ressive prose$ution of the purpose and su.Ee$t of its or-ani:ation" *)1+

This traditional $ase law definition has evolved into a statutor& definition,havin- .een adopted with soe Aualifi$ations in various pie$es of le-islation inour Eurisdi$tion"

>or instan$e, Repu.li$ $t No" 5455*)B+provides7S6CTION )" /e$initions and scope o$ this Act.L !)# 9 9 9G and the phrase8doin- .usiness= shall in$lude soli$itin- orders, pur$hases, servi$e $ontra$ts,openin- offi$es, whether $alled 8liaison= offi$es or .ran$hesG appointin-representatives or distri.utors who are doi$iled in the Philippines or who in an&$alendar &ear sta& in the Philippines for a period or periods totallin- onehundred ei-ht& da&s or oreG parti$ipatin- in the ana-eent, supervision or$ontrol of an& doesti$ .usiness fir, entit& or $orporation in the PhilippinesGand an& other a$t or a$ts that ipl& a $ontinuit& of $oer$ial dealin-s or

arran-eents, and $onteplate to that e9tent the perforan$e of a$ts or wor2s,or the e9er$ise of soe of the fun$tions norall& in$ident to, and inpro-ressiveprose$ution of, $oer$ial -ain or of the purpose and o.Ee$t of the .usinessor-ani:ation"

Presidential De$ree No" )B


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or the e9er$ise of soe of the fun$tions norall& in$ident to, or in thepro-ressive prose$ution of, $oer$ial -ain or of the purpose and o.Ee$t of the.usiness or-ani:ation"

>inall&, Repu.li$ $t No" B(4'*)0+e.odies su$h $on$ept in this wise7

S6C" /" /e$initions" L s used in this $t7

999 999 999

!d# the phrase 8doin- .usiness shall in$lude soli$itin- orders, servi$e$ontra$ts, openin- offi$es, whether $alled liaison? offi$es or .ran$hesGappointin- representatives or distri.utors doi$iled in the Philippines or who inan& $alendar &ear sta& in the $ountr& for a period or periods totallin- onehundred ei-ht! !)


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aforestated, said forei-n fil $orporations do not transa$t or do .usiness in thePhilippines and, therefore, do not need to .e li$ensed in order to ta2e re$ourseto our $ourts"

lthou-h Se$tion )!-# of the Ipleentin- Rules and Re-ulations of theOni.us Investents Code lists, aon- others L

!)# Soli$itin- orders, pur$hases !sales# or servi$e $ontra$ts"Con$rete and spe$ifi$ soli$itations .& a forei-n fir, or .& an a-ent of su$hforei-n fir, not a$tin- independentl& of the forei-n fir aountin- tone-otiations or fi9in- of the ters and $onditions of sales or servi$e $ontra$ts,re-ardless of where the $ontra$ts are a$tuall& redu$ed to writin-, shall $onstitutedoin- .usiness even if the enterprise has no offi$e or fi9ed pla$e of .usiness inthe Philippines" The arran-eents a-reed upon as to anner, tie and ters ofdeliver& of the -oods or the transfer of title thereto is iaterial" forei-n firwhi$h does .usiness throu-h the iddleen a$tin- in their own naes, su$h as

indentors, $oer$ial .ro2ers or $oission er$hants, shall not .e deeeddoin- .usiness in the Philippines" 3ut su$h indentors, $oer$ial .ro2ers or$oission er$hants shall .e the ones deeed to .e doin- .usiness in thePhilippines"

!'# ppointin- a representative or distri.utor who is doi$iled in thePhilippines, unless said representative or distri.utor has an independent status,i"e", it transa$ts .usiness in its nae and for its own a$$ount, and not in thenae or for the a$$ount of a prin$ipal" Thus, where a forei-n fir is represented

in the Philippines .& a person or lo$al $opan& whi$h does not a$t in its nae.ut in the nae of the forei-n fir, the latter is doin- .usiness in the Philippines"

as a$ts $onstitutive of 8doin- .usiness,= the fa$t that petitioners are adittedl&$op&ri-ht owners or owners of e9$lusive distri.ution ri-hts in the Philippines ofotion pi$tures or fils does not $onvert su$h ownership into an indi$iu ofdoin- .usiness whi$h would reAuire the to o.tain a li$ense .efore the& $ansue upon a $ause of a$tion in lo$al $ourts"

Neither is the appointent of tt&" Ri$o V" Doin-o as attorne&infa$t of

petitioners, with e9press authorit& pursuant to a spe$ial power of attorne&, interaliaL

To la& $riinal $oplaints with the appropriate authorities and to provideeviden$e in support of .oth $ivil and $riinal pro$eedin-s a-ainst an& person orpersons involved in the $riinal infrin-eent of $op&ri-ht, or $on$ernin- theunauthori:ed iportation, dupli$ation, e9hi.ition or distri.ution of an&$ineato-raphi$ wor2!s# L fils or video $assettes L of whi$h 9 9 9 is the


