Copyrights

1. Basic Principles

SECTION 171. Definitions. — For the purpose of this Act, the following terms have the following meaning:
171.1. "Author" is the natural person who has created the work;
171.2. A "collective work" is a work which has been created by two (2) or more natural persons at the initiative and
under the direction of another with the understanding that it will be disclosed by the latter under his own name
and that contributing natural persons will not be identified;
171.3. "Communication to the public" or "communicate to the public" means the making of a work available to the
public by wire or wireless means in such a way that members of the public may access these works from a
place and time individually chosen by them;
171.4. A "computer" is an electronic or similar device having information-processing capabilities, and a "computer
program" is a set of instructions expressed in words, codes, schemes or in any other form, which is capable
when incorporated in a medium that the computer can read, of causing the computer to perform or achieve a
particular task or result;
171.5. "Public lending" is the transfer of possession of the original or a copy of a work or sound recording for a limited
period, for non-profit purposes, by an institution the services of which are available to the public, such as
public library or archive;
171.6. "Public performance", in the case of a work other than an audiovisual work, is the recitation, playing, dancing,
acting or otherwise performing the work, either directly or by means of any device or process; in the case of
an audiovisual work, the showing of its images in sequence and the making of the sounds accompanying it
audible; and, in the case of a sound recording, making the recorded sounds audible at a place or at places
where persons outside the normal circle of a family and that family's closest social acquaintances are or can
be present, irrespective of whether they are or can be present at the same place and at the same time, or at
different places and/or at different times, and where the performance can be perceived without the need for
communication within the meaning of Subsection 171.3;
171.7. "Published works" means works, which, with the consent of the authors, are made available to the public by
wire or wireless means in such a way that members of the public may access these works from a place and
time individually chosen by them: Provided, That availability of such copies has been such, as to satisfy the
reasonable requirements of the public, having regard to the nature of the work;
171.8. "Rental" is the transfer of the possession of the original or a copy of a work or a sound recording for a limited
period of time, for profit-making purposes;
171.9. "Reproduction" is the making of one (1) or more copies of a work or a sound recording in any manner or form
(Sec. 41 (E), P.D. No. 49 a);
171.10.A "work of applied art" is an artistic creation with utilitarian functions or incorporated in a useful article,
whether made by hand or produced on an industrial scale;
171.11.A "work of the Government of the Philippines" is a work created by an officer or employee of the Philippine
Government or any of its subdivisions and instrumentalities, including government-owned or controlled
corporations as a part of his regularly prescribed official duties.

Section 172. Literary and Artistic Works.

172.2. Works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well
as of their content, quality and purpose. (Sec. 2, P.D. No. 49a) cda

SECTION 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. (n)

SECTION 181. Copyright and Material Object. — The copyright is distinct from the property in the material object
subject to it. Consequently, the transfer or assignment of the copyright shall not itself constitute a transfer of the
material object. Nor shall a transfer or assignment of the sole copy or of one or several copies of the work imply
transfer or assignment of the copyright. (Sec. 16, P.D. No. 49)
ABS-CBN v. Phil Multimedia
Facts:
Petitioner ABS-CBN, a broadcasting corporation, filed a complaint against respondent PMSI alleging that the latter’s
unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright. PMSI posits that
it was granted a franchise to operate a digital direct-to-home satellite service and that the rebroadcasting was in
accordance with the NTC memo to carry television signals of authorized television broadcast stations, which includes
petitioner’s programs. The IPO Bureau of Legal Affairs found PMSI to have infringed petitioner’s broadcasting rights
and ordered it to permanently desist from rebroadcasting. On appeal, the IPO Director General found for PMSI. CA
affirmed.

Issue:
Whether or not petitioner’s broadcasting rights and copyright are infringed.

Ruling: NO.
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.
Section 202.7 of the IP Code defines broadcasting as “the transmission by wireless means for the public reception of
sounds or of images or of representations thereof; such transmission by satellite is also ‘broadcasting’ where the means
for decrypting are provided to the public by the broadcasting organization or with its consent.” On the other
hand, rebroadcasting as defined in Article 3(g) of the International Convention for the Protection of Performers,
Producers of Phonograms and Broadcasting Organizations, otherwise known as the 1961 Rome Convention, of which
the Republic of the Philippines is a signatory, is “the simultaneous broadcasting by one broadcasting organization of
the broadcast of another broadcasting organization.” The Working Paper 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.” 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.

2. Copyrightable Works

Star Atletica v. Varsity Brands

Varsity Brands, Inc. (Varsity) designs and manufactures clothing and accessories for use in various athletic activities,
including cheerleading. Design concepts for the clothing incorporate elements such as colors, shapes, lines, etc., and
do not consider the functionality of the final clothing. Varsity received copyright registration for the two-dimensional
artwork of the designs at issue in this case, which were very similar to ones that Star Athletica, LLC (Star) was
advertising. Varsity sued Star and alleged, among other claims, that Star violated the Copyright Act. Star asserted
counterclaims, including one that alleged that Varsity had made fraudulent representations to the Copyright Office
because the designs at issue were not copyrightable. Both parties filed motions for summary judgment. Star argued
that Varsity did not have valid copyrights because the designs were for “useful articles,” which cannot be copyrighted,
and the designs cannot be separated from the uniforms themselves, which also makes the designs impossible to
copyright. Varsity argued that the designs were separable and non-functional, and therefore that the copyrights were
valid and had been infringed. The district court granted summary judgment for Star and held that the designs were
integral to the functionality of the uniform. The U.S. Court of Appeals for the Sixth Circuit reversed and held that the
Copyright Act allows graphic features of a design to be copyrighted even when those designs are not separable from
a “useful article.”

