Microsoft Corp. vs.

Hwang
Citation: G.R. No. 147043, June 21, 2005 Topic: Infringement

Facts of the case:

Microsoft Corporation ("Microsoft"), a Delaware, United States corporation, owns the

copyright and trademark to several computer software. Beltron Computer Philippines,
Inc. ("Beltron") and Taiwan Machinery Display & Trade Center, Inc. ("TMTC") are
domestic corporations.

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:

(1) reproduce and install no more than one (1) copy of Microsoft software on each
Customer System hard disk or Read Only Memory ("ROM")

(2) distribute directly or indirectly and license copies of the Product in object code form
to end users

The Agreement also authorized Microsoft and Beltron to terminate the contract if the
other fails to comply with any of the Agreements provisions. Microsoft terminated the
Agreement effective 22 June 1995 for Beltrons non-payment of royalties.

Afterwards, Microsoft learned that Beltron were illegally copying and selling Microsoft
software. Consequently, Microsoft, through its Philippine agent, 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, a PCS employee and an NBI agent posing as representatives

of a computer shop, bought computer hardware (central processing unit ("CPU") and
computer monitor) and software (12 computer disks ("CDs") in read-only memory
("ROM") format) from Beltron. The CPU contained pre-installed Microsoft Windows 3.1
and MS-DOS software. The 12 CD-ROMs, encased in plastic containers with Microsoft
packaging, also contained Microsoft software. At least two of the CD-ROMs were
"installers," so-called because they contain several software (Microsoft only or both
Microsoft and non- Microsoft). The PCS employee and the NBI agent were not given the
Microsoft end-user license agreements, users manuals, registration cards or certificates
of authenticity for the articles they purchased. The receipt issued to them for the CPU
and monitor bore the heading "T.M.T.C. (PHILS.) INC. BELTRON COMPUTER."

The NBI searched the premises of Beltron and TMTC and seized several computer-
related hardware, software, accessories, and paraphernalia based on the search
warrant applied by Microsoft.

Based on the articles obtained from Beltron and TMC, Microsoft and a certain Lotus
Development Corporation ("Lotus Corporation") charged Beltron and TMC 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") and with unfair
competition under Article 189(1) of the Revised Penal Code. Microsoft alleged that
respondents illegally copied and sold Microsoft software.

Issues :

Whether or not Beltron and TMC are liable for copyright infringement and unfair
competition?

Held :

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 owners prior consent renders himself civilly and criminally liable
for copyright infringement.

Infringement of a copyright is a trespass on a private domain owned and occupied by

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

Significantly, under Section 5(A), a copyright owner is vested with the exclusive right to
"copy, distribute, multiply, [and] sell" his intellectual works.

The 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.

The element of intent to deceive may be inferred from the similarity of the goods or their
appearance.
Microsoft Corp. vs. Maxicorp Inc

Citation : 438 SCRA 224

Facts of the case:

Microsoft sued Maxicorp for copyright infringement and unfair competition for
production, installing and selling of counterfeit Microsofts products. Microsoft alleged
that they did not authorize Maxicorp for production or selling of their products.

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 Maxicorps 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 Maxicorps motion on 22 January 1997. The
RTC also denied Maxicorps 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 RTCs order. On 23 December 1998, the Court of Appeals
reversed the RTCs order denying Maxicorps 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.

Issues

Whether or not Maxicorp committed copyright infringement and unfair competition?

Held
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 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.

Bayanihan Music Phils., Inc. vs. BMG Records

Citation: G.R. No. 166337, March 7, 2005

Facts of the case:

On July 16, 1973, private respondent Jose Mari Chan (Chan) entered into a contract
with petitioner Bayanihan Music Philippines, Inc. (Bayanihan), whereunder the former
assigned to the latter all his rights, interests and participation over his musical
composition "Can We Just Stop and Talk A While". On March 11, 1976, the parties
entered into a similar contract over Chan's other musical composition entitled "Afraid
For Love To Fade".

Jose Mari Chan (Chan) entered into a contract with Bayanihan Music Philippines, Inc.
(Bayanihan), whereunder the former assigned to the latter all his rights, interests and
participation over his musical composition "Can We Just Stop and Talk A While". Three
years after the parties entered into a similar contract over Chan's other musical
composition entitled "Afraid For Love To Fade".

On the strength of the abovementioned contracts, Bayanihan applied for and was
granted by the National Library a Certificate of Copyright Registration for each of the
two musical compositions.Apparently, without the knowledge and consent of petitioner
Bayanihan, Chan authorized BMG Records (BMG) to record and distribute the
aforementioned musical compositions in a then recently released album of singer Lea
Salonga.

Bayanihan informed Chan and BMG of its existing copyrights over the subject musical
compositions and the alleged violation of such right by the two. Demands were made on
both to settle the matter with Bayanihan. However no settlement was reached by the
parties.

Hence, Bayanihan filed a against Chan and BMG for violation of Section 216 of
Republic Act No. 8293, otherwise known as the Intellectual Property Code of the
Philippines, with a prayer for the issuance of Temporary Restraining Order (TRO) and/or
writ of preliminary injunction, enjoining respondent BMG from further recording and
distributing the subject musical compositions in whatever form of musical products, and
Chan from further granting any authority to record and distribute the same musical
compositions.

BMG Arguments:
(1) the acts of recording and publication sought to be enjoined had already been
consummated, thereby rendering moot Bayanihan's prayer for TRO and/or preliminary
injunction;
(2) there is no clear showing that petitioner Bayanihan would be greatly damaged by the
refusal of the prayed for TRO and/or preliminary injunction.

Chan Arguments:
(1) it was never his intention to divest himself of all his rights and interest over the
musical compositions in question;
(2) the contracts he entered into with Bayanihan are mere music publication
agreements giving Bayanihan, as assignee, the power to administer his copyright over
his two songs and to act as the exclusive publisher thereof;
(3) he was not cognizant of the application made by and the subsequent grant of
copyrights to Bayanihan;
(4) Bayanihan was remissed in its obligations under the contracts because it failed to
effectively advertise his musical compositions for almost twenty (20) years, hence, he
caused the rescission of said contracts in 1997.

Issues

Whether or not Bayanihan as assignee of the copyrights over the musical compositions
in question has a clear legal right to a writ of preliminary injunction?

Held

No, Bayanihan has no right for right for injunction over the subject musical
compositions.

The issuance of an injunctive writ if the following requisites provided for by law are:
(1) there must be a right in esse or the existence of a right to be protected;

(2) the act against which the injunction is to be directed is a violation of such right, the
trial court threaded the correct path in denying petitioner's prayer therefor.
Chan, the composer and author of the lyrics of the two (2) songs, is protected by the
mere fact alone that he is the creator thereof, conformably with Republic Act No. 8293,
otherwise known as the Intellectual Property Code, Section 172.2 of which reads:

172.2. Works are protected by the sole fact of their creation, irrespective of their mode
or form of expression, as well as of their content, quality and purpose.

The copyrights obtained by Bayanihan on the basis of the selfsame two (2) contracts,
suffice it to say 'that such purported copyrights are not presumed to subsist in
accordance with Section 218[a] and [b], of the Intellectual Property Code, because
respondent Chan had put in issue the existence thereof. `

PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., and FABRIQUES DE
TABAC REUNIES, S.A., (now known as PHILIP MORRIS PRODUCTS S.A.),
Petitioners,
vs. FORTUNE TOBACCO CORPORATION, Respondent.

Citation : G.R. No. 158589 June 27, 2006

Facts of the case:

Petitioner Philip Morris, Inc., a corporation organized under the laws of the State of
Virginia, United States of America, is, per Certificate of Registration No. 18723 issued
on April 26, 1973 by the Philippine Patents Office (PPO), the registered owner of the
trademark "MARK VII" for cigarettes. Similarly, petitioner Benson & Hedges (Canada),
Inc., a subsidiary of Philip Morris, Inc., is the registered owner of the trademark "MARK
TEN" for cigarettes as evidenced by PPO Certificate of Registration No. 11147. And as
can be seen in Trademark Certificate of Registration No. 19053, another subsidiary of
Philip Morris, Inc., the Swiss company Fabriques de Tabac Reunies, S.A., is the
assignee of the trademark "LARK," which was originally registered in 1964 by Ligget
and Myers Tobacco Company. On the other hand, respondent Fortune Tobacco
Corporation, a company organized in the Philippines, manufactures and sells cigarettes
using the trademark "MARK."

The legal dispute between the parties started when the herein petitioners, on the claim
that an infringement of their respective trademarks had been committed, filed, on
August 18, 1982, a Complaint for Infringement of Trademark and Damages against
respondent Fortune Tobacco Corporation, docketed as Civil Case No. 47374 of the
Regional Trial Court of Pasig, Branch 166.

Issue:

(1) whether or not petitioners, as Philippine registrants of trademarks, are entitled to

enforce trademark rights in this country; and

(2) whether or not respondent has committed trademark infringement against

petitioners by its use of the mark "MARK" for its cigarettes, hence liable for
damages.

Held:

1. No. registrants or ordinary users, like respondent. But while petitioners enjoy the
statutory presumptions arising from

such registration, i.e., as to the validity of the registration, ownership and the exclusive
right to use the registered marks, they may not successfully sue on the basis alone of
their respective certificates of registration of trademarks. For, petitioners are still foreign
corporations. As such, they ought, as a condition to availment of the rights and
privileges vis--vis their trademarks in this country, to show proof that, on top of
Philippine registration, their country grants substantially similar rights and privileges to
Filipino citizens pursuant to Section 21-Aof R.A. No. 166.

In Leviton Industries v. Salvador, the Court further held that the aforementioned
reciprocity requirement is a condition sine qua non to filing a suit by a foreign
corporation which, unless alleged in the complaint, would justify dismissal thereof, a
mere allegation that the suit is being pursued under Section 21-A of R.A. No. 166 not
being sufficient. In a subsequent case, however, the Court held that where the
complainant is a national of a Paris Convention- adhering country, its allegation that it is
suing under said Section 21-A would suffice, because the reciprocal agreement
between the two countries is embodied and supplied by the Paris Convention which,
being considered part of Philippine municipal laws, can be taken judicial notice of in
infringement suits.
2. NO . The "likelihood of confusion" is the gravamen of trademark infringement.But
likelihood of confusion is a relative concept, the particular, and sometimes peculiar,
circumstances of each case being determinative of its existence. Thus, in trademark
infringement cases, more than in other kinds of litigation, precedents must be evaluated
in the light of each particular case.

Since the word "MARK," be it alone or in combination with the word "TEN" and the
Roman numeral "VII," does not point to the origin or ownership of the cigarettes to
which they apply, the local buying public could not possibly be confused or deceived
that respondents "MARK" is the product of petitioners and/or originated from the
U.S.A., Canada or Switzerland. And lest it be overlooked, no actual commercial use of
petitioners marks in local commerce was proven. There can thus be no occasion for the
public in this country, unfamiliar in the first place with petitioners marks, to be confused.

CANON KABUSHIKI KAISHA vs. COURT OF APPEALS

Citation: G.R. No. 120900, July 20, 2000

Facts of the case:

On January 15, 1985, private respondent NSR Rubber Corporation filed an

application for registration of the mark CANON for sandals in the Bureau of Patents,
Trademarks, and Technology Transfer (BPTTT). Canon Kabushiki Kaisha filed a Verified
Notice of Opposition alleging that it will be damaged by the registration of the trademark
CANON in the name of private respondent since they were using the same trademark
for their footwear line of products. The private respondent will also use the name
Canon for its footwear products.

Based on the records, the evidence presented by petitioner consisted of its certificates
of registration for the mark CANON in various countries covering goods belonging to
class 2, paints, chemical products, toner, and dye stuff. Petitioner also submitted in
evidence its Philippine Trademark Registration No. 39398, showing its ownership over
the trademark CANON.

The BPTTT, on November 10, 1992, issued its decision dismissing the opposition of
petitioner and giving due course to NSR's application for the registration of the
trademark CANON. Canon Kabushiki Kaisha filed an appeal with the Court of Appeals
that eventually affirmed the decision of the BPTTT.
Issue:

Is the use of trademark, CANON, by the private respondent affects the business
of Canon Kabushiki Kaisha who has an existing ownership of a trademark also known
as CANON?

Held:

The Supreme Court says that ordinarily, the ownership of a trademark or

tradename is a property right that the owner is entitled to protect as mandated by the
Trademark Law. However, when a trademark is used by a party for a product in which
the other party does not deal, the use of the same trademark on the latter's product
cannot be validly objected to.

The BPTTT correctly ruled that since the certificate of registration of petitioner
for the trademark CANON covers class 2 (paints, chemical products, toner, dyestuff),
private respondent can use the trademark CANON for its goods classified as class 25
(sandals). Clearly, there is a world of difference between the paints, chemical products,
toner, and dyestuff of petitioner and the sandals of private respondent.

The Convention of Paris for the Protection of Industrial Property, otherwise known as
the Paris Convention, of which both the Philippines and Japan, the country of petitioner,
are signatories, is a multilateral treaty that seeks to protect industrial property consisting
of patents, utility models, industrial designs, trademarks, service marks, trade names
and indications of source or appellations of origin, and at the same time aims to repress
unfair competition. We agree with public respondents that the controlling doctrine with
respect to the applicability of Article 8 of the Paris Convention is that established in
Kabushi Kaisha Isetan vs. IAC. As pointed out by the BPTTT: Regarding the
applicability of Article 8 of the Paris Convention, this Office believes that there is no
automatic protection afforded an entity whose tradename is alleged to have been
infringed through the use of that name as a trademark by a local entity. To illustrate if a
taxicab or bus company in a town in the United Kingdom or India happens to use the
tradename Rapid Transportation, it does not necessarily follow that Rapid can no
longer be registered in Uganda, Fiji, or the Philippines.