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owner of $op&ri-ht or the owner of e9$lusive ri-hts of distri.ution in thePhilippines pursuant to an& a-reeent!s# .etween 9 9 9 and the respe$tiveowners of $op&ri-ht in su$h $ineato-raphi$ wor2!s#, to initiate and prose$uteon .ehalf of 9 9 9 $riinal or $ivil a$tions in the Philippines a-ainst an& person orpersons unlawfull& distri.utin-, e9hi.itin-, sellin- or offerin- for sale an& fils or

video $assettes of whi$h 9 9 9 is the owner of $op&ri-ht or the owner ofe9$lusive ri-hts of distri.ution in the Philippines pursuant to an& a-reeent!s#.etween 9 9 9 and the respe$tive owners of $op&ri-ht in su$h wor2s" *')+

tantaount to doin- .usiness in the Philippines" Fe fail to see how e9er$isin-one?s le-al and propert& ri-hts and ta2in- steps for the vi-ilant prote$tion of saidri-hts, parti$ularl& the appointent of an attorne&infa$t, $an .e deeed .& andof theselves to .e doin- .usiness here"

s a -eneral rule, a forei-n $orporation will not .e re-arded as doin-

.usiness in the State sipl& .e$ause it enters into $ontra$ts with residents ofthe State, where su$h $ontra$ts are $onsuated outside the State" *''+In fa$t,a view is ta2en that a forei-n $orporation is not doin- .usiness in the stateerel& .e$ause sales of its produ$t are ade there or other .usiness furtherin-its interests is transa$ted there .& an alle-ed a-ent, whether a $orporation or anatural person, where su$h a$tivities are not under the dire$tion and $ontrol ofthe forei-n $orporation .ut are en-a-ed in .& the alle-ed a-ent as anindependent .usiness"*'/+

It is -enerall& held that sales ade to $ustoers in the State .& an

independent dealer who has pur$hased and o.tained title fro the $orporationto the produ$ts sold are not a doin- of .usiness .& the $orporation"*'4+i2ewise, a forei-n $orporation whi$h sells its produ$ts to persons st&led8distri.utin- a-ents= in the State, for distri.ution .& the, is not doin- .usinessin the State so as to render it su.Ee$t to servi$e of pro$ess therein, where the$ontra$t with these pur$hasers is that the& shall .u& e9$lusivel& fro the forei-n$orporation su$h -oods as it anufa$tures and shall sell the at trade pri$esesta.lished .& it"*'5+

It has oreover .een held that the a$t of a forei-n $orporation in en-a-in-

an attorne& to represent it in a >ederal $ourt sittin- in a parti$ular State is notdoin- .usiness within the s$ope of the iniu $onta$t test" *'1+ Fith u$hore reason should this do$trine appl& to the ere retainer of tt&" Doin-o forle-al prote$tion a-ainst $ontin-ent a$ts of intelle$tual pira$&"

In a$$ordan$e with the rule that 8doin- .usiness= iports onl& a$ts infurtheran$e of the purposes for whi$h a forei-n $orporation was or-ani:ed, it isheld that the ere institution and prose$ution or defense of a suit, parti$ularl& if


42/76

the transa$tion whi$h is the .asis of the suit too2 pla$e out of the State, do notaount to the doin- of .usiness in the State" The institution of a suit or thereoval thereof is neither the a2in- of a $ontra$t nor the doin- of .usinesswithin a $onstitutional provision pla$in- forei-n $orporations li$ensed to do.usiness in the State under the sae re-ulations, liitations and lia.ilities with

respe$t to su$h a$ts as doesti$ $orporations" %erel& en-a-in- in liti-ation has.een $onsidered as not a suffi$ient iniu $onta$t to warrant the e9er$ise ofEurisdi$tion over a forei-n $orporation"*'B+

s a $onsideration aside, we have perfor$e to $oent on privaterespondents? .asis for ar-uin- that petitioners are .arred fro aintainin- suitin the Philippines" >or alle-edl& .ein- forei-n $orporations doin- .usiness inthe Philippines without a li$ense, private respondents repeatedl& aintain in alltheir pleadin-s that petitioners have there.& no legal personality to .rin- ana$tion .efore Philippine $ourts"*'


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forei-n $orporations not en-a-ed in .usiness in the Philippines, invo2e thelatter?s supposed la$2 of $apa$it& to sue" The do$trine of la$2 of $apa$it& to sue.ased on failure to first a$Auire a lo$al li$ense is .ased on $onsiderations ofpu.li$ poli$&" It was never intended to favor nor insulate fro suit uns$rupulousesta.lishents or nationals in $ase of .rea$h of valid o.li-ations or violations of

le-al ri-hts of unsuspe$tin- forei-n firs or entities sipl& .e$ause the& are notli$ensed to do .usiness in the $ountr&"*/5+