What is the appropriate test to determine whether a feature of a “useful article” is copyrightable under the Copyright
Act?
A feature of a useful article is copyrightable if it can be perceived as a two- or three-dimensional artwork that is
separable from the useful article and if it would be a protectable pictorial, graphical, or sculptural work on its own (or
if applied to another medium, such as a canvas). Justice Clarence Thomas delivered the opinion of the 6-2 majority.
The Court held that the Copyright Act clearly requires that, to be copyrightable, a design element of a useful article
must be able to be identified separately from the article and be capable of existing separately from the article. The
separate identification prong of this test requires only that the decisionmaker be able to distinguish a two- or three-
dimensional element that has pictorial, graphical, or sculptural qualities. To satisfy the independent-existence
requirement, the decisionmaker must determine that the element can exist as its own pictorial, graphical, or sculptural
work and not merely as a part of a replica of the useful article in a different medium. This interpretation is consistent
not only with the text of the Copyright Act but also with its history. In this case, the decoration designs of cheerleading
uniforms satisfy both prongs of the test because the decorations can be identified as having their own pictorial,
graphical, or sculptural qualities, and they would be copyrightable on their own if separated from the uniforms. The
Court determined that the fact that the designs on their own still retained the outline of the cheerleading uniforms did
not prevent them from being copyrightable because artwork designed to fit a particular space or object does not
replicate that object or space when applied to a different medium. The Court rejected alternative tests for separability
as ungrounded in the text of the statute.
In her opinion concurring in the judgment, Justice Ruth Bader Ginsburg wrote that separability analysis was
unnecessary in this case because the designs are themselves copyrightable and are merely reproduced on useful
articles. The designs are clearly pictorial, graphical, or sculptural works, which are copyrightable. The copyright for
such a work includes the right to reproduce the work on a useful article and exclude a would-be infringer from doing
the same.

Breyer, J. Dissent
in which he argued that, although he agreed with the majority opinion’s analysis of the test that the statute required,
the designs at issue in this case failed the test. A feature is not separable from the useful article if it cannot be extracted
without necessarily replicating the useful article in another medium. Because the designs in this case could only be
represented as pictures, and therefore replicas, of the uniforms, they were not capable of existing independently of the
useful article. Based on the statutory text and relevant case law, the designs fail the second prong of separability test.

a. Original Works

SECTION 172. Literary and Artistic Works. —

172.1. Literary and artistic works, hereinafter referred to as "works", are original intellectual creations in the literary
and artistic domain protected from the moment of their creation and shall include in particular:
a. Books, pamphlets, articles and other writings;
b. Periodicals and newspapers;
c. Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other
material form;
d. Letters;
e. Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;
f. Musical compositions, with or without words;
g. Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or designs
for works of art;
h. Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design,
and other works of applied art;
i. Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography,
architecture or science;
j. Drawings or plastic works of a scientific or technical character;
k. Photographic works including works produced by a process analogous to photography; lantern slides;
l. Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or
any process for making audio-visual recordings;
m. Pictorial illustrations and advertisements;
n. Computer programs; and
o. Other literary, scholarly, scientific and artistic works.
172.2. Works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well
as of their content, quality and purpose.

SECTION 218. Affidavit Evidence. —

218.1. In an action under this Chapter, an affidavit made before a notary public by or on behalf of the owner of the
copyright in any work or other subject matter and stating that:
a. At the time specified therein, copyright subsisted in the work or other subject matter;
b. He or the person named therein is the owner of the copyright; and
c. The copy of the work or other subject matter annexed thereto is a true copy thereof, shall be admitted in evidence
in any proceedings for an offense under this Chapter and shall be prima facie proof of the matters therein stated until
the contrary is proved, and the court before which such affidavit is produced shall assume that the affidavit was made
by or on behalf of the owner of the copyright.

218.2. In an action under this Chapter:

a. Copyright shall be presumed to subsist in the work or other subject matter to which the action relates if the defendant
does not put in issue the question whether copyright subsists in the work or other subject matter; and
b. Where the subsistence of the copyright is established, the plaintiff shall be presumed to be the owner of the copyright
if he claims to be the owner of the copyright and the defendant does not put in issue the question of his ownership.
c. Where the defendant, without good faith, puts in issue the questions of whether copyright subsists in a work or other
subject matter to which the action relates, or the ownership of copyright in such work or subject matter, thereby
occasioning unnecessary costs or delay in the proceedings, the court may direct that any costs to the defendant in
respect of the action shall not be allowed by him and that any costs occasioned by the defendant to other parties shall
be paid by him to such other parties. (n)

Feist Publication v. Rural

Brief Fact Summary. A publishing company used information from a telephone directory to publish its own directory.
Synopsis of Rule of Law. To qualify for copyright protection, a work must be original to the author, which means that
the work was independently created by the author, and it possesses at least some minimal degree of creativity. A work
may be original even thought it closely resembles other works so long as the similarity is fortuitous, not the result of
copying.

Facts
 Rural Telephone Service Company, Inc. (Plaintiff) provides telephone service to several communities. Due
to a state regulation, it must issue an annual telephone directory, so it published a directory consisting of
white and yellow pages. The yellow pages have advertisements that generate revenue. Feist Publications,
Inc.(Defendant) is a publishing company whose directory covers a larger range than atypical directory.
Defendant distributes their telephone books free of charge, and they also generate revenue through the
advertising in the yellow pages. Plaintiff refused to give a license to Defendant for the phone numbers in the
area, so Defendant used them without Plaintiff’s consent. Rural sued for copyright infringement.
Issue
 W/N the names, addresses, and phone numbers in a telephone directory may be copyrighted - No

Held.
 No. Facts cannot be copyrighted, however compilations of facts can generally be copyrighted.
 To qualify for copyright protection, a work must be original to the author, which means that the work was
independently created by the author, and it possesses at least some minimal degree of creativity. A work may
be original even thought it closely resembles other works so long as the similarity is fortuitous, not the result
of copying.
 Facts are not original. The first person to find and report a particular fact has not created the fact; he has
merely discovered its existence. Facts may not be copyrighted and are part of the public domain available to
every person.
 Factual compilations may possess the requisite originality. The author chooses what facts to include, in what
order to place them, and how to arrange the collected date so they may be effectively used by readers. Thus,
 even a directory that contains no written expression that could be protected, only facts, meets the
constitutional minimum for copyright protection if it features an original selection or arrangement But, even
though the format is original, the facts themselves do not become original through association. The copyright
on a factual compilation is limited to formatting. The copyright does not extend to the facts themselves.
 To establish copyright infringement, two elements must be proven: ownership of a valid copyright and
copying of constituent elements of the work that are original. The first element is met in this case because
the directory contains some forward text. As to the second element, the information contains facts, which
cannot be copyrighted. They existed before being reported and would have continued to exist if a telephone
directory had never been published. There is no originality in the formatting, so there is no copyrightable
expression. Thus, there is no copyright infringement.
 Discussion. Facts cannot be subject to copyright laws; otherwise there would be no spreading of information
or learning. Subjecting facts to copyright laws would mean that any time a person used a fact found in a book,
be it in a school paper, newspaper, or another book, that person would be guilty of piracy.

