UPDATES ON Protocol Relating to the Madrid Agreement Concerning
INTELLECTUAL PROPERTY LAWS the International Registration of Marks (Madrid Protocol)
CAVEAT: This material does not intend nor purport to
replace a thorough and comprehensive reading of the
IP Code, nor does it guarantee that all topics herein
will be asked in the Bar Exam.
This material is based on the informed guesses of
the author taking into consideration the relevant
developments in Intellectual Property Laws and cases
decided by J. Bersamin, J. Peralta and other recent
pronouncements of the Supreme Court.
Credits are due to Atty. MPS for advising the author
on some topics covered by this material.
Study hard, but pray harder! AMDG! - BIA 😉
CONSTITUTIONAL BASIS FOR IP LAWS
What is the MADRID PROTOCOL?
➢ Political Law, Public International Law,
Intellectual Property Law
July 19, 2016 G.R. No. 204605
INTELLECTUAL PROPERTY ASSOCIATION OF
THE PHILIPPINES vs. HON. PAQUITO OCHOA.
BERSAMIN, J.
The Madrid System for the International Registration of
Marks (Madrid System), which is the centralized system
providing a one-stop solution for registering and
managing marks worldwide, allows the trademark owner
to file one application in one language, and to pay one set
of fees to protect his mark in the territories of up to 97
member-states. The Madrid System is governed by the
Madrid Agreement, concluded in 1891, and the Madrid
Protocol, concluded in 1989.
The Madrid Protocol, which was adopted in order to
remove the challenges deterring some countries from
acceding to the Madrid Agreement, has two objectives,
namely: (1) to facilitate securing protection for marks;
and (2) to make the management of the registered marks
easier in different countries
DFA endorsed to the President the country's accession to
the Madrid Protocol. Conformably with its express
authority under Section 9 of Executive Order No. 459
(Providing for the Guidelines in the Negotiation of
International Agreements and its Ratification) dated
November 25, 1997, the DFA determined that the Madrid
Protocol was an executive agreement.1âwphi1 The
IPOPHL, the Department of Science and Technology, and
the Department of Trade and Industry concurred in the
recommendation of the DFA.7
On March 27, 2012, President Benigno C. Aquino III
ratified the Madrid Protocol through an instrument of
accession, the instrument of accession was deposited with
the Director General of the World Intellectual Property
Organization (WIPO) on April 25, 2012.8 The Madrid
Protocol entered into force in the Philippines on July 25,
2012.
Intellectual Property Association of the Philippines (IPAP)
seeks to declare the accession of the Philippines to the
PAGE 1 OF 19
unconstitutional on the ground of the lack of concurrence
by the Senate, and in the alternative, to declare the
implementation thereof as unconstitutional because it
conflicts with Republic Act No. 8293, otherwise known as
the Intellectual Property Code of the Philippines (IP Code)
➢ Issue: WON the Madrid Protocol is an
executive agreement or treaty.
Held: Executive agreement
Executive Order No. 459, Series of 1997, notes the
following definitions, to wit:
Sec. 2. Definition of Terms.
a. International agreement - shall refer to a contract
or understanding, regardless of nomenclature, entered
into between the Philippines and another government in
written form and governed by international law, whether
embodied in a single instrument or in two or more related
instruments.
b. Treaties - international agreements entered into by
the Philippines which require legislative concurrence after
executive ratification. This term may include compacts
like conventions, declarations, covenants and acts.
c. Executive Agreements - similar to treaties except
that they do not require legislative concurrence.
The Court has highlighted the difference between treaties
and executive agreements in Commissioner of
Customs v. Eastern Sea Trading, thusly:
International agreements involving political issues or
changes of national policy and those involving
international arrangements of a permanent
character usually take the form of treaties. But
international agreements embodying adjustments of
detail carrying out well-established national policies
and traditions and those involving arrangements of
a more or less temporary nature usually take the
form of executive agreements.
In the Philippines, the DFA, by virtue of Section 9,
Executive Order No. 459,32 is initially given the
power to determine whether an agreement is to be
treated as a treaty or as an executive agreement. To
determine the issue of whether DFA Secretary Del
Rosario gravely abused his discretion in making his
determination relative to the Madrid Protocol, we
review the jurisprudence on the nature of executive
agreements, as well as the subject matters to be
covered by executive agreements.
The pronouncement in Commissioner of Customs v.
Eastern Sea Trading is instructive, to wit:
x x x The concurrence of said House of Congress is
required by our fundamental law in the making of
"treaties" (Constitution of the Philippines; Article VII,
Section 10[7]), which are, however, distinct and
different from "executive agreements," which may
be validly entered into without such concurrence.
"Treaties are formal documents which require
ratification with the approval of two thirds of the
 Senate. Executive agreements become binding
through executive action without the need of a vote
by the Senate or by Congress.
xxxx
"x x x the right of the Executive to enter into binding
agreements without the necessity of subsequent
Congressional approval has been confirmed by long
usage. From the earliest days of our history we have
entered into executive agreements covering such
subjects as commercial and consular relations, most-
favored-nation rights, patent rights, trademark and
copyright protection, postal and navigation
arrangements and the settlement of claims. The
validity of these has never been seriously questioned
by our courts.
xxxx
Agreements with respect to the registration of
trademarks have been concluded by the Executive
with various countries under the Act of Congress of
March 3, 1881 (21 Stat. 502), x x x
xxxx
As the foregoing pronouncement indicates, the
registration of trademarks and copyrights have been the
subject of executive agreements entered into without the
concurrence of the Senate. Some executive agreements
have been concluded in conformity with the policies
declared in the acts of Congress with respect to the
general subject matter.
➢ Issue: WON the Philippine's accession to
the Madrid Protocol was unconstitutional.
Held: No, it was constitutional.
The Intellectual Property Code espouses our state policy
on intellectual property.
Section 2. Declaration of State Policy. - The State
recognizes that an effective intellectual and industrial
property system is vital to the development of domestic
and creative activity, facilitates transfer of technology,
attracts foreign investments, and ensures market access
for our products. It shall protect and secure the exclusive
rights of scientists, inventors, artists and other gifted
citizens to their intellectual property and creations,
particularly when beneficial to the people, for such
periods as provided in this Act.
The use of intellectual property bears a social function. To
this end, the State shall promote the diffusion of
knowledge and information for the promotion of national
development and progress and the common good.
It is also the policy of the State to streamline
administrative procedures of registering patents,
trademarks and copyright, to liberalize the registration on
the transfer of technology; and to enhance the
enforcement of intellectual property rights in the
Philippines.
In view of the expression of state policy having been
made by the Congress itself, the IPAP is plainly mistaken
in asserting that "there was no Congressional act that
PAGE 2 OF 19
authorized the accession of the Philippines to the Madrid
Protocol."34
Accordingly, DFA Secretary Del Rosario’s determination
and treatment of the Madrid Protocol as an executive
agreement; being in apparent contemplation of the
express state policies on intellectual property as well as
within his power under Executive Order No. 459, are
upheld. We observe at this point that there are no hard
and fast rules on the propriety of entering into a treaty or
an executive agreement on a given subject as an
instrument of international relations. The primary
consideration in the choice of the form of agreement is
the parties' intent and desire to craft their international
agreement in the form they so wish to further their
respective interests. The matter of form takes a back seat
when it comes to effectiveness and binding effect of the
enforcement of a treaty or an executive agreement;
inasmuch as all the parties; regardless of the form,
become obliged to comply conformably with the time-
honored principle of pacta sunt servanda.35The principle
binds the parties to perform in good faith their parts in
the agreements.
➢ Issue: WON the adoption of the Madrid
Protocol is in conflict with the provisions of
the Intellectual Property Code
Held: No.
The IPAP has argued that the implementation of the
Madrid Protocol in the Philippines; specifically the
processing of foreign trademark applications, conflicts
with the IP Code.
The IPAP has insisted that Article 2 of the Madrid Protocol
means that foreign trademark applicants may file their
applications through the International Bureau or the
WIPO, and their applications will be automatically granted
trademark protection without the need for designating
their resident agents in the country.
Moreover, the IPAP has submitted that the procedure
outlined in the Guide to the International Registration of
Marks relating to representation before the International
Bureau is in conflict with that under Section 125 of the IP
Code, and constitutes in effect an amendment of the local
law by the Executive Department.
In short, IPAP argues that the Madrid Protocol does away
with the requirement of a resident agent under Section
125 of the IP Code; and that the Madrid Protocol is
unconstitutional for being in conflict with the local law,
which it cannot modify.
In arguing that the Madrid Protocol conflicts with Section
125 of the IP Code, the IP AP highlights the importance
of the requirement for the designation of a resident agent.
It underscores that the requirement is intended to ensure
that non-resident entities seeking protection or privileges
under Philippine Intellectual Property Laws will be
subjected to the country's jurisdiction. It submits that
without such resident agent, there will be a need to resort
to costly, time consuming and cumbersome
extraterritorial service of writs and processes.
IPAP's argument is untenable.
The method of registration through the IPOPHL, as laid
down by the IP Code, is distinct and separate from the
method of registration through the WIPO, as set in the
Madrid Protocol. Comparing the two methods of
registration despite their being governed by two separate
systems of registration is thus misplaced.
The IPAP misapprehends the procedure for examination
under the Madrid Protocol, The difficulty, which the IPAP
illustrates, is minimal, if not altogether inexistent.
The IPOPHL actually requires the designation of the
resident agent when it refuses the registration of a mark.
Local representation is further required in the submission
of the Declaration of Actual Use, as well as in the
submission of the license contract.
The Madrid Protocol accords with the intent and spirit of
the IP Code, particularly on the subject of the registration
of trademarks. The Madrid Protocol does not amend or
modify the IP Code on the acquisition of trademark rights
considering that the applications under the Madrid
Protocol are still examined according to the relevant
national law, In that regard, the IPOPHL will only grant
protection to a mark that meets the local registration
requirements.
STRUCTURE OF THE IP OFFICE
➢ Administrative Proceedings (“Inter Partes
Proceedings”) before the BLA
G.R. No. 167715 November 17, 2010
PHIL PHARMAWEALTH, INC., Petitioner, vs.
PFIZER, INC. and PFIZER (PHIL.) INC.
PERALTA, J.:
Note:
➢ From Bureau of Legal Affairs (BLA) appeal to
Director General-IPO if FINAL ORDER of BLA
➢ From BLA file a petition for certiorari to Court of
Appeals if INTERLOCUTORY ORDER of BLA
It is true that under Section 7(b) of RA 8293, otherwise
known as the Intellectual Property Code of the
Philippines, which is the presently prevailing law, the
Director General of the IPO exercises exclusive
appellate jurisdiction over all decisions rendered
by the Director of the BLA-IPO. However, what is
being questioned before the CA is not a decision, but an
interlocutory order of the BLA-IPO denying
respondents' motion to extend the life of the
preliminary injunction issued in their favor.
RA 8293 is silent with respect to any remedy available to
litigants who intend to question an interlocutory order
issued by the BLA-IPO. Moreover, Section 1(c), Rule 14
of the Rules and Regulations on Administrative
Complaints for Violation of Laws Involving Intellectual
Property Rights simply provides that interlocutory orders
shall not be appealable. The said Rules and Regulations
do not prescribe a procedure within the administrative
machinery to be followed in assailing orders issued by the
BLA-IPO pending final resolution of a case filed with them.
Hence, in the absence of such a remedy, the provisions
of the Rules of Court shall apply in a suppletory manner,
as provided under Section 3, Rule 1 of the same Rules
and Regulations. Hence, in the present case, respondents
correctly resorted to the filing of a special civil action for
certiorari with the CA to question the assailed Orders of
the BLA-IPO, as they cannot appeal therefrom and they
PAGE 3 OF 19
have no other plain, speedy and adequate remedy in the
ordinary course of law. This is consistent with Sections
120 and 4,21 Rule 65 of the Rules of Court, as amended.
LAW ON PATENTS
➢ What is an INNOVATIVE PATENT?