II

Fe now pro$eed to the ain issue of the retroa$tive appli$ation to thepresent $ontrovers& of the rulin- in 9:th Century #o" #ilm Corporation vs. Courto$ Appeals! et al., proul-ated on u-ust )0, )0


44/76

essen$e of pro.a.le $ause" t the tie of the issuan$e of the sear$h warrantinvolved here, althou-h the 9:th Century #o"$ase had not &et .een de$ided,Se$tion ', rti$le III of the Constitution and Se$tion /, Rule )'1 of the )0


45/76

7udicially accepted, reAuired with respe$t to the findin- of pro.a.le $ause"

rti$le 4 of the Civil Code provides that 8!l#aws shall have no retroa$tiveeffe$t, unless the $ontrar& is provided" Correlativel&, rti$le < of the sae Codede$lares that 8!E#udi$ial de$isions appl&in- the laws or the Constitution shall forpart of the le-al s&ste of the Philippines"=

;urispruden$e, in our s&ste of -overnent, $annot .e $onsidered as anindependent sour$e of lawG it $annot $reate law"*4(+Fhile it is true that Eudi$ialde$isions whi$h appl& or interpret the Constitution or the laws are part of thele-al s&ste of the Philippines, still the& are not laws" ;udi$ial de$isions, thou-hnot laws, are nonetheless eviden$e of what the laws ean, and it is for thisreason that the& are part of the le-al s&ste of the Philippines" *4)+ ;udi$ialde$isions of the Supree Court assue the sae authorit& as the statute itself"*4'+

Interpretin- the aforeAuoted $orrelated provisions of the Civil Code and inli-ht of the a.ove disAuisition, this Court ephati$all& de$lared in Co vs. Courto$ Appeals! et al"*4/+that the prin$iple of prospe$tivit& applies not onl& to ori-inalaendator& statutes and adinistrative rulin-s and $ir$ulars, .ut also, andproperl& so, to Eudi$ial de$isions" Our holdin- in the earlier $ase of ,eople vs.2ubinal*44+e$hoes the rationale for this Eudi$ial de$laration, vi"7

De$isions of this Court, althou-h in theselves not laws, are neverthelesseviden$e of what the laws ean, and this is the reason wh& under rti$le < ofthe New Civil Code, 8;udi$ial de$isions appl&in- or interpretin- the laws or the

Constitution shall for part of the le-al s&ste"= The interpretation upon a law.& this Court $onstitutes, in a wa&, a part of the law as of the date that the lawwas ori-inall& passed, sin$e this Court?s $onstru$tion erel& esta.lishes the$onteporaneous le-islative intent that the law thus $onstrued intends toeffe$tuate" The settled rule supported .& nuerous authorities is a restateentof the le-al a9i 8legis interpretation legis vim obtinet= L the interpretationpla$ed upon the written law .& a $opetent $ourt has the for$e of law" 9 9 9, .utwhen a do$trine of this Court is overruled and a different view is adopted, thene% doctrine should be applied prospectively! and should not apply to parties%ho had relied on the old doctrine and acted on the $aith thereo$" 9 9 9" !Stresssupplied#"

This was for$efull& reiterated in Spouses Benonan vs. Court o$ Appeals! etal.,*45+where the Court e9pounded7

9 9 9" 3ut while our de$isions for part of the law of the land, the& are alsosu.Ee$t to rti$le 4 of the Civil Code whi$h provides that 8laws shall have noretroa$tive effe$t unless the $ontrar& is provided"= This is e9pressed in the


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failiar le-al a9iu le"prospicit! non respicit, the law loo2s forward not.a$2ward" The rationale a-ainst retroa$tivit& is eas& to per$eive" Theretroa$tive appli$ation of a law usuall& divests ri-hts that have alread& .e$oevested or ipairs the o.li-ations of $ontra$t and hen$e, is un$onstitutional!>ran$is$o v" Certe:a, / SCR 515 *)01)+#" The sae $onsideration underlies

our rulin-s -ivin- onl& prospe$tive effe$t to de$isions enun$iatin- newdo$trines" 9 9 9"

The reasonin- .ehind Senarillos vs. Hermosisima*41+ that Eudi$ialinterpretation of a statute $onstitutes part of the law as of the date it wasori-inall& passed, sin$e the Court?s $onstru$tion erel& esta.lishes the$onteporaneous le-islative intent that the interpreted law $arried into effe$t, isall too failiar" Su$h Eudi$ial do$trine does not aount to the passa-e of a newlaw .ut $onsists erel& of a $onstru$tion or interpretation of a pree9istin- one,and that is pre$isel& the situation o.tainin- in this $ase"