ABS-CBN v. Gozon

Facts:
On August 13, 2004, petitioner ABS-CBN filed a criminal complaint against respondent GMA for (alleged) act of
copyright infringement under Sections 177 and 211 of the Intellectual Property Code (RA 8293, as amended), because
the respondent aired footage of the arrival and homecoming of OFW Angelo dela Cruz at NAIA from Iraq without
the petitioner's consent. ABS-CBN stated that it has an agreement with Reuter's that the petition will contribute news
and content that it owns and makes to Reuters in exchange of the latter's news and video material, and Reuters will
ensure that ABS-CBN's materials cannot be aired in the country. The respondent was a subscriber of Reuter's and
CNN live feeds. After it received the live feed of Angelo Dela Cruz's arrival and homecoming from Reuter's, it
immediately aired the video from that news feed. The respondent alleged that itsnews staff was not aware that there
was (a news embargo) agreement between ABSCBN and Reuters. Respondent alleged that it was not also aware that
it aired petitioner's footage. Assistant City Prosecutor Dindo Venturanza issued resolution on 3 December 2004 which
found probable cause to indict Dela Peña-Reyes and Manalastas. The respondents appealed the Prosccutor's resolution
before DOJ. DOJ Secretary Raul M. Gonzalez ruled in favor of respondents in his resolution dated 1 August 2005 and
held that good faith may be raised as a defense in the case. Meanwhile, DOJ Acting Secretary Alberto C. Agra issued
a resolution on 29 June 2010 which reversed Sec. Gonzalez's resolution and found probable cause to charge Dela
Peña-Reyes, Manalastas, as well as to indict Gozon, Duavit, Jr., Flores, and Soho for violation of the Intellectual
Property Code (due to copyright infringement). The Court of Appeals rendered a decision on 9 November 2010, which
granted the Petition for Certiorari to reverse and set aside DOJ Sec. Alberto Agra's resolution and a prayer for issuance
of a temporary restraining order and/or Writ of Preliminary Injunction. The appellate court stated that the petitioner
has copyright of its news coverage, but respondents’ act of airing five (5) seconds of the homecoming footage without
notice of the “No Access Philippines” restriction of the live Reuter's video feed, was undeniably attended by good
faith and thus, serves to exculpate from criminal liability under the Intellectual Property Code.

Issue:
W/N there is probable cause to find respondents to be held liable criminally for the case of copyright infringement
under the Intellectual Property Law (RA 8293, as amended)?

Held:
The Supreme Court PARTIALLY GRANTED ABS-CBN’s petition and ordered RTC Q.C. Branch 93 to continue
with the criminal proceedings against Grace Dela Peña- Reyes and John Oliver Manalastas due to copyright
infringement. The other respondents, Atty. Felipe Gozon, Gilberto Duavit Jr., Marissa L. Flores, and Jessica A. Soho
were held not liable for the (criminal) act of copyright infringement. The Court held that their mere membership in
GMA7's Board of Directors does not mean that they have knowledge, approval, or participation in the criminal act of
copyright infringement., as there is a need for their direct/active participation in such act. Also, there was lack of proof
that they actively participated or exercised moral ascendancy over Manalastas and Dela Cruz-Pena. Contrary to
GMA’s contention, the Supreme Court deemed GMA's mere act of rebroadcast of ABS-CBN’s news footage (arrival
and homecoming of OFW Angelo dela Cruz at NAIA from Iraq last 22 July 2004) for 2 mins and 40 secs.without the
latter's authority creates probable cause to find GMA's news personnel Manalastas and Dela Peña-Reyes criminally
liable for violating provisions of Intellectual Property Code (Section 216217 of RA 8293, as amended) that imposes
strict liability for copyright infringement, since they have not been diligent in their functions to prevent that footage
from being aired on television. They knew that there would be consequences in carrying ABS-CBN’s footage in their
broadcast – which is why they allegedly cut the feed from Reuters upon seeing ABS-CBN’s logo and reporter. The
difference of an act mala in se and mala prohibita was stated in the present case. Acts mala in se requires presence of
criminal intent and the person's knowledge of the nature of his/her act, while in acts mala prohibita, presence of
criminal intent and the person's knowledge is not necessary. The Court also stated that Philippine laws on copyright
infringement does not require criminal intent (mens rea) and does not support good faith as a defense. Thus, the act of
infringement and not the intent is the one that causes the damage. It held that ABS-CBN's video footage is
copyrightable because it is under “audiovisual works and cinematographic works and works produced by a process
also stated that news or the event itself is not copyrightable. The Court
differentiated idea and expression – idea meant as “a form, the look or appearance of a thing” while expression is its
reality or the “external, perceptible world of articulate sounds and visible written symbols that others can understand.”
Thus, the Supreme Court stated that “only the expression of an idea is protected by copyright, not the idea itself”,
citing the US Supreme Court's decision in Baker vs Selden (101 U.S. 99). In the present case, expression applies to
the event captured and presented in a specific medium via cinematography or processes analogous to it. The Court
also gave the four-fold test under the Fair Use Doctrine (stated in section 185 of RA 8293 or the Intellectual Property
Code, as amended) to determine fair use:
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.
Fair use, which is an exception to copyright owner’s monopoly of the work's usage, was defined by the Supreme Court
as privilege to use the copyrighted material in a reasonable manner without the copyright owner's consent or by
copying the material's theme or idea rather than its expression. It also said that determination of whether the Angelo
dela Cruz footage is subject to fair use is better left to the trial court where the proceedings are currently pending.

B. Derivative Works

SECTION 173. Derivative Works. —

173.1. The following derivative works shall also be protected by copyright:
a. Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary or
artistic works; and
b. Collections of literary, scholarly or artistic works, and compilations of data and other materials which are
original by reason of the selection or coordination or arrangement of their contents. (Sec. 2, [P] and [Q],
P.D. No. 49)
173.2. The works referred to in paragraphs (a) and (b) of Subsection 173.1 shall be protected as new works: Provided
however, That such new work shall not affect the force of any subsisting copyright upon the original works
employed or any part thereof, or be construed to imply any right to such use of the original works, or to secure
or extend copyright in such original works. (Sec. 8, P.D. 49; Art. 10, TRIPS)

3. Non-Copyrightable Works

SECTION 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. (n)

Baker v. Selden
Facts. Selden (Plaintiff) copyrighted a book in which he used in introductory essay explaining his system of
bookkeeping followed by forms to put the system to use. He had arranged the columns and headings so that the entire
operation of a day, week or month was on a single page or on two pages facing each other. Baker (Defendant) then
began selling forms with columns and headings arranged differently to achieve the same result. When Plaintiff
successfully sued for copyright infringement, Defendant appealed. He argued that the forms were non-copyrightable.
Issue. Does copyright protection for a book explaining an art or system prevent others from using the system or the
forms incidentally used?