In our jurisdiction, this pertains to a UTILITY MODEL
which is novel and industrially applicable. Instead of
having an inventive step, this “patent” has an innovative
step.
➢ What are the GRAHAM FACTORS?
These are factors to determine the existence of
INVENTIVE STEP. Remember Section 26 of the IPC
provides that: “An invention involves an inventive step if
having regard to prior art, it is not obvious to a person
skilled in the art at the time of the filing date or priority
date of the application claiming the invention”
In order the determine non-obviousness (inventive step):
1. “the scope and content of the prior art are to be
determined;
2. differences between the prior art and the claims
at issue [new invention] are to be ascertained;
and
3. the level of ordinary skill in the pertinent art
resolved.
Against this background, the obviousness or non-
obviousness of the subject matter is determined.
Such secondary considerations as:
1. commercial success,
2. long felt but unsolved needs,
3. failure of others, etc., might be utilized to give
light to the circumstances surrounding the origin
of the subject matter sought to be patented.
As indicia of obviousness or non-obviousness, these
inquiries may have relevancy.” (from the Book of
Ernesto Salao, Essentials of Intellectual Property
Law, 2016; Graham v. John Deere Co., U.S. S.C.)
➢ What are the tests for PATENT
INFRINGEMENT?
“Tests have been established to determine infringement.
These are (a) literal infringement; and (b) the doctrine of
equivalents.
In using LITERAL INFRINGEMENT as a test, ". . .
resort must be had, in the first instance, to the words of
the claim. If accused matter clearly falls within the claim,
infringement is made out and that is the end of it." To
determine whether the particular item falls within the
literal meaning of the patent claims, the court must
juxtapose the claims of the patent and the accused
product within the overall context of the claims and
specifications, to determine whether there is exact
identity of all material elements.
Under the DOCTRINE OF EQUIVALENTS (a.k.a.
FUNCTION-WAY-RESULTS TEST), "(a)n infringement
also occurs when a device appropriates a prior invention
by incorporating its innovative concept and, albeit with
some modification and change, performs substantially the
same function in substantially the same way to achieve
substantially the same result.” (Godines v. Court of
Appeals, G.R. No. 97343, September 13, 1993)
➢ Patent Infringement
G.R. No. 167715 November 17, 2010
PHIL PHARMAWEALTH, INC., vs. PFIZER, INC.
and PFIZER (PHIL.) INC..
PERALTA, J.
Pfizer sued for patent infringement against petitioner Phil
Pharmawealth, Inc. by respondent companies, Pfizer, Inc.
and Pfizer (Phil.), Inc., with the Bureau of Legal Affairs of
the Intellectual Property Office (BLA-IPO).
Pfizer is the registered owner of Philippine Letters Patent
No. 21116 (the "Patent") which was issued by this
Honorable Office on July 16, 1987. The patent is valid
until July 16, 2004. The claims of this Patent are directed
to "a method of increasing the effectiveness of a beta-
lactam antibiotic in a mammalian subject, which
comprises co-administering to said subject a beta-lactam
antibiotic effectiveness increasing amount of a compound
of the formula IA." The scope of the claims of the Patent
extends to a combination of penicillin such as ampicillin
sodium and beta-lactam antibiotic like sulbactam sodium.
Patent No. 21116 thus covers ampicillin
sodium/sulbactam sodium (hereafter "Sulbactam
Ampicillin"). Ampicillin sodium is a specific example of the
broad beta-lactam antibiotic disclosed and claimed in the
Patent. It is the compound which efficacy is being
enhanced by co-administering the same with sulbactam
sodium. Sulbactam sodium, on the other hand, is a
specific compound of the formula IA disclosed and
claimed in the Patent.
Pfizer is marketing Sulbactam Ampicillin under the brand
name "Unasyn." Pfizer's "Unasyn" products, which come
in oral and IV formulas, are covered by Certificates of
Product Registration ("CPR") issued by the Bureau of Food
and Drugs ("BFAD") under the name of complainants. The
sole and exclusive distributor of "Unasyn" products in the
Philippines is Zuellig Pharma Corporation, pursuant to a
Distribution Services Agreement it executed with Pfizer
Phils. on January 23, 2001.
Sometime in January and February 2003, complainants
came to know that respondent [herein petitioner]
submitted bids for the supply of Sulbactam Ampicillin to
several hospitals without the consent of complainants and
in violation of the complainants' intellectual property
rights.
Complainants thus wrote the above hospitals and
demanded that the latter immediately cease and desist
from accepting bids for the supply [of] Sulbactam
Ampicillin or awarding the same to entities other than
complainants. Complainants, in the same letters sent
through undersigned counsel, also demanded that
respondent immediately withdraw its bids to supply
Sulbactam Ampicillin.
In gross and evident bad faith, respondent and the
hospitals named in paragraph 9 hereof, willfully ignored
complainants' just, plain and valid demands, refused to
comply therewith and continued to infringe the Patent, all
to the damage and prejudice of complainants. As
registered owner of the Patent, Pfizer is entitled to
protection under Section 76 of the IP Code.
PAGE 4 OF 19
Petitioner argues that respondents' exclusive right to
monopolize the subject matter of the patent exists only
within the term of the patent. Petitioner claims that since
respondents' patent expired on July 16, 2004, the latter
no longer possess any right of monopoly and, as such,
there is no more basis for the issuance of a restraining
order or injunction against petitioner insofar as the
disputed patent is concerned
WON there was patent infringement
Held: No
It is clear from Section 37 of Republic Act No. (RA) 165
that the exclusive right of a patentee to make, use and
sell a patented product, article or process exists only
during the term of the patent.
In the instant case, Philippine Letters Patent No. 21116,
which was the basis of respondents in filing their
complaint with the BLA-IPO, was issued on July 16, 1987.
They also admitted that the validity of the said patent is
until July 16, 2004, which is in conformity with Section 21
of RA 165, providing that the term of a patent shall be
seventeen (17) years from the date of issuance thereof.
In the present case, there is no dispute as to
respondents' admission that the term of their
patent expired on July 16, 2004.
On the basis of the foregoing, the Court agrees with
petitioner that after July 16, 2004, respondents no longer
possess the exclusive right to make, use and sell the
articles or products covered by Philippine Letters Patent
No. 21116. Hence, no patent to infringe.
LAW ON TRADEMARKS
➢ What is a COLLECTIVE MARK?
"COLLECTIVE MARK" is any visible sign designated as
such in the application for registration and capable of
distinguishing the origin or any other common
characteristic, including the quality of goods or services
of different enterprises which use the sign under the
control of the registered owner of the collective mark.
(UFC v. Barrio Fiesta, G.R. No. 198889, January 20,
2016)
➢ What is CYBER-SQUATTING?
Sec. 4. Criminal Offenses - (6) “Cyber-squatting. – The
acquisition of a domain name over the internet in bad
faith to profit, mislead, destroy reputation, and deprive
others from registering the same, if such a domain name
is:
(i) Similar, identical, or confusingly similar to an existing
trademark registered with the appropriate government
agency at the time of the domain name registration:
(ii) Identical or in any way similar with the name of a
person other than the registrant, in case of a personal
name; and
(iii) Acquired without right or with intellectual property
interests in it.” (RA 10175; Cybercrime Prevention
Act of 2012)
 ➢ What is the basic element for TRADEMARK
INFRINGEMENT?
"COLORABLE IMITATION" denotes such a close or
ingenious imitation as to be calculated to deceive
ordinary persons, or such a resemblance to the original
as to deceive an ordinary purchaser giving such
attention as a purchaser usually gives, as to cause him
to purchase the one supposing it to be the other.
➢ Trademark Infringement
G.R. No. 164321 March 23, 2011
SKECHERS, U.S.A., INC., Petitioner, vs. INTER
PACIFIC INDUSTRIAL TRADING CORP., et al.
PERALTA, J.
The present controversy arose when petitioner filed with
Branch 24 of the Regional Trial Court (RTC) of Manila an
application for the issuance of search warrants against an
outlet and warehouse operated by respondents for
infringement of trademark under Section 155, in relation
to Section 170 of Republic Act No. 8293, otherwise known
as the Intellectual Property Code of the Philippines.2 In
the course of its business, petitioner has registered the
trademark "SKECHERS"3 and the trademark "S" (within
an oval design)4 with the Intellectual Property Office
(IPO).
Two search warrants5 were issued by the RTC and were
served on the premises of respondents. As a result of the
raid, more than 6,000 pairs of shoes bearing the "S" logo
were seized.
Later, respondents moved to quash the search warrants,
arguing that there was no confusing similarity between
petitioner’s "Skechers" rubber shoes and its "Strong"
rubber shoes.
Issue: WON there was confusing similarity between the
"Skechers" and "Strong" rubber shoes
Held: Yes
The essential element of infringement under R.A. No.
8293 is that the infringing mark is likely to cause
confusion. In determining similarity and likelihood of
confusion, jurisprudence has developed tests the
Dominancy Test and the Holistic or Totality Test.
The Dominancy Test focuses on the similarity of the
prevalent or dominant features of the competing
trademarks that might cause confusion, mistake, and
deception in the mind of the purchasing public.
Duplication or imitation is not necessary; neither is it
required that the mark sought to be registered suggests
an effort to imitate. Given more consideration are the
aural and visual impressions created by the marks on the
buyers of goods, giving little weight to factors like prices,
quality, sales outlets, and market segments.16
In contrast, the Holistic or Totality Test necessitates a
consideration of the entirety of the marks as applied to
the products, including the labels and packaging, in
determining confusing similarity. The discerning eye of
the observer must focus not only on the predominant
words, but also on the other features appearing on both
labels so that the observer may draw conclusion on
whether one is confusingly similar to the other.17
PAGE 5 OF 19
Relative to the question on confusion of marks and trade
names, jurisprudence has noted two (2) types of
confusion, viz.: (1) confusion of goods (product
confusion), where the ordinarily prudent purchaser would
be induced to purchase one product in the belief that he
was purchasing the other; and (2) confusion of business
(source or origin confusion), where, although the goods
of the parties are different, the product, the mark of which
registration is applied for by one party, is such as might
reasonably be assumed to originate with the registrant of
an earlier product, and the public would then be deceived
either into that belief or into the belief that there is some
connection between the two parties, though inexistent.18
Applying the Dominancy Test to the case at bar, this
Court finds that the use of the stylized "S" by respondent
in its Strong rubber shoes infringes on the mark already
registered by petitioner with the IPO. While it is
undisputed that petitioner’s stylized "S" is within an oval
design, to this Court’s mind, the dominant feature of the
trademark is the stylized "S," as it is precisely the stylized
"S" which catches the eye of the purchaser. Thus, even if
respondent did not use an oval design, the mere fact that
it used the same stylized "S", the same being the
dominant feature of petitioner’s trademark, already
constitutes infringement under the Dominancy Test.
Both the RTC and the CA applied the Holistic Test in ruling
that respondent had not infringed petitioner’s trademark.
This Court is at a loss as to how the RTC and the CA, in
applying the holistic test, ruled that there was no
colorable imitation, when it cannot be any more clear and
apparent to this Court that there is colorable imitation.
The dissimilarities between the shoes are too trifling and
frivolous that it is indubitable that respondent’s products
will cause confusion and mistake in the eyes of the public.
Respondent’s shoes may not be an exact replica of
petitioner’s shoes, but the features and overall design are
so similar and alike that confusion is highly likely.
In Converse Rubber Corporation v. Jacinto Rubber &
Plastic Co., Inc., this Court, in a case for unfair
competition, had opined that even if not all the details
are identical, as long as the general appearance of
the two products are such that any ordinary
purchaser would be deceived, the imitator should
be liable [NOTE: COMPARE THIS WITH DIAZ]
Neither can the difference in price be a complete defense
in trademark infringement.
In McDonald’s Corporation v. L.C. Big Mak Burger. Inc.,24
this Court held:
Modern law recognizes that the protection to which the
owner of a trademark is entitled is not limited to guarding
his goods or business from actual market competition
with identical or similar products of the parties, but
extends to all cases in which the use by a junior
appropriator of a trade-mark or trade-name is likely to
lead to a confusion of source, as where prospective
purchasers would be misled into thinking that the
complaining party has extended his business into the field
(see 148 ALR 56 et seq; 53 Am. Jur. 576) or is in any way
connected with the activities of the infringer; or when it
forestalls the normal potential expansion of his business
(v. 148 ALR 77, 84; 52 Am. Jur. 576, 577). x x x
Indeed, the registered trademark owner may use its mark
on the same or similar products, in different segments of
the market, and at different price levels depending on
variations of the products for specific segments of the
market.26 The purchasing public might be mistaken in
thinking that petitioner had ventured into a lower market
segment such that it is not inconceivable for the public to
think that Strong or Strong Sport Trail might be
associated or connected with petitioner’s brand, which
scenario is plausible especially since both petitioner and
respondent manufacture rubber shoes.
Withal, the protection of trademarks as intellectual
property is intended not only to preserve the goodwill and
reputation of the business established on the goods
bearing the mark through actual use over a period of
time, but also to safeguard the public as consumers
against confusion on these goods.27 While respondent’s
shoes contain some dissimilarities with petitioner’s shoes,
this Court cannot close its eye to the fact that for all
intents and purpose, respondent had deliberately
attempted to copy petitioner’s mark and overall design
and features of the shoes. Let it be remembered, that
defendants in cases of infringement do not normally copy
but only make colorable changes.28 The most successful
form of copying is to employ enough points of similarity
to confuse the public, with enough points of difference to
confuse the courts.
Note: In the case of Diaz v. People, Bersamin
clarified the definition of an “ordinary purchaser”.
G.R. No. 180677 February 18, 2013
VICTORIO P. DIAZ, vs. PEOPLE OF THE
PHILIPPINES AND LEVI STRAUSS [PHILS.],
INC.
BERSAMIN, J.
On February 10, 2000, the Department of Justice filed two
informations in the RTC of Las Piñas City, charging Diaz
with violation of Section 155, in relation to Section 170,
of Republic Act No. 8293, also known as the Intellectual
Property Code of the Philippines (Intellectual Property
Code)
Issue: WON there was trademark infringement
Held: No trademark infringement
The elements of the offense of trademark infringement
under the Intellectual Property Code are, therefore, the
following:
1. The trademark being infringed is registered in
the Intellectual Property Office;
2. The trademark is reproduced, counterfeited,
copied, or colorably imitated by the infringer;
3. The infringing mark is used in connection with
the sale, offering for sale, or advertising of any
goods, business or services; or the infringing mark
is applied to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended
to be used upon or in connection with such goods,
business or services;
4. The use or application of the infringing mark is
likely to cause confusion or mistake or to deceive
purchasers or others as to the goods or services
PAGE 6 OF 19
themselves or as to the source or origin of such
goods or services or the identity of such business;
and
5. The use or application of the infringing mark is
without the consent of the trademark owner or the
assignee thereof.
As can be seen, the likelihood of confusion is the
gravamen of the offense of trademark infringement.15
There are two tests to determine likelihood of confusion,
namely: the dominancy test, and the holistic test.
The contrasting concept of these tests was explained in
Societes Des Produits Nestle, S.A. v. Dy, Jr., thus:
x x x. The DOMINANCY TEST focuses on the similarity
of the main, prevalent or essential features of the
competing trademarks that might cause confusion.
Infringement takes place when the competing trademark
contains the essential features of another. Imitation or an
effort to imitate is unnecessary. The question is whether
the use of the marks is likely to cause confusion or deceive
purchasers.
The HOLISTIC TEST considers the entirety of the marks,
including labels and packaging, in determining confusing
similarity. The focus is not only on the predominant words
but also on the other features appearing on the labels.16
The HOLISTIC TEST IS APPLICABLE HERE
considering that the herein criminal cases also involved
trademark infringement in relation to jeans products.
Accordingly, the jeans trademarks of Levi’s Philippines
and Diaz must be considered as a whole in determining
the likelihood of confusion between them. The maong
pants or jeans made and sold by Levi’s Philippines, which
included LEVI’S 501, were very popular in the Philippines.
The consuming public knew that the original LEVI’S 501
jeans were under a foreign brand and quite expensive.
Such jeans could be purchased only in malls or boutiques
as ready-to-wear items, and were not available in tailoring
shops like those of Diaz’s as well as not acquired on a
"made-to-order" basis. Under the circumstances, the
consuming public could easily discern if the jeans were
original or fake LEVI’S 501, or were manufactured by
other brands of jeans.
Confusion and deception were remote, for, as the Court
has observed in Emerald Garments:
First, the products involved in the case at bar are, in the
main, various kinds of jeans. These are not your ordinary
household items like catsup, soy sauce or soap which are
of minimal cost. Maong pants or jeans are not
inexpensive. Accordingly, the casual buyer is predisposed
to be more cautious and discriminating in and would
prefer to mull over his purchase. Confusion and
deception, then, is less likely.
Second, like his beer, the average Filipino consumer
generally buys his jeans by brand. He does not ask the
sales clerk for generic jeans but for, say, a Levis, Guess,
Wrangler or even an Armani. He is, therefore, more or
less knowledgeable and familiar with his preference and
will not easily be distracted.
Finally, in line with the foregoing discussions, more credit
should be given to the "ordinary purchaser." Cast in this
particular controversy, the ordinary purchaser is not the
"completely unwary consumer" but is the "ordinarily
intelligent buyer" considering the type of product
involved.
The definition laid down in Dy Buncio v. Tan Tiao Bok is
better suited to the present case. There, the "ordinary
purchaser" was defined as one "accustomed to buy, and
therefore to some extent familiar with, the goods in
question.
The test of fraudulent simulation is to be found in
the likelihood of the deception of some persons in
some measure acquainted with an established
design and desirous of purchasing the commodity
with which that design has been associated. The
test is not found in the deception, or the possibility
of deception, of the person who knows nothing
about the design which has been counterfeited,
and who must be indifferent between that and the
other. The simulation, in order to be objectionable, must
be such as appears likely to mislead the ordinary
intelligent buyer who has a need to supply and is familiar
with the article that he seeks to purchase.
Diaz used the trademark "LS JEANS TAILORING" for the
jeans he produced and sold in his tailoring shops. His
trademark was visually and aurally different from the
trademark "LEVI STRAUSS & CO" appearing on the patch
of original jeans under the trademark LEVI’S 501. The
word "LS" could not be confused as a derivative from
"LEVI STRAUSS" by virtue of the "LS" being connected to
the word "TAILORING", thereby openly suggesting that
the jeans bearing the trademark "LS JEANS TAILORING"
came or were bought from the tailoring shops of Diaz, not
from the malls or boutiques selling original LEVI’S 501
jeans to the consuming public.
There were other remarkable differences between the
two trademarks that the consuming public would easily
perceive. Diaz aptly noted such differences, as follows:
The prosecution also alleged that the accused copied the
"two horse design" of the petitioner-private complainant
but the evidence will show that there was no such design
in the seized jeans. Instead, what is shown is "buffalo
design." Again, a horse and a buffalo are two different
animals which an ordinary customer can easily
distinguish. x x x.
The prosecution further alleged that the red tab was
copied by the accused. However, evidence will show that
the red tab used by the private complainant indicates the
word "LEVI’S" while that of the accused indicates the
letters "LSJT" which means LS JEANS TAILORING. Again,
even an ordinary customer can distinguish the word
LEVI’S from the letters LSJT.
xxxx
In terms of classes of customers and channels of trade,
the jeans products of the private complainant and the
accused cater to different classes of customers and flow
through the different channels of trade. The customers of
the private complainant are mall goers belonging to class
A and B market group – while that of the accused are
those who belong to class D and E market who can only
afford Php 300 for a pair of made-toorder pants.20 x x x.
PAGE 7 OF 19
Moreover, based on the certificate issued by the
Intellectual Property Office, "LS JEANS TAILORING" was
a registered trademark of Diaz. He had registered his
trademark prior to the filing of the present cases.21 The
Intellectual Property Office would certainly not have
allowed the registration had Diaz’s trademark been
confusingly similar with the registered trademark for
LEVI’S 501 jeans.
Given the foregoing, it should be plain that there was no
likelihood of confusion between the trademarks involved.
G.R. No. 194062 June 17, 2013
REPUBLIC GAS CORPORATION, ARNEL U. TY,
MARI ANTONETTE N. TY, ORLANDO REYES,
FERRER SUAZO and ALVIN U. TV, vs. PETRON
CORPORATION, PILIPINAS SHELL
PETROLEUM CORPORATION, and SHELL
INTERNATIONAL PETROLEUM COMPANY
LIMITED.
PERALTA, J.
Petron Corporation ("Petron" for brevity) and Pilipinas
Shell Petroleum Corporation ("Shell" for brevity) are two
of the largest bulk suppliers and producers of LPG in the
Philippines. Petron is the registered owner in the
Philippines of the trademarks GASUL and GASUL cylinders
used for its LGP products. It is the sole entity in the
Philippines authorized to allow refillers and distributors to
refill, use, sell, and distribute GASUL LPG containers,
products and its trademarks.
Pilipinas Shell, on the other hand, is the authorized user
in the Philippines of the tradename, trademarks, symbols
or designs of its principal, Shell International Petroleum
Company Limited, including the marks SHELLANE and
SHELL device in connection with the production, sale and
distribution of SHELLANE LPGs. It is the only corporation
in the Philippines authorized to allow refillers and
distributors to refill, use, sell and distribute SHELLANE
LGP containers and products. Private respondents, on the
other hand, are the directors and officers of Republic Gas
Corporation ("REGASCO" for brevity), an entity duly
licensed to engage in, conduct and carry on, the business
of refilling, buying, selling, distributing and marketing at
wholesale and retail of Liquefied Petroleum Gas ("LPG").
LPG Dealers Associations, such as the Shellane Dealers
Association, Inc., Petron Gasul Dealers Association, Inc.
and Totalgaz Dealers Association, received reports that
certain entities were engaged in the unauthorized
refilling, sale and distribution of LPG cylinders bearing the
registered tradenames and trademarks of the petitioners.
Search warrants were issued.
Upon the issuance of the said search warrants, Special
Investigator Edgardo C. Kawada and other NBI operatives
immediately proceeded to the REGASCO LPG Refilling
Station in Malabon and served the search warrants on the
private respondents. After searching the premises of
REGASCO, they were able to seize several empty and
filled Shellane and Gasul cylinders as well as other allied
paraphernalia.
Subsequently, on January 28, 2005, the NBI lodged a
complaint in the Department of Justice against the private
respondents for alleged violations of Sections 155 and
168 of Republic Act (RA) No. 8293, otherwise known as
the Intellectual Property Code of the Philippines.
Upon the issuance of the said search warrants, Special
Investigator Edgardo C. Kawada and other NBI operatives
immediately proceeded to the REGASCO LPG Refilling
Station in Malabon and served the search warrants on the
private respondents. After searching the premises of
REGASCO, they were able to seize several empty and
filled Shellane and Gasul cylinders as well as other allied
paraphernalia.
Subsequently, on January 28, 2005, the NBI lodged a
complaint in the Department of Justice against the private
respondents for alleged violations of Sections 155 and
168 of Republic Act (RA) No. 8293, otherwise known as
the Intellectual Property Code of the Philippines.
Issue: whether probable cause exists to hold petitioners
liable for the crime of trademark infringement
Held: Yes, there was trademark infringement
Section 155. Remedies; Infringement. – Any person who
shall, without the consent of the owner of the registered
mark:
155.1 Use in commerce any reproduction, counterfeit,
copy or colorable imitation of a registered mark of the
same container or a dominant feature thereof in
connection with the sale, offering for sale,
distribution, advertising of any goods or services
including other preparatory steps necessary to carry
out the sale of any goods or services on or in
connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2 Reproduce, counterfeit, copy or colorably
imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit,
copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in
connection with the sale, offering for sale,
distribution, or advertising of goods or services on or
in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be
liable in a civil action for infringement by the
registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the
moment any of the acts stated in Subsection 155.1 or
this subsection are committed regardless of whether
there is actual sale of goods or services using the
infringing material.8
From the foregoing provision, the Court in a very similar
case, made it categorically clear that the mere
unauthorized use of a container bearing a registered
trademark in connection with the sale, distribution or
advertising of goods or services which is likely to cause
confusion, mistake or deception among the buyers or
consumers can be considered as trademark infringement.
Here, petitioners have actually committed trademark
infringement when they refilled, without the respondents’
consent, the LPG containers bearing the registered marks
of the respondents. As noted by respondents, petitioners’
acts will inevitably confuse the consuming public, since
they have no way of knowing that the gas contained in
the LPG tanks bearing respondents’ marks is in reality not
the latter’s LPG product after the same had been illegally
refilled. The public will then be led to believe that
petitioners are authorized refillers and distributors of
PAGE 8 OF 19
respondents’ LPG products, considering that they are
accepting empty containers of respondents and refilling
them for resale.
➢ Unfair Competition under IPC
G.R. No. 194062 June 17, 2013
REPUBLIC GAS CORPORATION, et al, vs.
PETRON CORPORATION, PILIPINAS SHELL
PETROLEUM CORPORATION, and SHELL
INTERNATIONAL PETROLEUM COMPANY LTD.
PERALTA, J.
Issue: whether probable cause exists to hold petitioners
liable for unfair competition
Held: Yes, there is unfair competition.
As to the charge of unfair competition, Section 168.3, in
relation to Section 170, of R.A. No. 8293 describes the
acts constituting unfair competition as follows:
Section 168. Unfair Competition, Rights, Regulations and
Remedies. x x x.
168.3 In particular, and without in any way limiting the
scope of protection against unfair competition, the
following shall be deemed guilty of unfair competition:
(a) Any person, who is selling his goods and gives them
the general appearance of goods of another manufacturer
or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or
the devices or words thereon, or in any other feature of
their appearance, which would be likely to influence
purchasers to believe that the goods offered are those of
a manufacturer or dealer, other than the actual
manufacturer or dealer, or who otherwise clothes the
goods with such appearance as shall deceive the public
and defraud another of his legitimate trade, or any
subsequent vendor of such goods or any agent of any
vendor engaged in selling such goods with a like purpose;
xxxx
Section 170. Penalties. Independent of the civil and
administrative sanctions imposed by law, a criminal
penalty of imprisonment from two (2) years to five (5)
years and a fine ranging from Fifty thousand pesos
(P50,000) to Two hundred thousand pesos (P200,000),
shall be imposed on any person who is found guilty of
committing any of the acts mentioned in Section 155,
Section 168 and Subsection 169.1.
From jurisprudence, unfair competition has been defined
as the passing off (or palming off) or attempting to
pass off upon the public of the goods or business
of one person as the goods or business of another
with the end and probable effect of deceiving the
public.
Passing off (or palming off) takes place where the
defendant, by imitative devices on the general
appearance of the goods, misleads prospective
purchasers into buying his merchandise under the
impression that they are buying that of his
competitors. Thus, the defendant gives his goods
the general appearance of the goods of his
competitor with the intention of deceiving the
public that the goods are those of his competitor.

In the present case, respondents pertinently observed
that by refilling and selling LPG cylinders bearing their
registered marks, petitioners are selling goods by giving
them the general appearance of goods of another
manufacturer.
What's more, the CA correctly pointed out that there is a
showing that the consumers may be misled into believing
that the LPGs contained in the cylinders bearing the marks
"GASUL" and "SHELLANE" are those goods or products of
the petitioners when, in fact, they are not. Obviously, the
mere use of those LPG cylinders bearing the trademarks
"GASUL" and "SHELLANE" will give the LPGs sold by
REGASCO the general appearance of the products of the
petitioners.
In sum, this Court finds that there is sufficient evidence
to warrant the prosecution of petitioners for trademark
infringement and unfair competition, considering that
petitioner Republic Gas Corporation, being a corporation,
possesses a personality separate and distinct from the
person of its officers, directors and stockholders.12
Petitioners, being corporate officers and/or directors,
through whose act, default or omission the corporation
commits a crime, may themselves be individually held
answerable for the crime.
➢ Unfair Competition under the New Civil
Code
G.R. No. 195549 September 3, 2014
WILLAWARE PRODUCTS CORPORATION,
Petitioner, vs. JESICHRIS MANUFACTURING
CORPORATION, Respondent.
PERALTA, J.
[Respondent] Jesichris Manufacturing Company
([respondent] for short) filed this present complaint for
damages for unfair competition with prayer for
permanent injunction to enjoin [petitioner] Willaware
Products Corporation ([petitioner] for short) from
manufacturing and distributing plastic-made automotive
parts similar to those of [respondent].
[Respondent] alleged that it is a duly
registeredpartnership engaged in the manufacture and
distribution of plastic and metal products, with principal
office at No. 100 Mithi Street, Sampalukan, Caloocan City.
Since its registration in 1992, [respondent] has been
manufacturing in its Caloocan plant and distributing
throughout the Philippines plastic-made automotive parts.
[Petitioner], on the other hand, which is engaged in the
manufacture and distribution of kitchenware items made
of plastic and metal has its office near that of
[respondent]. [Respondent] further alleged that in view
of the physical proximity of [petitioner’s] office to
[respondent’s] office, and in view of the fact that some of
the [respondent’s] employeeshad transferred to
[petitioner], [petitioner] had developed familiarity with
[respondent’s] products, especially its plastic-made
automotive parts.
That sometime in November 2000, [respondent]
discovered that [petitioner] had been manufacturing and
distributing the same automotive parts with exactly
similar design, same material and colors but was selling
these products at a lower price as [respondent’s] plastic-
made automotive parts and to the same customers.
PAGE 9 OF 19
[Respondent] alleged that it had originated the use of
plastic in place of rubber in the manufacture of
automotive under chassis parts such as spring eye
bushing, stabilizer bushing, shock absorber bushing,
center bearing cushions, among others. [Petitioner’s]
manufacture of the same automotive parts with plastic
material was taken from [respondent’s] idea of using
plastic for automotive parts. Also, [petitioner] deliberately
copied [respondent’s] products all of which acts constitute
unfair competition, is and are contrary to law, morals,
good customs and public policy and have caused
[respondent] damages in terms of lost and unrealized
profits in the amount of TWO MILLION PESOS as of the
date of [respondent’s] complaint.
Furthermore, [petitioner’s] tortuous conduct compelled
[respondent] to institute this action and thereby to incur
expenses in the way of attorney’s fees and other litigation
expenses in the amount of FIVE HUNDRED THOUSAND
PESOS (P500,000.00).
In its Answer, [petitioner] denies all the allegations of the
[respondent] except for the following facts: that it is
engaged in the manufacture and distribution of
kitchenware items made of plastic and metal and that
there’s physical proximity of [petitioner’s] office to
[respondent]’s office, and that some of [respondent’s]
employees had transferred to [petitioner] and that over
the years [petitioner] had developed familiarity with
[respondent’s] products, especially its plastic made
automotive parts.
As its Affirmative Defenses, [petitioner] claims that there
can be no unfair competition as the plastic-made
automotive parts are mere reproductions of original parts
and their construction and composition merely conforms
to the specifications of the original parts of motor vehicles
they intend to replace. Thus, [respondent] cannot claim
that it "originated" the use of plastic for these automotive
parts. Even assuming for the sake of argument that
[respondent] indeed originated the use of these plastic
automotive parts, it still has no exclusive right to use,
manufacture and sell these as it has no patent over these
products. Furthermore, [respondent] is not the only
exclusive manufacturer of these plastic-made automotive
parts as there are other establishments which were
already openly selling them to the public.3
Issue: WON there is unfair competition
Held: Yes, under Art. 28 of the NCC
Article 28. Unfair competition in agricultural,
commercial or industrial enterprises or in labor
through the use of force, intimidation, deceit,
machination or any other unjust, oppressive or
highhanded method shall give rise to a right of
action by the person who thereby suffers damage.
First, both parties are competitors or trade rivals, both
being engaged in the manufacture of plastic-made
automotive parts.
Second, the acts of the petitioner were clearly "contrary
to good conscience" as petitioner admitted having
employed respondent’s former employees, deliberately
copied respondent’s products and even went to the extent
of selling these products to respondent’s customers.
To bolster this point, the CA correctly pointed out that
petitioner’s hiring of the former employees of respondent
and petitioner’s act of copying the subject plastic parts of
respondent were tantamount to unfair competition
Another point we observe is that Yabut, who used to be
a warehouse and delivery man of [respondent], was fired
because he was blamed of spying in favor of [petitioner].
Despite this accusation, he did not get angry. Later on,
he applied for and was hired by [petitioner] for the same
position he occupied with [respondent].
These sequence of events relating to his employment by
[petitioner] is suspect too like the situation with De
Guzman.
Thus, it is evident that petitioner is engaged in unfair
competition as shown by his act of suddenly shifting his
business from manufacturing kitchenware to plastic-made
automotive parts; his luring the employees of the
respondent to transfer to his employ and trying to
discover the trade secrets of the respondent.
Moreover, when a person starts an opposing place of
business, not for the sake of profit to himself, but
regardless of loss and for the sole purpose of driving his
competitor out of business so that later on he can take
advantage of the effects of his malevolent purpose, he is
guilty of wanton wrong.13 As aptly observed by the
courta quo, the testimony of petitioner’s witnesses
indicate that it acted in bad faith in competing with the
business of respondent.
LAW ON COPYRIGHTS
➢ What are NEIGHBORING RIGHTS?
“Developments in technology, including the process of
preserving once ephemeral works and disseminating
them, resulted in the need to provide a new kind of
protection as distinguished from copyright. The
designation "neighboring rights" was abbreviated
from the phrase "rights neighboring to copyright."
Neighboring or related rights are of equal
importance with copyright as established in the
different conventions covering both kinds of
rights.
Several treaties deal with neighboring or related rights of
copyright. The most prominent of these is the
"International Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting
Organizations" (Rome Convention).
The Rome Convention protects the rights of broadcasting
organizations in relation to their broadcasts.
With regard to the neighboring rights of a broadcasting
organization in this jurisdiction, this court has discussed
the difference between broadcasting and rebroadcasting:
Section 202.7 of the IP Code defines broadcasting as "the
transmission by wireless means for the public reception
of sounds or of images or of representations thereof; such
transmission by satellite is also ‘broadcasting’ where the
means for decrypting are provided to the public by the
broadcasting organization or with its consent."
1
GMA Networks v. Cable CATV Inc.
PAGE 10 OF 19
On the other hand, rebroadcasting as defined in Article
3(g) of the International Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting
Organizations, otherwise known as the 1961 Rome
Convention, of which the Republic of the Philippines is a
signatory, is "the simultaneous broadcasting by one
broadcasting organization of the broadcast of another
broadcasting organization." (ABS-CBN v. Gozon, G.R.
No. 195956, March 11, 2015)
➢ What is the MUST-CARRY RULE?
Sections 6.2, 6.2.1, 6.4(a)(1) and 6.4(b) of MC 04-08-88
embody the "MUST-CARRY RULE." This rule mandates
that the local TV broadcast signals of an authorized TV
broadcast station should be carried in full by the CATV
operator, without alteration or deletion. (NTC
Memorandum Circular No. 04-08-88)1
G.R. No. 175769-70 January 19, 2009
ABS-CBN BROADCASTING CORPORATION, vs.
PHILIPPINE MULTI-MEDIA SYSTEM, INC., et al.
YNARES-SANTIAGO, J.
ABS-CBN Broadcasting Corporation (ABS-CBN) is licensed
under the laws of the Republic of the Philippines to
engage in television and radio broadcasting.4 It
broadcasts television programs by wireless means to
Metro Manila and nearby provinces, and by satellite to
provincial stations through Channel 2 on Very High
Frequency (VHF) and Channel 23 on Ultra High Frequency
(UHF). The programs aired over Channels 2 and 23 are
either produced by ABS-CBN or purchased from or
licensed by other producers.
Philippine Multi-Media System, Inc. (PMSI) is the operator
of Dream Broadcasting System. It delivers digital direct-
to-home (DTH) television via satellite to its subscribers all
over the Philippines. Herein individual respondents, Cesar
G. Reyes, Francis Chua, Manuel F. Abellada, Raul B. De
Mesa, and Aloysius M. Colayco, are members of PMSI’s
Board of Directors.
PMSI was granted a legislative franchise under Republic
Act No. 86305 on May 7, 1998 and was given a Provisional
Authority by the National Telecommunications
Commission (NTC) on February 1, 2000 to install, operate
and maintain a nationwide DTH satellite service. When it
commenced operations, it offered as part of its program
line-up ABS-CBN Channels 2 and 23, NBN, Channel 4, ABC
Channel 5, GMA Channel 7, RPN Channel 9, and IBC
Channel 13, together with other paid premium program
channels.
However, on April 25, 2001,6 ABS-CBN demanded for
PMSI to cease and desist from rebroadcasting Channels 2
and 23. On April 27, 2001,7 PMSI replied that the
rebroadcasting was in accordance with the authority
granted it by NTC and its obligation under NTC
Memorandum Circular No. 4-08-88,8 Section 6.2 of which
requires all cable television system operators operating in
a community within Grade “A” or “B” contours to carry the
television signals of the authorized television broadcast
stations.9
Thereafter, negotiations ensued between the parties in an
effort to reach a settlement; however, the negotiations
were terminated on April 4, 2002 by ABS-CBN allegedly
due to PMSI’s inability to ensure the prevention of illegal
retransmission and further rebroadcast of its signals, as
well as the adverse effect of the rebroadcasts on the
business operations of its regional television stations
ABS-CBN filed with the IPO a complaint for “Violation of
Laws Involving Property Rights, with Prayer for the
Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction,” which was docketed as IPV No.
10-2002-0004. It alleged that PMSI’s unauthorized
rebroadcasting of Channels 2 and 23 infringed on its
broadcasting rights and copyright.
Bureau of Legal Affairs (BLA) of the IPO granted ABS-
CBN’s application for a temporary restraining order. On
July 12, 2002, PMSI suspended its retransmission of
Channels 2 and 23 and likewise filed a petition for
certiorari with the Court of Appeals, which was docketed
as CA-G.R. SP No. 71597.
Subsequently, PMSI filed with the BLA a Manifestation
reiterating that it is subject to the must-carry rule under
Memorandum Circular No. 04-08-88.
On December 22, 2003, the BLA rendered a decision14
finding that PMSI infringed the broadcasting rights and
copyright of ABS-CBN and ordering it to permanently
cease and desist from rebroadcasting Channels 2 and 23.
On February 6, 2004, PMSI filed an appeal with the Office
of the Director-General of the IPO. On December 20,
2004, the Director-General of the IPO rendered a decision
in favor of PMSI.
On appeal, ABS-CBN contends that PMSI’s unauthorized
rebroadcasting of Channels 2 and 23 is an infringement
of its broadcasting rights and copyright under the
Intellectual Property Code (IP Code);18that Memorandum
Circular No. 04-08-88 excludes DTH satellite television
operators; that the Court of Appeals’ interpretation of the
must-carry rule violates Section 9 of Article III19 of the
Constitution because it allows the taking of property for
public use without payment of just compensation
Issue: Did PMSI violate ABS-CBN's broadcaster’s rights
under Section 211 of the IP Code?
Held: No.
Sec. 211. Scope of Right. - Subject to the provisions of
Section 212, broadcasting organizations shall enjoy the
exclusive right to carry out, authorize or prevent any of
the following acts:
211.1. The rebroadcasting of their broadcasts;
xxxx
Neither is PMSI guilty of infringement of ABS-CBN’s
copyright under Section 177 of the IP Code which states
that copyright or economic rights shall consist of the
exclusive right to carry out, authorize or prevent the
public performance of the work (Section 177.6), and other
communication to the public of the work (Section
177.7).20
Section 202.7 of the IP Code defines broadcasting as “the
transmission by wireless means for the public reception
of sounds or of images or of representations thereof; such
transmission by satellite is also ‘broadcasting’ where the
PAGE 11 OF 19
means for decrypting are provided to the public by the
broadcasting organization or with its consent.”
On the other hand, rebroadcasting as defined in Article
3(g) of the International Convention for the Protection of
Performers, Producers of Phonograms and Broadcasting
Organizations, otherwise known as the 1961 Rome
Convention, of which the Republic of the Philippines is a
signatory, 21 is “the simultaneous broadcasting by one
broadcasting organization of the broadcast of another
broadcasting organization.”
The Director-General of the IPO correctly found that PMSI
is not engaged in rebroadcasting and thus cannot be
considered to have infringed ABS-CBN’s broadcasting
rights and copyright
According to the DG-IPO, Section 202.7 of the IP Code
states that broadcasting means
“the transmission by wireless means for the public
reception of sounds or of images or of representations
thereof; such transmission by satellite is also
‘broadcasting’ where the means for decrypting are
provided to the public by the broadcasting organization or
with its consent.”
Section 202.7 of the IP Code, thus, provides two instances
wherein there is broadcasting, to wit:
1. The transmission by wireless means for the public
reception of sounds or of images or of representations
thereof; and
2. The transmission by satellite for the public reception of
sounds or of images or of representations thereof where
the means for decrypting are provided to the public by
the broadcasting organization or with its consent.
It is under the second category that PMSI’s DTH satellite
television service must be examined since it is satellite-
based. The elements of such category are as follows:
1. There is transmission of sounds or images or of
representations thereof;
2. The transmission is through satellite;
3. The transmission is for public reception; and
4. The means for decrypting are provided to the public by
the broadcasting organization or with its consent.
It is only the presence of all the above elements can a
determination that the DTH is broadcasting and
consequently, rebroadcasting ABS-CBN’s signals in
violation of Sections 211 and 177 of the IP Code, may be
arrived at.
Accordingly, this Office is of the view that the
transmission contemplated under Section 202.7 of the IP
Code presupposes that the origin of the signals is the
broadcaster. Hence, a program that is broadcasted is
attributed to the broadcaster. In the same manner, the
rebroadcasted program is attributed to the rebroadcaster.
In the case at hand, PMSI is not the origin nor does it
claim to be the origin of the programs broadcasted by the
ABS-CBN. PMSI did not make and transmit on its own but
merely carried the existing signals of the ABS-CBN. When
PMSI’s subscribers view ABS-CBN’s programs in Channels
2 and 23, they know that the origin thereof was the ABS-
CBN.
Aptly, it is imperative to discern the nature of
broadcasting. When a broadcaster transmits, the signals
are scattered or dispersed in the air. Anybody may pick-
up these signals. There is no restriction as to its number,
type or class of recipients. To receive the signals, one is
not required to subscribe or to pay any fee. One only has
to have a receiver, and in case of television signals, a
television set, and to tune-in to the right
channel/frequency. The definition of broadcasting,
wherein it is required that the transmission is wireless, all
the more supports this discussion. Apparently, the
undiscriminating dispersal of signals in the air is possible
only through wireless means. The use of wire in
transmitting signals, such as cable television, limits the
recipients to those who are connected. Unlike wireless
transmissions, in wire-based transmissions, it is not
enough that one wants to be connected and possesses
the equipment. The service provider, such as cable
television companies may choose its subscribers.
The only limitation to such dispersal of signals in the air
is the technical capacity of the transmitters and other
equipment employed by the broadcaster. While the
broadcaster may use a less powerful transmitter to limit
its coverage, this is merely a business strategy or decision
and not an inherent limitation when transmission is
through cable.
Accordingly, the nature of broadcasting is to scatter the
signals in its widest area of coverage as possible. On this
score, it may be said that making public means that
accessibility is undiscriminating as long as it [is] within the
range of the transmitter and equipment of the
broadcaster. That the medium through which the PMSI
carries the ABS-CBN’s signal, that is via satellite, does not
diminish the fact that it operates and functions as a cable
television. It remains that the PMSI’s transmission of
signals via its DTH satellite television service cannot be
considered within the purview of broadcasting.
Under the Rome Convention, rebroadcasting is “the
simultaneous broadcasting by one broadcasting
organization of the broadcast of another broadcasting
organization.” The Working Paper23 prepared by the
Secretariat of the Standing Committee on Copyright and
Related Rights defines broadcasting organizations as
“entities that take the financial and editorial responsibility
for the selection and arrangement of, and investment in,
the transmitted content.”24 Evidently, PMSI would not
qualify as a broadcasting organization because it does not
have the aforementioned responsibilities imposed upon
broadcasting organizations, such as ABS-CBN.
ABS-CBN creates and transmits its own signals; PMSI
merely carries such signals which the viewers receive in
its unaltered form. PMSI does not produce, select, or
determine the programs to be shown in Channels 2 and
23. Likewise, it does not pass itself off as the origin or
author of such programs. Insofar as Channels 2 and 23
are concerned, PMSI merely retransmits the same in
accordance with Memorandum Circular 04-08-88. With
regard to its premium channels, it buys the channels from
content providers and transmits on an as-is basis to its
viewers. Clearly, PMSI does not perform the functions of
a broadcasting organization; thus, it cannot be said that
it is engaged in rebroadcasting Channels 2 and 23.
PAGE 12 OF 19
The Director-General of the IPO and the Court of Appeals
also correctly found that PMSI’s services are similar to a
cable television system because the services it renders fall
under cable “retransmission,” as described in the Working
Paper, to wit:
(G) Cable Retransmission
47. When a radio or television program is being
broadcast, it can be retransmitted to new audiences by
means of cable or wire. In the early days of cable
television, it was mainly used to improve signal reception,
particularly in so-called “shadow zones,” or to distribute
the signals in large buildings or building complexes. With
improvements in technology, cable operators now often
receive signals from satellites before retransmitting them
in an unaltered form to their subscribers through cable.
48. In principle, cable retransmission can be either
simultaneous with the broadcast over-the-air or delayed
(deferred transmission) on the basis of a fixation or a
reproduction of a fixation. Furthermore, they might be
unaltered or altered, for example through replacement of
commercials, etc. In general, however, the term
“retransmission” seems to be reserved for such
transmissions which are both simultaneous and
unaltered.
49. The Rome Convention does not grant rights against
unauthorized cable retransmission. Without such a right,
cable operators can retransmit both domestic and foreign
over the air broadcasts simultaneously to their subscribers
without permission from the broadcasting organizations
or other right holders and without obligation to pay
remuneration.
Thus, while the Rome Convention gives broadcasting
organizations the right to authorize or prohibit the
rebroadcasting of its broadcast, however, this protection
does not extend to cable retransmission. The
retransmission of ABS-CBN’s signals by PMSI – which
functions essentially as a cable television – does not
therefore constitute rebroadcasting in violation of the
former’s intellectual property rights under the IP Code.
It must be emphasized that the law on copyright is not
absolute. The IP Code provides that:
Sec. 184. Limitations on Copyright. -
184.1. Notwithstanding the provisions of Chapter V, the
following acts shall not constitute infringement of
copyright:
xxxx
(h) The use made of a work by or under the direction or
control of the Government, by the National Library or by
educational, scientific or professional institutions where
such use is in the public interest and is compatible with
fair use;
The carriage of ABS-CBN’s signals by virtue of the must-
carry rule in Memorandum Circular No. 04-08-88 is under
the direction and control of the government though the
NTC which is vested with exclusive jurisdiction to
supervise, regulate and control telecommunications and
broadcast services/facilities in the Philippines.26 The
imposition of the must-carry rule is within the NTC’s
power to promulgate rules and regulations, as public
safety and interest may require, to encourage a larger and
more effective use of communications, radio and
television broadcasting facilities, and to maintain effective
competition among private entities in these activities
whenever the Commission finds it reasonably feasible.
As correctly observed by the Director-General of the IPO:
Accordingly, the “Must-Carry Rule” under NTC Circular
No. 4-08-88 falls under the foregoing category of
limitations on copyright. This Office agrees with the
Appellant [herein respondent PMSI] that the “Must-Carry
Rule” is in consonance with the principles and objectives
underlying Executive Order No. 436,28 to wit:
The Filipino people must be given wider access to more
sources of news, information, education, sports event and
entertainment programs other than those provided for by
mass media and afforded television programs to attain a
well informed, well-versed and culturally refined citizenry
and enhance their socio-economic growth:
WHEREAS, cable television (CATV) systems could support
or supplement the services provided by television
broadcast facilities, local and overseas, as the national
information highway to the countryside.
Indeed, television is a business; however, the welfare of
the people must not be sacrificed in the pursuit of profit.
The right of the viewers and listeners to the most diverse
choice of programs available is paramount.45 The
Director-General correctly observed, thus:
The “Must-Carry Rule” favors both broadcasting
organizations and the public. It prevents cable television
companies from excluding broadcasting organization
especially in those places not reached by signal. Also, the
rule prevents cable television companies from depriving
viewers in far-flung areas the enjoyment of programs
available to city viewers. In fact, this Office finds the rule
more burdensome on the part of the cable television
companies. The latter carries the television signals and
shoulders the costs without any recourse of charging. On
the other hand, the signals that are carried by cable
television companies are dispersed and scattered by the
television stations and anybody with a television set is
free to pick them up.
With its enormous resources and vaunted technological
capabilities, Appellee’s [herein petitioner ABS-CBN]
broadcast signals can reach almost every corner of the
archipelago. That in spite of such capacity, it chooses to
maintain regional stations, is a business decision. That the
“Must-Carry Rule” adversely affects the profitability of
maintaining such regional stations since there will be
competition between them and its Metro Manila station is
speculative and an attempt to extrapolate the effects of
the rule. As discussed above, Appellant’s DTH satellite
television services is of limited subscription. There was
not even a showing on part of the Appellee the number
of Appellant’s subscribers in one region as compared to
non-subscribing television owners. In any event, if this
Office is to engage in conjecture, such competition
between the regional stations and the Metro Manila
station will benefit the public as such competition will
most likely result in the production of better television
programs.”
G.R. No. 176694 July 18, 2014
PAGE 13 OF 19
GMA NETWORK, INC. vs. CENTRAL CATV, INC.,
BRION, J.
Sometime in February 2000, the petitioner, together with
the Kapisanan ng mga Brodkaster ng Pilipinas,
Audiovisual Communicators, Incorporated, Filipinas
Broadcasting Network and Rajah Broadcasting Network,
Inc. (complainants), filed with the NTC a complaint
against the respondent to stop it from soliciting and
showing advertisements in its cable television
(CATV)system, pursuant to Section 2 of Executive Order
(EO) No. 205.5 Under this provision, a grantee’s authority
to operate a CATV system shall not infringe on the
television and broadcast markets. The petitioner alleged
that the phrase "television and broadcast markets"
includes the commercial or advertising market.
In its answer, the respondent admitted the airing of
commercial advertisement on its CATV network but
alleged that Section 3 of EO No. 436, which was issued
by former President Fidel V. Ramos on September 9,
1997, expressly allowed CATV providers to carry
advertisements and other similar paid segments provided
there is consent from their program providers.
Issue: WON GMA Network may stop Central CATV, Inc.
from soliciting and showing advertisements in its cable
television (CATV) system.
Held: No.
An understanding of the "must-carry rule" would show
how it carries out the directive of Section 2 of EO No. 205
that the CATV operation must not infringe upon the
broadcast television markets, specifically the audience
market. In ABS-CBN Broadcasting Corporation v.
Philippine Multi-Media System, Inc.,36 the Court clarified
the "must-carry rule" and its interplay in the free-signal
TV, such as the petitioner, and the CATV operators, such
as the respondent, and to quote:
Anyone in the country who owns a television set and
antenna can receive ABS-CBN’s signals for free. Other
broadcasting organizations with free-to-air signals such as
GMA-7, RPN-9, ABC-5, and IBC-13 can likewise be
accessed for free. No payment is required to view the said
channels because these broadcasting networks do not
generate revenue from subscription from their viewers
but from airtime revenue from contracts with commercial
advertisers and producers, as well as from direct sales.
In contrast, cable and DTH television earn revenues from
viewer subscription. In the case of PMSI, it offers its
customers premium paid channels from content providers
like Star Movies, Star World, Jack TV, and AXN, among
others, thus allowing its customers to go beyond the limits
of "Free TV and Cable TV." It does not advertise itself as
a local channel carrier because these local channels can
be viewed with or without DTH television.
Relevantly, PMSI’s carriage of Channels 2 and 23 is
material in arriving at the ratings and audience share of
ABS-CBN and its programs. These ratings help
commercial advertisers and producers decide whether to
buy airtime from the network. Thus, the must-carry rule
is actually advantageous to the broadcasting networks
because it provides them with increased viewership which
attracts commercial advertisers and producers.
On the other hand, the carriage of free-to-air signals
imposes a burden to cable and DTH television providers
such as PMSI. PMSI uses none of ABS-CBN’s resources or
equipment and carries the signals and shoulders the costs
without any recourse of charging. Moreover, such
carriage of signals takes up channel space which can
otherwise be utilized for other premium paid channels.
Contrary to the petitioner’s claim, EO No. 205 was not
issued solely for the benefit of the free-signal TV
networks. In fact, it was issued to end the monopoly of
Sining Makulay, Inc. which was granted by then President
Ferdinand Marcos an exclusive franchise, through
Presidential Decree (PD) No. 1512, to operate CATV
system anywhere within the Philippines.37 EO No. 205
encouraged the growth of CATV operation when it
expressly repealed PD No. 151238 thus encouraging
competition in the CATV industry. As stated in the
whereas clause of EO No. 205, the primary purpose of the
law in regulating the CATV operations was for the
protection of the public and the promotion of the general
welfare.
MC 4-08-88 mirrored the legislative intent of EO No. 205
and acknowledged the importance of the CATV operations
in the promotion of the general welfare. The circular
provides in its whereas clause that the CATV has the
ability to offer additional programming and to carry much
improved broadcast signals in the remote areas, thereby
enriching the lives of the rest of the population through
the dissemination of social, economic and educational
information, and cultural programs.
Unavoidably, however, the improved broadcast signals
that CATV offers may infringe or encroach upon the
audience or viewer market of the free-signal TV. This is
so because the latter’s signal may not reach the remote
areas or reach them with poor signal quality. To foreclose
this possibility and protect the free-TV market (audience
market), the must-carry rule was adopted to level the
playing field. With the must-carry rule in place, the CATV
networks are required to carry and show in full the free
local TV’s programs, including advertisements, without
alteration or deletion. This, in turn, benefits the public
who would have a wide-range of choices of programs or
broadcast to watch. This also benefits the free-TV signal
as their broadcasts are carried under the CATV’s much-
improved broadcast signals thus expanding their viewer’s
share.
In view of the discussion above, the Court finds that the
quoted sections of MC 4-08-88, i.e., 6.2, 6.2.1, 6.4(a)(1)
and 6.4(b) which embody the "must-carry rule," are the
governing rules in the present case. These provisions
sufficiently and fairly implement the intent of Section 2 of
EO No. 205 to protect the broadcast television market vis-
à-vis the CATV system. For emphasis, under these rules,
the phrase "television and broadcast markets" means
viewers or audience market and not commercial
advertisement market as claimed by the petitioner.
Therefore, the respondent’s act of showing
advertisements does not constitute an infringement of the
"television and broadcast markets" under Section 2 of EO
No. 205.
➢ What is FAIR USE? What is the FOUR-FACTOR
TEST? What is the TRANSFORMATIVE TEST?
This court defined fair use as "a privilege to use the
copyrighted material in a reasonable manner without the
PAGE 14 OF 19
consent of the copyright owner or as copying the theme
or ideas rather than their expression."
Fair use is an exception to the copyright owner’s
monopoly of the use of the work to avoid stifling "the very
creativity which that law is designed to foster."
Determining fair use requires application of the FOUR-
FACTOR TEST.
Section 185 of the Intellectual Property Code lists four (4)
factors to determine if there was fair use of a copyrighted
work:
a. The purpose and character of the use, including
whether such use is of a commercial nature or is for non-
profit educational purposes;
b. The nature of the copyrighted work;
c. The amount and substantiality of the portion used in
relation to the copyrighted work as a whole; and
d. The effect of the use upon the potential market for or
value of the copyrighted work.
First, the purpose and character of the use of the
copyrighted material must fall under those listed in
Section 185, thus: "criticism, comment, news reporting,
teaching including multiple copies for classroom use,
scholarship, research, and similar purposes." The purpose
and character requirement is important in view of
copyright’s goal to promote creativity and encourage
creation of works. Hence, commercial use of the
copyrighted work can be weighed against fair use.
The "TRANSFORMATIVE TEST" is generally used in
reviewing the purpose and character of the usage of the
copyrighted work. This court must look into whether the
copy of the work adds "new expression, meaning or
message" to transform it into something else. "Meta-use"
can also occur without necessarily transforming the
copyrighted work used.
Second, the nature of the copyrighted work is significant
in deciding whether its use was fair. If the nature of the
work is more factual than creative, then fair use will be
weighed in favor of the user.
Third, the amount and substantiality of the portion used
is important to determine whether usage falls under fair
use. An exact reproduction of a copyrighted work,
compared to a small portion of it, can result in the
conclusion that its use is not fair. There may also be cases
where, though the entirety of the copyrighted work is
used without consent, its purpose determines that the
usage is still fair.121 For example, a parody using a
substantial amount of copyrighted work may be
permissible as fair use as opposed to a copy of a work
produced purely for economic gain. Lastly, the effect of
the use on the copyrighted work’s market is also weighed
for or against the user. If this court finds that the use had
or will have a negative impact on the copyrighted work’s
market, then the use is deemed unfair. (ABS-CBN v.
Gozon, G.R. No. 195956, March 11, 2015)
 ➢ What is a CREATIVE COMMONS (CC)
LICENSE?
A Creative Commons (CC) license is one of several
public copyright licenses that enable the free distribution
of an otherwise copyrighted work. A CC license is used
when an author wants to give people the right to share,
use, and build upon a work that they have created.
➢ Copyright Infringement
G.R. No. 166391, October 21, 2015
MICROSOFT CORPORATION, v. ROLANDO D.
MANANSALA AND/OR MEL MANANSALA,
DOING BUSINESS AS DATAMAN TRADING
COMPANY AND/OR COMIC ALLEY.
BERSAMIN, J.
Microsoft Corporation is the copyright and trademark
owner of all rights relating to all versions and editions of
Microsoft software (computer programs) such as, but not
limited to, MS-DOS (disk operating system), Microsoft
Encarta, Microsoft Windows, Microsoft Word, Microsoft
Excel, Microsoft Access, Microsoft Works, Microsoft
Powerpoint, Microsoft Office, Microsoft Flight Simulator
and Microsoft FoxPro, among others, and their user's
guide/manuals.
Rolando Manansala is doing business under the name of
DATAMAN TRADING COMPANY and/or COMIC ALLEY with
business address at 3rd Floor, University Mall Building,
Tail Avc, Manila.
Manansala, without authority from petitioner, was
engaged in distributing and selling Microsoft computer
software programs.
On November 3, 1997, Mr. John Benedict A. Sacriz, a
private investigator accompanied by an agent from the
National Bureau of Investigation (NBI) was able to
purchase six (6) CD-ROMs containing various computer
programs belonging to petitioner.
As a result of the test-purchase, the agent from the NBI
applied for a search warrant to search the premises of the
private respondent.
On November 17, 1997, a Search Warrant was issued
against the premises of the private respondent.
On November 19, 1997, the search warrant was served
on the private respondent's premises and yielded several
illegal copies of Microsoft programs.
Issue: WON there was probable cause as to the existence
of copyright infringement
Held: Yes.
Although the general rule is that the determination of the
existence of probable cause by the public prosecutor is
not to be judicially scrutinized because it is an executive
function, an exception exists when the determination is
tainted with grave abuse of discretion. Bearing this in
mind, we hold that the DOJ committed grave abuse of
discretion in sustaining the public prosecutor's dismissal
of the charge of copyright infringement under Section 29
of Presidential Decree No. 49 on the ground of lack of
evidence because the public prosecutor thereby flagrantly
disregarded the existence of acts sufficient to engender
PAGE 15 OF 19
the well-founded belief that the crime of copyright
infringement had been committed, and that the
respondent was probably guilty thereof.
Section 5 of Presidential Decree No. 49 specifically
defined copyright as an exclusive right in the following
manner:
Section 5. Copyright shall consist in the exclusive right;
(A) To print, reprint, publish, copy, distribute, multiply,
sell, and make photographs, photo-engravings, and
pictorial illustrations of the works;
(B) To make any translation or other version or extracts
or arrangements or adaptations thereof; to dramatize it if
it be a non-dramatic work; to convert it into a non-
dramatic work if it be a drama; to complete or execute if
it be a model or design;
(C) To exhibit, perform, represent, produce, or reproduce,
the work in any manner or by any method whatever for
profit or otherwise; it not reproduced in copies for sale,
to sell any manuscript or any record whatsoever thereof;
(D) To make any other use or disposition of the work
consistent with the laws of the land.
Accordingly, the commission of any of the acts mentioned
in Section 5 of Presidential Decree No. 49 without the
copyright owner's consent constituted actionable
copyright infringement.
In Columbia Pictures, Inc. v. Court of Appeals,12 the
Court has emphatically declared:
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.
The "gravamen of copyright infringement," according to
NBI-Microsoft Corporation v. Hwang 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.
The mere sale of the illicit copies of the software
programs was enough by itself to show the
existence of probable cause for copyright
infringement. There was no need for the petitioner
to still prove who copied, replicated or reproduced
the software programs.
Indeed, the public prosecutor and the DOJ gravely abused
their discretion in dismissing the petitioner's charge for
copyright infringement against the respondents for lack
of evidence. There was grave abuse of discretion because
the public prosecutor and the DOJ acted whimsically or
arbitrarily in disregarding the settled jurisprudential rules
on finding the existence of probable cause to charge the
offender in court. Accordingly, the CA erred in upholding
the dismissal by the DOJ of the petitioner's petition for
review. We reverse.

G.R. No. 195956 March 11, 2015
ABS-CBN CORPORATION, Petitioner, vs.
FELIPE GOZON, GILBERTO R. DUAVIT, JR.,
MARISSA L. FLORES, JESSICA A. SORO, GRACE
DELA PENA-REYES, JOHN OLIVER T.
MANALASTAS, JOHN DOES AND JANE DOES.
LEONEN, J.
The controversy arose from GMA-7’s news coverage on
the homecoming of Filipino overseas worker and hostage
victim Angelo dela Cruz on July 22, 2004. As summarized
by the Court of Appeals:
Overseas Filipino worker Angelo dela Cruz was kidnapped
by Iraqi militants and as a condition for his release, a
demand was made for the withdrawal of Filipino troops in
Iraq. After negotiations, he was released by his captors
and was scheduled to return to the country in the
afternoon of 22 July 2004. Occasioned by said
homecoming and the public interest it generated, both . .
. GMA Network, Inc. . . . and [petitioner] made their
respective broadcasts and coverage of the live event.7
ABS-CBN "conducted live audio-video coverage of and
broadcasted the arrival of Angelo dela Cruz at the Ninoy
Aquino International Airport (NAIA) and the subsequent
press conference."8 ABS-CBN allowed Reuters Television
Service (Reuters) to air the footages it had taken earlier
under a special embargo agreement.9
ABS-CBN alleged that under the special embargo
agreement, any of the footages it took would be for the
"use of Reuter’s international subscribers only, and shall
be considered and treated by Reuters under ‘embargo’
against use by other subscribers in the Philippines. . . .
[N]o other Philippine subscriber of Reuters would be
allowed to use ABS-CBN footage without the latter’s
consent."10
GMA-7, to which Gozon, Duavit, Jr., Flores, Soho, Dela
Peña-Reyes, and Manalastas are connected, "assigned
and stationed news reporters and technical men at the
NAIA for its live broadcast and non-live news coverage of
the arrival of dela Cruz."11 GMA-7 subscribes to both
Reuters and Cable News Network (CNN). It received a live
video feed of the coverage of Angelo dela Cruz’s arrival
from Reuters.12
GMA-7 immediately carried the live news feed in its
program "Flash Report," together with its live
broadcast.13 Allegedly, GMA-7 did not receive any notice
or was not aware that Reuters was airing footages of ABS-
CBN.14 GMA-7’s news control room staff saw neither the
"No Access Philippines" notice nor a notice that the video
feed was under embargo in favor of ABS-CBN.15
On August 13, 2004, ABS-CBN filed the Complaint for
copyright infringement under Sections 17716 and 21117
of the Intellectual Property Code.
ABS-CBN claims that news footage is subject to copyright
and prohibited use of copyrighted material is punishable
under the Intellectual Property Code. It argues that the
new footage is not a "newsworthy event" but "merely an
account of the arrival of Angelo dela Cruz in the
Philippines — the latter being the newsworthy event":76
To be clear, it is the event itself or the arrival of Angelo
dela Cruz which is not copyrightable because that is the
PAGE 16 OF 19
newsworthy event. However, any footage created from
the event itself, in this case the arrival of Angelo dela
Cruz, are intellectual creations which are copyrightable.
Thus, the footage created by ABS-CBN during the arrival
of Angelo dela Cruz, which includes the statements of
Dindo Amparo, are copyrightable and protected by the
laws on copyright.77
On the other hand, respondents argue that ABS-CBN’s
news footage of Angelo dela Cruz’s arrival is not
copyrightable or subject to protection:
Certainly, the arrival of Angelo [d]ela Cruz, which aroused
public attention and the consciousness of the Filipino
people with regard to their countrymen, OFWs working in
foreign countries and how the Philippine government
responds to the issues concerning them, is "news". There
is no ingenuity or inventiveness added in the said news
footage. The video footage of this "news" is not
copyrightable by any legal standard as facts of everyday
life depicted in the news and items of press information
is part of the public domain.
Issue: WON news footage is copyrightable
Held: Yes, the news footage is copyrightable.
The Intellectual Property Code is clear about the rights
afforded to authors of various kinds of work. Under the
Code, "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." These
include "[a]udiovisual works and cinematographic works
and works produced by a process analogous to
cinematography or any process for making audiovisual
recordings."
It is true that under Section 175 of the Intellectual
Property Code, "news of the day and other miscellaneous
facts having the character of mere items of press
information" are considered unprotected subject
matter.83 However, the Code does not state that
expression of the news of the day, particularly when it
underwent a creative process, is not entitled to
protection.
AN IDEA OR EVENT MUST BE DISTINGUISHED
FROM THE EXPRESSION OF THAT IDEA OR EVENT.
An idea has been likened to a ghost in that it "must be
spoken to a little before it will explain itself."84 It is a
concept that has eluded exact legal definition.85
The term "idea" is mentioned only once in the Intellectual
Property Code.87 In Joaquin, Jr. v. Drilon,88 a television
format (i.e., a dating show format) is not copyrightable
under Section 2 of Presidential Decree No. 49; it is a mere
concept:
P.D. No. 49, §2, in enumerating what are subject to
copyright, refers to finished works and not to
concepts. The copyright does not extend to an idea,
procedure, process, system, method of operation,
concept, principle, or discovery, regardless of the
form in which it is described, explained, illustrated, or
embodied in such work.
Thus, the new INTELLECTUAL PROPERTY CODE OF
THE PHILIPPINES provides:
 SEC. 175. Unprotected Subject Matter.—
Notwithstanding the provisions of Sections 172 and
173, no protection shall extend, under this law, to any
idea, procedure, system, method or operation,
concept, principle, discovery or mere data as such,
even if they are expressed, explained, illustrated or
embodied in a work; news of the day and other
miscellaneous facts having the character of mere
items of press information; or any official text of a
legislative, administrative or legal nature, as well as
any official translation thereof.
What then is the subject matter of petitioners’
copyright? This Court is of the opinion that petitioner
BJPI’s copyright covers audio-visual recordings of
each episode of Rhoda and Me, as falling within the
class of works mentioned in P.D. 49, §2(M),to wit:
Cinematographic works and works produced by a
process analogous to cinematography or any process
for making audio-visual recordings;
The copyright does not extend to the general concept
or format of its dating game show. Accordingly, by
the very nature of the subject of petitioner BJPI’s
copyright, the investigating prosecutor should have
the opportunity to compare the videotapes of the two
shows.
Mere description by words of the general format of
the two dating game shows is insufficient; the
presentation of the master videotape in evidence was
indispensable to the determination of the existence of
probable cause. As aptly observed by respondent
Secretary of Justice:
A television show includes more than mere words can
describe because it involves a whole spectrum of
visuals and effects, video and audio, such that no
similarity or dissimilarity may be found by merely
describing the general copyright/format of both
dating game shows.90 (Emphasis supplied, citations
omitted)
In this case, however, respondents admitted that
the material under review — which is the subject
of the controversy — is an exact copy of the
original. Respondents did not subject ABS-CBN’s
footage to any editing of their own. The news
footage did not undergo any transformation where
there is a need to track elements of the original.
RULES OF PROCEDURE – IP COURTS
November 9, 2016 G.R. No. 205972
CATERPILLAR, INC., Petitioner vs. MANOLO P.
SAMSON, Respondent
BERSAMIN, J.
Issue: WON a civil action for damages and cancellation of
trademark can be considered a prejudicial question which
suspends the proceedings in criminal cases for unfair
competition.
Held: No, it is not a prejudicial question
A prejudicial question is that which arises in a civil case
the resolution of which is a logical antecedent of the
issues to be determined in the criminal case. It must
appear not only that the civil case involves facts upon
PAGE 17 OF 19
which the criminal action is based, but also that the
resolution of the issues raised in the civil action will
necessarily be determinative of the criminal case.
The elements of a prejudicial question are provided in
Section 7 of Rule 111, Rules of Court, to wit: (a) a
previously instituted civil action involves an issue similar
to or intimately related to the issue raised in the
subsequent criminal action, and (b) the resolution of such
issue determines whether or not the criminal action may
proceed.
An examination of the nature of the two kinds of cases
involved is necessary to determine whether a prejudicial
question existed.
An action for the cancellation of trademark like Civil Case
No. Q-00-41446 is a remedy available to a person who
believes that he is or will be damaged by the registration
of a mark. On the other hand, the criminal actions for
unfair competition (Criminal Cases Nos. Q-02-108043-44)
involved the determination of whether or not Samson had
given his goods the general appearance of the goods of
Caterpillar, with the intent to deceive the public or defraud
Caterpillar as his competitor.
In the suit for the cancellation of trademark, the issue of
lawful registration should necessarily be determined, but
registration was not a consideration necessary in unfair
competition. Indeed, unfair competition is committed if
the effect of the act is "to pass off to the public the goods
of one man as the goods of another;" it is independent of
registration. As fittingly put in R.F. & Alexander & Co. v.
Ang,64 "one may be declared unfair competitor even if
his competing trade-mark is registered."
Clearly, the determination of the lawful ownership of the
trademark in the civil action was not determinative of
whether or not the criminal actions for unfair competition
shall proceed against Samson.
G.R. No. 208090 November 09, 2016
FERDINAND V. TOMAS, Petitioner, v. CRIMINAL
INVESTIGATION AND DETECTION GROUP
(CIDG) - ANTI-ORGANIZED CRIME DIVISION
(AOCD) (CIDG-AOCD) AND MYRNA UY TOMAS.
PERALTA, J.
Myrna Uy Tomas filed four (4) complaints for violation of
Sections 155 and 168 in relation to Section 170 of R.A.
No. 8293. The first two (2) complaints, docketed
respectively as I.S. Nos. 2007-926 and 2007-927, were
against petitioner Ferdinand V. Tomas, Federico Ladines,
Jr. and Ryan T. Valdez. The third and fourth ones,
docketed as I.S. Nos. 2007-940 and 2007-941, were
against Ferdinand V. Tomas.
The Philippine National Police (PNP) Criminal
Investigation and Detection Group (CIDG)-Anti-Organized
Crime Division (AOCD), on October 24, 2007, presented
four (4) applications for issuance of search warrants
before the Regional Trial Court (RTC) of Manila. The
applications were signed by P/Chief Inspector Helsin B.
Walin and approved by Police Director Edgardo M.
Doromal, Chief of the CIDG.
Executive Judge Reynaldo G. Ros, Presiding Judge of the
RTC of Manila, Branch 33, issued four (4) search warrants
(Search Warrant Nos. A07-12100 to A07-12103) which
the members of the PNP CIDG-AOCD used in conducting
a search on the premises of FMT Merchandising, located
at Alexander St., Urdaneta City, Pangasinan and at 394
Cayambanan, Urdaneta City, Pangasinan. The search at
the FMT Merchandising premises resulted to the seizure
and confiscation of one (1) piece of Pedrollo JSWm/8H
0.75 water pump, while the search conducted at Brgy.
Cayambanan yielded the following items: (1) three
hundred forty-two (342) empty boxes of Pedrollo; (2)
nineteen (19) pieces of Pedrollo terminal box cover; (3)
thirty-one (31) pieces of Pedrollo electric water pump; (4)
three (3) pieces of unserviceable Pedrollo water pump;
and (5) twenty-one (21) pieces of Pedrollo gauge.
Petitioner filed with the RTC a Motion to Quash the Search
Warrants and/or to Suppress Evidence Obtained thereby
assailing the applications for search warrant for being in
violation of SC Administrative Matter No. 03-8-02-SC. He
claimed that the application for search warrant, which
may be filed by the following agencies, namely, NBI, PNP
and ACTAF, should be personally endorsed by the heads
of said agencies. According to petitioner, the quashal of
the warrants was warranted because the four (4)
applications for issuance of the search warrants were
merely endorsed and/or approved by P/Director Edgardo
M. Doromal, Head of the CIDG, when at the time, the
Chief of the PNP was Director General Avelino Razon.
Issue: WON the search warrants should be quashed
Held: No.
As a caveat, although the Decision dated August 16, 2011
has attained finality, it does not mean that the principle it
laid down should still be followed.
The said decision basically rules that every application for
search warrant shall be personally endorsed by the heads
of such agencies as enumerated in Section 12 Chapter V
of A.M. No. 03-8-02-SC. This Court, however, finds that
nothing in A.M. No. 03-8-02-SC prohibits the heads of the
National Bureau of Investigation (NBI), the Philippine
National Police (PNP) and the Anti-Crime Task Force
(ACTAF) from delegating their ministerial duty of
endorsing the application for search warrant to their
assistant heads.
This has already been clarified by this Court in Spouses
Marimla v. People, when it ruled that under Section 31,
Chapter 6, Book IV of the Administrative Code of 1987,
an assistant head or other subordinate in every bureau
may perform such duties as may be specified by their
superior or head, as long as it is not inconsistent with law.
Nothing in A.M. No. 99-10-09-SC prohibits the heads of
the PNP, NBI, PAOC-TF and REACT-TF from delegating
their ministerial duty of endorsing the application for
search warrant to their assistant heads.
Under Section 31, Chapter 6, Book IV of the
Administrative Code of 1987, an assistant head or other
subordinate in every bureau may perform such duties as
may be specified by their superior or head, as long as it
is not inconsistent with law.
Director Wycoco's act of delegating his task of endorsing
the application for search warrant to Deputy Director
Nasol is allowed by the above quoted provision of law
unless it is shown to be inconsistent with any law. Thus,
Deputy Director Nasol's endorsement had the same force
and effect as an endorsement issued by Director Wycoco
PAGE 18 OF 19
himself. The finding of the RTC in the questioned Orders
that Deputy Director Nasol possessed the authority to sign
for and in behalf of Director Wycoco is unassailable.
A.M. No. 03-8-02-SC and A.M. No. 99-10-09-SC
substantially contain the same provisions, except that the
former involves applications for search warrants for
violations of the Intellectual Property Code and the latter
involves applications for search warrants for the
commission of heinous crimes, illegal gambling,
dangerous drugs and illegal possession of firearms.
Nevertheless, without this Court issuing A.M. No. 99-10-
09-SC clarifying the guidelines in the application and
enforceability of search warrants, the search warrants
subject of this case should still not have been quashed
because before the issuance thereof, the court had
already found probable cause to issue those search
warrants and whatever defects that the applications had
are minor and technical, hence, the court could have
merely ordered its correction. The finding of the court of
probable cause in the issuance of search warrants should
be given more consideration and importance over a mere
defect in the application of the same search warrants.
Incidentally, the CA Fourth Division correctly ruled that
the absence of the personal endorsement of the Chief of
the PNP is of no moment and may cause only the possible
administrative liability of the concerned police officers but
in no way affect the validity of the search warrants in
question, thus:
Further, the fact that the application for search warrants
were not personally endorsed by the Chief of the
Philippine National Police but only by the Chief of the
CIDG in violation of Section 12 of Administrative Matter
No. 03-8-02-SC issued by the Supreme Court, is of no
moment. If indeed there was such violation, such violation
may jeopardize only the concerned police officers to incur
administrative liability but would certainly not render
nugatory the effect of the assailed search warrants.
Furthermore, it must be remembered that the requisites
for the issuance of a search warrant are: (1) probable
cause is present; (2) such probable cause must be
determined personally by the judge; (3) the judge must
examine, in writing and under oath or affirmation, the
complainant and the witnesses he or she may produce;
(4) the applicant and the witnesses testify on the facts
personally known to them; and (5) the warrant
specifically describes the place to be searched and the
things to be seized.
Thus, a search warrant is valid as long as it has all the
elements set forth and may only be quashed if it lacks one
or some of the said elements, or on those two grounds
mentioned earlier. In this case, it was an error to quash
the search warrant simply because the application thereof
was without the personal endorsement of the Chief of the
PNP.
G.R. No. 189669 February 16, 2015
PILIPINAS SHELL PETROLEUM CORPORATION
and PETRON CORPORATION, Petitioners,
vs. ROMARS INTERNATIONAL GASES
CORPORATION, Respondent.
PERALTA, J.
Petitioners received information that respondent was
selling, offering for sale, or distributing liquefied
petroleum gas (LPG) by illegally refilling the steel
cylinders manufactured by and bearing the duly
registered trademark and device of respondent Petron.
Petron then obtained the services of a paralegal
investigation team who sent their people to investigate.
The investigators went to respondent's premises located
in San Juan, Baao, Camarines Sur, bringing along four
empty cylinders of Shellane, Gasul, Total and Superkalan
and asked that the same be refilled. Respondent's
employees then refilled said empty cylinders at
respondent's refilling station. The refilled cylinders were
brought to the Marketing Coordinator of Petron Gasul who
verified that respondent was not authorized to distribute
and/or sell, or otherwise deal with Petron LPG products,
and/or use or imitate any Petron trademarks.
Petitioners then requested the National Bureau of
Investigation (NBI) to investigate said activities of
respondent for the purpose of apprehending and
prosecuting establishments conducting illegal refilling,
distribution and/or sale of LPG products using the same
containers of Petron and Shell, which acts constitute a
violation of Section 168,3 in relation to Section 1704 of
Republic Act (R.A.) No. 8293, otherwise known as the
Intellectual Property Code of the Philippines
The NBI proceeded with their investigation and reportedly
found commercial quantities of Petron Gasul and Shellane
cylinders stockpiled at respondent's warehouse. They also
witnessed trucks coming from respondent's refilling
facility loaded with Gasul, Shellane and Marsflame
cylinders, which then deposit said cylinders in different
places, one of them a store called "Edrich Enterprises"
located at 272 National Highway, San Nicolas, Iriga City.
The investigators then bought Shellane and Gasul
cylinders from Edrich Enterprises, for which they were
issued an official receipt.
Thus, the NBI, in behalf of Petron and Shell, filed with the
Regional Trial Court of Naga City (RTC-Naga), two
separate Applications for Search Warrant for Violation of
Section 155.1,6 in relation to Section 1707 of R.A. No.
8293 against respondent and/or its occupants.
On October 23, 2002, the RTC-Naga City issued an Order
granting said Applications and Search Warrant Nos. 2002-
27 and 2002-28 were issued. On the same day, the NBI
served the warrants at the respondent's premises in an
orderly and peaceful manner, and articles or items
described in the warrants were seized.
On November 4, 2002, respondent filed a Motion to
Quash Search Warrant Nos. 2002-27 and 2002-28. In an
Order dated February 21, 2003, the RTC-Naga denied the
Motion to Quash
On March 27,2003, respondent's new counsel filed an
Appearance with Motion for Reconsideration. It was only
in said motion where respondent raised for the first time,
the issue of the impropriety of filing the Application for
Search Warrant at the RTC-Naga City when the alleged
crime was committed in a place within the territorial
jurisdiction of the RTC-Iriga City.
Respondent pointed out that the application filed with the
RTC-Naga failed to state any compelling reason to justify
the filing of the same in a court which does not have
territorial jurisdiction over the place of the commission of
the crime, as required by Section 2 (b), Rule 126 of the
Revised Rules of Criminal Procedure.
PAGE 19 OF 19
Issue: Is the quashal of the search warrants proper on
the ground that the RTC-Naga does not have territorial
jurisdiction over the offense?
Held: No.
In Malaloan v. Court of Appeals, and reiterated in the
more recent Worldwide Web Corporation v. People of the
Philippines, to wit:
x x x as we held in Malaloan v. Court of Appeals, an
application for a search warrant is a "special criminal
process," rather than a criminal action:
The basic flaw of the CA’s reasoning is in erroneously
equating the application for and the obtention of a search
warrant with the institution and prosecution of a criminal
action in a trial court. It would thus categorize what is
only a special criminal process, the power to issue which
is inherent in all courts, as equivalent to a criminal action,
jurisdiction over which is reposed in specific courts of
indicated competence. It ignores the fact that the
requisites, procedure and purpose for the issuance of a
search warrant are completely different from those for the
institution of a criminal action.
For, indeed, a warrant, such as a warrant of arrest or a
search warrant, merely constitutes process. A search
warrant is defined in our jurisdiction as an order in writing
issued in the name of the People of the Philippines signed
by a judge and directed to a peace officer, commanding
him to search for personal property and bring it before
the court. A search warrant is in the nature of a criminal
process akin to a writ of discovery. It is a special and
peculiar remedy, drastic in its nature, and made
necessary because of a public necessity.
In American jurisdictions, from which we have taken our
jural concept and provisions on search warrants, such
warrant is definitively considered merely as a process,
generally issued by a court in the exercise of its ancillary
jurisdiction, and not a criminal action to be entertained by
a court pursuant to its original jurisdiction. x x x.
(Emphasis supplied)
Clearly then, an application for a search warrant is not a
criminal action.
The foregoing explanation shows why the CA arrived at
the wrong conclusion. It gravely erred in equating the
proceedings for applications for search warrants with
criminal actions themselves. As elucidated by the Court,
proceedings for said applications are not criminal in
nature and, thus, the rule that venue is jurisdictional does
not apply thereto. Evidently, the issue of whether the
application should have been filed in RTC-Iriga City or
RTC-Naga, is not one involving jurisdiction because, as
stated in the afore-quoted case, the power to issue a
special criminal process is inherent in all courts.
Inferring from the foregoing, the Court deems it improper
for the RTC-Naga to have even taken into consideration
an issue which respondent failed to raise in its motion to
quash, as it did not involve a question of jurisdiction over
the subject matter. It is quite clear that the RTC-Naga had
jurisdiction to issue criminal processes such as a search
warrant.