It is $onseAuentl& $lear that a Eudi$ial interpretation .e$oes a part of thelaw as of the date that law was ori-inall& passed, su.Ee$t onl& to the Aualifi$ationthat when a do$trine of this Court is overruled and a different view is adopted,and ore so when there is a reversal thereof, the new do$trine should .eapplied prospe$tivel& and should not appl& to parties who relied on the olddo$trine and a$ted in -ood faith"*4B+To hold otherwise would .e to deprive thelaw of its Aualit& of fairness and Eusti$e then, if there is no re$o-nition of whathad transpired prior to su$h adEudi$ation"*4o9# was ine9istent inDe$e.er of )0


47/76

9 9 9" !F#e .elieve that the lower $ourt should .e $onsidered as havin- followedthe reAuireents of the law in issuin- Sear$h Farrant No" or Petitioners who too2 spe$ial effort to redress their -rievan$es and toprote$t their propert& ri-hts .& resortin- to the reedies provided .& the law, it isost unfair that fealt& to the rules and pro$edures then o.tainin- would .ear .utfruits of inEusti$e"*40+

Fithal, even the proposition that the prospe$tivit& of Eudi$ial de$isionsiports appli$ation thereof not onl& to future $ases .ut also to $ases still

on-oin- or not &et final when the de$ision was proul-ated, should not .e$ountenan$ed in the Eural sphere on a$$ount of its inevita.l& unsettlin-reper$ussions" %ore to the point, it is felt that the reasona.leness of the addedreAuireent in 9:th Century #o"$allin- for the produ$tion of the aster tapes ofthe $op&ri-hted fils for deterination of pro.a.le $ause in $op&ri-htinfrin-eent $ases needs revisitin- and $larifi$ation"

It will .e re$alled that the 9:th Century #o"$ase arose fro sear$h warrantpro$eedin-s in anti$ipation of the filin- of a $ase for the unauthori:ed sale orrentin- out of $op&ri-hted fils in videotape forat in violation of Presidential

De$ree No" 40" It revolved around the eanin- of pro.a.le $ause within the$onte9t of the $onstitutional provision a-ainst ille-al sear$hes and sei:ures, asapplied to $op&ri-ht infrin-eent $ases involvin- videotapes"

Therein it was ruled that L

The presentation of aster tapes of the $op&ri-hted fils fro whi$h the piratedfils were alle-edl& $opied, was ne$essar& for the validit& of sear$h warrants


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a-ainst those who have in their possession the pirated fils" The petitioner?sar-uent to the effe$t that the presentation of the aster tapes at the tie ofappli$ation a& not .e ne$essar& as these would .e erel& evidentiar& innature and not deterinative of whether or not a pro.a.le $ause e9ists to Eustif&the issuan$e of the sear$h warrants is not eritorious" The $ourt $annot

presue that dupli$ate or $opied tapes were ne$essaril& reprodu$ed froaster tapes that it owns"

The appli$ation for sear$h warrants was dire$ted a-ainst video tape outletswhi$h alle-edl& were en-a-ed in the unauthori:ed sale and rentin- out of$op&ri-hted fils .elon-in- to the petitioner pursuant to P"D" 40"

The essen$e of a $op&ri-ht infrin-eent is the siilarit& or at least su.stantialsiilarit& of the purported pirated wor2s to the $op&ri-hted wor2" Hen$e, theappli$ant ust present to the $ourt the $op&ri-hted fils to $opare the with

the pur$hased eviden$e of the video tapes alle-edl& pirated to deterinewhether the latter is an unauthori:ed reprodu$tion of the forer" This lin2a-e ofthe $op&ri-hted fils to the pirated fils ust .e esta.lished to satisf& thereAuireents of pro.a.le $ause" %ere alle-ations as to the e9isten$e of the$op&ri-hted fils $annot serve as .asis for the issuan$e of a sear$h warrant"

>or a $loser and ore perspi$uous appre$iation of the fa$tual ante$edentsof 9:th Century #o", the pertinent portions of the de$ision therein are Auotedhereunder, to wit7

In the instant $ase, the lower $ourt lifted the three Auestioned sear$h warrantsa-ainst the private respondents on the -round that it a$ted on the appli$ation forthe issuan$e of the said sear$h warrants and -ranted it on theisrepresentations of appli$ant N3I and its witnesses that infrin-eent of$op&ri-ht or a pira$& of a parti$ular fil have .een $oitted" Thus the lower$ourt stated in its Auestioned order dated ;anuar& ', )0


49/76

tapes was fro aster tapes alle-edl& .elon-in- to the Twentieth Centur& >o9,.e$ause, a$$ordin- to hi it is of his personal 2nowled-e"

8t the hearin- of the %otion for Re$onsideration, Senior N3I -ent tt&" l.inoRe&es testified that %hen the complaint $or in$ringement %as brought to the @BI!

the master tapes o$ the allegedly pirated tapes %ere sho%n to him and he madecomparisons o$ the tapes %ith those purchased by their man Bacani. hy themaster tapes or at least the $ilm reels o$ the allegedly pirated tapes %ere notsho%n to the Court during the application gives some misgivings as to the trutho$ that bare statement o$ the @BI agent on the %itness stand"