Held. (Bradley, J.) No. The copyright protection for a book explaining an art or system extends only to the author’s
unique explanation of it and does not prevent others from using the system or the forms incidentally used. To find
that a copyright protected against use of the system itself or the forms necessary to such use would be to grant
protection similar to a patent without requiring a showing of novelty. Copyright is based on originality, not novelty,
and protects the explanation of the system and not the use of the system. In this case, therefore, the copyright Selden
(Plaintiff) obtained could not give him the exclusive right to use the bookkeeping system or the forms necessary to
such use. Reversed and remanded.

Discussion. This case has been interpreted by many as allowing copying for use as opposed to copying for the purpose
of explanation. However, in applying this rule, some courts have gone rather far and have allowed something to pass
as copying for use when there were alternate ways to arrange the words that could have easily been chosen to
communicate the non-copyrightable system or art. This has provoked much criticism of the interpretation previously
mentioned regarding the rule of this case.

Feist case <see above>

*Pearl v. Shoemart (Bugay)

G.R. No. 114508 |Nov. 19, 1999| Puno, J.
Petitioner/s: PRIBHDAS J. MIRPURI
Respondent/s: CA, DIRECTOR OF PATENTS and the BARBIZON
CORPORATIONS
FACTS:
 Pearl and Dean is a corporation engaged in the manufacture of advertising display units called light boxes
(you see this in the malls and sometimes along the streets. They’re like small billboards lighted from the
inside). They secured a Certificate of Copyright Registration for the lightboxes, and where marketed to
advertisers under the trademark “Poster Ads.” The manufacture of the light boxes was contracted to Metro
Industrial Services. While Pearl and Dean secured copyright and trademark registration, they never did so
for patents.
 Pearl and Dean was supposed to enter into a contract with SM for the installation of these lightboxes at SM
Makati and SM Cubao. However, the contract for SM Cubao was not signed and returned, and while the
contract for SM Makati was signed, SM was later seeking its recission. 2 years later, Metro Industrial offered
to construct light boxes for SM. 10 light boxes were manufactured by Metro Industrial for SM. SM then
engaged the services of EYD Rainbox to construct more lightboxes.
 Later on, North Edsa Marketing (NEMI), a sister company of SM, was set-up to primarily sell advertising
space in lightboxes located at different SM branches. Upon filing of an infringement suit, the Court of
Appeals eventually ruled that there was neither any copyright nor trademark infringement.

ISSUE:
WON there was any copyright, trademark or patent infringement.

HELD:
 NO. There could not have had been copyright infringement as a light box is not a proper subject of copyright
laws. It was neither a literary nor an artistic work, but engineering or marketing invention.
 Copyright is a statutory right, and thus, protection may only be obtained for works enumerated by the law.
At best, what copyright laws can protect is the technical drawing of the light boxes, and there would be
infringement if SM had reprinted these technical drawings for sale to the public without a license from Pearl
and Dean. “Only the expression of an idea is protected by copyright, not the idea itself.”
 Neither was there patent infringement. Patent requires registration. “There can be no infringement of a patent
until a patent has been issued, since whatever right one has to the invention covered by the patent arises alone
from the grant of patent. x x x (A)n inventor has no common law right to a monopoly of his invention. He
 has the right to make use of and vend his invention, but if he voluntarily discloses it, such as by offering it
for sale, the world is free to copy and use it with impunity. A patent, however, gives the inventor the right to
exclude all others.”
 “The patent law has a three-fold purpose: “first, patent law seeks to foster and reward invention; second, it
promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the
invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that
ideas in the public domain remain there for the free use of the public.”
 As for trademark infringement, the court said, “the certificate of registration issued by the Director of Patents
can confer (upon petitioner) the exclusive right to use its own symbol only to those goods specified in the
certificate, subject to any conditions and limitations specified in the certificate x x x. One who has adopted
and used a trademark on his goods does not prevent the adoption and use of the same trademark by others
for products which are of a different description” (note: technical infringement is stricter than unfair
competition). “Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure of P &
D to secure a trademark registration for specific use on the light boxes meant that there could not have been
any trademark infringement since registration was an essential element thereof.”

Ching v. Salinas
Facts
 Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co., the maker and
manufacturer of a Utility Model, described as Leaf Spring Eye Bushing for Automobile made up of plastic.
 On September 4, 2001, Ching and Joseph Yu were issued by the National Library Certificates of Copyright
Registration and Deposit of the said work described therein as Leaf Spring Eye Bushing for Automobile.[4]
 On September 20, 2001, Ching requested the National Bureau of Investigation (NBI) for police/investigative
assistance for the apprehension and prosecution of illegal manufacturers, producers and/or distributors of the
works.[5]
 After due investigation, the NBI filed applications for search warrants in the RTC of Manila against William
Salinas, Sr. and the officers and members of the Board of Directors of Wilaware Product Corporation. It was
alleged that the respondents therein reproduced and distributed the said models penalized under Sections
177.1 and 177.3 of Republic Act (R.A.) No. 8293.
 RTC granted the application and issued Search Warrants.
 Respondents filed a motion to quash on the ground that the subject matter are not artistic in nature; they are
automotive parts and pertain to technology.
 RTC granted the motion and quashed the warrants on the ground of no probable cause.
 Petitioner filed MR, denied. Filed Petition for Certiorari on the ground that RTC has no jurisdiction to delve
into and resolve the validity of the copyright certificates issued to him covered by the Intellectual Property
Code.

Issue
(1) W/N the RTC has jurisdiction to determine validity. - Yes
(2) W/N the utility models can be considered literary and artistic works. – No
(3) W/N Ching’s copyright registration is valid. - No

RULING
(1) Yes.
 The RTC had jurisdiction to delve into and resolve the issue whether the petitioners utility models are
copyrightable and, if so, whether he is the owner of a copyright over the said models. It bears stressing that
upon the filing of the application for search warrant, the RTC was duty-bound to determine whether probable
cause existed. For the RTC to determine whether the crime for infringement under R.A. No. 8293 as alleged
in an application is committed, the petitionerapplicant was burdened to prove that (a) respondents Jessie
Ching and Joseph Yu were the owners of copyrighted material; and (b) the copyrighted material was being
copied and distributed by the respondents. Thus, the ownership of a valid copyright is essential.

(2) No.
 But, as gleaned from the specifications appended to the application for a copyright certificate filed by the
petitioner, the said Leaf Spring Eye Bushing for Automobile is merely a utility model. Plainly, these are not
 literary or artistic works. It bears stressing that the focus of copyright is the usefulness of the artistic design,
and its marketability. The central inquiry is whether the article is a work of art. Works for applied art include
all original pictorials, graphics, and sculptural works that are intended to be or have been embodied in useful
article regardless of factors such as mass production, commercial exploitation, and the potential availability
of design patent protection.
 As gleaned from the description of the models and their objectives, these articles are useful articles which
are defined as one having an intrinsic utilitarian function that is not merely to portray the appearance of the
article or to convey information. Indeed, while works of applied art, original intellectual, literary and artistic
works are copyrightable, useful articles and works of industrial design are not. A useful article may be
copyrightable only if and only to the extent that such design incorporates pictorial, graphic, or sculptural
features that can be identified separately from, and are capable of existing independently of the utilitarian
aspects of the article. We agree with the contention of the petitioner (citing Section 171.10 of R.A. No. 8293),
that the authors intellectual creation, regardless of whether it is a creation with utilitarian functions or
incorporated in a useful article produced on an industrial scale, is protected by copyright law. However, the
law refers to a work of applied art which is an artistic creation. It bears stressing that there is no copyright
protection for works of applied art or industrial design which have aesthetic or artistic features that cannot
be identified separately from the utilitarian aspects of the article. [36] Functional components of useful
articles, no matter how artistically designed, have generally been denied copyright protection unless they are
separable from the useful article.
 In this case, the petitioners models are not works of applied art, nor artistic works. They are utility models,
useful articles, albeit with no artistic design or value. A utility model is a technical solution to a problem in
any field of human activity which is new and industrially applicable. It may be, or may relate to, a product,
or process, or an improvement of any of the aforesaid.[40] Essentially, a utility model refers to an invention
in the mechanical field. This is the reason why its object is sometimes described as a device or useful
object.[41] A utility model varies from an invention, for which a patent for invention is, likewise, available,
on at least three aspects: first, the requisite of inventive step[42] in a patent for invention is not required;
second, the maximum term of protection is only seven years[43] compared to a patent which is twenty
years,[44] both reckoned from the date of the application; and third, the provisions on utility model dispense
with its substantive examination[45] and prefer for a less complicated system.
 Being automotive parts they are not ornamental nor artistic creations with incidental utilitarian functions or
works incorporated in a useful article.

(3) No.
 No copyright granted by law can be said to arise in favor of the petitioner despite the issuance of the
certificates of copyright registration and the deposit of the Leaf Spring Eye Bushing and Vehicle Bearing
Cushion. Indeed, in Joaquin, Jr. v. Drilon [47] and Pearl & Dean (Phil.), Incorporated v. Shoemart,
Incorporated,[48] the Court ruled that: Copyright, in the strict sense of the term, is purely a statutory right. It
is a new or independent right granted by the statute, and not simply a pre-existing right regulated by it. Being
a statutory grant, the rights are only such as the statute confers, and may be obtained and enjoyed only with
respect to the subjects and by the persons, and on terms and conditions specified in the statute. Accordingly,
it can cover only the works falling within the statutory enumeration or description.
 That the works of the petitioner may be the proper subject of a patent does not entitle him to the issuance of
a search warrant for violation of copyright laws. In Kho v. Court of Appeals [49] and Pearl & Dean (Phil.),
Incorporated v. Shoemart, Incorporated, [50] the Court ruled that these copyright and patent rights are
completely distinct and separate from one another, and the protection afforded by one cannot be used
interchangeably to cover items or works that exclusively pertain to the others. The Court expounded further,
thus: Trademark, copyright and patents are different intellectual property rights that cannot be interchanged
with one another. A trademark is any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods. In relation thereto,
a trade name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the scope
of a copyright is confined to literary and artistic works which are original intellectual creations in the literary
and artistic domain protected from the moment of their creation. Patentable inventions, on the other hand,
refer to any technical solution of a problem in any field of human activity which is new, involves an inventive
step and is industrially applicable.
IN LIGHT OF ALL THE FOREGOING, the instant petition is hereby DENIED for lack of merit. The assailed
Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 70411 are AFFIRMED. Search Warrant Nos.
01-2401 and 01-2402 issued on October 15, 2001 are ANNULLED AND SET ASIDE. Costs against the petitioner.
SO ORDERED.

Olano v. Lim
Idk!

4. Rights of a Copyright Owner

Sec. 177
SECTION 177. Copyright or Economic Rights. — Subject to the provisions of Chapter VIII, copyright or economic
rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:
177.1. Reproduction of the work or substantial portion of the work;
177.2. Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work; aisadc
177.3. The first public distribution of the original and each copy of the work by sale or other forms of transfer of
ownership;
177.4. Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound
recording, a computer program, a compilation of data and other materials or a musical work in graphic form,
irrespective of the ownership of the original or the copy which is the subject of the rental; (n)
177.5. Public display of the original or a copy of the work;
177.6. Public performance of the work; and
177.7. Other communication to the public of the work. (Sec. 5, P. D. No. 49a)

Kirtsaeng v. John Wiley & Sons

Doctrine:
The Supreme Court held that the “first sale” doctrine does indeed cover licensed works produced outside the U.S. and
then brought back within its boundaries for subsequent sales. That is, if a person obtains a tangible copy of a protected
work abroad, that person may then sell that copy anywhere in the world without infringing on the original
rightsholder’s rights.

Facts:
In Kirtsaeng, John Wiley & Sons provided Thai publishers with licenses to produce copies of Wiley’s textbooks for
sale in Thailand. Thereafter, Mr. Kirtsaeng asked contacts to purchase the textbooks cheaply in Thailand and send
them to him in the U.S., where he was studying at Cornell and USC. Mr. Kirtsaeng then sold the textbooks at a markup,
reimbursed his contacts for their purchases, and kept the profit. The sale of the textbooks was used primarily to
subsidize the costs associated with his education. All told, he made roughly $100,000 in profit from the sales.
Naturally, Wiley sued Mr. Kirtsaeng for copyright infringement after discovering the nature (and volume) of his
activities, and won a $600,000 statutory judgment from a district court. The judgment was later affirmed by the Second
Circuit.