8-ain as the appli$ation and sear$h pro$eedin-s is a prelude to the filin- of$riinal $ases under P"D" 40, the $op&ri-ht infrin-eent law, and althou-h whatis reAuired for the issuan$e thereof is erel& the presen$e of pro.a.le $ause,that pro.a.le $ause ust .e satisfa$tor& to the Court, for it is a tiehonored

pre$ept that pro$eedin-s to put a an to tas2 as an offender under our lawsshould .e interpreted in strictissimi 7urisa-ainst the -overnent and li.erall& infavor of the alle-ed offender"

999 999 999

8This do$trine has never .een overturned, and as a atter of fa$t it had .eenenshrined in the 3ill of Ri-hts in our )0B/ Constitution"

8So that lacking in persuasive e$$ect! the allegation that master tapes %ere

vie%ed by the @BI and %ere compared to the purchased and seied videotapes $rom the respondents establishments! it should be dismissed as notsupported by competent evidence and $or that matter the probable cause hoversin that grey debatable t%ilight one bet%een black and %hite resolvable in $avoro$ respondents herein"

83ut the -larin- fa$t is that Co$oon,? the first video tape entioned in the sear$hwarrant, was not even dul& re-istered or $op&ri-hted in the Philippines" !nne9C of Opposition, p" )5', re$ord"# So that la$2in- in the reAuisite presentation to

the Court of an alle-ed aster tape for purposes of $oparison with thepur$hased eviden$e of the video tapes alle-edl& pirated and those sei:ed frorespondents, there was no wa& to deterine whether there reall& was pira$&, or$op&in- of the fil of the $oplainant Twentieth Centur& >o9"=

999 999 999

The lo%er court! there$ore! li$ted the three *+ 8uestioned search %arrants in theabsence o$ probable cause that the private respondents violated ,./. =. As


50/76

$ound by the court! the @BI agents %ho acted as %itnesses did not havepersonal kno%ledge o$ the sub7ect matter o$ their testimony %hich %as thealleged commission o$ the o$$ense by the private respondents" Onl& thepetitioner?s $ounsel who was also a witness durin- the appli$ation for theissuan$e of the sear$h warrants stated that he had personal 2nowled-e that the

$onfis$ated tapes owned .& the private respondents were pirated tapes ta2enfro aster tapes .elon-in- to the petitioner" However, the lower $ourt did not-ive u$h $reden$e to his testion& in view of the fa$t that the aster tapes ofthe alle-edl& pirated tapes were not shown to the $ourt durin- the appli$ation=!Itali$s ours#"

The itali$i:ed passa-es readil& e9pose the reason wh& the trial $ourt thereinreAuired the presentation of the aster tapes of the alle-edl& pirated fils inorder to $onvin$e itself of the e9isten$e of pro.a.le $ause under the fa$tualilieu pe$uliar to that $ase" In the $ase at .ar, respondent appellate $ourt itself

o.served7

Fe feel that the rationale .ehind the aforeAuoted do$trine is that the pirated$opies as well as the aster tapes, unli2e the other t&pes of personal propertieswhi$h a& .e sei:ed, %ere available $or presentation to the court at the time o$the application $or a search %arrantto deterine the e9isten$e of the lin2a-e ofthe $op&ri-hted fils with the pirated ones" Thus, there is no reason not topresent the !Itali$s supplied for ephasis#"*5(+

In fine, the supposedpronunciamentoin said $ase re-ardin- the ne$essit&

for the presentation of the aster tapes of the $op&ri-hted fils for the validit& ofsear$h warrants should at ost .e understood to erel& serve as a -uidepost indeterinin- the e9isten$e of pro.a.le $ause in $op&ri-ht infrin-eent $ases%here there is doubt as to the true ne"us bet%een the master tape and the

pirated copies" n o.Ee$tive and $areful readin- of the de$ision in said $ase$ould lead to no other $on$lusion than that said dire$tive was hardl& intended to.e a sweepin- and infle9i.le reAuireent in all or siilar $op&ri-ht infrin-eent$ases" 2udicial dictashould alwa&s .e $onstrued within the fa$tual atri9 oftheir parturition, otherwise a $areless interpretation thereof $ould unfairl& fault

the writer with the vi$e of overstateent and the reader with the falla$& of undue-enerali:ation"

In the $ase at .ar, N3I Senior -ent auro C" Re&es who filed theappli$ation for sear$h warrant with the lower $ourt followin- a foral $oplaintlod-ed .& petitioners, Eud-in- fro his affidavit *5)+and his deposition,*5'+ didtestif& on atters within his personal 2nowled-e .ased on said $oplaint ofpetitioners as well as his own investi-ation and surveillan$e of the privaterespondents? video rental shop" i2ewise, tt&" Ri$o V" Doin-o, in his $apa$it&


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as attorne&infa$t, stated in his affidavit*5/+ and further e9pounded in hisdeposition*54+that he personall& 2new of the fa$t that private respondents hadnever .een authori:ed .& his $lients to reprodu$e, lease and possess for thepurpose of sellin- an& of the $op&ri-hted fils"

3oth testionies of -ent Re&es and tt&" Doin-o were $orro.orated .&

Rene C" 3alta:ar, a private resear$her retained .& %otion Pi$tures sso$iationof eri$a, In$" !%P, In$"#, who was li2ewise presented as a witness durin-the sear$h warrant pro$eedin-s"*55+ The re$ords $learl& refle$t that thetestionies of the a.ovenaed witnesses were strai-htforward and steedfro atters within their personal 2nowled-e" The& displa&ed none of thea.ivalen$e and un$ertaint& that the witnesses in the 9:th Century #o" $asee9hi.ited" This $ate-ori$al forthri-htness in their stateents, aon- others, waswhat initiall& and $orre$tl& $onvin$ed the trial $ourt to a2e a findin- of thee9isten$e of pro.a.le $ause"

There is no ori-inalit& in the ar-uent of private respondents a-ainst thevalidit& of the sear$h warrant, o.viousl& .orrowed fro 9:thCentury #o", thatpetitioners? witnesses L N3I -ent auro C" Re&es, tt&" Ri$o V" Doin-o andRene C" 3alta:ar L did not have personal 2nowled-e of the su.Ee$t atter oftheir respe$tive testionies and that said witnesses? $lai that the video tapeswere pirated, without statin- the anner .& whi$h these were pirated, is a$on$lusion of fa$t without .asis"*51+The differen$e, it ust .e pointed out, isthat the re$ords in the present $ase reveal that !)# there is no alle-ation ofisrepresentation, u$h less a findin- thereof .& the lower $ourt, on the part of

petitioners? witnessesG !'# there is no denial on the part of private respondentsthat the tapes sei:ed were ille-itiate $opies of the $op&ri-hted ones nor havethe& shown that the& were -iven an& authorit& .& petitioners to $op&, sell, lease,distri.ute or $ir$ulate, or at least, to offer for sale, lease, distri.ution or$ir$ulation the said video tapesG and !/# a dis$reet .ut e9tensive surveillan$e ofthe suspe$ted area was underta2en .& petitioner?s witnesses suffi$ient to ena.lethe to e9e$ute trustworth& affidavits and depositions re-ardin- attersdis$overed in the $ourse thereof and of whi$h the& have personal 2nowled-e"

It is evidentl& in$orre$t to su--est, as the rulin- in '(th Centur& >o9 a&

appear to do, that in $op&ri-ht infrin-eent $ases, the presentation of astertapes of the $op&ri-hted fils is alwa&s ne$essar& to eet the reAuireent ofpro.a.le $ause and that, in the a.sen$e thereof, there $an .e no findin- ofpro.a.le $ause for the issuan$e of a sear$h warrant" It is true that su$h astertapes are o.Ee$t eviden$e, with the erit that in this $lass of eviden$e theas$ertainent of the $ontroverted fa$t is ade throu-h deonstrations involvin-the dire$t use of the senses of the presidin- a-istrate" *5B+ Su$h au9iliar&pro$edure, however, does not rule out the use of testionial or do$uentar&


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eviden$e, depositions, adissions or other $lasses of eviden$e tendin- to provethe $actum probandum,*5


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thereof is, in le-al $onteplation, ar.itrar&"*1)+It .ehooves us, then, to reviewthe $on$ept of pro.a.le $ause, firstl&, fro representative holdin-s in the

eri$an Eurisdi$tion fro whi$h we patterned our do$trines on the atter"

lthou-h the ter 8pro.a.le $ause= has .een said to have a welldefinedeanin- in the law, the ter is e9$eedin-l& diffi$ult to define, in this $ase, with

an& de-ree of pre$isionG indeed, no definition of it whi$h would Eustif& theissuan$e of a sear$h warrant $an .e forulated whi$h would $over ever& stateof fa$ts whi$h i-ht arise, and no forula or standard, or hard and fast rule,a& .e laid down whi$h a& .e applied to the fa$ts of ever& situation" *1'+s towhat a$ts $onstitute pro.a.le $ause see in$apa.le of definition"*1/+There is,of ne$essit&, no e9a$t test"*14+

t .est, the ter 8pro.a.le $ause= has .een understood to ean areasona.le -round of suspi$ion, supported .& $ir$ustan$es suffi$ientl& stron-in theselves to warrant a $autious an in the .elief that the person a$$used is

-uilt& of the offense with whi$h he is $har-edG*15+or the e9isten$e of su$h fa$tsand $ir$ustan$es as would e9$ite an honest .elief in a reasona.le ind a$tin-on all the fa$ts and $ir$ustan$es within the 2nowled-e of the a-istrate thatthe $har-e ade .& the appli$ant for the warrant is true" *11+