Issue:

Held:
The “first sale” doctrine is a defense to copyright infringement based on violation of the right to distribute a protected
work. Once a tangible copy (e.g. a book or DVD) of a work has been sold, the rightsholder no longer has any power
over further sales of that particular tangible copy of the work. That is, the purchaser of a copy of a work may do with
it whatever he or she pleases, including selling the work to a third party. In this case, Kirtsaeng argued that the
textbooks were properly produced and sold under a license, and that Wiley could not maintain an infringement action
due to the protection afforded by the first sale doctrine.
More specifically, Wiley argued that the textbooks were not “lawfully made under [the Copyright Act],” as is required
for application of the first sale doctrine, because they were made outside the U.S. The Supreme Court disagreed,
however, reasoning that nothing in the phrase specifies a location or geographic limitation. The Court also expressed
an unwillingness to issue a decision that would require a number of international arrangements to be re-ordered due
to overseas parties having to now seek permission from original rightsholders to dispose of protected items in their
possession.
The effect of the ruling will be quite interesting. Rightsholders are faced with a need to somehow prevent the flow of
protected works from “low-cost” countries to “high-cost” countries. Future practices may come down to a question of
whether accessing markets abroad is worth the eventual losses that result when their products return to the U.S. and
harm their own high-value sales in their native market.

5. Rules on Ownership of Copyright

SECTION 178. Rules on Copyright Ownership. — Copyright ownership shall be governed by the following rules:
178.1. Subject to the provisions of this section, in the case of original literary and artistic works, copyright shall belong
to the author of the work;
178.2. In the case of works of joint authorship, the co-authors shall be the original owners of the copyright and in the
absence of agreement, their rights shall be governed by the rules on co-ownership. If, however, a work of joint
authorship consists of parts that can be used separately and the author of each part can be identified, the author
of each part shall be the original owner of the copyright in the part that he has created;
178.3. In the case of work created by an author during and in the course of his employment, the copyright shall belong
to:
a. The employee, if the creation of the object of copyright is not a part of his regular duties even if the
employee uses the time, facilities and materials of the employer.
b. The employer, if the work is the result of the performance of his regularly-assigned duties, unless there is
an agreement, express or implied, to the contrary.
178.4. In the case of a work commissioned by a person other than an employer of the author and who pays for it and
the work is made in pursuance of the commission, the person who so commissioned the work shall have
ownership of the work, but the copyright thereto shall remain with the creator, unless there is a written
stipulation to the contrary;

6. Limitations on Copyright

SECTION 184. Limitations on Copyright. —

184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright:
a. The recitation or performance of a work, once it has been lawfully made accessible to the public, if done
privately and free of charge or if made strictly for a charitable or religious institution or society; (Sec.
10(1), P.D. No. 49)
b. The making of quotations from a published work if they are compatible with fair use and only to the extent
justified for the purpose, including quotations from newspaper articles and periodicals in the form of press
summaries: Provided, That the source and the name of the author, if appearing on the work, are mentioned;
(Sec. 11, third par., P.D. No. 49)
c. The reproduction or communication to the public by mass media of articles on current political, social,
economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are
delivered in public if such use is for information purposes and has not been expressly reserved: Provided,
That the source is clearly indicated; (Sec. 11, P.D. No. 49)
d. The reproduction and communication to the public of literary, scientific or artistic works as part of reports
of current events by means of photography, cinematography or broadcasting to the extent necessary for
the purpose; (Sec. 12, P.D. No. 49)
e. The inclusion of a work in a publication, broadcast, or other communication to the public, sound recording
or film, if such inclusion is made by way of illustration for teaching purposes and is compatible with fair
use: Provided, That the source and of the name of the author, if appearing in the work, are mentioned;

f. The recording made in schools, universities, or educational institutions of a work included in a broadcast
for the use of such schools, universities or educational institutions: Provided, That such recording must be
deleted within a reasonable period after they were first broadcast: Provided, further, That such recording
 may not be made from audiovisual works which are part of the general cinema repertoire of feature films
except for brief excerpts of the work;
g. The making of ephemeral recordings by a broadcasting organization by means of its own facilities and for
use in its own broadcast; cdt
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;
i. The public performance or the communication to the public of a work, in a place where no admission fee is
charged in respect of such public performance or communication, by a club or institution for charitable or
educational purpose only, whose aim is not profit making, subject to such other limitations as may be
provided in the Regulations; (n)
j. Public display of the original or a copy of the work not made by means of a film, slide, television image or
otherwise on screen or by means of any other device or process: Provided, That either the work has been
published, or, that the original or the copy displayed has been sold, given away or otherwise transferred
to another person by the author or his successor in title; and
k. Any use made of a work for the purpose of any judicial proceedings or for the giving of professional advice
by a legal practitioner.
184.2. The provisions of this section shall be interpreted in such a way as to allow the work to be used in a manner
which does not conflict with the normal exploitation of the work and does not unreasonably prejudice the
right holder's legitimate interests.

a. Doctrine Fair Use

Sec. 185
SECTION 185. Fair Use of a Copyrighted Work. —
185.1. The fair use of a copyrighted work for criticism, comment, news reporting, teaching including multiple copies
for classroom use, scholarship, research, and similar purposes is not an infringement of copyright.
Decompilation, which is understood here to be the reproduction of the code and translation of the forms of
the computer program to achieve the inter-operability of an independently created computer program with
other programs may also constitute fair use. In determining whether the use made of a work in any particular
case is fair use, the factors to be considered shall include:

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.
185.2. The fact that a work is unpublished shall not by itself bar a finding of fair use if such finding is made upon
consideration of all the above factors.

Abs-Cbn v. Gozon (see above)

Sony Corp of America v. Universal City Studios

Synopsis: Movie studios (Plaintiff) that owned copyrights in movies and other television programming argued that
Sony (Defendant) contributed to copyright infringement of their copyrighted works by marketing videocassette
recorders (VCRs or VTRs) that enabled users to record the programs.
Doctrine: One who supplies the way to accomplish an infringing activity and encourages that activity through
advertisement is not liable for copyright infringement.

Facts: Sony Corp. (Sony) (Defendant) marketed Betamax videocassette recorders (VCRs or VTRs), which allowed
home recording of televised programs. Several movie studios (Plaintiff), holders of copyrights on televised movies
and other televised programs, brought an action for contributory copyright infringement on the theory that Defendant
was contributorily liable for infringement by consumers of VTRs of the studios’ (Plaintiff) copyrighted works on the
basis of Sony’s (Defendant) marketing and distribution of the VTRs. The district court, finding, inter alia, that no
Sony (Defendant) employee had either direct involvement with the allegedly infringing activity or direct contact with
purchasers of Betamax who recorded copyrighted works off-the-air, and that there was no evidence that any of the
copies made by individuals were influenced or encouraged by Defendant’s advertisements, held that Defendant was
not liable for direct or contributory copyright infringement. The court of appeals reversed. The United States Supreme
Court granted certeriori.