Pro.a.le $ause does not ean a$tual and positive $ause, nor does itiport a.solute $ertaint&" The deterination of the e9isten$e of pro.a.le $auseis not $on$erned with the Auestion of whether the offense $har-ed has .een oris .ein- $oitted in fa$t, or whether the a$$used is -uilt& or inno$ent, .ut onl&whether the affiant has reasona.le -rounds for his .elief"*1B+The reAuireent is

less than certainty or proo$! but more than suspicion or possibility"*1


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o$$urren$e of the offense alle-ed to have .een $oitted, the issuin- Eud-e, indeterinin- the e9isten$e of pro.a.le $ause, $an and should lo-i$all& loo2 tothe tou$hstones in the laws therefore ena$ted and the de$isions alread&proul-ated at the tie, and not to those whi$h had not &et even .een$on$eived or forulated"

It is worth notin- that neither the Constitution nor the Rules of Court atteptto define pro.a.le $ause, o.viousl& for the purpose of leavin- su$h atter to the$ourt?s dis$retion within the parti$ular fa$ts of ea$h $ase" lthou-h theConstitution prohi.its the issuan$e of a sear$h warrant in the a.sen$e ofpro.a.le $ause, su$h $onstitutional inhi.ition does not $oand the le-islatureto esta.lish a definition or forula for deterinin- what shall $onstitute pro.a.le$ause"*B)+Thus, Con-ress, despite its .road authorit& to fashion standards ofreasona.leness for sear$hes and sei:ures,*B'+does not venture to a2e su$h adefinition or standard forulation of pro.a.le $ause, nor $ate-ori:e what fa$ts

and $ir$ustan$es a2e up the sae, u$h less liit the deterination thereofto and within the $ir$us$ription of a parti$ular $lass of eviden$e, all indeferen$e to Eudi$ial dis$retion and pro.it&"*B/+

$$ordin-l&, to restri$t the e9er$ise of dis$retion .& a Eud-e .& addin- aparti$ular reAuireent !the presentation of aster tapes, as intiated .& 9:thCentury #o"# not provided nor iplied in the law for a findin- of pro.a.le $auseis .e&ond the real of Eudi$ial $opeten$e or stateanship" It serves nopurpose .ut to stultif& and $onstri$t the Eudi$ious e9er$ise of a $ourtQsprero-atives and to deni-rate the Eudi$ial dut& of deterinin- the e9isten$e of

pro.a.le $ause to a ere inisterial or e$hani$al fun$tion" There is, to repeat,no law or rule whi$h reAuires that the e9isten$e of pro.a.le $ause is or should.e deterined solel& .& a spe$ifi$ 2ind of eviden$e" Surel&, this $ould not have.een $onteplated .& the fraers of the Constitution, and we do not .elievethat the Court intended the stateent in 9:th Century #o" re-ardin- astertapes as the di$tu for all seasons and reasons in infrin-eent $ases"

Turnin- now to the $ase at .ar, it $an .e -leaned fro the re$ords that thelower $ourt followed the pres$ri.ed pro$edure for the issuan$es of a sear$hwarrant7 !)# the e9aination under oath or affiration of the $oplainant and his

witnesses, with the parti$ularl& des$ri.in- the pla$e to .e sear$hed and thethin-s to .e sei:edG !'# an e9aination personall& $ondu$ted .& the Eud-e in thefor of sear$hin- Auestions and answers, in writin- and under oath of the$oplainant and witnesses on fa$ts personall& 2nown to theG and, !/# theta2in- of sworn stateents, to-ether with the affidavits su.itted, whi$h weredul& atta$hed to the re$ords"

Thereafter, the $ourt a 8uoade the followin- fa$tual findin-s leadin- to


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the issuan$e of the sear$h warrant now su.Ee$t to this $ontrovers&7

In the instant $ase, the followin- fa$ts have .een esta.lished7 !)# $op&ri-htedvideo tapes .earin- titles enuerated in Sear$h Farrant No"


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den&in- petitioners? otion for re$onsideration and Auashin- the sear$h warrantthat L

9 9 9" The two !'# $ases have a $oon fa$tual ilieuG .oth involve alle-edpirated $op&ri-hted fils of private $oplainants whi$h were found in thepossession or $ontrol of the defendants" Hen$e, the ne$essit& of the

presentation of the aster tapes fro whi$h the pirated fils were alle-edl&$opied is ne$essar& in the instant $ase, to esta.lish the e9isten$e of pro.a.le$ause"*B5+

3ein- .ased solel& on an unEustifia.le and iproper retroa$tive appli$ationof the aster tape reAuireent -enerated .& 9:th Century #o"upon a fa$tualsituation $opletel& different fro that in the $ase at .ar, and without an&thin-ore, this later order $learl& defies eleental fair pla& and is a -ross reversi.leerror" In fa$t, this o.servation of the Court in La Chemise Lacoste! S.A. vs.

#ernande! et al", supra, a& Eust as easil& appl& to the present $ase7 review of the -rounds invo2ed 9 9 9 in his otion to Auash the sear$hwarrants reveals the fa$t that the& are not appropriate for Auashin- a warrant"The& are atters of defense whi$h should .e ventilated durin- the trial on theerits of the $ase" 9 9 9

s $orre$tl& pointed out .& petitioners, a .lind espousal of the reAuisite ofpresentation of the aster tapes in $op&ri-ht infrin-eent $ases, as the priedeterinant of pro.a.le $ause, is too e9a$tin- and ipra$ti$a.le a reAuireent

to .e $oplied with in a sear$h warrant appli$ation whi$h, it ust not .eoverloo2ed, is onl& an an$illar& pro$eedin-" >urther, on realisti$ $onsiderations,a stri$t appli$ation of said reAuireent ilitates a-ainst the eleents of se$re$&and speed whi$h underlie $overt investi-ative and surveillan$e operations inpoli$e enfor$eent $apai-ns a-ainst all fors of $riinalit&, $onsiderin- thatthe aster tapes of a otion pi$ture reAuired to .e presented .efore the $ourt$onsists of several reels $ontained in $ir$ular steel $asin-s whi$h, .e$ause oftheir .ul2, will definitel& draw attention, unli2e diinutive o.Ee$ts li2e video tapeswhi$h $an .e easil& $on$ealed"*B1+Fith hundreds of titles .ein- pirated, thisonerous and tedious iposition would .e ultiplied a hundredfold .& Eudi$ial fiat,

dis$oura-in- and preventin- le-al re$ourses in forei-n Eurisdi$tions"

@iven the present international awareness and furor over violations in lar-es$ale of intelle$tual propert& ri-hts, $allin- for transnational san$tions, it .ears$allin- to ind the Court?s adonition also in La Chemise Lacoste! supra, thatL

9 9 9" ;ud-es all over the $ountr& are well advised to ree.er that $ourt


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pro$esses should not .e used as instruents to, unwittin-l& or otherwise, aid$ounterfeiters and intelle$tual pirates, tie the hands of the law as it see2s toprote$t the >ilipino $onsuin- pu.li$ and frustrate e9e$utive and adinistrativeipleentation of solen $oitents pursuant to international $onventionsand treaties"

III

The aendent of Se$tion 51 of Presidential De$ree No" 40 .& PresidentialDe$ree No" )0


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o$$upied .& the owner of the $op&ri-ht, and, therefore, prote$ted .& law, andinfrin-eent of $op&ri-ht, or pira$&, whi$h is a s&non&ous ter in this$onne$tion, $onsists in the doin- .& an& person, without the $onsent of theowner of the $op&ri-ht, of an&thin- the sole ri-ht to do whi$h is $onferred .&statute on the owner of the $op&ri-ht"*B


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sei:ure should $oe in hand& erel& to stren-then su$h eviden$e" 9 9 9"

On private respondents? averent that the sear$h warrant was adeappli$a.le to ore than one spe$ifi$ offense on the -round that there are asan& offenses of infrin-eent as there are ri-hts prote$ted and, therefore, to

issue one sear$h warrant for all the ovie titles alle-edl& pirated violates therule that a sear$h warrant ust .e issued onl& in $onne$tion with one spe$ifi$offense, the lower $ourt said7

9 9 9" s the fa$e of the sear$h warrant itself indi$ates, it was issued forviolation of Se$tion 51, PD 40 as aended onl&" The spe$ifi$ations therein !in

nne9 # erel& refer to the titles of the $op&ri-hted otion pi$turesfils.elon-in- to private $oplainants whi$h defendants were in $ontrolpossessionfor sale, lease, distri.ution or pu.li$ e9hi.ition in $ontravention of Se$" 51, PD40 as aended"*


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daa-es"= The statutor& interpretation of the 69e$utive 3ran$h .ein- $orre$t, isentitled !to# wei-ht and respe$t"

999 999 999

Defendantsovants aintain that $oplainant and his witnesses led the Court

to .elieve that a $rie e9isted when in fa$t there was none" This is wron-" searlier dis$ussed, PD 40 as aended, does not reAuire re-istration and depositfor a $reator to .e a.le to file an a$tion for infrin-eent of his ri-hts" These$onditions are erel& prereAuisites to an a$tion for daa-es" So, as lon- asthe pros$ri.ed a$ts are shown to e9ist, an a$tion for infrin-eent a& .einitiated"*


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One distressin- o.servation" This $ase has .een fou-ht on the .asis of,and its resolution lon- dela&ed .& resort to, te$hni$alities to a virtuall& a.usivee9tent .& private respondents, without so u$h as an attept to addu$e an&$redi.le eviden$e showin- that the& $ondu$t their .usiness le-iti

Documents

LIP Session 4