Issue: Is one who supplies the way to accomplish an infringing activity and encourages that activity through
advertisement liable for copyright infringement?

Held. No. One who supplies the way to accomplish an infringing activity and encourages that activity through
advertisement is not liable for copyright infringement. The protection given to copyrights is wholly statutory, and, in
a case like this, in which Congress has not plainly marked the course to be followed by the judiciary, the Court must
be circumspect in construing the scope of rights created by a statute that never contemplated such a calculus of interests
based on technological advances. In proceeding, the Court must balance the encouraging and rewarding of authors to
create new works with the public good. This case does not fall in the category of those in which it is manifestly just
to impose vicarious liability because the “contributory” infringer was in a position to control the use of copyrighted
works by others and had authorized the use without permission from the copyright owner. In this case, the only contact
between Defendant and the users of the VTR’s occurred at the moment of sale. However, there is no precedent for
imposing vicarious liability on the theory that Sony (Defendant) sold the VTR’s with constructive knowledge that its
customers might use the equipment to make unauthorized copies of copyrighted material. The sale of copying
equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is
widely used for legitimate, unobjectionable purposes, or actually, is merely capable of substantial noninfringing
uses. In this case, a large portion of the public’s use of VTRs does not implicate copyright at all, and also time-
shifting, the most common use for the Betama, constitutes a fair use. Reversed.

Justice Blackmun, Dissent:

He faulted the majority for deferring to congressional action in the face of major technological advancements, saying
that the Court was thereby “evading the hard issues when they arise in the area of copyright law.” He proposed instead
a test for indirect liability for copyright infringement based on whether the primary use of technology is
infringing. Even under this test, however, Sony (Defendant) would have prevailed given the determination of the
majority that the predominant use of VTRs (time-shifting) constituted fair use.

Harper & Row v. Nation Enters

Brief Fact Summary. Nation Enterprises (Defendant) argued that its use of quotes from a yet-unpublished set of
memoirs constituted fair use.
Synopsis of Rule of Law. Publication of parts of a work soon to be published does not qualify as fair use.

Facts. Harper & Row Publishers, Inc. (Harper) (Plaintiff) obtained the rights to publish President Ford’s memoirs, A
Time to Heal. Time magazine contracted for the rights to preview the work immediately before publication. Before
the publication of the article by Time magazine, Nation Enterprises (Defendant), publisher of The Nation magazine,
got a copy of the Ford manuscript. The Nation published an article that quoted the manuscript about the Nixon pardon.
Time then choose not to use the article as planned and canceled its contract with Harper (Plaintiff). Plaintiff sued
Defendant for copyright infringement. The district court awarded damages for infringement. The Second Circuit
reversed, holding Nation Enterprises’ (Defendant) use to be a “fair use” under 17 U.S.C.107. The United States
Supreme Court granted certiorari.

Issue. Does publication of parts of a work soon to be published qualify as fair use?

Held. (O’Connor, J.) No. Publication of parts of a work soon to be published does not qualify as fair use. The idea
behind the fair use doctrine as it was framed in the common law was that one using a copyrighted work should not
have to get a copyright holder’s permission to use the copyrighted work in a case where a reasonable copyright holder
would in fact grant permission. Section 107 of the Copyright Act, which codified the doctrine, expressly noted in its
legislative history that it was not meant to change the common law. As for reasonableness, it is not reasonable to
expect a copyright holder to let another person “scoop” it by publishing his material ahead of time. Regarding the
language of § 107, the section lists four points to consider in applying the doctrine. The two factors most relevant here
are purpose of the use and effect on the market. Usually, a fair use will not be one of economic competition with the
copyright holder, which is exactly what prior publication of a copyrighted work is. In addition, the effect on the market
of such a use is shown by what happened here: it greatly decreases the market value of the copyrighted work.
Therefore, the conclusion in this case, and in almost all cases, is that prior publication of a work pending publication
will not be a fair use. Reversed.

Discussion. The common law doctrine of “fair use” is well established. The Supreme Court recognized the doctrine
as early as 1841. In Folsom v. Marsh, 9 F. Cas. 342 (1841), Justice Story allowed use of quotes by a reviewer as a
“fair use.” A major application of the doctrine remains to be the use of quotes in criticism of a work.

7. Copyright Infringement

SECTION 216. Remedies for Infringement. —

216.1. Any person infringing a right protected under this law shall be liable:
a. To an injunction restraining such infringement. The court may also order the defendant to desist from an
infringement, among others, to prevent the entry into the channels of commerce of imported goods that
involve an infringement, immediately after customs clearance of such goods.
b. Pay to the copyright proprietor or his assigns or heirs such actual damages, including legal costs and other
expenses, as he may have incurred due to the infringement as well as the profits the infringer may have
made due to such infringement, and in proving profits the plaintiff shall be required to prove sales only
and the defendant shall be required to prove every element of cost which he claims, or, in lieu of actual
damages and profits, such damages which to the court shall appear to be just and shall not be regarded as
penalty.
c. Deliver under oath, for impounding during the pendency of the action, upon such terms and conditions as
the court may prescribe, sales invoices and other documents evidencing sales, all articles and their
packaging alleged to infringe a copyright and implements for making them.
d. Deliver under oath for destruction without any compensation all infringing copies or devices, as well as all
plates, molds, or other means for making such infringing copies as the court may order.
e. Such other terms and conditions, including the payment of moral and exemplary damages, which the court
may deem proper, wise and equitable and the destruction of infringing copies of the work even in the event
of acquittal in a criminal case.
216.2. In an infringement action, the court shall also have the power to order the seizure and impounding of any article
which may serve as evidence in the court proceedings. (Sec. 28, P.D. No. 49a)

217.1. Any person infringing any right secured by provisions of Part IV of this Act or aiding or abetting such
infringement shall be guilty of a crime punishable by:
a. Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand pesos (P50,000) to
One hundred fifty thousand pesos (P150,000) for the first offense.
b. Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from One hundred fifty
thousand pesos (P150,000) to Five hundred thousand pesos (P500,000) for the second offense.
c. Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from Five hundred
thousand pesos (P500,000) to One million five hundred thousand pesos (P1,500,000) for the third and
subsequent offenses.
d. In all cases, subsidiary imprisonment in cases of insolvency.
217.2. In determining the number of years of imprisonment and the amount of fine, the court shall consider the value
of the infringing materials that the defendant has produced or manufactured and the damage that the copyright
owner has suffered by reason of the infringement.
217.3. Any person who at the time when copyright subsists in a work has in his possession an article which he knows,
or ought to know, to be an infringing copy of the work for the purpose of:
a. Selling, letting for hire, or by way of trade offering or exposing for sale, or hire, the article; cdasia
b. Distributing the article for purpose of trade, or for any other purpose to an extent that will prejudice the
rights of the copyright owner in the work; or
c. Trade exhibit of the article in public, shall be guilty of an offense and shall be liable on conviction to
imprisonment and fine as above mentioned. (Sec. 29, P.D. No. 49a)
Habana v. Robles
FACTS: Pacita Habana et al., are authors and copyright owners of duly issued of the book, College English For Today
(CET). Respondent Felicidad Robles was the author of the book Developing English Proficiency (DEP). Petitioners
found that several pages of the respondent's book are similar, if not all together a copy of petitioners' book. Habana et
al. filed an action for damages and injunction, alleging respondent’s infringement of copyrights, in violation of P.D.
49. They allege respondent Felicidad C. Robles being substantially familiar with the contents of petitioners' works,
and without securing their permission, lifted, copied, plagiarized and/or transposed certain portions of their book CET.

On the other hand, Robles contends that the book DEP is the product of her own intellectual creation, and was not a
copy of any existing valid copyrighted book and that the similarities may be due to the authors' exercise of the "right
to fair use of copyrighted materials, as guides."

The trial court ruled in favor of the respondents, absolving them of any liability. Later, the Court of Appeals rendered
judgment in favor of respondents Robles and Goodwill Trading Co., Inc. In this appeal, petitioners submit that the
appellate court erred in affirming the trial court's decision.

ISSUE: Whether Robles committed infringement in the production of DEP.

HELD: A perusal of the records yields several pages of the book DEP that are similar if not identical with the text of
CET. The court finds that respondent Robles' act of lifting from the book of petitioners substantial portions of
discussions and examples, and her failure to acknowledge the same in her book is an infringement of petitioners'
copyrights.

In the case at bar, the least that respondent Robles could have done was to acknowledge petitioners Habana et. al. as
the source of the portions of DEP. The final product of an author's toil is her book. To allow another to copy the book
without appropriate acknowledgment is injury enough.

a. Direct Infringement and Vicarious Liability

b. Technological Protection Measures

MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005)

Brief Fact Summary. The defendant’s distributed free software that allowed private individuals to share copyrighted
electronic files without authorization. Some of those files shared are movies and songs that MGM hold copyrights to.

Synopsis of Rule of Law. When a distributor takes affirmative steps to foster infringement through the use of its
product, the distributor will be liable for that infringement conducted by 3rd parties.

Facts. Grokster, LTD and StreamCast Network distributed fee software that allowed the sharing of files in a peer to
peer network. This avoided the need for central servers and costly server storage and works faster. Since files can go
from computer to computer and not through the server it is safer and cost efficient. This program was used by
universities, government agencies, corporations, libraries and then private users. Private users began sharing
copyrighted music and video files without authorization. Grokster used technology called FastTrack and Stream Cast
used Gnutella. The files shared do not go to a central location so Grokster and StreamCast did not know when the files
were being copied but if they had searched there software they would see the type of files being shared. It was shown
that StreamCast gave software called OpenNap labeled the best alternative to Napster in the hopes to take all the
Napster users that had to stop using that software after Napster was sued. Grokster had a program called OpenNap
that allowed users to search for Napster files. Grokster and StreamCast received revenues from posting advertising all
over its program software. MGM was able to show that some 90 percent of the files being shared where copyrighted
files. Also there is no evidence that either company tried to filter or stop copyright infringement. The district court
granted summary judgment in favor of Grokster and Stream Case because although users of the software did infringe
MGM’s property there was no proof there the distributors had actual knowledge of specific acts of infringement.
MGM appealed.
Issue. Whether a distributor of a product that is capable of lawful and unlawful use is liable for copyright infringement
by a 3rd party using that product.

Held. Yes. The appeals court stated that since these distributors did not have actual knowledge, did not partake in, or
monitor the file sharing they are not directly liable for the infringement. However the court erred in finding they were
not secondarily liable for the actions of the users of its products. There is a balance between growing technologies and
copyright protection, but to not make distributors liable will make copyright protections meaningless. The lower court
looked to the commerce doctrine now codified which states that a product must be capable of commercially significant
noninfridging uses and if so, no secondary liability would follow. This court finds that interpretation too narrow. Here
this court considers the doctrine of inducement to also be relevant. When a distributor promotes using its device to
infringe copyright material, shown by affirmative steps to foster infringement this is inducement and the distributor
will be liable for 3rd party infringement. All the actions of the companies is enough to show a genuine issue of material
fact, thus the court reversed the summary judgment ruling and remanded the case upon those findings.

Dissent. Justice Breyer states this case is no different from Sony where time-shifting was the main purpose of users
copying shows by VCRS (so they could watch later). The court did not find Sony responsible there. Also there is such
a major market for non-infringement uses for this software that they shouldn’t be stopped from distributing the
software. The standard in Sony should not be adapted as we did it here to add inducement.

Lenz v. Universal Music Corp., 801 F.3d 1126 (2015)

Facts:
Stephanie Lenz (plaintiff) made a video of her children dancing to Prince’s song Let’s Go Crazy (the song) and
uploaded the video to YouTube. The song was audible but unclear in the background of the video. Universal Music
Corporation (Universal) (defendant) contacted YouTube to remove Lenz’s video, alleging that the video infringed
Universal’s copyright in the song. YouTube removed the video and sent a notice to Lenz that the video had been
removed; Lenz had a right to counter-notification under the Digital Millennium Copyright Act (DMCA); and if Lenz
infringed again, all of Lenz’s videos could be removed from the site in the future. Lenz contacted an attorney for
advice before sending a counter-notification to YouTube, stating that the video did not infringe Universal’s copyright
in the song under the doctrine of fair use. Lenz then sued Universal under § 512(f) of the DMCA, which gives those
accused of infringement a cause of action against anybody who knowingly and materially misrepresents the infringing
nature of a work or activity. Universal filed a motion to dismiss for failure to state a claim.

Issue:

Ruling: