TANADA VS. ANGARA – not included
(IPC 2049). Private respondent opposed again. This time it alleged (1)
Facts:
This is a petition seeking to nullify the Philippine ratification of the World
Trade Organization (WTO) Agreement. Petitioners question the
concurrence of herein respondents acting in their capacities as Senators
via signing the said agreement.
The WTO opens access to foreign markets, especially its major trading
partners, through the reduction of tariffs on its exports, particularly
agricultural and industrial products. Thus, provides new opportunities
for the service sector cost and uncertainty associated with exporting and
more investment in the country. These are the predicted benefits as
reflected in the agreement and as viewed by the signatory Senators, a
“free market” espoused by WTO.
Petitioners on the other hand viewed the WTO agreement as one that
limits, restricts and impair Philippine economic sovereignty and
legislative power. That the Filipino First policy of the Constitution was
taken for granted as it gives foreign trading intervention.
Issue:
Whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of the Senate in giving its
concurrence of the said WTO agreement.
Ruling:
In its Declaration of Principles and state policies, the Constitution “adopts
the generally accepted principles of international law as part of the law of
the land, and adheres to the policy of peace, equality, justice, freedom,
cooperation and amity , with all nations. By the doctrine of incorporation,
the country is bound by generally accepted principles of international
law, which are considered automatically part of our own laws. Pacta sunt
servanda – international agreements must be performed in good faith. A
treaty is not a mere moral obligation but creates a legally binding
obligation on the parties.
Through WTO the sovereignty of the state cannot in fact and reality be
considered as absolute because it is a regulation of commercial relations
among nations. Such as when Philippines joined the United Nations (UN)
it consented to restrict its sovereignty right under the “concept of
sovereignty as autolimitation.” What Senate did was a valid exercise of
authority. As to determine whether such exercise is wise, beneficial or
viable is outside the realm of judicial inquiry and review. The act of
signing the said agreement is not a legislative restriction as WTO allows
withdrawal of membership should this be the political desire of a
member. Also, it should not be viewed as a limitation of economic
sovereignty. WTO remains as the only viable structure for multilateral
trading and the veritable forum for the development of international
trade law. Its alternative is isolation, stagnation if not economic self-
destruction. Thus, the people be allowed, through their duly elected
officers, make their free choice.
Petition is DISMISSED for lack of merit.
MIRPURI VS. COURT OF APPEALS
Facts:
In 1970, Escobar filed an application with the Bureau of Patents for the
registration of the trademark “Barbizon” for use in horsiers and ladies
undergarments (IPC No. 686). Private respondent reported Barbizon
Corporation, a corporation organized and doing business under the laws
of New York, USA, opposed the application. It was alleged that its
trademark is confusingly similar with that of Escobar and that the
registration of the said trademark will cause damage to its business
reputation and goodwill. In 1974, the Director of Patents gave due course
to the application. Escobar later assigned all his rights and interest over
the trademark to petitioner. In 1979, Escobar failed to file with the
Bureau the affidavit of use of the trademark required under the
Philippine Trademark Law. Due to this failure, the Bureau cancelled
Escobar’s certificate of registration. In 1981, Escobar and petitioner
separately filed this application for registration of the same trademark.
that the said trademark was registered with the US Patent Office; (2) that
it is entitled to protection as well-known mark under Article 6 bis of the
Paris Convention, EO 913 and the two Memoranda of the Minister of
Trade and Industry and (3) that its use on the same class of goods
amounts to a violation of the Trademark Law and Art. 189 of the RPC.
Petitioner raised the defense of Res Judicata.
Issue:
One of the requisites of res judicata is identical causes of action. Do IPC
No. 686 and IPC No. 2049 involve the same cause of action?
Ruling:
No. The issue of ownership of the trademark was not raised in IPC 686.
IPC 2049 raised the issue of ownership, the first registration and use of
the trademark in the US and other countries, and the international
recognition of the trademark established by extensive use and
advertisement of respondents products for over 40 years here and
abroad. These are different from the issues of confessing similarity and
damage in IPC 686. The issue of prior use may have been raised in IPC
686 but this claim was limited to prior use in the Philippines only. Prior
use in IPC 2049 stems from the respondents claims originator of the word
and symbol “Barbizon”, as the first and registered user of the mark
attached to its products which have been sold and advertised would arise
for a considerable number of years prior to petitioner’s first application.
Indeed, these are substantial allegations that raised new issues and
necessarily gave respondents a new cause of action.
Moreover, the cancellation of petitioner’s certificate registration for
failure to file the affidavit of use arose after IPC 686. This gave
respondent another cause to oppose the second application.
It is also to be noted that the oppositions in the first and second cases are
based on different laws. Causes of action which are distinct and
independent from each other, although out of the same contract,
transaction, or state of facts, may be sued on separately, recovery on one
being no bar to subsequent actions on others. The mere fact that the same
relief is sought in the subsequent action will not render the judgment in
the prior action operating as res judicata, such as where the actions are
based on different statutes.
FEIST PUBLICATIONS VS. RURAL TELEPHONE SERVICE
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 a typical 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:
Are the names, addresses, and phone numbers in a telephone directory
able to be copyrighted?
Ruling:
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.
JOAQUIN VS. DRILON
Facts:
Intellectual Property – Law on Copyright – Game Show – Ideas and
Concepts Not Covered by Copyright
BJ Productions Inc. (BJPI) was the holder of copyright over the show
Rhoda and Me. It holds rights over the show’s format and style of
presentation. In 1991, BJPI’s president Francisco Joaquin saw on TV RPN
9’s show It’s a Date, which is basically the same as Rhoda and Me. He
eventually sued Gabriel Zosa, the manager of the show It’s a Date. Zosa
later sought a review of the prosecutor’s resolution before the Secretary
of Justice (Drilon). Drilon reversed the findings of the fiscal and directed
him to dismiss the case against Zosa.
Issue:
Whether or not the decision of Drilon is valid.
Ruling:
Yes. The essence of copyright infringement is the copying, in whole or in
part, of copyrightable materials as defined and enumerated in Section 2 of
PD. No. 49 (Copyright Law). Apart from the manner in which it is actually
expressed, however, the idea of a dating game show is a non-
copyrightable material. Ideas, concepts, formats, or schemes in their
abstract form clearly do not fall within the class of works or materials
susceptible of copyright registration as provided in PD. No. 49. What is
covered by BJPI’s copyright is the specific episodes of the show Rhoda
and Me.
Further, BJPI should have presented the master videotape of the
show in order to show the linkage between the copyright show (Rhoda
and Me) and the infringing show (It’s a Date). This is based on the ruling
in 20th Century Fox vs CA (though this has been qualified by Columbia
Pictures vs CA, this is still good law). Though BJPI did provide a lot of
written evidence and description to show the linkage between the shows,
the same were not enough. 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.
MALANG SANTOS VS. MCCULLOUGH
Syllabus:
1. COPYRIGHT LAW; INTELLECTUAL CREATIONS NOT COPYRIGHTED
BECOMES PUBLIC PROPERTY. — An intellectual creation should be
copyrighted within the periods provided by law, failure of which renders
such creation public property.
2. ID.; LIMITED PUBLICATION MUST BE INDICATED ON THE FACE OF A
DESIGN; CASE AT BAR. — For there to be a limited publications or
prohibition, such fact must appear on the face of the design. When the
purpose is a limited publication, but the effect is a general publication,
irrevocable rights thereon become vested in the general public.
3. ID.; EXCLUSIVE RIGHT OF OWNER TO PUBLISH LIMITED TO FIRST
PUBLICATION UNLESS COPYRIGHTED. — The author of a literary
composition has a right to the first publication thereof. He has a right to
determine whether it shall be published at all, and if published, when,
where, by whom, and in what form. This exclusive right is confined to the
first publication. Once published, it is dedicated to the public, and the
author loses, the exclusive right to control subsequent publication by
others, unless the work is placed under the protection of the copyright
law
Decision:
This is an action for damages based on the provisions of Articles 721 and
722 of the Civil Code of the Philippines, allegedly on the unauthorized
use, adoption and appropriation by the defendant company of plaintiff's
intellectual creation or artistic design for a Christmas card. The design
depicts "a Philippine rural Christmas time scene consisting of a woman
and a child in nipa hut adorned with a star shaped lantern and a man
astride a carabao beside a tree, underneath which appears the plaintiff's
pen name, Malang."
The complaint alleges that plaintiff Mauro Malang Santos, designed for
former Ambassador Felino Neri, for his personal Christmas card greetings
for the year 1959, the artistic motif in question. The following year the
defendant McCullough Printing Company, without the knowledge and
authority of plaintiff, displayed the very design in its album of Christmas
card and offered it for sale, for a price. For such unauthorized act of
defendant, plaintiff suffered moral damages to the tune of P16,000.00,
because it has placed plaintiff's professional integrity and ethics under
serious question and caused him grave embarrassment before
Ambassador Neri. He further prayed for the additional sum of P3,000.00
by way of attorney's fee.
Defendant in answer to the complaint, after some denials and admissions,
moved for a dismissal of the action, claiming that —
(1) The design claimed does not contain a clear notice that it belonged to
him and that he prohibited its use by others;
(2) The design in question has been published but does not contain a
notice of copyright, as in fact it had never been copyrighted by the
plaintiff, for which reason this action is barred by the Copyright Law;
(3) The complaint does not state a cause of action.
The documentary evidence submitted were the Christmas cards, as
originally designed by plaintiff, the design as printed for Ambassador
Neri, and the subsequent reprints ordered by other parties. The case was
submitted on a "Stipulation of Facts", the pertinent portions of which are
hereunder reproduced:
"1. That the plaintiff was the artist who created the design shown in
Exhibit A, . . .
2. That the design carries the pen name of plaintiff, MALANG, on its face . .
. and indicated in Exhibit A, . . .
3. That said design was created by plaintiff in the latter part of 1959 for
the personal use of former Ambassador Felino Neri; . . .
4. That former Ambassador Neri had 300 such cards . . . printed by the
defendant company in 1959, . . . which he distributed to his friends in
December, 1959;
5. That defendant company utilized plaintiff's design the year 1960 in its
album of Christmas card samples displayed to it customers. . .
6. That the Sampaguita Pictures, Inc. placed an order with defendant
company for 700 of said cards . . . while Raul Urra & Co. ordered 200 . . .,
which cards were sent out by them to their respective correspondents,
clients and friends during the Christmas season of 1960;
7. That defendant company's use of plaintiff's design was without
knowledge, authority or consent of plaintiff;
8. That said design has not yet been copyrighted;
9. That plaintiff is an artist of established name, goodwill and reputation .
. . ."
Upon the basis of the facts stipulated, the lower court rendered judgment
on December 1, 1961, the pertinent portions of which are recited below:
"As a general proposition, there can be no dispute that the artist acquires
ownership of the product of his art. At the time of its creation, he has the
absolute dominion over it. To help the author protect his rights the
copyright law was enacted.
"In intellectual creation, a distinction must be made between two classes
of property rights: the fact of authorship and the right to publish and/or
distribute copies of the creation. With regards to the first, i.e., the fact of
authorship, the artist cannot be divested of the same. In other words, he
may sell the right to print hundred of his work yet the purchaser of said
right can never be the author of the creation.
"It is the second right, i.e., the right to publish, republish, multiply and/or
distribute copies of the intellectual creation which the state, through the
enactment of the copyright law, seeks to protect. The author or his
assigns or heirs may have the work copyrighted and once this is legally
accomplished any infringement of the copyright will render the infringer
liable to the owner of the copyright.
xxx xxx xxx
"The plaintiff in this case did not choose to protect his intellectual
creation by a copyright. The fact that the design was used in the
Christmas card of Ambassador Neri who distributed eight hundred copies
thereof among his friends during the Christmas season of 1959, shows
that the same was published.
"Unless satisfactorily explained a delay in applying for a copyright, of
more than thirty days from the date of its publication converts the
property to one of public domain.
"Since the name of the author appears in each of the alleged infringing
copies of the intellectual creation, the defendant may not be said to have
pirated the work nor guilty of plagiarism. Consequently, the complaint
does not state a cause of action against the defendant.
xxx xxx xxx
WHEREFORE, the Court dismisses the complaint without pronouncement
as to costs."
In his appeal to this Court, plaintiff-appellant pointed five (5) errors
allegedly committed by the trial court, all of which bring to the fore, the
following propositions, (1) whether plaintiff is entitled to protection,
notwithstanding the fact that he has not copyrighted his design; (2)
whether the publication is limited, so as to prohibit its use of by others, or
it is general publication, and (3) whether the provisions of the Civil Code
or the Copyright
Law should apply in the case. We will undertake a collective discussion of
these propositions.
Under the established facts, We find that plaintiff is not entitled to a
protection, the provision of the Civil Code, notwithstanding. Paragraph 33
of Patent Office Administrative Order No. 3 (as amended, dated
September 18, 1947) entitled "Rules of Practice in the Philippines Patent
Office relating to the Registration of Copyright Claims", promulgated
pursuant to Republic Act 165, provides, among others, that an intellectual
creation should be copyrighted thirty (30) days after its publication, if
made in Manila, or within sixty (60) days if made elsewhere, failure of
which renders such creation public property. In the case at bar, even as of
this moment, there is no copyright for the design in question. We are not
also prepared to accept the contention of appellant that the publication of
the design was a limited one, or that there was an understanding that
only Ambassador Neri should have absolute right to use the same. In the
first place if such were the condition, then Ambassador Neri would be the
aggrieved party, and not the appellant. In the second place, if there was
such a limited publication or prohibition, the same was not shown on the
face of the design. When the purpose is a limited publication, but the
effect is general publication, irrevocable rights thereupon become vested
in the public, in consequence of which enforcement of the restriction
becomes impossible (Nutt vs. National Institute, 31 F [2d] 236). It has
been held that the effect of offering for sale a dress, for example,
manufactured in accordance with an original design which is not
protected by either a copyright or a patent, is to divest the owner of his
common law rights therein by virtue of the publication of a 'copy' and
thereafter anyone is free to copy the design or the dress (Fashion
Originators Guild of America vs. Federal Trade Commission, 114 F [2d]
80) . When Ambassador Neri distributed 800 copies of the design in
controversy, the plaintiff lost control of his design and the necessary
implication was that there had been a general publication, there having
been no showing of a clear indication that a limited publication was
intended. The author of a literary composition has a right to the first
publication thereof. He has a right to determine whether it shall be
published at all, and if published, when, where, by whom, and in what
form. The exclusive right it confined to the first publication. When once
published, it is dedicated to the public, and the author loses the exclusive
right to control subsequent publication by others, unless the work is
placed under the protection of the copy right law.
CONFORMABLY WITH ALL THE FOREGOING, We find that the errors
assigned have not been committed by the lower court. The decision
appealed from, therefore, should be, as it is hereby affirmed. Costs taxed
against plaintiff-appellant.
FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS VS.
BENJAMIN TAN
Facts:
Plaintiff-appellant:
*is the owner of certain musical compositions among which are the songs
entitled: "Dahil Sa Iyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao
Lamang" and "The Nearness Of You."
*filed a complaint with the lower court for infringement of copyright
against defendant-appellee for allowing the playing in defendant-
appellee's restaurant of said songs copyrighted in the name of the former.
Defendant-appellee,
*countered that the complaint states no cause of action. While not
denying the playing of said copyrighted compositions in his
establishment, appellee maintains that the mere singing and playing of
songs and popular tunes even if they are copyrighted do not constitute an
infringement under the provisions of Section 3 of the Copyright Law.
Issue:
Whether or not the playing and signing of musical compositions which
have been copyrighted under the provisions of the Copyright Law (Act
3134) inside the establishment of the defendant-appellee constitute a
public performance for profit within the meaning and contemplation of
the Copyright Law of the Philippines; and assuming that there were
indeed public performances for profit, whether or not appellee can be
held liable therefore.
Ruling:
NO. It has been held that "The playing of music in dine and dance
establishment which was paid for by the public in purchases of food and
drink constituted "performance for profit" within a Copyright Law." Thus,
it has been explained that while it is possible in such establishments for
the patrons to purchase their food and drinks and at the same time dance
to the music of the orchestra, the music is furnished and used by the
orchestra for the purpose of inducing the public to patronize the
establishment and pay for the entertainment in the purchase of food and
drinks. The defendant conducts his place of business for profit, and it is
public; and the music is performed for profit.
Nevertheless, appellee cannot be said to have infringed upon the
Copyright Law. Appellee's allegation that the composers of the contested
musical compositions waived their right in favor of the general public
when they allowed their intellectual creations to become property of the
public domain before applying for the corresponding copyrights for the
same is correct.
The Supreme Court has ruled that "Paragraph 33 of Patent Office
Administrative Order No. 3 (as amended, dated September 18, 1947)
entitled 'Rules of Practice in the Philippines Patent Office relating to the
Registration of Copyright Claims' promulgated pursuant to Republic Act
165, provides among other things that an intellectual creation should be
copyrighted thirty (30) days after its publication, if made in Manila, or
within the (60) days if made elsewhere, failure of which renders such
creation public property." Indeed, if the general public has made use of
the object sought to be copyrighted for thirty (30) days prior to the
copyright application the law deems the object to have been donated to
the public domain and the same can no longer be copyrighted. Under the
circumstances, it is clear that the musical compositions in question had
long become public property, and are therefore beyond the protection of
the Copyright Law.
Atty. Rodriguez’ Dissent: Isn’t Copyright is protected from the moment of
creation?
CHING VS. 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.”
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.
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.
Issue:
Whether or not the subject matter is covered by the Copyright of the
Intellectual Property Code?
Ruling:
It is worthy to state that the works protected under the Law on Copyright
are: literary or artistic works (Sec. 172) and derivative works (Sec. 173).
The Leaf Spring Eye Bushing and Vehicle Bearing Cushion fall on neither
classification.
Being plain automotive spare parts that must conform to the original
structural design of the components they seek to replace, the Leaf Spring
Eye Bushing and Vehicle Bearing Cushion are not ornamental. They lack
the decorative quality or value that must characterize authentic works of
applied art. They are not even artistic creations with incidental utilitarian
functions or works incorporated in a useful article. In actuality, the
personal properties described in the search warrants are mechanical
works, the principal function of which is utility sans any aesthetic
embellishment.
Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing
Cushion as included in the catch-all phrase “other literary, scholarly,
scientific and artistic works” in Section 172.1(a) of R.A. No. 8293.
Applying the principle of ejusdem generis which states that “where a
statute describes things of a particular class or kind accompanied by
words of a generic character, the generic word will usually be limited to
things of a similar nature with those particularly enumerated, unless
there be something in the context of the state which would repel such
inference,”[46] the Leaf Spring Eye Bushing and Vehicle Bearing Cushion
are not copyrightable, being not of the same kind and nature as the works
enumerated in Section 172 of R.A. No. 8293.
MANLY SPORTWEAR MANUFACTURING, INC. VS. DADODETTE
Facts:
The NBI secured a search warrant on March 14, 2003 from the RTC to act
upon the information that respondents were in possession of goods
copyright of which belongs to the petitioner. Finding reasonable grounds
in violation of Section 172 and 217 of RA 8293 a search warrant was
issued. Respondents move to quash and annul the search warrant
contending it is invalid and the requisites for its issuance are not
complied with. They insist that the sporting goods manufactured and
registered in the name MANLY is just ordinary and common and not
among the classes protected under RA 8293. The court granted the
motion to quash declaring the search warrant null and void because there
were certificates of registrations issued earlier than MANLY for the same
sporting goods under various brands thereby negating the fact that their
products are copyrighted and original creations. Motion for
reconsideration was denied by the appellate court sustaining the lower
court’s decision thus this instant petition for review for certiorari.
Issue:
Whether or not the certificate of registration in favor of MANLY sustains
the action against the respondents.
Ruling:
The court ruled that the petitioner is not protected by the copyright law
despite the issuance of the copyright certificate of registration as it
merely gives prima facie evidence of the validity and ownership.
Therefore if the there are sufficient evidence that the copyrighted
products are not original creations and are readily available in the market
under various brands, validity and originality will not be presumed
therefore the trial court has the right to quash the issued warrant for lack
of probable cause. Moreover no copyright accrues to the petitioner since
Sec. 2, Rule 7 of the Copyrights Safeguards and Regulations provides that
the registration and deposit of work is purely for recording the date of
registration and is not conclusive as to the copyright ownership. It is not a
proof of copyright ownership and non-payment for registration within
the prescribed period shall only make the copyright owner liable to pay a
fine.
HODGE E. MASON VS. MONTGOMERY DATA, INC.
Facts:
Hodge E. Mason, Hodge Mason Maps, Inc., and Hodge Mason Engineers,
Inc. (collectively Mason) sued Montgomery Data, Inc. (MDI), Landata, Inc.
of Houston (Landata), and Conroe Title & Abstract Co. (Conroe Title),
claiming that the defendants infringed Mason's copyrights on 233 real
estate ownership maps of Montgomery County, Texas. The district court
initially held that Mason cannot recover statutory damages or attorney's
fees for any infringement of 232 of the copyrights. The court later held
that Mason's maps are not copyrightable under the idea/expression
merger doctrine, and granted summary judgment for the defendants. We
agree with Mason that the maps are copyrightable, so we reverse the
district court's judgment and remand the case. But we agree with the
district court that, if Mason proves that the defendants infringed his
copyrights,[2] he can only recover statutory damages and attorney's fees
for the infringements of one of the 233 maps.
I. BACKGROUND
Between August 1967 and July 1969, Mason created and published 118
real estate ownership maps that, together, cover all of Montgomery
County. The maps, which display copyright notices, pictorially portray the
location, size, and shape of surveys, land grants, tracts, and various
topographical features within the county. Numbers and words on the
maps identify deeds, abstract numbers, acreage, and the owners of the
various tracts. Mason obtained the information that he included on the
maps from a variety of sources.[3] Relying on these sources, Mason
initially determined the location and dimensions of each survey in the
county, and then drew the corners and lines of the surveys onto
topographical maps of the county that were published by the United
States Geological Survey (USGS).[4] He then determined the location of
the property lines of the real estate tracts within each survey and drew
them on the USGS maps. Finally, Mason traced the survey and tract lines
onto transparent overlays, enlarged clean USGS maps and the overlays,
added names and other information to the overlays, and combined the
maps and overlays to print the final maps. Mason testified that he used
substantial judgment and discretion to reconcile 137*137 inconsistencies
among the various sources, to select which features to include in the final
map sheets, and to portray the information in a manner that would be
useful to the public. From 1970 to 1980, Mason revised the original maps
and eventually published 115 new maps with copyright notices, for a
total of 233 maps. Mason sold copies of his maps individually and in sets.
Mason's infringement claims are based on the defendants' use of his maps
as part of a geographical indexing system that Landata created to
continuously organize and store ever-changing title information on each
tract in Montgomery County. To create this sytem, Landata purchased a
set of Mason's maps and reorganized them by cutting and pasting them
into 72 map sheets. Landata then attached a transparent overlay to each
of the 72 sheets, and depicted on these overlays numerous updates and
corrections to the information on Mason's maps. Landata arbitrarily
assigned identification numbers ("arb numbers") to tracts or areas within
the county, and added these numbers to the overlays. Using this process,
Landata created an inked mylar "master overlay" for each of the 72
reorganized map sheets. Landata then made sepia copies of the master
overlays, and began registering ownership and other changes on the
sepia copies from the hundreds of land grants that are recorded in the
county each day. Using this system, the defendants are able to retrieve
current ownership and other information on any tract by locating its arb
number on the appropriate overlay and entering that number into a
computer database that contains data on each tract.
In 1985, several title companies, including Conroe Title, incorporated
MDI as a joint title plant. MDI and Landata then entered into a series of
agreements under which Conroe Title and MDI's other shareholders can
use Landata's system when they issue title insurance policies. On
September 17, 1985, Landata asked Mason for permission to use his
maps as part of its system, but Mason denied the request because Landata
refused to pay a licensing fee. Landata then provided its products to MDI
without Mason's permission. Each of MDI's shareholders purchased an
original set of Mason's maps, and either MDI or the shareholders
reorganized the maps from 118 to 72 map sheets according to Landata's
specifications. Landata provided MDI with a set of sepia copies of the
master overlays for each set of reorganized maps and with access to its
computer database. Annually from 1982 through 1986, and again in
1989, Landata or MDI produced new, updated editions of the master
overlays.
Mason registered the copyright for one of the original 118 maps in
October 1968. After learning of Landata's use of his maps, Mason
registered the copyrights for the remaining 117 original maps and the
115 revised maps between October and December 1987. Mason filed this
suit in September 1988, claiming infringement of his 233 copyrights
under 17 U.S.C. § 106, and seeking statutory damages and attorney's fees
under 17 U.S.C. §§ 504-05. In December 1989, the defendants sought a
partial summary judgment that, even if Mason proves copyright
infringement, 17 U.S.C. § 412 precludes an award of statutory damages or
attorney's fees for any infringement of the 232 maps that Mason
registered in 1987. The district court granted this motion on June 1, 1990.
Mason v. Montgomery Data, Inc., 741 F.Supp. 1282, 1287 (S.D.Tex.1990).
In September 1990, Mason filed a motion for partial summary judgment
that the defendants had infringed his copyrights. The defendants
countered with motions for summary judgment in which they asserted
that Mason's maps are not copyrightable and, even if they are, the
defendants' use of the maps does not constitute infringement. The district
court granted the defendants' motions after holding that Mason's maps
are not copyrightable because the idea embodied in the maps is
inseparable from the maps' expression of that idea. Mason v. Montgomery
Data, Inc., 765 F.Supp. 353, 356 (S.D.Tex.1991). The court dismissed
Mason's claims with prejudice and awarded the defendants costs and
attorney's fees.
II. DISCUSSION
A. THE COPYRIGHTABILITY OF MASON'S MAPS
1. The Idea/Expression Merger Doctrine
The Copyright Act extends copyright protection to "original works of
authorship fixed in any tangible medium of expression." 17 U.S.C.A. §
102(a) (West Supp. 1992). The scope of that protection, however, is not
unlimited. "In no case does copyright protection for an original work of
authorship extend to any idea, ... regardless of the form in which it is
described, explained, illustrated, or embodied in such work." Id. § 102(b)
(emphasis added). Thus, while a copyright bars others from copying an
author's original expression of an idea, it does not bar them from using
the idea itself. "Others are free to utilize the `idea' so long as they do not
plagiarize its `expression.'" Herbert Rosenthal Jewelry Corp. v. Kalpakian,
446 F.2d 738, 741 (9th Cir.1971). In some cases, however, it is so difficult
to distinguish between an idea and its expression that the two are said to
merge. Thus, when there is essentially only one way to express an idea,
"copying the `expression' will not be barred, since protecting the
`expression' in such circumstances would confer a monopoly of the `idea'
upon the copyright owner free of the conditions and limitations imposed
by the patent law." Id. at 742. By denying protection to an expression that
is merged with its underlying idea, we "prevent an author from
monopolizing an idea merely by copyrighting a few expressions of it."
Toro Co. v. R & R Products Co., 787 F.2d 1208, 1212 (8th Cir.1986).[5]
The district court applied these principles to the present case and
concluded that "the problem with the Hodge Mason maps is ... that [they]
express the only pictorial presentation which could result from a correct
interpretation of the legal description and other factual information
relied upon by the plaintiffs in producing the maps." Mason, 765 F.Supp.
at 355. The court believed that,
[t]o extend copyright protection to the Hodge Mason maps, which
resulted from facts essentially in the public domain, would give the
plaintiffs a monopoly over the facts. In other words, anyone who has the
desire and ability to correctly interpret the legal descriptions and toil
through the factual information relied upon by the plaintiffs in creating
their maps, would create a pictorial presentation so substantially similar
to the plaintiffs['] that they could be accused of copyright infringement.
This result would clearly upset Congress' intent to balance the
"competing concerns of providing incentive to authors to create and of
fostering competition in such creativity."
Id. at 356 (quoting Apple Computer, Inc. v. Franklin Computer Corp., 714
F.2d 1240, 1253 (3rd Cir.1983), cert. dismissed, 464 U.S. 1033, 104 S.Ct.
690, 79 L.Ed.2d 158 (1984)). The court thus concluded that "the
plaintiffs' idea to create the maps, based on legal and factual public
information, is inseparable from its expression embodied within the
maps, and hence not subject to copyright protection." Id.
We agree with Mason that the district court erred in applying the merger
doctrine in this case. To determine whether the doctrine is applicable in
any case, the court must "focus on whether the idea is capable of various
modes of expression." Apple Computer, 714 F.2d at 1253. Thus, the court
must first identify the idea that the work expresses, and then attempt to
distinguish that idea from the author's expression 139*139 of it. If the
court concludes that the idea and its expression are inseparable, then the
merger doctrine applies and the expression will not be protected.
Conversely, if the court can distinguish the idea from its expression, then
the expression will be protected because the fact that one author has
copyrighted one expression of that idea will not prevent other authors
from creating and copyrighting their own expressions of the same idea. In
all cases, "[t]he guiding consideration in drawing the line is the
preservation of the balance between competition and protection reflected
in the patent and copyright laws." Herbert Rosenthal Jewelry, 446 F.2d at
742.
The district court determined that Mason's idea, "which includes drawing
the abstract and tract boundaries, indicating the ownership name, the
tract size, and the other factual information" on a map of Montgomery
County, was "to create the maps, based on legal and factual public
information." Mason, 765 F.Supp. at 356. Mason argues that the court
clearly erred in finding that this idea can be expressed in only one or a
limited number of ways. We agree. The record in this case contains copies
of maps created by Mason's competitors that prove beyond dispute that
the idea embodied in Mason's maps is capable of a variety of expressions.
Although the competitors' maps and Mason's maps embody the same
idea, they differ in the placement, size, and dimensions of numerous
surveys, tracts, and other features. The record also contains affidavits in
which licensed surveyors and experienced mapmakers explain that the
differences between Mason's maps and those of his competitors are the
natural result of each mapmaker's selection of sources, interpretation of
those sources, discretion in reconciling inconsistencies among the
sources, and skill and judgment in depicting the information.[6]
MDI argues that this evidence is irrelevant because there is no proof that
Mason and his competitors obtained their information from the same
sources. But the fact that different mapmakers with the same idea could
reach different conclusions by relying on different sources only supports
our result. Whether Mason and his competitors relied on different
sources, or interpreted the same sources and resolved inconsistencies
among them differently, or made different judgments as to how to best
depict the information from those sources, the differences in their maps
confirm the fact that the idea embodied in Mason's maps can be
expressed in a variety of ways. By selecting different sources, or by
resolving inconsistencies among the same sources differently, or by
coordinating, arranging, or even drawing the information differently,
other mapmakers may create — and indeed have created — expressions
140*140 of Mason's idea that differ from those that Mason created.[7]
Finally, the defendants contend that this court's decision in Kern River
Gas Transmission Co. v. Coastal Corp., 899 F.2d at 1458, requires
application of the merger doctrine in this case. Kern River concerned the
copyrightability of maps on which Kern River Gas Transmission Company
(Kern River) depicted the location that it proposed for construction of a
gas pipeline. The idea at issue in Kern River was simply the placing on a
map of Kern River's certain "proposed location for a prospective
pipeline." Id. at 1464. This court concluded that that idea merged with
Kern River's expression because there was only one way to effectively
express that idea. Id.
The defendants argue that the merger doctrine applies in this case
because drawing lines on a public map is the only way to depict the
locations of surveys and boundary lines in Montgomery County, just as it
was the only way to depict the location of a pipeline in Kern River. But the
distinction between Kern River and this case is not in the methods
available for depicting an object's location on a map, but in the ideas that
the maps in the two cases embody. We cannot determine whether an idea
is capable of a variety of expressions until we first identify what that idea
is. A court's decision whether to apply the merger doctrine often depends
on how it defines the author's idea. For this reason, in defining the idea
the court should be guided by "the balance between competition and
protection reflected in the patent and copyright laws." Herbert Rosenthal
Jewelry, 446 F.2d at 742.[8]
We focus in this case on an earlier point in the mapping process, a point
prior to the selection of information and decisions where to locate tract
lines. The idea here was to bring together the available information on
boundaries, landmarks, and ownership, and to choose locations and an
effective pictorial expression of those locations. That idea and its final
expression are separated by Mason's efforts and creativity that are
entitled to protection from competitors. The evidence in this case
demonstrates that a mapmaker who desires to express the idea of
depicting the location and ownership of property in Montgomery County
in map form must select information from numerous sources, reconcile
inconsistencies among those sources, and depict the information
according to the mapmaker's skill and judgment. Although Mason sought
to depict the information accurately, the conflicts among the sources and
the limitations inherent in the process of representing reality in pictorial
map form required him to make choices that resulted in independent
expression. Extending protection to that expression will not grant Mason
a monopoly over the idea, because other mapmakers can express the
same idea differently. The protection that each map receives extends only
to its original expression, and neither the facts nor the idea embodied in
the maps is protected. 141*141 "[T]he facts and ideas ... are free for the
taking.... "[T]he very same facts and ideas may be divorced from the
context imposed by the author, and restated or reshuffled by second
comers, even if the author was the first to discover the facts or to propose
the ideas." Feist, 111 S.Ct. at 1289 (quoting Jane C. Ginsburg, Creation and
Commercial Value: Copyright Protection of Works of Information, 90
COLUM.L.REV. 1865, 1868 (1990)).
For these reasons, we conclude that the district court erred by applying
the merger doctrine in this case. Because the idea embodied in Mason's
maps can be expressed in a variety of ways, the merger doctrine does not
render Mason's expression of that idea uncopyrightable.
2. The "Originality" Requirement
Landata contends that, even if the merger doctrine does not apply,
Mason's maps are uncopyrightable because they are not "original" under
Feist. Although the district court applied the merger doctrine to hold that
Mason's maps are not copyrightable, it found that "the problem with the
Hodge Mason maps is not a lack of originality." Mason, 765 F.Supp. at 355.
We agree that Mason's maps are original. Originality does not require
"novelty, ingenuity, or aesthetic merit." H.R.REP. No. 1476, 94th Cong., 2d
Sess. 51 (1976), reprinted in 1976 U.S.C.C.A.N. 5659, 5664; see also Feist,
111 S.Ct. at 1287. Instead, originality "means only that the work was
independently created by the author (as opposed to copied from other
works), and that it possesses at least some minimal degree of creativity."
Feist, 111 S.Ct. at 1287 (citing 1 M. Nimmer & D. Nimmer, COPYRIGHT §
2.01[A]-[B] (1990)). The parties do not dispute Mason's claim that he
independently created his maps, but Landata contends that they do not
possess the degree of creativity necessary to qualify them as original
under Feist.
Mason's maps pass muster under Feist because Masons' selection,
coordination, and arrangement of the information that he depicted are
sufficiently creative to qualify his maps as original "compilations" of
facts.[9] Under the originality standard, bare facts are never
copyrightable "because facts do not owe their origin to an act of
authorship." Id. at 1288. A compilation of facts, however, may be
copyrightable if the author made choices as to "which facts to include, in
what order to place them, and how to arrange the collected data so that
they may be used effectively by readers." Id. at 1289. The author's
selection, coordination, and arrangement of facts, however, are protected
only if they were "made independently ... and entail a minimal degree of
creativity." Id.
In Feist, the Court held that the defendant, who copied a list of names,
towns, and telephone numbers from the white pages of the plaintiff's
telephone directory, did not copy anything that was "original" to the
plaintiff. Id. at 1296. The Court explained that the plaintiff's selection of
facts to publish — the name, town, and telephone number of each person
who applied for telephone service — "lacks the modicum of creativity
necessary to transform mere selection into copyrightable expression." Id.
And the plaintiff's arrangement of these facts, which involved "nothing
more than list[ing] ... [the] subscribers in alphabetical order," is "not only
unoriginal, it is practically inevitable." Id. at 1297. Because the plaintiff
"simply [took] the data provided by its subscribers and list[ed] it
alphabetically by surname ..., [t]he end product is a garden-variety white
pages directory, devoid of even the slightest trace of creativity." Id. at
1296.
But the evidence in this case demonstrates that Mason exercised
sufficient creativity when he created his maps. In his deposition and
affidavit, Mason explained the choices that he independently made to
select information from numerous and sometimes conflicting sources,
and to depict that information on his maps.[10] Mason's 142*142
compilation of the information on his maps involved creativity that far
exceeds the required minimum level.
Mason's maps also possess sufficient creativity to merit copyright
protection as pictorial and graphic works of authorship. Historically, most
courts have treated maps solely as compilations of facts. See Wolf, supra
note 4, at 227. The Copyright Act, however, categorizes maps not as
factual compilations but as "pictorial, graphic, and sculptural works" — a
category that includes photographs and architectural plans. 17 U.S.C.A. §
101 (West Supp.1992). Some courts have recognized that maps, unlike
telephone directories and other factual compilations, have an inherent
pictorial or photographic nature that merits copyright protection. See,
e.g., Rockford Map Publishers, Inc. v. Directory Service Co., 768 F.2d 145,
149 (7th Cir.1985) ("Teasing pictures from the debris left by
conveyancers is a substantial change in the form of the information. The
result is copyrightable...."), cert. denied, 474 U.S. 1061, 106 S.Ct. 806, 88
L.Ed.2d 781 (1986); United States v. Hamilton, 583 F.2d 448, 451 (9th
Cir.1978) ("Expression in cartography is not so different from other
artistic forms seeking to touch upon external realities that unique rules
are needed to judge whether the authorship is original."). We agree with
these courts. As Wolf explains in his article:
It is true that maps are factual compilations insofar as their subject
matter is concerned. Admittedly, most maps present information about
geographic relationships, and the "accuracy" of this presentation, with its
utilitarian aspects, is the reason most maps are made and sold. Unlike
most other factual compilations, however, maps translate this subject-
matter into pictorial or graphic form.... Since it is this pictorial or graphic
form, and not the map's subject matter, that is relevant to copyright
protection, maps must be distinguished from non-pictorial fact
compilations.... A map does not present objective reality; just as a
photograph's pictorial form is central to its nature, so a map transforms
reality into a unique pictorial form central to its nature.
Wolf, supra note 4, at 239-40.
The level of creativity required to make a work of authorship original "is
extremely low; even a slight amount will suffice." Feist, 111 S.Ct. at 1287.
We think that the process by which Mason, using his own skill and
judgment, pictorially portrayed his understanding of the reality in
Montgomery County by drawing lines and symbols in particular relation
to one another easily exceeds that level.
Because Mason's maps possess sufficient creativity in both the selection,
coordination, and arrangement of the facts that they depict, and as in the
pictorial, graphic nature of the way that they do so, we find no error in
the district court's determination that Mason's maps are original.
B. AVAILABILITY OF STATUTORY DAMAGES
Mason sought statutory damages rather than actual damages. The district
court held that section 412 of the Copyright Act precludes an award of
statutory damages (and attorney's fees) for any alleged infringement of
all but one of Mason's 143*143 maps. See Mason, 741 F.Supp. at 1285-87.
Mason calls that holding error, but we agree with the district court.
Section 412 provides that:
no award of statutory damages or of attorney's fees, as provided by
sections 504 and 505, shall be made for ... (2) any infringement of
copyright commenced after first publication of the work and before the
effective date of its registration, unless such registration is made within
three months after the first publication of the work.
17 U.S.C.A. § 412 (West Supp.1992). Mason argues that Congress' use of
the phrase "for any infringement" in this section reveals its intent that
courts treat each of a defendant's infringing acts separately and deny
statutory damages only for those specific infringing acts that commenced
prior to registration. Thus, Mason argues, section 412 allows him to
recover statutory damages and attorney's fees for any infringement that
the defendants commenced after he registered the copyrights, even
though they commenced other, separate infringements of the same work
prior to registration. The district court rejected this argument because it
interpreted the term "infringement" to mean all of a defendant's acts of
infringement of any one work. Thus, the court interpreted "the words
`commencement of infringement' to mean the first act of infringement in
a series of on-going separate infringements." 741 F.Supp. at 1286.
We find section 412 to be ambiguous and open to either interpretation.
But we find support for the district court's interpretation in the
legislative history of section 412. The House Report explains that "clause
(2) [of section 412] would generally deny an award of [statutory damages
and attorney's fees] where infringement takes place before registration."
H.R.REP. No. 1476 at 158, reprinted in 1976 U.S.C.C.A.N. at 5659, 5774
(emphasis added). In contrast to the "for any infringement" language of
section 412, this language reveals Congress' intent that statutory
damages be denied not only for the particular infringement that a
defendant commenced before registration, but for all of that defendant's
infringements of a work if one of those infringements commenced prior
to registration.
In addition to the legislative history of section 412, we find support for
the district court's interpretation in 17 U.S.C. § 504. We look to section
504 for assistance in understanding section 412 because section 412 bars
an award of statutory damages "as provided by section 504." Section 504
provides that:
the copyright owner may elect, at any time before final judgment is
rendered, to recover, instead of actual damages and profits, an award of
statutory damages for all infringements involved in the action with
respect to any one work, for which any one infringer is liable individually,
or for which any two or more infringers are liable jointly and severally, in
a sum of not less than $500 or more than $20,000 as the court considers
just.
17 U.S.C.A. § 504(c)(1) (West Supp.1992) (emphasis added). Under this
section, the total number of "awards" of statutory damages (each ranging
from $500 to $20,000) that a plaintiff may recover in any given action
depends on the number of works that are infringed and the number of
individually liable infringers, regardless of the number of infringements
of those works.[11] So if a plaintiff proves that one 144*144 defendant
committed five separate infringements of one copyrighted work, that
plaintiff is entitled to only one award of statutory damages ranging from
$500 to $20,000. And if a plaintiff proves that two different defendants
each committed five separate infringements of five different works, the
plaintiff is entitled to ten awards, not fifty. It would be inconsistent to
read section 504 to include all of one defendant's infringements of one
work within "an award of statutory damages," and then read section 412
to treat each infringement separately for purposes of barring that award.
Moreover, section 504 provides that the plaintiff may elect to recover an
award of statutory damages for all of one defendant's infringements of
any one work "instead of actual damages and profits." Thus, if all of one
defendant's infringements commenced after registration, the plaintiff
may not elect to recover statutory damages for some of those
infringements and actual damages for the rest. See H.R.REP. No. 1476 at
161, reprinted in 1976 U.S.C.C.A.N. at 5659, 5777 ("Recovery of actual
damages and profits under section 504(b) or of statutory damages under
section 504(c) is alternative."). Under Mason's argument, a plaintiff could
recover actual damages for infringements that a defendant commenced
before registration, and still recover statutory damages for infringements
of the same work that the same defendant commenced after registration.
This argument must fail because "an award of statutory damages" —
which section 504 giveth and section 412 taketh away — encompasses all
of one defendant's infringements of one work.
Finally, our conclusion accords with the purpose of section 412. Congress
included section 412 in the Copyright Act of 1976 because "[c]opyright
registration for published works, which is useful and important to users
and the public at large, would no longer be compulsory [under the 1976
Act], and should therefore be induced in some practical way." H.R.REP.
No. 1476 at 158, reprinted in 1976 U.S.C.C.A.N. at 5659, 5774. Denying an
"award of the special or `extraordinary' remedies of statutory damages or
attorney's fees where ... infringement commenced after publication and
before registration" encourages early registration of copyrights. Id. As
one court has noted, "[t]he threat of such a denial would hardly provide a
significant motivation to register early if the owner of the work could
obtain those remedies for acts of infringement taking place after a belated
registration." Singh v. Famous Overseas, Inc., 680 F.Supp. 533, 536
(E.D.N.Y. 1988).
We thus conclude that a plaintiff may not recover an award of statutory
damages and attorney's fees for infringements that commenced after
registration if the same defendant commenced an infringement of the
same work prior to registration. Mason published his 233 maps between
1967 and 1980, and registered the copyright in one map in October 1968.
By the time he registered the remaining 232 copyrights in 1987, the
defendants had reorganized Mason's maps and created and used the
overlays and computer database. As to each work and each defendant, the
alleged acts of infringement that could give rise to an award of statutory
damages had commenced prior to registration of 232 of the works. We
thus uphold this ruling of the district court. If Mason proves infringement,
he may elect to recover statutory damages and attorney's fees only for
the infringements of the map that he registered in 1968.
C. DEFENDANTS' COSTS AND ATTORNEY'S FEES
Because we reverse the district court's final judgment, the defendants are
not presently entitled to costs and attorney's fees as "prevailing parties."
See 17 U.S.C. § 505. We thus reverse the court's amended 145*145 final
judgment of June 5, 1991 that awarded costs and attorney's fees to the
defendants.
III. CONCLUSION
We REVERSE the court's judgments dismissing plaintiff's action and
awarding the defendants costs and attorney's fees, and we REMAND the
case for further proceedings consistent with this opinion.
REVERSED and REMANDED.
UNILEVER PHILIPPINES VS. COURT OF APPEALS
In this petition for review under Rule 45 of the Rules of Court, petitioner
assails the February 24, 1995 decision[1] of the Court of Appeals (CA) in
CA-G.R. SP No. 35242 entitled “Unilever Philippines (PRC), Inc. v.
Honorable Fernando V. Gorospe, Jr. and Procter and Gamble Philippines,
Inc. (P&GP)” which affirmed the issuance by the court a quo of a writ of
preliminary injunction against it. The writ enjoined petitioner from using
and airing, until further orders of the court, certain television
commercials for its laundry products claimed to be identical or similar to
its “double tug” or “tac-tac” key visual.[2]
Petitioner alleges that the writ of preliminary injunction was
issued by the trial court (and affirmed by the CA) without any evidence of
private respondent’s clear and unmistakable right to the writ. Petitioner
further contends that the preliminary injunction issued against it already
disposed of the main case without trial, thus denying petitioner of any
opportunity to present evidence on its behalf.
The antecedents show that on August 24, 1994, private respondent
Procter and Gamble Phils., Inc. filed a complaint for injunction with
damages and a prayer for temporary restraining order and/or writ of
preliminary injunction against petitioner Unilever, alleging that:
1.5. As early as 1982, a P&G subsidiary in Italy
used a key visual in the advertisement of
its laundry detergent and bleaching
products. This key visual known as the
“double-tug” or “tac-tac” demonstration
shows the fabric being held by both hands
and stretched sideways.
1.6. The “tac-tac” was conceptualized for P&G
by the advertising agency Milano and
Gray of Italy in 1982. The “tac-tac” was
used in the same year in an advertisement
entitled “All aperto” to demonstrate the
effect on fabrics of one
of P&GP’sproducts, a liquid bleach called
“Ace.”
xxx xxx xxx
1.7. Since then, P&G has used the “tac-tac” key
visual in the advertisement of its
products. In fact, in 1986, in Italy, the
“tac-tac” key visual was used in the
television commercial for “Ace” entitled
“Kite.”
1.8. P&G has used the same distinctive “tac-tac”
key visual to local consumers in the
Philippines.
xxx xxx xxx
1.10. Substantially and materially imitating the
aforesaid “tac-tac” key visual of P&GP
and in blatant disregard
of P&GP’sintellectual property rights,
Unilever on 24 July 1993 started airing a
60 second television commercial “TVC” of
its “BreezePowerwhite” laundry product
called “Porky.” The said TVC included a
stretching visual presentation and sound
effects almost [identical] or substantially
similar to P&GP’s “tac-tac” key visual.
xxx xxx xxx
1.14. On July 15, 1994, P&GP aired in the
Philippines, the same “Kite” television
advertisement it used in Italy in 1986,
merely dubbing the Italian language with
Filipino for the same produce “Ace”
bleaching liquid which P&GP now
markets in the Philippines.
1.15. On August 1, 1994, Unilever filed a
Complaint with the Advertising Board of
the Philippines to prevent P&GP from
airing the “Kite” television
advertisement.[3]
On August 26, 1994, Judge Gorospe issued an order granting a
temporary restraining order and setting it for hearing on September 2,
1994 for Unilever to show cause why the writ of preliminary injunction
should not issue. During the hearing on September 2, 1994, P&GP
received Unilever’s answer with opposition to preliminary
injunction. P&GP filed its reply to Unilever’s opposition to a preliminary
injunction on September 6, 1994.
During the hearing on September 9, 1994,
Judge Gorospe ordered petitioner to submit a sur-rejoinder. P&GP
received Unilever’s rejoinder to reply on September 13, 1994. The
following day, on September 14, 1994, P&GP filed its sur-reply to
Unilever’s rejoinder.
On September 19, 1994, P&GP received a copy of the order
dated September 16, 1994 ordering the issuance of a writ of preliminary
injunction and fixing a bond of P100,000. On the same date, P&GP filed
the required bond issued by Prudential Guarantee and Assurance, Inc.
On September 21, 1994, petitioner appealed to the CA
assigning the following errors allegedly committed by the court a quo, to
wit:
PUBLIC RESPONDENT HAD ACTED
WITHOUT OR IN EXCESS OF JURISDICTION AND
WITH GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OF JURISDICTION IN ISSUING THE WRIT
OF PRELIMINARY INJUNCTION IN VIOLATION OF
THE RULES ON EVIDENCE AND PROCEDURE,
PARTICULARLY OF SEC. 3 (a), RULE 58 OF THE
REVISED RULES OF COURT AND OF THE
PREVAILING JURISPRUDENCE.
PUBLIC RESPONDENT IN ISSUING THE
VOID ORDER DATED SEPTEMBER 16, 1994, HAD, IN
EFFECT, ALREADY PREJUDGED THE MERITS OF
THE MAIN CASE.
PUBLIC RESPONDENT HAD ISSUED THE
VOID ORDER ACCORDING RELIEF TO A NON-PARTY
IN CIVIL CASE NO. 94-2434 WITHOUT
JURISDICTION.
PUBLIC RESPONDENT IN ISSUING THE
VOID ORDER HAD DEPRIVED PETITIONER OF
 SUBSTANTIVE AND PROCEDURAL DUE PROCESS;
PUBLIC RESPONDENT HAD FORECLOSED
PETITIONER’S RIGHT AND THE OPPORTUNITY TO
CROSS-EXAMINE PROCTER’S WITNESSES ABAD
AND HERBOSA.[4]
On February 24, 1995, the CA rendered its decision finding that
Judge Gorospe did not act with grave abuse of discretion in issuing the
disputed order. The petition for certiorari was thus dismissed for lack of
merit.
After a careful perusal of the records, we agree with the CA and
affirm its decision in toto:
Petitioner does not deny that the
questioned TV advertisements are substantially
similar to P&GP’s “double tug” or “tac-tac” key
visual. However, it submits that P&GP is not entitled
to the relief demanded, which is to enjoin petitioner
from airing said TV advertisements, for the reason
that petitioner has Certificates of Copyright
Registration for which advertisements while P&GP
has none with respect to its “double-tug” or “tac-tac”
key visual. In other words, it is petitioner’s
contention that P&GP is not entitled to any
protection because it has not registered with the
National Library the very TV commercials which it
claims have been infringed by petitioner.
We disagree. Section 2 of PD 49 stipulates
that the copyright for a work or intellectual creation
subsists from the moment of its creation.
Accordingly, the creator acquires copyright for his
work right upon its creation.… Contrary to
petitioner’s contention, the intellectual creator’s
exercise and enjoyment of copyright for his work
and the protection given by law to him is not
contingent or dependent on any formality or
registration. Therefore, taking the material
allegations of paragraphs 1.3 to 1.5
of P&GP’s verified Complaint in the context of PD 49,
it cannot be seriously doubted that at least, for
purposes of determining whether preliminary
injunction should issue during the pendency of the
case, P&GP is entitled to the injunctive relief prayed
for in its Complaint.
The second ground is likewise not well-
taken. As adverted to earlier, the provisional remedy
of preliminary injunction will not issue unless it is
shown in the verified complaint that plaintiff is
probably entitled to the relief demanded, which
consists in whole or in part in restraining the
commission or continuance of the acts complained
of. In view of such requirement, the court has to
make a tentative determination if the right sought to
be protected exists and whether the act against
which the writ is to be directed isviolative of such
right. Certainly, the court’s determination as to the
propriety of issuing the writ cannot be taken as a
prejudgment of the merits of the case because it is
tentative in nature and the writ may be dissolved
during or after the trial if the court finds that
plaintiff was not entitled to it….
xxx xxx xxx
Obviously, the determination made by the
court a quo was only for purposes of preliminary
injunction, without passing upon the merits of the
case, which cannot be done until after a full-blown
hearing is conducted.
The third ground is patently
unmeritorious. As alleged in the Complaint P&GP is
a subsidiary of Procter and Gamble Company (P&G)
for which the “double tug” or “tac-tac” key visual
was conceptualized or created. In that capacity,
P&GP used the said TV advertisement in the
Philippines to promote its products. As such
subsidiary, P&GP is definitely within the protective
mantle of the statute (Sec. 6, PD 49).
Finally, We find the procedure adopted by
the court a quo to be in order….
The record clearly shows that respondent
Judge followed the (procedure provided for in
Section 5, Rule 58, as amended by BP 224, and
Paragraph A(8) of the Interim Rules). In fact, the
court a quo set the incident for hearing on
September 2, 1994, at which date petitioner was
ordered to show cause why the writ should not be
issued. Petitioner filed an Opposition to the
application for preliminary injunction. The same
incident was again set for hearing on September 9,
1994, during which the parties made some
manifestations in support of their respective
positions. Subsequent to such hearing petitioner
filed a Reply to P&GP’sRejoinder to its Opposition.
Under the foregoing circumstances, it is absurd to
even suggest that petitioner was not given its day in
court in the matter of the issuance of the
preliminary injunctive relief.
xxx xxx xxx
There was of course extreme urgency for
the court a quo to act on plaintiff’s application for
preliminary injunction. The airing of TV
commercials is necessarily of limited duration
only. Without such temporary relief, any permanent
injunction against the infringing TV advertisements
of which P&GP may possibly succeed in getting after
the main case is finally adjudicated could be illusory
if by then such advertisements are no longer used or
aired by petitioner. It is therefore not difficult to
perceive the possible irreparable damage which
P&GP may suffer if respondent Judge did not act
promptly on its application for preliminary
injunction.[5]
Preliminary injunction is a provisional remedy intended to
provide protection to parties for the preservation of their rights or
interests during the pendency of the principal action.[6] Thus, Section1,
Rule 58 of the Rules of Court provides:
Section 1. Preliminary injunction defined;
classes. — A preliminary injunction is an order
granted at any stage of an action or proceeding prior
to the judgment or final order, requiring a party or a
court, agency or a person to refrain from a particular
act or acts. It may also require the performance of a
particular act or acts, in which case it shall be known
as a preliminary mandatory injunction.
Injunction is resorted to only when there is a pressing
necessity to avoid injurious consequences which cannot be remedied
under any standard compensation.[7] As correctly ruled by the CA, there
was an extreme urgency to grant the preliminary injunction prayed for by
P&GP considering that TV commercials are aired for a limited period of
time only. In fact, this Court takes note of the fact that the TV commercial
in issue ― the Kite TV advertisement ― is no longer aired today, more
than 10 years after the injunction was granted on September 16, 1994.
The sole objective of a writ of preliminary injunction is to
preserve the status quo until the merits of the case can be heard fully. [8] A
writ of preliminary injunction is generally based solely on initial and
incomplete evidence.[9] Thus, it was impossible for the court a quo to fully
dispose of the case, as claimed by petitioner, without all the evidence
needed for the full resolution of the same. To date, the main case still has
to be resolved by the trial court.
The issuance of a preliminary injunction rests entirely on the
discretion of the court and is generally not interfered with except in cases
of manifest abuse.[10] There was no such abuse in the case at bar,
especially because petitioner was given all the opportunity to oppose the
application for injunction. The fact was, it failed to convince the court
why the injunction should not be issued. Thus, in Santos v. Court of
Appeals,[11] we held that no grave abuse of discretion can be attributed to
a judge or body issuing a writ of preliminary injunction where a party has
not been deprived of its day in court as it was heard and it exhaustively
presented all its arguments and defenses.
WHEREFORE, the petition is hereby DENIED. Costs against
petitioner. SO ORDERED.
SAMBAR VS. LEVI STRAUSS & CO.
Facts:
1. Levi Strauss & Co., and Levi Strauss Phil, Inc., through a letter
from their legal officer, demanded that CVS Garment
Enterprises (CVSGE) desist from using their stitched arcuate
design on the Europress jeans which CVSGE advertised in
the Manila Bulletin.
2. Defense: Atty. Benjamin Gruba, counsel of CVSGE: the arcuate
design on the back pockets of Europress jeans was different
from the design on the back pockets of Levi’s jeans.
a. He further asserted that his client had a copyright on
the design it was using.
3. Private respondents filed a complaint against Sambar, doing
business under the name and style of CVSGE.
a. Private respondents also impleaded the Director of
the National Library.
b. Alleged in their complaint that Levi Strauss and Co.
(LS&Co.), an internationally known clothing
manufacturer, owns the arcuate design trademark
which was registered under U.S. Trademark
Registration No. 404, 248 and in the Principal
Register of trademarks with the Philippine Patent
Office under Certificate of Registration No. 20240
c. CVSGIC and Venancio Sambar, without the consent
and authority of private respondents and in
infringement and unfair competition, sold and
advertised, and despite demands to cease and desist,
continued to manufacture, sell and advertise denim
pants under the brand name “Europress” with back
pockets bearing a design similar to the arcuate
trademark of private respondents, thereby causing
confusion on the buying public, prejudicial to private
respondents’ goodwill and property right.
4. Answer: CVSGIC admitted it manufactured, sold and advertised
and was still manufacturing and selling denim pants under the
brand name of “Europress”, bearing a back pocket design of
two double arcs meeting in the middle.
a. However, it denied that there was infringement or
unfair competition because the display rooms of
department stores where Levi’s and Europress jeans
were sold, were distinctively segregated by
billboards and other modes of advertisement.
b. CVSGIC avers that the public would not be confused
on the ownership of such known trademark as
Levi’s, Jag, Europress, etc.. Also, CVSGIC claimed that
it had its own original arcuate design, as evidenced
by Copyright Registration No. 1-1998, which was
very different and distinct from Levi’s design.
5. TC: issued a writ of preliminary injunction enjoining CVSGIC
and petitioner from manufacturing, advertising and selling
pants with the arcuate design on their back pockets.
6. CA: affirmed
Issue:
WON there was an infringement of respondent’s arcuate mark.
Ruling:
Europress’ use of the arcuate design was an infringement of the Levi’s
design
.
Ratio:
1. The backpocket design of Europress jeans, a double arc
intersecting in the middle was the same as Levi’s’ mark, also a
double arc intersecting at the center.
a. Although the trial court found differences in the
two designs, these differences were not
noticeable.
b. Further, private respondents said, infringement of
trademark did not require exact similarity.
c. Colorable imitation enough to cause confusion
among the public, was sufficient for a trademark to
be infringed.
d. Private respondents explained that in a market
research they conducted with 600 respondents, the
result showed that the public was confused by
Europress trademark vis the Levi’s trademark.
2. It must be stressed that it was immaterial whether or not
petitioner was connected with CVSGIC.
a. What is relevant is that petitioner had a copyright
over the design and that he allowed the use of the
same by CVSGIC.
3. Private respondents assert that the lower courts found that
there was infringement and Levi’s was entitled to damages
based on Sections 22 and 23 of RA No. 166 otherwise known as
the Trade Mark Law, as amended, which was the law then
governing. Said sections define infringement and prescribe the
remedies therefor.
a. Further, private respondents aver it was misleading
for petitioner to claim that the trial court ruled that
private respondents did not suffer pecuniary loss,
suggesting that the award of damages was
improper.
b. According to the private respondents, the trial court
did not make any such ruling. It simply stated that
there was no evidence that Levi’s had suffered
decline in its sales because of the use of the arcuate
design by Europress jeans.
c. They offer that while there may be no direct
proof that they suffered a decline in sales,
damages may still be measured based on a
reasonable percentage of the gross sales of the
respondents, pursuant to Section 23 of the
Trademark law.
4. The cancellation of petitioner’s copyright was justified
because petitioner’s copyright cannot prevail over
respondents’ registration in the Principal Register of
Bureau of Patents, Trademarks, and Technology Transfer.
a. According to private respondents, the essence of
copyright registration is originality and a copied
design is inherently non-copyrightable.
b. They insist that registration does not confer
originality upon a copycat version of a prior design.
5. The award of damages and cancellation of petitioner’s
copyright are appropriate.
a. Award of damages is clearly provided in Section
23, while cancellation of petitioner’s copyright finds
basis on the fact that the design was a mere copy of
that of private respondents’ trademark.
b. To be entitled to copyright, the thing being
copyrighted must be original, created by the
author through his own skill, labor and
judgment, without directly copying or evasively
imitating the work of another.
BAYANIHAN MUSIC VS. BMG, JOSE MARI CHAN
Facts:
Jose Mari Chan (Chan) entered into a contract with Bayanihan Music
Philippines, Inc. (Bayanihan), whereunder the former assigned to the
latter all his rights, interests and participation over his musical
composition "Can We Just Stop and Talk A While". Three years after the
parties entered into a similar contract over Chan's other musical
composition entitled "Afraid For Love To Fade".
On the strength of the abovementioned contracts, Bayanihan applied for
and was granted by the National Library a Certificate of Copyright
Registration for each of the two musical compositions. Apparently,
without the knowledge and consent of petitioner Bayanihan, Chan
authorized BMG Records (BMG) to record and distribute the
aforementioned musical compositions in a then recently released album
of singer Lea Salonga.
Bayanihan informed Chan and BMG of its existing copyrights over the
subject musical compositions and the alleged violation of such right by
the two. Demands were made on both to settle the matter with
Bayanihan. However no settlement was reached by the parties.
Hence, Bayanihan filed a against Chan and BMG for violation of Section
216 of Republic Act No. 8293, otherwise known as the Intellectual
Property Code of the Philippines, with a prayer for the issuance of
Temporary Restraining Order (TRO) and/or writ of preliminary
injunction, enjoining respondent BMG from further recording and
distributing the subject musical compositions in whatever form of
musical products, and Chan from further granting any authority to record
and distribute the same musical compositions.
BMG Arguments:
(1) the acts of recording and publication sought to be enjoined had
already been consummated, thereby rendering moot Bayanihan's prayer
for TRO and/or preliminary injunction;
(2) there is no clear showing that petitioner Bayanihan would be greatly
damaged by the refusal of the prayed for TRO and/or preliminary
injunction.
Chan Arguments:
(1) it was never his intention to divest himself of all his rights and
interest over the musical compositions in question;
(2) the contracts he entered into with Bayanihan are mere music
publication agreements giving Bayanihan, as assignee, the power to
administer his copyright over his two songs and to act as the exclusive
publisher thereof;
(3) he was not cognizant of the application made by and the subsequent
grant of copyrights to Bayanihan;
(4) Bayanihan was remissed in its obligations under the contracts
because it failed to effectively advertise his musical compositions for
almost twenty (20) years, hence, he caused the rescission of said
contracts in 1997.
Issue:
Whether or not Bayanihan as assignee of the copyrights over the musical
compositions in question has a clear legal right to a writ of preliminary
injunction?
Ruling:
No, Bayanihan has no right for right for injunction over the subject
musical compositions.
The issuance of an injunctive writ if the following requisites provided for
by law are:
(1) there must be a right in esse or the existence of a right to be
protected;
(2) the act against which the injunction is to be directed is a violation of
such right, the trial court threaded the correct path in denying
petitioner's prayer therefore,
Chan, the composer and author of the lyrics of the two (2) songs, is
protected by the mere fact alone that he is the creator thereof,
conformably with Republic Act No. 8293, otherwise known as the
Intellectual Property Code, Section 172.2 of which reads:
172.2. Works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as of
their content, quality and purpose.
The copyrights obtained by Bayanihan on the basis of the selfsame two
(2) contracts, suffice it to say 'that such purported copyrights are not
presumed to subsist in accordance with Section 218[a] and [b], of the
Intellectual Property Code, because respondent Chan had put in issue the
existence thereof.
SONY CORPORATION VS. UNIVERSAL CITY STUDIOS
Facts:
Petitioner Sony Corp. manufactures home video tape recorders (VTR's),
and markets them through retail establishments, some of which are also
petitioners. Respondents own the copyrights on some of the television
programs that are broadcast on the public airwaves. Respondents
brought an action against petitioners in Federal District Court, alleging
that VTR consumers had been recording some of respondents' copy-
righted works that had been exhibited on commercially sponsored
television and thereby infringed respondents' copyrights, and further that
petitioners were liable for such copyright infringement because of their
marketing of the VTR's. Respondents sought money damages, an
equitable accounting of profits, and an injunction against the manufacture
and marketing of the VTR's. The District Court denied respondents all
relief, holding that noncommercial home use recording of material
broadcast over the public airwaves was a fair use of copyrighted works
and did not constitute copyright infringement, and that petitioners could
not be held liable as contributory infringers even if the home use of a VTR
was considered an infringing use. The Court of Appeals reversed, holding
petitioners liable for contributory infringement and ordering the District
Court to fashion appropriate relief.
Ruling:
The sale of the VTR's to the general public does not constitute
contributory infringement of respondents' copyrights.
(a) 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, this Court must be circumspect in construing
the scope of rights created by a statute that never contemplated such a
calculus of interests. Any individual may reproduce a copyrighted work
for a "fair use"; the copyright owner does not possess the exclusive right
to such a use.
(b) Kalem Co. v. Harper Brothers, 222 U.S. 55 , does not support
respondents' novel theory that supplying the "means" to accomplish an
infringing activity and encouraging that activity through advertisement
are sufficient to establish liability for copyright infringement. This case
does not fall in the category of those in which it is manifestly just to [464
U.S. 417, 418] 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. Here, the only contact between petitioners and the users of the
VTR's occurred at the moment of sale. And there is no precedent for
imposing vicarious liability on the theory that petitioners sold the VTR's
with constructive knowledge that their 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, indeed, is merely capable of
substantial noninfringing uses.
(c) The record and the District Court's findings show (1) that there is a
significant likelihood that substantial numbers of copyright holders who
license their works for broadcast on free television would not object to
having their broadcast time-shifted by private viewers (i. e., recorded at a
time when the VTR owner cannot view the broadcast so that it can be
watched at a later time); and (2) that there is no likelihood that time-
shifting would cause nonminimal harm to the potential market for, or the
value of, respondents' copyrighted works. The VTR's are therefore
capable of substantial noninfringing uses. Private, noncommercial time-
shifting in the home satisfies this standard of noninfringing uses both
because respondents have no right to prevent other copyright holders
from authorizing such time-shifting for their programs, and because the
District Court's findings reveal that even the unauthorized home time-
shifting of respondents' programs is legitimate fair use.
659 F.2d 963, reversed.
LOS ANGELES NEWS SERVICE VS. FRANK TULLO
I. Overview
Los Angeles News Service ("LANS") records newsworthy events on
videotape and licenses television stations and networks to use all or
segments of the unedited ("raw") footage in edited broadcast news
stories. Audio Video Reporting Services ("AVRS") provides a video "news
clipping" service: It monitors television news programs, records them on
videotape and sells copies of all or segments of the tapes to interested
individuals and businesses.
LANS videotaped the sites of an airplane crash and a train wreck,
registered its copyrights to the tapes, and licensed certain Los Angeles-
area television stations to use them on news programs. AVRS made video
recordings of these news programs, which included portions of LANS's
footage, and marketed the recordings.
LANS sued, claiming copyright infringement. AVRS counterclaimed,
alleging LANS had fraudulently induced AVRS to provide LANS with
copies of AVRS recordings by falsely promising to pay for the tapes. n1
After a bench trial, the district court entered judgment for LANS on the
copyright infringement claims and awarded statutory damages of $
10,000 for each infringement, a total of $ 20,000. The court found for
AVRS on its fraud claim and awarded AVRS $ 346.13.
AVRS appeals, making the following claims: (1) the raw videotapes are
not sufficiently original to merit copyright protection; (2) the public's
First Amendment right of access to videotapes of newsworthy events,
such as the crash and the wreck, precludes copyright protection for the
tapes; (3) even if the tapes are copyrightable, AVRS made "fair use" of
them and is therefore shielded from liability for copyright infringement;
(4) even if AVRS would otherwise be liable for copyright infringement,
LANS's "unclean hands" barred recovery; (5) having found AVRS liable
for copyright infringement, the court should have permanently enjoined
AVRS from copying LANS's copyrighted material without license from
LANS, fixed the terms of a license that would permit AVRS to copy LANS's
copyrighted material, and required LANS to notify AVRS when LANS's
copyrighted material was broadcast; (6) the damage award was
excessive; and (7) a videotape of the train wreck should not have been
admitted into evidence. We affirm.
II. Raw Videotapes as Original Works of Authorship
AVRS claims LANS's raw videotapes, as opposed to the edited news
stories in which portions of those tapes were combined with other
footage, narrative, interview excerpts and graphics to form a television
news "package," are not "original works of authorship" and thus do not
merit copyright protection under @ 102(a) of the Copyright Act of 1976,
17 U.S.C. @@ 101-914. Whether the raw tapes are sufficiently original to
merit copyright protection is a mixed question of law and fact that we
examine denovo. See Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d
197, 201 (9th Cir. 1989).
AVRS argues LANS's tapes merely captured whatever was before the
camera, involved no creativity or intellectual input, and so are not
original works deserving copyright protection. The Supreme Court
rejected a similar argument more than 100 years ago. In Burrow-Giles
Lithographic Co. v. Sarony, 111 U.S. 53 (1884), the plaintiff argued a
photograph of the author Oscar Wilde was not original and therefore not
copyrightable because a "photograph is the mere mechanical
reproduction of the physical features or outlines of some object animate
or inanimate, and involves no originality of thought or any novelty in the
intellectual operation connected with its visible reproduction in shape of
a picture." Id. at 59. The Court did not decide whether all photographs
reflected the necessary originality, id., but held the Wilde photograph
clearly was original because of the creative and intellectual decisions
involved in producing it:
[The court below found that the photograph was] a "useful, new,
harmonious, characteristic, and graceful picture, and that plaintiff made
the same . . . entirely from his own original mental conception, to which
he gave visible form by posing the said Oscar Wilde in front of the camera,
selecting and arranging the costume, draperies, and other various
accessories in said photograph, arranging the subject so as to present
graceful outlines, arranging and disposing the light and shade, [and]
suggesting and evoking the desired expression . . . ."
These findings, we think, show this photograph to be an original work of
art, the product of plaintiff's intellectual invention, of which plaintiff is the
author . . . .
Id. at 60.
Thirty-seven years later, Judge Learned Hand suggested the question left
open in Burrow-Giles - whether all photographs are sufficiently original
by their nature to merit copyright protection - had been answered in the
affirmative by Bleistein v. Donaldson Lithographing Co., 188 U.S. 239
(1903), which held that chromolithographs that depicted real scenes and
people, as photographs do, were copyrightable because they were "the
personal reaction of an individual upon nature. Personality always
contains something unique. It expresses its singularity even in
handwriting, and a very modest grade of art has in it something
irreducible, which is one man's alone. That something he may copyright . .
. ." Id. at 250. In Jewelers' Circular Publishing Co. v. Keystone Publishing
Co., 274 F. 932, 934 (S.D.N.Y. 1921), aff'd, 281 F. 83 (2d Cir. 1922), Judge
Hand said, "Burrow-Giles [Lithographic] Co. v. Sarony . . . left open an
intimation that some photographs might not be protected . . . . I think that
. . . Bleistein v. Donaldson Lithographing Co. . . . rules, because no
photograph, however simple, can be unaffected by the personal influence
of the author, and no two will be absolutely alike."
Professor Nimmer's treatise reports that Judge Hand's statement of the
law "has become the prevailing view, so that [almost] any . . . photograph
may claim the necessary originality to support a copyright merely by
virtue of the photographers' personal choice of subject matter, angle of
photograph, lighting, and determination of the precise time when the
photograph is to be taken." 1 Melville B. Nimmer & David Nimmer,
Nimmer on Copyright (" Nimmer") @ 2.08[E][1], at 2 - 126.3 (1992 ed.)
(footnote omitted). n2 We have stated before that the courts have
recognized repeatedly that the creative decisions involved in producing a
photograph may render it sufficiently original to be copyrightable and
"have carefully delineated selection of subject, posture, background,
lighting, and perhaps even perspective alone as protectible elements of a
photographer's work." United States v. Hamilton, 583 F.2d 448, 452 (9th
Cir. 1978); see also Time, Inc. v. Bernard Geis Assocs., 293 F. Supp. 130,
142-43 (S.D.N.Y. 1968) (amateur photographer's raw footage of the
assassination of President John Kennedy was sufficiently original because
of the creative effort involved in selecting type of camera, film, lens, area
in which to shoot, time to film, and position of camera).
Whether or not every photograph or raw videotape is original and
therefore copyrightable, it is clear from the record in this case that the
preparation of the two videotapes at issue required the intellectual and
creative input entitled to copyright protection. n3 The district court so
concluded after hearing testimony, from the operator of the video camera
and the pilot of the helicopter in which the camera operator flew,
regarding the production of LANS's news videotapes in general and the
tapes in this case in particular. The witnesses described the initial
decisions about the newsworthiness of the events and how best to tell the
stories succinctly and effectively; the selections of camera lenses, angles
and exposures; the choices of the heights and directions from which to
tape and what portions of the events to film and for how long. The camera
operator described herself as "an artist. I use a paintbrush. I use the
camera to tell a story."
AVRS's reliance on Cable News Network, Inc. v. Video Monitoring Services
of America, Inc. ("CNN"), 940 F.2d 1471, vacated, 949 F.2d 378 (11th Cir.
1991), to support its contention that under Feist Publications, Inc. v.
Rural Telephone Service Co., Inc., 111 S. Ct. 1282 (1991), the videotapes
did not possess the required originality, is misplaced. n4 Feist stated the
"requisite level of creativity is extremely low; even a slight amount will
suffice. The vast majority of works make the grade quite easily, as they
possess some creative spark, 'no matter how crude, humble or obvious' it
might be." Feist, 111 S. Ct. at 1287 (citation omitted). Feist held only that
a "garden-variety" telephone directory listing subscribers alphabetically
by surname was not sufficiently original because the selection and
arrangement was "entirely typical" and "devoid of even the slightest trace
of creativity." Id. at 1296-97. The Court did not disavow the century-old
proposition that photographs may be copyrightable as the original
products of creative and artistic decisions; rather, the Court explicitly
reaffirmed Burrow-Giles, stating that "the originality requirement
articulated [therein] remains the touchstone of copyright protection
today." Id. at 1288.
III. First Amendment Preclusion of Copyright Protection
AVRS contends that even if the tapes are original enough to merit
copyright protection, we should adopt a bright-line rule that no videotape
of a newsworthy event is copyrightable because its creator's proprietary
interest must give way to the public's First Amendment right of access to
information.
Copyright law incorporates First Amendment goals by ensuring that
copyright protection extends only to the forms in which ideas and
information are expressed and not to the ideas and information
themselves. "The idea-expression dichotomy . . . serves to accommodate
the competing interests of copyright and the first amendment. The
'marketplace of ideas' is not limited by copyright because copyright is
limited to protection of expression." Sid & Marty Krofft Television Prods.,
Inc. v. McDonald's Corp. ("Krofft"), 562 F.2d 1157, 1170 (9th Cir. 1977);
see also Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539,
556 (1985) ("copyright's idea/expression dichotomy 'strikes a
definitional balance between the First Amendment and the Copyright Act
by permitting free communication of facts while still protecting an
author's expression' " (citation omitted)).
First Amendment concerns are also addressed in the copyright field
through the "fair use" doctrine, discussed in part IV of this opinion. As we
will note, First Amendment considerations are relevant in determining
whether the purpose of copying a work and the nature of the work copied
militate in favor of finding a given use of a particular work to be a "fair
use," for which no liability should be imposed.
Professor Nimmer has suggested the idea-expression dichotomy and the
fair use doctrine may not adequately protect First Amendment interests
in some circumstances. 1 Nimmer @ 1.10[C][2], at 1 - 81. Citing the
exclusive photographs of the My Lai massacre during the Vietnam War
and the Zapruder home movie of the assassination of President John
Kennedy as examples, Nimmer proposes that "where the 'idea' of a work
contributes almost nothing to the democratic dialogue, and it is only its
expression which is meaningful," copyright protection of the expression
should be limited in the interest of public access to information necessary
to effective public dialogue. Id. at 1 - 82-1 - 84. Nimmer explains:
No amount of words describing the "idea" of the massacre could
substitute for the public insight gained through the photographs. The
photographic expression, not merely the idea, became essential if the
public was to fully understand what occurred in that tragic episode. It
would be intolerable if the public's comprehension of the full meaning of
My Lai could be censored by the copyright owner of the photographs. . . .
Similarly, in the welter of conflicting versions of what happened that
tragic day in Dallas, the Zapruder film gave the public authoritative
answers that it desperately sought; answers that no other source could
supply with equal credibility. Again, it was only the expression, not the
idea alone, that could adequately serve the needs of an enlightened
democratic dialogue.
Id. at 1 - 83-1 - 84.
Nimmer recognizes, however, that denying copyright protection to news
pictures might defeat the ultimate First Amendment goal of greater public
access to information by inhibiting or destroying the business of news
photography. Id. at 1 - 84.1-1 - 85. The treatise therefore suggests a news
photograph in which idea and expression are inseparable should be
subject to a compulsory licensing scheme unless within a month of its
making, the photograph appears in the newspapers, magazines or
television news programs servicing a given area. Id. at 1 - 85. n5
Because there was no showing that other depictions and reports of the
plane crash and train wreck were unavailable or omitted information
vital to the public understanding of the events, and because the record
establishes that LANS's tapes were shown on local television programs
immediately after the events and thus were freely available to the public,
we conclude the problem perceived by Professor Nimmer was not
present in this case, and we reject, as indeed would Professor Nimmer,
AVRS's contention that the First Amendment precludes liability for
infringement of LANS's copyrights.
IV. Fair Use
AVRS contends that if the videotapes are copyrightable, AVRS's use of
them is protected by the doctrine of fair use, which " 'allows a holder of
the privilege to use copyrighted material in a reasonable manner without
the consent of the copyright owner.' " Lewis Galoob Toys, Inc. v. Nintendo
of America, Inc., No. 91-16205, slip op. 9345, 9354 (9th Cir. May 21, 1992,
as amended Aug. 5, 1992) (citation omitted). Fair use is a mixed question
of law and fact. Harper & Row, 471 U.S. at 560. Where the district court
has found facts sufficient to evaluate each of the statutory factors
considered in determining fair use, as did the court here, we may
determine as a matter of law whether the challenged use is a fair one. Id.
Congress has identified four nonexclusive factors as "especially relevant"
in determining fair use. Id. The Copyright Act provides:
The fair use of a copyrighted work . . . for purposes such as criticism,
comment, news reporting, teaching . . ., scholarship, or research, is not an
infringement of copyright. In determining whether the use made of a
work in any particular case is a fair use the factors to be considered shall
include -
(1) the purpose and character of the use, including whether such use is of
a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the
copyrighted work.
17 U.S.C. @ 107.
(1) AVRS argues the district court erred in finding AVRS's use of the tapes
was not a fair use because the use was commercial in character. AVRS
maintains its clients used the tapes for "research, scholarship and private
study," and therefore AVRS's use must be considered fair in light of Sony
Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984).
Even assuming AVRS's representation of its clients' use of the tapes to be
accurate, Sony does not dictate the result for which AVRS argues. Sony
held distributors of videotape recorders ("VTRs") were not vicariously
liable for copyright infringements allegedly committed by VTR
purchasers because VTRs could be used for "private, noncommercial
time-shifting [taping for later viewing] in the home," id. at 442, and such a
private, noncommercial, nonprofit activity is presumptively a fair use, id.
at 449.
Unlike the claim against the VTR distributors involved in Sony, LANS's
claim against AVRS is not that AVRS is vicariously liable for alleged
infringements by its customers but that it is directly liable for its own
infringements. The difference is crucial: Under Sony, a VTR owner who
tapes a copyrighted movie broadcast over a public television station to
watch at home at a later time is protected by the fair use doctrine, but a
VTR owner who tapes the movie to sell copies to others without the
copyright owner's consent is subject to a range of civil and criminal
sanctions. See, e.g., id. at 434 n.15 ("anyone who willfully infringes the
copyright to reproduce a motion picture for purposes of commercial
advantage or private financial gain is subject to substantial criminal
penalties"). The fact that the VTR owner's customer buys the tape to
watch the movie at home at a convenient time will not shield the VTR
owner from liability; the ultimate use to which the customer puts the tape
is irrelevant, as is the use AVRS's customers make of the tapes AVRS sells.
Moreover, if AVRS had been sued on a theory of vicarious liability, AVRS's
clients' use of LANS's footage for "research, scholarship and private
study" would not automatically be deemed fair. The four statutory factors
must still be considered. For the same reason, AVRS's argument that its
use of the tapes was fair as a matter of law because its purpose was
"private news reporting" is unavailing. Even if AVRS's characterization of
its purposewas correct, it would not be dispositive:
News reporting is one of the examples enumerated in @ 107 to "give
some idea of the sort of activities the courts might regard as fair use
under the circumstances." This listing was not intended . . . to single out
any particular use as presumptively a "fair" use. . . . The fact that an article
arguably is "news" and therefore a productive use is simply one factor in
a fair use analysis.
Harper & Row, 471 U.S. at 561 (citations omitted). In any case, AVRS is no
more a "news reporter" than the VTR owner who tapes a publicly
broadcast movie is a filmmaker.
AVRS's purposes are "unabashedly commercial." Pacific & S. Co., Inc. v.
Duncan ("Duncan"), 744 F.2d 1490, 1496 (11th Cir. 1984) ("Of course,
every commercial exchange of goods and services involves both the
giving of the good or service and the taking of the purchase price. The fact
that [the defendant] focuses on the giving rather than the taking cannot
hide the fact that profit is its primary motive for making the exchange.").
In Sony, the Court emphasized that if a VTR owner copied material
previously broadcast over the public airwaves for a commercial or profit-
making purpose, that use "would presumptively be unfair." Sony, 464 U.S.
at 449. This factor weighs against AVRS.
(2) The second factor bearing on the availability of the fair use exception
is the nature of the copyrighted work - here, videotapes of news events.
"The law generally recognizes a greater need to disseminate factual
works than works of fiction or fantasy." Harper & Row, 471 U.S. at 563;
see also Sony, 464 U.S. at 454 (interest in expanding public access to
television broadcasting is factor to be considered in determining fair
use); Duncan, 744 F.2d at 1497 (the "importance to society of the news
could affect the definition of a fair use for a number of reasons"). This
factor weighs in AVRS's favor. n6
(3) AVRS contends the third factor, the amount and substantiality of the
portion used in relation to the copyrighted work as a whole, also weighs
in its favor because AVRS copied only a small portion of LANS's
copyrighted footage: the "clips" included in the television newscasts
AVRS recorded. Copying even a small portion of a copyrighted work may
exceed the boundaries of fair use if the material taken is the "heart" of the
work. See Harper & Row, 471 U.S. at 564-65 (while words quoted by
copyright infringers were "an insubstantial portion" of President Ford's
unpublished memoirs, they were the "heart of the book" in that they were
among the most "interesting," "moving" and "powerful" passages).
Although AVRS copied only a small part of the raw footage shot by LANS,
it was the most valuable part of that footage. In preparing a newscast, a
television station selects the most effective and illustrative shots from the
raw footage available. Thus the news programs AVRS copied included
what LANS's customers thought was the best of the LANS footage - its
"heart." The third factor weighs against AVRS. n7
(4) The fourth factor, the effect of the use upon the potential market for
or value of the copyrighted work, "is undoubtedly the single most
important element of fair use." Harper & Row, 471 U.S. at 566. This factor
militates against a finding of fair use if there is a "showing by a
preponderance of the evidence that some meaningful likelihood of future
harm exists. If the intended use is for commercial gain, that likelihood
may be presumed." Sony, 464 U.S. at 451 (emphasis deleted).
Although the AVRS and LANS markets are not identical - AVRS sells
edited news stories copied from television news programs to individuals
and businesses while LANS licenses television stations to use its raw
footage in producing news programs - there is an overlap between the
AVRS market and the potential LANS market. At least some AVRS
customers might choose to buy raw footage from LANS if they could not
purchase edited news stories from AVRS, and LANS might choose to sell
the raw footage to them. Cf. Duncan, 744 F.2d at 1496 ("[The news
clipping service] uses the broadcasts for a purpose that [the broadcaster]
might use for its own benefit. The fact that [the broadcaster] does not
actively market copies of the news programs does not matter, for Section
107 [of the Copyright Act] looks to the 'potential market' in analyzing the
effects of an alleged infringement."). This factor also weighs against AVRS.
Only one of the four statutory factors (the nature of the copyrighted
work) argues in favor of classifying AVRS's unauthorized use of LANS's
copyrighted material as fair. The remainder (the commercial character of
the use, the use of the most valuable part of the material, and the adverse
impact upon LANS's potential market) argue strongly to the contrary. On
balance, we conclude that the doctrine of fair use does not protect AVRS
from liability for infringing LANS's copyrights. n8
V. Unclean Hands
AVRS contends the district court erred by failing to find LANS was barred
from prevailing on its copyright claim because of its "unclean hands."
"The application of the unclean hands doctrine raises primarily a
question of fact." Dollar Sys., Inc. v. Avcar Leasing Sys., Inc., 890 F.2d 165,
173 (9th Cir. 1989). We review factual findings for clear error. Lewis
Galoob Toys, slip op. at 9349.
AVRS maintains LANS should be barred from recovering for AVRS's
copyright infringement because LANS induced AVRS to provide LANS
with copies of videotapes at issue in this litigation by giving AVRS a check
for $ 346.13 on which LANS then stopped payment. Arguably, this
behavior could constitute unclean hands. See 3 Nimmer @ 13.09[B], at 13
- 149-13 - 150 (defense of unclean hands has been recognized where
plaintiff "obtained information as to the nature of defendant's work
through unfair means"). However, the defense is rarely effective, id. at 13
- 148, and is properly denied when the "plaintiff's transgression is of an . .
. inconsequential nature," id. at 13 - 150 (footnote omitted). The district
court did not err in concluding LANS's behavior was not sufficiently
serious to bar it from recovery.
VI. Injunctive Relief
AVRS contends the district court should have granted LANS's request for
an injunction barring AVRS from copying LANS's copyrighted material
without a license, and should have fixed the terms of a license that would
permit AVRS to copy LANS's copyrighted material and ordered LANS to
notify AVRS when LANS's copyrighted material was broadcast. AVRS
opposed LANS's request initially but changed its position when the
district court ruled in LANS's favor on the merits. LANS now opposes the
injunctive relief it originally sought.
The district court had discretion to grant the injunction LANS requested
but had no obligation to do so after LANS abandoned its request. Cf.
Universal City Studios, Inc. v. Sony Corp. of America, 659 F.2d 963, 976
(9th Cir. 1981) (citing Nimmer for proposition it would be abuse of
discretion to deny plaintiff's request for permanent injunction after
liability and threat of continuing infringement had been established),
rev'd on other grounds, 464 U.S. 417 (1984). Neither was the court
required to compel LANS to grant AVRS license to copy LANS's
copyrighted material nor to protect AVRS from the possibility that
without the notification provision AVRS sought, it might inadvertently
copy LANS's copyrighted material and thus become liable for further
substantial damages. See Universal City Studios, 659 F.2d at 976 ("In
fashioning relief, the district court should not be overly concerned with
the prospective harm to [defendant]. A defendant has no right to expect a
return on investment from activities which violate the copyright laws.
Once a determination has been made that an infringement is involved, the
continued profitability of [defendant's] business[ ] is of secondary
concern."). n9
VII. Damages
AVRS claims that because it had a good faith belief in the legality of
copying the newscasts containing LANS's copyrighted material, the
district court erred by awarding more than minimal damages. AVRS relies
on 17 U.S.C. @ 504(c)(2), which provides that "in a case where the
infringer sustains the burden of proving, and the court finds, that such
infringer was not aware and had no reason to believe that his or her acts
constituted an infringement of copyright, the court in its discretion may
reduce the award of statutory damages to a sum of not less than $ 200."
The district court did not find AVRS "had no reason to believe" its acts did
not constitute infringement. Even if the court had so found, @ 504(c)(2)
does not mandate a nominal award. On this record, the district court did
not abuse its discretion by declining to reduce the award. n10
VIII. Evidentiary Ruling
Finally, AVRS argues the district court erred by admitting a videotape of
the train wreck into evidence. "Evidentiary rulings are reviewed for
abuse of discretion and will not be reversed absent prejudice." Roberts v.
College of the Desert, 870 F.2d 1411, 1418 (9th Cir. 1988). AVRS argues it
was prejudiced because there would have been no evidence that AVRS
infringed LANS's copyright to the footage of the train wreck without the
tape. AVRS is incorrect. The videographer who shot the footage testified
at trial that she saw her video broadcast on a local channel; another LANS
employee testified the station that broadcast on that channel had been
licensed to use the footage; and AVRS's log sheets showed AVRS sold a
copy of that station's newscast from the day in question to the Southern
Pacific Transportation Company, whose train derailed in the wreck. This
evidence was sufficient to permit the trier of fact to infer AVRS sold a
copy of a news program containing LANS's copyrighted footage of the
train wreck without LANS's consent, thus infringing LANS's copyright.
Assuming error, AVRS was not prejudiced.
AFFIRMED. n11
n1 LANS obtained copies of the infringing tapes by presenting AVRS with
a $ 346.13 check on which LANS later stopped payment.
n2 The exceptions Nimmer would recognize do not apply in this case. See
id. at 2 - 126.3-2 - 126.7 (suggesting a photograph of a copyrighted
photograph would not be copyrightable, nor would a photograph that
duplicated exactly every single element of a copyrighted photograph).
n3 We do not imply the mere time and effort LANS invested in making
the videotapes entitle the tapes to copyright protection; originality in the
work product is required. See Feist Publications, Inc. v. Rural Tel. Serv.
Co., Inc., 111 S. Ct. 1282, 1291-92 (1991) (rejecting the "sweat of the
brow" doctrine that held mere industrious compilation deserving of
copyright even if the compilation was not original).
n4 CNN is not precedential even in the Eleventh Circuit since it was
vacated for reconsideration by the en banc court. See Ierna v. Arthur
Murray Int'l, Inc., 833 F.2d 1472, 1475 n.4 (11th Cir. 1987) (opinion
vacated on rehearing is not binding precedent). The en banc court
dismissed the appeal. Cable News Network, Inc. v. Video Monitoring
Servs. of America, Inc., 959 F.2d 188 (11th Cir. 1992) (en banc) (district
court had entered permanent injunction which was not before the court
so appeal was dismissed as it would not be judicious to grant relief
sought).
In any case, the CNN panel considered an injunction barring the copying
of any portion of an entire newscast, which consisted of "various news
stories, prerecorded segments, interviews, and weather reports" which
themselves were "preexisting, collected and assembled" works, CNN, 940
F.2d at 1485, a very different issue from the copyrightability of raw
footage that may be used in such a newscast. CNN found the injunction
too broad because the newscast was a compilation of preexisting
materials, see 17 U.S.C. @ 101, and so merited copyright protection only
to the extent the selection and arrangement of those materials was
original. CNN, 940 F.2d at 1485-86; see also 17 U.S.C. @ 103(b) ("The
copyright in a compilation . . . extends only to the material contributed by
the author of such work, as distinguished from the preexisting material
employed in the work . . . ."). The tapes at issue in this case were not
compilations of preexisting works or data; they were preexisting creative
works that were incorporated into the kind of compilatory news
programs the CNN panel discussed.
n5 No court has adopted Nimmer's proposal. Those that have discussed it
have found it inapplicable to the facts before them. See, e.g., Krofft, 562
F.2d at 1171 & n.16 (defendants infringed by producing "McDonaldland"
television commercials substantially similar to plaintiffs' "H.R. Pufnstuf"
children's television show; court found there "may be certain rare
instances when first amendment considerations will operate to limit
copyright protection for graphic expressions of newsworthy events" but
Nimmer exception was inapplicable because plaintiffs' work did not fit
Nimmer's definition of a news photograph); Roy Export Co. Estab. of
Vaduz v. Columbia Broadcasting Sys., Inc., 672 F.2d 1095, 1100 (2d Cir.
1982) (defendant CBS infringed by including copyrighted film clips from
several Charlie Chaplin movies in a television biography of the comedian;
court stated "even if we were inclined to recognize some narrow
exception [such as the one Nimmer suggests] on extraordinary facts, we
would still conclude that the facts in this case could not support the
invention or application of even a limited privilege" because the "showing
of copyrighted films was not essential to CBS's news report of Charlie
Chaplin's death or to its assessment of his place in history"); Iowa State
Univ. Research Found., Inc. v. American Broadcasting Cos., Inc., 621 F.2d
57, 61 n.6 (2d Cir. 1980) (defendant ABC infringed by including in its film
biography of an Olympic wrestler portions of an earlier film biography of
the wrestler produced by two university students; court recognized that
in the "almost unique instance" of the Zapruder film, "it is at least
arguable that the informational value of that film cannot be separated
from the photographer's expression" but "such situations are rare" and
the student film at issue "does not fall within this limited category");
Pacific & S. Co., Inc. v. Duncan, 572 F. Supp. 1186, 1193 (N.D. Ga. 1983)
(defendant, a video monitoring service like AVRS, infringed television
station's copyright in a news feature about a "fitness trail" at a local
college; court found Nimmer's hypothesis "theoretically provocative" but
inapplicable because the "soft news" story, "though informational, hardly
fits in a category with film of the My Lai massacre" and because both the
story and the trail itself were available for viewing), aff'd in part and rev'd
in part, 744 F.2d 1490 (11th Cir. 1984).
n6 AVRS cites the Supreme Court's statement in Sony that "copying a
news broadcast may have a stronger claim to fair use than copying a
motion picture," 464 U.S. at 455 n.40, to support its contention that the
nature of the copyrighted work at issue in this case outweighs the
commercial use to which it was put. AVRS takes the Sony Court's
statement out of context. The Court was explaining that some copyrights
are more valuable because they "govern material with broad potential
secondary markets. Such material may well have a broader claim to
protection because of the greater potential for commercial harm." Id.
Thus, "copying a news broadcast may have a stronger claim to fair use
than copying a motion picture" because the potential market for copies of
news broadcasts is not as great as that for copies of movies. This
discussion concerns not the second factor, the nature of the copyrighted
work, but the fourth factor, the effect upon the potential market for the
copyrighted work.
n7 AVRS argues that because its service is essentially one of time-shifting,
the third factor would not count against a finding of fair use even if AVRS
had copied all of LANS's copyrighted footage of the train wreck and plane
crash. AVRS relies on the statement in Sony that because "time-shifting
merely enables a viewer to see [a televised copyrighted audiovisual
work] which he had been invited to witness in its entirety free of charge,
the fact that the entire work is reproduced does not have its ordinary
effect of militating against a finding of fair use." Sony, 464 U.S. at 449-50
(citation omitted). Again, AVRS's reliance on Sony is misplaced. While a
viewer is "invited to witness [a telecast program] in its entirety free of
charge" and may therefore do so at a time the viewer finds convenient,
the viewer is not invited to sell copies of the program.
n8 AVRS does not qualify for the exemption from liability provided by 17
U.S.C. @ 109(a), which allows the lawful owner of a copy of a copyrighted
work to sell the copy. AVRS did not purchase from LANS the copies of the
tapes AVRS sold, and the television stations that broadcast the tapes were
only licensed to use them and could not authorize AVRS to sell them. See
17 U.S.C. @ 109(d) (privilege of selling copy does not "extend to any
person who has acquired possession of the copy . . . from the copyright
owner, by rental, lease, loan, or otherwise, without acquiring ownership
of it"); Duncan, 744 F.2d at 1494 n.6 (for purposes of 17 U.S.C. @ 109, the
defendant video news monitoring service "cannot be considered a
newspaper clipping service because it does not purchase the copy that it
sells to its clients"); see also United States v. Wise, 550 F.2d 1180, 1190-
91 (9th Cir. 1977) (for purposes of 17 U.S.C. @ 27, predecessor to 17
U.S.C. @ 109, theaters granted license to exhibit films did not own the
films and so could not lawfully have sold them).
n9 Nonetheless, to avoid unnecessary litigation in the future, it would be
prudent for LANS to require its licensees to identify LANS's footage when
it is broadcast.
n10 We also reject AVRS's argument that the court erred in awarding
statutory damages of $ 10,000 rather than $ 5,000 for the infringement of
the copyright to the plane crash footage. The argument hinges on AVRS's
theory that the district court believed each of the two infringements was
worth half the statutory maximum of $ 20,000, but that because the
statutory maximum for the plane crash tape was actually $ 10,000, the
court should have awarded LANS only $ 5,000 for that infringement.
There is no evidence the district court awarded $ 10,000 for the plane
crash footage infringement based on a belief the infringement was worth
half the statutory maximum; the court could simply have believed the
infringement merited a $ 10,000 damage award.
In any case, the statutory maximum for the infringement of the copyright
to the plane crash footage was $ 20,000. The court found the infringement
occurred on March 1, 1989, the date the statutory maximum increased
from $ 10,000 to $ 20,000 under the Berne Convention. See Historical and
Statutory Notes to 17 U.S.C.A. @ 504 (West Supp. 1992).
n11 AVRS's motion to supplement the excerpts of record with material
previously stricken as outside the record is denied. LANS's request for
sanctions against AVRS for bringing the motion is also denied.
CAMPBELL VS. ACUFF-ROSE MUSIC
Facts:
Respondent Acuff Rose Music, Inc., filed suit against petitioners, the
members of the rap music group 2 Live Crew and their record company,
claiming that 2 Live Crew's song, "Pretty Woman," infringed Acuff Rose's
copyright in Roy Orbison's rock ballad, "Oh Pretty Woman." The District
Court granted summary judgment for 2 Live Crew, holding that its song
was a parody that made fair use of the original song. See Copyright Act of
1976, 17 U.S.C. § 107. The Court of Appeals reversed and remanded,
holding that the commercial nature of the parody rendered it
presumptively unfair under the first of four factors relevant under §107;
that, by taking the "heart" of the original and making it the "heart" of a
new work, 2 Live Crew had, qualitatively, taken too much under the third
§107 factor; and that market harm for purposes of the fourth §107 factor
had been established by a presumption attaching to commercial uses.
Ruling:
2 Live Crew's commercial parody may be a fair use within the meaning of
§107. Pp. 4-25.
(a) Section 107, which provides that "the fair use of a copyrighted work . .
. for purposes such as criticism [or] comment . . . is not an infringement . . .
," continues the common law tradition of fair use adjudication and
requires case by case analysis rather than bright line rules. The statutory
examples of permissible uses provide only general guidance. The four
statutory factors are to be explored and weighed together in light of
copyright's purpose of promoting science and the arts. Pp. 4-8.
(b) Parody, like other comment and criticism, may claim fair use. Under
the first of the four §107 factors, "the purpose andcharacter of the use,
including whether such use is of a commercial nature . . . ," the enquiry
focuses on whether the new work merely supersedes the objects of the
original creation, or whether and to what extent it is "transformative,"
altering the original with new expression, meaning, or message. The more
transformative the new work, the less will be the significance of other
factors, like commercialism, that may weigh against a finding of fair use.
The heart of any parodist's claim to quote from existing material is the
use of some elements of a prior author's composition to create a new one
that, at least in part, comments on that author's work. But that tells courts
little about where to draw the line. Thus, like other uses, parody has to
work its way through the relevant factors. Pp. 8-12.
(c) The Court of Appeals properly assumed that 2 Live Crew's song
contains parody commenting on and criticizing the original work, but
erred in giving virtually dispositive weight to the commercial nature of
that parody by way of a presumption, ostensibly culled from Sony Corp.
of America v. Universal City Studios, Inc., 464 U.S. 417, 451, that "every
commercial use of copyrighted material is presumptively . . . unfair . . . ."
The statute makes clear that a work's commercial nature is only one
element of the first factor enquiry into its purpose and character, and
Sony itself called for no hard evidentiary presumption. The Court of
Appeals's rule runs counter to Sony and to the long common law tradition
of fair use adjudication. Pp. 12-16.
(d) The second §107 factor, "the nature of the copyrighted work," is not
much help in resolving this and other parody cases, since parodies almost
invariably copy publicly known, expressive works, like the Orbison song
here. Pp. 16-17.
(e) The Court of Appeals erred in holding that, as a matter of law, 2 Live
Crew copied excessively from the Orbison original under the third §107
factor, which asks whether "the amount and substantiality of the portion
used in relation to the copyrighted work as a whole" are reasonable in
relation to the copying's purpose. Even if 2 Live Crew's copying of the
original's first line of lyrics and characteristic opening bass riff may be
said to go to the original's "heart," that heart is what most readily
conjures up the song for parody, and it is the heart at which parody takes
aim. Moreover, 2 Live Crew thereafter departed markedly from the
Orbison lyrics and produced otherwise distinctive music. As to the lyrics,
the copying was not excessive in relation to the song's parodic purpose.
As to the music, this Court expresses no opinion whether repetition of the
bass riff is excessive copying, but remands to permit evaluation of the
amount taken, in light of thesong's parodic purpose and character, its
transformative elements, and considerations of the potential for market
substitution. Pp. 17-20.
(f) The Court of Appeals erred in resolving the fourth §107 factor, "the
effect of the use upon the potential market for or value of the copyrighted
work," by presuming, in reliance on Sony, supra, at 451, the likelihood of
significant market harm based on 2 Live Crew's use for commercial gain.
No "presumption" or inference of market harm that might find support in
Sony is applicable to a case involving something beyond mere duplication
for commercial purposes. The cognizable harm is market substitution, not
any harm from criticism. As to parody pure and simple, it is unlikely that
the work will act as a substitute for the original, since the two works
usually serve different market functions. The fourth factor requires
courts also to consider the potential market for derivative works. See, e.
g., Harper & Row, supra, at 568. If the later work has cognizable
substitution effects in protectable markets for derivative works, the law
will look beyond the criticism to the work's other elements. 2 Live Crew's
song comprises not only parody but also rap music. The absence of
evidence or affidavits addressing the effect of 2 Live Crew's song on the
derivative market for a nonparody, rap version of "Oh, Pretty Woman"
disentitled 2 Live Crew, as the proponent of the affirmative defense of fair
use, to summary judgment. Pp. 20-25.
972 F. 2d 1429, reversed and remanded.
TRIAD SYSTEMS VS. SOUTHEASTERN EXPRESS CO.
Southeastern Express Company (“Southeastern”) appeals the district
court's grant of a preliminary injunction in favor of Triad Systems
Corporation (“Triad”). The injunction followed a finding that
Southeastern was infringing on Triad's software copyrights.1 The terms
of the injunction substantially prohibit Southeastern from servicing Triad
computer systems. In a consolidated appeal, two of Triad's attorneys,
Jeffrey Lederman and Michael Madison (“Lederman and Madison”),
appeal the imposition of Rule 11 sanctions against them for filing a
misleading declaration in support of Triad's motion for injunctive relief.
For the reasons discussed below, we affirm the grant of the preliminary
injunction against Southeastern and reverse the imposition of Rule 11
sanctions against Lederman and Madison.
I. FACTS AND PROCEEDINGS BELOW
Triad manufactures computers for use by automotive parts stores and
designs, sells, and licenses unique software to run its computers. The
computer systems enable customers in the automotive parts industry to
automate their sales, inventory, and accounting tasks. Southeastern is
what is known as an independent service organization (“ISO”) that
services Triad computers.2 Southeastern and Triad thus compete for the
business of servicing and maintaining Triad computers. The crux of
Triad's complaint is that Southeastern has infringed on its software
copyrights and continues to do so by performing maintenance on Triad
computer systems for Triad's licensees.
Triad's copyrighted software includes:  (1) operating system software,
which is necessary to run any other program on the computer (“OS
software”);  (2) applications software, which performs the basic functions
like accounting and invoicing for the Triad customer;  and (3) utilities,
diagnostic, and auxiliary software, which is used by technicians to repair
Triad software and hardware (“service software”). The OS software and
the service software are involved in this dispute.
Triad software customers are subject to three different contractual
arrangements. From 1976 to 1985, Triad sold its software outright to
customers (“Regime 1”). Because Regime 1 customers own their
software, they have rights under the Copyright Act to make or authorize
the making of copies in the operation of their computers.3 As a result,
such copies are noninfringing, even if they are made by Southeastern in
the course of servicing Regime 1 customers' computers. Triad therefore
concedes that Southeastern cannot be barred from making use of
software owned by Regime 1 customers.
In 1986, however, Triad began licensing rather than selling its software
(“Regime 2”). Under Regime 2 agreements, customers may not duplicate
the software or allow it to be used by third parties. In 1991, Triad added
a requirement that licensees selling their computer systems pay Triad a
license transfer fee (“Regime 3”). Thus, Southeastern's performance of
service and maintenance on the computer systems of Regime 2 and 3
customers is at issue. At stake is the business of servicing these systems.
In order to service a Triad computer, the Southeastern technician uses
the OS software and the service software in the Triad customer's
possession. Triad argues that Southeastern has infringed its software
copyrights because copies of the software are made in the computer's
random access memory (RAM) when the computer is in use.4
Triad filed suit against Southeastern in federal district court in April
1992. A year later, while discovery was ongoing, this Circuit decided
MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 518 (9th Cir.1993),
cert. dismissed, 510 U.S. 1033, 114 S.Ct. 671, 126 L.Ed.2d 640 (1994).
There we held that the loading of MAI's operating system software into
RAM makes a “copy” under the Copyright Act, and that therefore Peak, an
ISO, had infringed MAI's copyright by operating its customers' MAI
computers in order to service them.5
Following the MAI decision, Triad understandably moved for summary
judgment on its copyright infringement claim. Southeastern moved for
summary judgment on its fair use and copyright misuse defenses. Both
motions were denied.6 The district court ordered that the trial be
bifurcated:  Phase One would include Triad's copyright infringement
claims, damages, and Southeastern's fair use defense;  Phase Two would
include Southeastern's copyright misuse defense and any remaining
counterclaims.
Phase One proceeded before a jury on January 12, 1995. At the close of
the evidence, the district court granted directed verdicts in favor of Triad
on Southeastern's fair use defense to infringement of both the OS
software and the service software. Then, on February 3, the jury found
that Southeastern had infringed Triad's software copyrights.
On March 15, 1995, the district court granted Triad's motion for a
preliminary injunction.7 This was a long step forward for Triad. In
essence, the injunction bars Southeastern from performing service or
maintenance on Triad computer systems that contain licensed software.8
Under the terms of the injunction, the onus is on Southeastern to
determine whether a particular customer's software is subject to a
Regime 2 or 3 license agreement. Triad, however, is obligated to
provide the license agreement upon the customer's written request;  if it
fails to do so within ten business days, Southeastern may service the
customer's computer without violating the injunction.
A panel of this court stayed the injunction pending this appeal. While
Phase Two of the trial remains in progress, on June 8, 1995, the district
court granted summary judgment in favor of Triad on Southeastern's
copyright misuse claim. Only a few remaining claims are as yet
unresolved.
Southeastern timely appeals the preliminary injunction. This court has
jurisdiction pursuant to 28 U.S.C. § 1292(a)(1).
II. DISCUSSION
A. Preliminary Injunction
Southeastern, attacking the preliminary injunction in several ways,
argues that (1) Triad cannot show the possibility of irreparable injury, (2)
Triad cannot show the likelihood of success on the merits because of
Southeastern's meritorious affirmative defenses, (3) the preliminary
injunction is too broad and will harm Southeastern, and (4) the district
court erred in bifurcating the trial.
A district court's order granting preliminary injunctive relief is subject
to limited review:  It will be reversed only where the district court abused
its discretion or based its decision on an erroneous legal standard or on
clearly erroneous findings of fact. Miller v. California Pac. Medical Ctr.,
19 F.3d 449, 455 (9th Cir.1994) (en banc).
To obtain a preliminary injunction in this case, Triad must show a
likelihood of success on the merits of its copyright infringement action
and the possibility of irreparable injury. See Oakland Tribune, Inc. v.
Chronicle Publishing Co., 762 F.2d 1374, 1376 (9th Cir.1985) (quoting
Apple Computer, Inc. v. Formula Int'l, Inc., 725 F.2d 521, 523 (9th
Cir.1984)).
1. Irreparable Injury.
Southeastern first argues that Triad cannot show a threat of irreparable
injury sufficient to merit injunctive relief. Southeastern, mindful of the
economic stakes involved, argues that Triad will suffer only monetary
damages from lost revenues, which are not usually considered
irreparable harm because of the availability of an adequate legal remedy.
Los Angeles Memorial Coliseum Comm'n v. National Football League, 634
F.2d 1197, 1202 (9th Cir.1980).
In a copyright infringement action, however, the rules are somewhat
different. A showing of a reasonable likelihood of success on the merits
raises a presumption of irreparable harm. Johnson Controls, Inc. v.
Phoenix Control Sys., Inc., 886 F.2d 1173, 1174 (9th Cir.1989).9 The
cases to the contrary cited by Southeastern are not controlling and are
distinguishable.10 Thus, Triad need only show a reasonable likelihood
of success on its copyright infringement claim to support the district
court's grant of the preliminary injunction. Id.
2. Likelihood of Success on the Merits.
To make its required showing of copyright infringement, Triad must
prove (1) ownership of the copyrights and (2) copying of an expression
protected by those copyrights. Johnson Controls, 886 F.2d at 1175.
Triad has shown both. Its ownership of valid copyrights is apparently
not in dispute;  Triad has produced certificates of registration,11 which
raise a presumption of the validity of Triad's copyrights in its software.
17 U.S.C. § 410(c).
Triad, to show that Southeastern made copies of its protected works,
relies on the MAI decision. It is clear that Southeastern's activities are
“copying” for purposes of the Copyright Act. MAI, 991 F.2d at 519.
Because Southeastern's service activities involved copying entire
programs, there is no doubt that protected elements of the software were
copied. Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1525 (9th
Cir.1992). Therefore, Triad has shown a likelihood of success as to its
prima facie case.
3. Fair Use.
Southeastern argues that, despite Triad's carrying its burden, the
preliminary injunction was improper because the district court failed to
consider adequately its affirmative defenses of fair use and copyright
misuse.13 Because those defenses are clearly meritorious, Southeastern
asserts, Triad cannot show that it is likely to succeed on the merits. See
Gould v. Lambert Excavating, Inc., 870 F.2d 1214, 1218 (7th Cir.1989).
We agree with the district court that the doctrine of fair use does not
apply given the facts of this case. “The doctrine of fair use allows a
holder of the privilege to use copyrighted material in a reasonable
manner without the consent of the copyright owner.” Narell v. Freeman,
872 F.2d 907, 913 (9th Cir.1989) (citing Harper & Row Publishers, Inc. v.
Nation Enters., 471 U.S. 539, 549, 105 S.Ct. 2218, 2224–25, 85 L.Ed.2d
588 (1985));  see 17 U.S.C. § 107.14 Southeastern relies on the rationale
of Sega v. Accolade, supra, to find that its service activities are a fair use of
Triad's copyrighted software.
Sega, however, was a very different case. There, the defendant,
Accolade, had made copies of Sega's video game programs in the process
of reverse-engineering them solely in order to figure out the
requirements for compatibility with Sega's “Genesis” game console. The
functional requirements of compatibility were not protected by
copyright, and there was no other method available to Accolade to
discover those requirements. 977 F.2d at 1522. This court held that the
copying at issue was a fair use. We determined (1) that Accolade had
made the copies “for a legitimate, essentially non-exploitative purpose,”
that is, determining the compatibility requirements;  (2) that the copying
resulted in the proliferation of independent, creative expression, by
making Accolade game programs compatible with the Sega Genesis
system, an outcome the Copyright Act was intended to promote;  and (3)
that the copying neither adversely affected the market for Sega's own
video games, nor pirated those games, but only used the unprotected
elements needed to make its own games compatible. Id. at 1523.
Southeastern's activities are wholly unlike the reverse-engineering in
Sega. Southeastern did not make a minimal use of Triad's programs
solely to achieve compatibility with Triad's computers for Southeastern's
own creative programs. Rather, Southeastern has invented nothing of
its own;  its use of Triad's software is, in the district court's words,
“neither creative nor transformative and does not provide the
marketplace with new creative works.” 15 See id. at 1523.
Southeastern is simply commandeering its customers' software and using
it for the very purpose for which, and in precisely the manner in which, it
was designed to be used. As a result, the copies made by Southeastern
while servicing Triad computers have undoubtedly diminished the value
of Triad's copyright. See id. As the district court reasoned:  “If ISOs like
Southeastern freely used Triad's copyrighted software on a widespread
basis to compete with Triad, this would likely cause a significant adverse
impact on Triad's licensing and service revenues and lower returns on its
copyrighted software investment.” 16 To allow Southeastern to use
Triad's software as it wishes would cause Triad to lose licensing revenues
from the ISOs, who “have a substantial motivation to obtain access” to
Triad's software.17 See Advanced Computer Serv., Inc. v. MAI Sys. Corp.,
845 F.Supp. 356, 366 (E.D.Va.1994). In short, we detect no appreciable
public benefit arising from Southeastern's practice to justify this
continuance under the fair use doctrine. See Sega, 977 F.2d at 1523.
We therefore agree with the district court's thoughtful analysis and its
rejection of Southeastern's fair use claim.
Southeastern also contends that the district court's analysis was flawed
because Triad's copyright does not extend to the service market. We
disagree. Triad invented, developed, and marketed its software to
enable its customers and its own technicians to service Triad computers.
Southeastern is getting a free ride when it uses that software to perform
precisely the same service. Triad is entitled to licensing fees from
Southeastern and other ISOs that make use of Triad's software in
servicing Triad computers. Furthermore, a finding of fair use is
unwarranted because the other relevant factors weigh against such a
finding. Not only is Southeastern's use of Triad's software entirely
commercial in nature, see Sega, 977 F.2d at 1522, but also both the OS
and the service software are protected expression, and Southeastern is
copying programs in their entirety, see id. at 1526. See Advanced
Computer Serv., 845 F.Supp. at 366 n. 13.
4. Copyright Misuse.
Not surprisingly, we also conclude that Southeastern cannot show that
it is likely to prevail on its asserted copyright misuse defense. The
district court properly granted summary judgment on this claim in favor
of Triad. It found that, unlike the case of Lasercomb America, Inc. v.
Reynolds, 911 F.2d 970, 978–79 (4th Cir.1990), Triad did not attempt to
prohibit Southeastern or any other ISO from developing its own service
software to compete with Triad. District Court's Order of June 8, 1995,
at 7;  see also Advanced Computer, 845 F.Supp. at 366–67. We agree.
5. Overbreadth and Harm to Southeastern.
Southeastern's most plausible claim, that the injunction is too broad
because it effectively prevents Southeastern from engaging in legitimate
service activities even for Regime 1 customers, also fails. We find that
Southeastern is not prevented from performing such service;  rather, the
injunction properly requires Southeastern to determine which customers
own their software under Regime 1, and which are mere licensees under
Regimes 2 and 3. Putting this burden on Southeastern is appropriate
because Southeastern is the infringer.18
Were Triad able to obscure or manipulate which machines fell under
which types of agreement, our attitude with respect to this issue might
have been different. But that is not the case. The injunction requires
Triad to ascertain the status of any computer that Southeastern seeks to
service, and it allows Southeastern to perform such service without
violating the injunction where Triad fails to provide the requested
information. We find that this arrangement is sufficient to prevent any
abuse. Therefore, we hold that the district court did not abuse its
discretion in issuing the injunction.
Southeastern, we suppose accurately enough, argues that the injunction
will cause it to suffer extensive harm as a result. Nonetheless, the
argument fails. Southeastern cannot complain of the harm that will
befall it when properly forced to desist from its infringing activities.
“Where the only hardship that the defendant will suffer is lost profits
from an activity which has been shown likely to be infringing, such an
argument in defense ‘merits little equitable consideration [on an appeal
from a preliminary injunction].’ ” Concrete Mach. Co. v. Classic Lawn
Ornaments, Inc., 843 F.2d 600, 612 (1st Cir.1988);  accord Apple
Computer, 714 F.2d at 1255 (in motion for preliminary injunction, district
court should not consider the “devastating effect” of the injunction on the
infringer's business).
6. Bifurcation.
Finally, Southeastern contends that the district court erred in dividing
the trial into two phases, one involving the copyright action and the other
involving Southeastern's antitrust counterclaims. We review that
decision by way of an abuse of discretion standard. Exxon Co. v. Sofec,
Inc., 54 F.3d 570, 575 (9th Cir.1995), petition for cert. filed, 64 U.S.L.W.
3070 (July 24, 1995) (No. 95–129). Southeastern claims that bifurcation
prevented consideration of its copyright misuse defense and antitrust
claims in conjunction with the infringement action. This was error,
Southeastern argues, because its counterclaims will affect the outcome of
the case. Once more, we must reject Southeastern's argument.
As Triad correctly points out, a party seeking a preliminary injunction
ordinarily is granted relief before trial. That is its purpose. Therefore,
the fact that some claims in this case have already been reached and
others not is irrelevant to the issuance of a preliminary injunction.
Furthermore, Triad's copyright infringement claim and Southeastern's
antitrust claims are discrete issues, involving separate, complex bodies of
law. The district court justifiably did not want the jury to muddle the
two. There was no abuse of discretion.
B. Rule 11 Sanctions
We turn now to Lederman's and Madison's appeal regarding the
sanctions imposed on them under Rule 11 of the Federal Rules of Civil
Procedure.
1. Facts.
In October 1992, Triad, in a then unsuccessful motion for a preliminary
injunction against Southeastern, supported its motion with the
declaration of David Mullen, Triad's field service coordinator (“the Mullen
declaration”). Ten months later, Southeastern deposed Mullen and
questioned him at length about his declaration. Mullen had difficulty
answering questions and at times contradicted his declaration
statements.
As a result, Southeastern filed a motion seeking sanctions under Rule 11
and the court's inherent powers against Triad and both its present
counsel, McCutchen, Doyle, Brown & Enersen, and its former counsel,
Ware & Friedenrich, which had represented Triad during the preliminary
injunction motion. McCutchen, Doyle filed a motion in opposition,
arguing that, under the applicable version of Rule 11, sanctions could only
be imposed against the person signing the document and not against a
law firm generally.
On April 7, 1994, the district court granted Southeastern's motion.
Acknowledging that it could not sanction the law firm, Ware &
Friedenrich, the district court instead imposed Rule 11 sanctions of $500
each against Lederman and Madison, the attorneys involved in the
preparation of the Mullen declaration.
2. Jurisdiction.
To forestall an argument on the merits, Southeastern first contends
that this court lacks jurisdiction over an appeal from the imposition of
sanctions. This is incorrect. We have jurisdiction over the appeal
under the collateral order doctrine. Optyl Eyewear Fashion Int'l Corp. v.
Style Cos., 760 F.2d 1045, 1047 n. 1 (9th Cir.1985). An order imposing
Rule 11 sanctions upon counsel, a nonparty, is final and appealable by the
attorney sanctioned upon imposition of the sanction. Rachel v. Banana
Republic, Inc., 831 F.2d 1503, 1508 n. 5 (9th Cir.1987);  Optyl Eyewear,
760 F.2d at 1047 n. 1.
3. Merits.
Lederman and Madison argue that the district court erred by
sanctioning them. They maintain that under the then-current version of
Rule 11, only a person whose signature was on the declaration could be
subject to sanctions. Southeastern, on the other hand, insists that
sanctions were appropriate because Lederman and Madison were
actively involved in the preparation of the misleading declaration, and
because Triad's brief, which did bear their signatures, was misleading
inasmuch as it relied heavily on the Mullen declaration. We find that the
order imposing sanctions on Lederman and Madison was improper and
cannot stand.19
Until Rule 11 was amended in 1993, subsequent to the Mullen
declaration, a bright-line rule applied:  Only the individual attorney who
actually signed the court paper could be sanctioned because of its
contents. Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120,
110 S.Ct. 456, 107 L.Ed.2d 438 (1989);  Giebelhaus v. Spindrift Yachts,
938 F.2d 962, 965 (9th Cir.1991);  see also id. at 966 (holding that an
attorney's typewritten name on a pleading is not a signature for purposes
of Rule 11 and therefore does not subject him to sanctions). As the
Supreme Court has explained:
We held in Pavelic & LeFlore that Rule 11 contemplates sanctions against
the particular individual who signs his or her name, not against the law
firm of which that individual is a member, because “the purpose of Rule
11 as a whole is to bring home to the individual signer his personal,
nondelegable responsibility ․ to validate the truth and legal
reasonableness of the papers filed.”
Business Guides, Inc. v. Chromatic Communications Enters., Inc., 498 U.S.
533, 546–47, 111 S.Ct. 922, 930–31, 112 L.Ed.2d 1140 (1991) (quoting
Pavelic & LeFlore, 493 U.S. at 126, 110 S.Ct. at 459–60) (emphasis
added); 20  see also Fed.R.Civ.P. 11 (“Every pleading, written motion, and
other paper of a party represented by an attorney shall be signed by at
least one attorney of record in the attorney's individual name․ ”)
(emphasis added) (prior to 1993 amendment).
Inasmuch as Lederman and Madison did not sign the Mullen
declaration, they cannot be sanctioned based on its misleading nature.21
Southeastern nonetheless urges us to uphold the sanctions order because
Triad's brief, which Madison apparently did sign, must also have been
misleading because it relied heavily on the Mullen declaration. We need
not consider whether the district court could have chosen to sanction
Lederman and Madison on this basis, because it did not. The district
court's order is based exclusively on the misleading nature of the Mullen
declaration.22 No factual findings were made regarding Triad's brief or
any other paper filed in this action. Furthermore, the district court
clearly stated that it was sanctioning Lederman and Madison under Rule
11 and not under the court's inherent powers. As a result, there is no
available alternative basis for upholding the sanctions. We must set
aside the sanctions imposed on Lederman and Madison.
AFFIRMED AS TO THE PRELIMINARY INJUNCTION;  REVERSED AS TO
THE IMPOSITION OF SANCTIONS.
HABANA VS. ROBLES
Facts:
Habana is the author of the copyrighted book entitled College English for
Today (CET). Robles and GoodWill is the author and publisher of the book
entitled Developing English Proficiency (DEP).
When Habana et al. try to revise their work they encountered by chance
that the work of Robles (DEP) is similar of the contents, scheme of
presentation, illustrations and illustrative examples in their own book.
After an itemized examination and comparison of the two books (CET and
DEP), Habana found that several pages of the Robles’ book are similar, if
not all together a copy of Habana’s book, which is a case of plagiarism and
copyright infringement.
Habana then made demands for damages against respondents and also
demanded that they cease and desist from further selling and distributing
to the general public the infringed copies of Robles’ works.
However, Robles ignored the demands, hence, Habana et al. filed with the
Regional Trial Court, Makati, a complaint for “Infringement and/or unfair
competition with damages” against private respondents.
Issue:
Whether or not, despite the apparent textual, thematic and sequential
similarity between DEP and CET, Robles committed no copyright
infringement?
Ruling:
No, Robles still committed copyright infringement.
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 cases of infringement, copying alone is not what is prohibited. The
copying must produce an “injurious effect”. Here, the injury consists in
that Robles lifted from Habana’s book materials that were the result of
the latter’s research work and compilation and misrepresented them as
her own. She circulated the book DEP for commercial use and did not
acknowledge Habana as her source.
Hence, there is a clear case of appropriation of copyrighted work for her
benefit that Robles committed. Habana’s work as authors is the product
of their long and assiduous research and for another to represent it as her
own is injury enough. In copyrighting books the purpose is to give
protection to the intellectual product of an author. This is precisely what
the law on copyright protected, under Section 184.1 (b). Quotations from
a published work if they are compatible with fair use and only to the
extent justified by the purpose, including quotations from newspaper
articles and periodicals in the form of press summaries are allowed
provided that the source and the name of the author, if appearing on the
work, are mentioned.
Notes:
When is there a substantial reproduction of a book?
It does not necessarily require that the entire copyrighted work, or even a
large portion of it, be copied. If so much is taken that the value of the
original work is substantially diminished, there is an infringement of
copyright and to an injurious extent, the work is appropriated.
In determining the question of infringement, the amount of matter copied
from the copyrighted work is an important consideration. To constitute
infringement, it is not necessary that the whole or even a large portion of
the work shall have been copied. If so much is taken that the value of the
original is sensibly diminished, or the labors of the original author are
substantially and to an injurious extent appropriated by another, that is
sufficient in point of law to constitute piracy.
The essence of intellectual piracy should be essayed in conceptual terms
in order to underscore its gravity by an appropriate understanding
thereof. Infringement of a copyright is a trespass on a private domain
owned and occupied by the owner of the copyright, and, therefore,
protected by law, and infringement of copyright, or piracy, which is a
synonymous term in this connection, consists in the doing by any person,
without the consent of the owner of the copyright, of anything the sole
right to do which is conferred by statute on the owner of the copyright.
Piracy
A copy of a piracy is an infringement of the original, and it is no defense
that the pirate, in such cases, did not know whether or not he was
infringing any copyright; he at least knew that what he was copying was
not his, and he copied at his peril.
ABS-CBN VS. PHILIPPINE MULTI-MEDIA SYSTEM, INC.
Facts:
ABS-CBN Broadcasting Corporation (ABS-CBN) is licensed under the laws
of the Republic of the Philippines to engage in television and radio
broadcasting. It broadcasts television programs by wireless means to
Metro Manila and nearby provinces, and by satellite to provincial stations
through Channel 2 on Very High Frequency (VHF) and Channel 23 on
Ultra High Frequency (UHF). The programs aired over Channels 2 and 23
are either produced by ABS-CBN or purchased from or licensed by other
producers.
ABS-CBN also owns regional television stations which pattern their
programming in accordance with perceived demands of the region. Thus,
television programs shown in Metro Manila and nearby provinces are not
necessarily shown in other provinces.
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.
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, ABS-CBN demanded for PMSI to cease and
desist from rebroadcasting Channels 2 and 23. On April 27, 2001, 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, 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.
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.
On May 13, 2002, ABS-CBN filed with the IPO a complaint for “Violation of
Laws Involving Property Rights, with Prayer for the Issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction,”.
It alleged that PMSI’s unauthorized rebroadcasting of Channels 2 and 23
infringed on its broadcasting rights and copyright. On July 2, 2002, the
Bureau of Legal Affairs (BLA) of the IPO granted ABS-CBN’s application
for a temporary restraining order. On July 12, 2002, PMSI suspended its
retransmission of Channels 2 and 23.
PMSI Argument:
Broadcasting Channels 1 & 23 is subject to the must-carry rule under
Memorandum Circular No. 04-08-88.
Issues:
(1) Whether or not PMSI’s unauthorized rebroadcasting of Channels 2
and 23 is an infringement of its broadcasting rights and copyright under
the Intellectual Property Code?
(2) Whether or not Memorandum Circular No. 04-08-88 excludes DTH
satellite television operators?
Ruling:
PMSI did not infringe on ABS-CBN’s intellectual property rights under the
IP Code.
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.”
PMSI would not qualify as a broadcasting organization because it does
not have the aforementioned responsibilities imposed upon broadcasting
organizations, such as ABS-CBN.
ABS-CBN creates and transmits its own signals; PMSI merely carries such
signals which the viewers receive in its unaltered form. PMSI does not
produce, select, or determine the programs to be shown in Channels 2
and 23. Likewise, it does not pass itself off as the origin or author of such
programs. Insofar as Channels 2 and 23 are concerned, PMSI merely
retransmits the same in accordance with Memorandum Circular 04-08-
88. With regard to its premium channels, it buys the channels from
content providers and transmits on an as-is basis to its viewers. Clearly,
PMSI does not perform the functions of a broadcasting organization; thus,
it cannot be said that it is engaged in rebroadcasting Channels 2 and 23.
The 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.
NBI-MICROSOFT CORP. VS. HWANG
Facts:
Microsoft Corporation ("Microsoft"), a Delaware, United States
corporation, owns the copyright and trademark to several computer
software. Beltron Computer Philippines, Inc. ("Beltron") and Taiwan
Machinery Display & Trade Center, Inc. ("TMTC") are domestic
corporations.
In May 1993, Microsoft and Beltron entered into a Licensing Agreement
("Agreement"). Under Section 2(a) of the Agreement, as amended in
January 1994, Microsoft authorized Beltron, for a fee, to:
(1) reproduce and install no more than one (1) copy of Microsoft
software on each Customer System hard disk or Read Only Memory
("ROM")
(2) distribute directly or indirectly and license copies of the Product in
object code form to end users
The Agreement also authorized Microsoft and Beltron to terminate the
contract if the other fails to comply with any of the Agreement’s
provisions. Microsoft terminated the Agreement effective 22 June 1995
for Beltron’s non-payment of royalties.
Afterwards, Microsoft learned that Beltron were illegally copying and
selling Microsoft software. Consequently, Microsoft, through its
Philippine agent, hired the services of Pinkerton Consulting Services
("PCS"), a private investigative firm. Microsoft also sought the assistance
of the National Bureau of Investigation ("NBI").
On 10 November 1995, a PCS employee and an NBI agent posing as
representatives of a computer shop, bought computer hardware (central
processing unit ("CPU") and computer monitor) and software (12
computer disks ("CDs") in read-only memory ("ROM") format) from
Beltron. The CPU contained pre-installed Microsoft Windows 3.1 and MS-
DOS software. The 12 CD-ROMs, encased in plastic containers with
Microsoft packaging, also contained Microsoft software. At least two of
the CD-ROMs were "installers," so-called because they contain several
software (Microsoft only or both Microsoft and non-Microsoft). The PCS
employee and the NBI agent were not given the Microsoft end-user
license agreements, user’s manuals, registration cards or certificates of
authenticity for the articles they purchased. The receipt issued to them
for the CPU and monitor bore the heading "T.M.T.C. (PHILS.) INC.
BELTRON COMPUTER."
The NBI searched the premises of Beltron and TMTC and seized several
computer-related hardware, software, accessories, and paraphernalia
based on the search warrant applied by Microsoft.
Based on the articles obtained from Beltron and TMC, Microsoft and a
certain Lotus Development Corporation ("Lotus Corporation") charged
Beltron and TMC before the Department of Justice ("DOJ") with copyright
infringement under Section 5(A) in relation to Section 29 of Presidential
Decree No. 49, as amended, ("PD 49") and with unfair competition under
Article 189(1) of the Revised Penal Code. Microsoft alleged that
respondents illegally copied and sold Microsoft software.
Issue:
Whether or not Beltron and TMC are liable for copyright infringement
and unfair competition?
Ruling:
The gravamen of copyright infringement is not merely the unauthorized
"manufacturing" of intellectual works but rather the unauthorized
performance of any of the acts covered by Section 5. Hence, any person
who performs any of the acts under Section 5 without obtaining the
copyright owner’s prior consent renders himself civilly and criminally
liable for copyright infringement.
Infringement of a copyright is a trespass on a private domain owned and
occupied by the owner of the copyright, and, therefore, protected by law,
and infringement of copyright, or piracy, which is a synonymous term in
this connection, consists in the doing by any person, without the consent
of the owner of the copyright, of anything the sole right to do which is
conferred by statute on the owner of the copyright.
Significantly, under Section 5(A), a copyright owner is vested with the
exclusive right to "copy, distribute, multiply, [and] sell" his intellectual
works.
The elements of unfair competition under Article 189(1)43 of the Revised
Penal Code are:
(a) That the offender gives his goods the general appearance of the goods
of another manufacturer or dealer;
(b) That the general appearance is shown in the
(1) goods themselves, or in the
(2) wrapping of their packages, or in the
(3) device or words therein, or in
(4) any other feature of their appearance
(c) That the offender offers to sell or sells those goods or gives other
persons a chance or opportunity to do the same with a like purpose[; and]
(d) That there is actual intent to deceive the public or defraud a
competitor.
MICROSOFT CORP. VS. MAXICORP
Facts:
Microsoft sued Maxicorp for copyright infringement and unfair
competition for production, installing and selling of counterfeit
Microsoft’s products. Microsoft alleged that they did not authorize
Maxicorp for production or selling of their products.
Issue:
Whether or not Maxicorp committed copyright infringement and unfair
competition?
Ruling:
Copyright infringement and unfair competition are not limited to the act
of selling counterfeit goods. They cover a whole range of acts, from
copying, assembling, packaging to marketing, including the mere offering
for sale of the counterfeit goods.
20TH CENTURY FOX FILM CORP. VS. COURT OF APPEALS
Petitioner’s claim:
The petitioner maintains that the lower court issued the questioned
search warrants after finding the existence of a probable cause justifying
their issuance. According to the petitioner, the lower court arrived at this
conclusion on the basis of the depositions of applicant NBI's two
witnesses which were taken through searching questions and answers by
the lower court.
Respondent’s claim:
The respondent posits that the three questioned search warrants against
the private respondents should be lifted on the ground that it acted on the
application for the issuance of the said search warrants and granted it on
the misrepresentations of applicant NBI and its witnesses that
infringement of copyright or a piracy of a particular film have been
committed.
They also maintained that the presentation of the master tapes of the
copyrighted films from which the pirated films were allegedly copied, was
necessary for the validity of search warrants against those who have in
their possession the pirated films. The petitioner's argument to the effect
that the presentation of the master tapes at the time of application may
not be necessary as these would be merely evidentiary in nature and not
determinative of whether or not a probable cause exists to justify the
issuance of the search warrants is not meritorious.
Ruling:
The presentation of the master tapes of the copyrighted films from which
the pirated films were allegedly copied, was necessary for the validity of
search warrants against those who have in their possession the pirated
films. The petitioner's argument to the effect that the presentation of the
master tapes at the time of application may not be necessary as these
would be merely evidentiary in nature and not determinative of whether
or not a probable cause exists to justify the issuance of the search
warrants is not meritorious. The court cannot presume that duplicate or
copied tapes were necessarily reproduced from master tapes that it owns.
The application for search warrants was directed against video tape
outlets which allegedly were engaged in the unauthorized sale and
renting out of copyrighted films belonging to the petitioner pursuant to
P.D. 49. The essence of a copyright infringement is the similarity or at
least substantial similarity of the purported pirated works to the
copyrighted work. Hence, the applicant must present to the court the
copyrighted films to compare them with the purchased evidence of the
video tapes allegedly pirated to determine whether the latter is an
unauthorized reproduction of the former. This linkage of the copyrighted
films to the pirated films must be established to satisfy the requirements
of probable cause.
COLUMBIA PICTURES, INC. VS. COURT OF APPEALS (1994)
Nature: Petitions for review on certiorari of the decision of the CA.
Facts:
 07 April 1998: NBI filed with the RTC of Pasig 3 applications
for SW against private respondent (Tube Video Enterprises –
Edward C. Cham; Blooming Rose Tape Center – Ma. Jajorie T.
Uy; Video Channel – Lydia Nabong) charging them with
 violations of Sec. 56 of PD 49 (Decree on the Protection of
Intellectual Property) as amended by PD 1988.
 RTC Judge Austria consolidated the 3 applications and
conducted a joint hearing where she made a personal
examination of the applicant (NBI Agent Reyes) and his
witnesses.
 Finding just and probable cause, Judge Austria issued the
search warrants.
 Private Respondents filed their “Motion to Quash” the SW
citing as grounds that there was no probable cause; the films in
question are not protected by PD 1988 in that they were never
registered in the National Library as a condition precedent to
the availment of the protection; the Motion Picture Association
of America have not proven nor established their ownership
over the films; etc.
 Judge Austria reversed her former stand initially finding
probable cause for the issuance of the search warrants and
ordered their quashal:
o Private complainants uncertain of their ownership
over the titles;
o Complainants did not comply with the requirement
that master tapes should be presented during the
application for search warrants;
o Complainants failed to comply with the deposit and
registration requirements of PD 49 as amended by
PD 1988.
 Judge Austria also ordered the return of the items seized by
virtue of the warrants.
 CA affirmed the quashal of the SWs.
Issue:
WON the SWs were issued with probable cause. NO
Ruling:
BASIC REQUIREMENT for the validity of search warrants (in cases of this
nature) is the presentation of the master tapes of the copyrighted
films from which the pirated films are supposed to have been copied
(20th Century Fox Film Corp. vs. CA, 164 SCRA 655).
The essence of a copyright infringement is the similarity or at least
substantial similarity of the purported pirated works to the copyrighted
work. Hence, the applicant must present to the court the copyrighted
films to compare them with the purchased evidence of the video tapes
allegedly pirated to determine whether the latter is an unauthorized
reproduction of the former. This linkage of the copyrighted films to the
pirated films must be established to satisfy the requirements of probable
cause. Mere allegations as to the existence of the copyrighted films cannot
serve as basis for the issuance of a search warrant.
According to the CA, in which the SC concurs:
It is not correct to say that "the basic fact" to be proven to
establish probable cause in the instant cases is not the
"unauthorized transfer" of a motion picture that has been
recorded but the "sale, lease, or distribution of pirated video
tapes of copyrighted films."
In applying for the search warrants the NBI charged violation
of the entire provisions of Section 56 of P.D. No. 49 as amended
by P.D.No. 1988. This included not only the sale, lease or
distribution of pirated tapes but also the transfer or causing to
be transferred of any sound recording or motion picture or
other audio visual work.
But even assuming, as appellants argue, that only the sale,
lease, or distribution of pirated video tapes is involved, the fact
remains that there is need to establish probable cause that the
tapes being sold, leased or distributed are pirated tapes, hence
the issue reverts back to the question of whether there was
unauthorized transfer, directly or indirectly, of a sound
recording or motion picture or other audio visual work that
has been recorded
Petitions denied.
COLUMBIA PICTURES, INC. VS. COURT OF APPEALS (1996)
Facts:
Columbia Pictures lodged a formal complaint with the National Bureau of
Investigation for violation of PD No. 49, as amended, and sought its
assistance in their anti-film piracy drive. Agents of the NBI and private
researchers made discreet surveillance on various video establishments
in Metro Manila including Sunshine Home Video Inc. owned and operated
by Danilo A. Pelindario.
On November 14, 1987, NBI Senior Agent Lauro C. Reyes applied for a
search warrant with the court a quo against Sunshine seeking the seizure,
among others, of pirated video tapes of copyrighted films all of which
were enumerated in a list attached to the application; and, television sets,
video cassettes and/or laser disc recordings equipment and other
machines and paraphernalia used or intended to be used in the unlawful
exhibition, showing, reproduction, sale, lease or disposition of
videograms tapes in the premises above described. In the hearing of the
application, NBI Senior Agent Lauro C. Reyes, upon questions by the court
a quo, reiterated in substance his averments in his affidavit. His testimony
was corroborated by another witness, Mr. Rene C. Baltazar. Atty. Rico V.
Domingo’s deposition was also taken. On the basis of the affidavits and
depositions of NBI Senior Agent Lauro C. Reyes, Rene C. Baltazar and Atty.
Rico V. Domingo, Search Warrant No 87-053 for violation of Section 56 of
PD No. 49, as amended, was issued by the court a quo.
NBI Agents found and seized various video tapes of duly copyrighted
motion pictures/films owned or exclusively distributed by private
complainants, and machines, equipment, television sets, paraphernalia,
materials, accessories all of which were included in the receipt for
properties accomplished by the raiding team. Copy of the receipt was
furnished and/or tendered to Mr. Danilo A. Pelindario, registered owner-
proprietor of Sunshine Home Video.
Issue:
Whether or not absence such registration, as in this case, there was no
right created, hence, no infringement under PD 49 as amended?
Ruling:
As correctly pointed out by private complainants-oppositors, the
Department of Justice has resolved this legal question as far back as
December 12, 1978 in its Opinion No. 191 of the then Secretary of Justice
Vicente Abad Santos which stated that Sections 26 and 50 do not apply to
cinematographic works and PD No. 49 “had done away with the
registration and deposit of cinematographic works” and that “even
without prior registration and deposit of a work which may be entitled to
protection under the Decree, the creator can file action for infringement
of its rights.” He cannot demand, however, payment of damages arising
from infringement. The same opinion stressed that “the requirements of
registration and deposit are thus retained under the Decree, not as
conditions for the acquisition of copyright and other rights, but as
prerequisites to a suit for damages.” The statutory interpretation of the
Executive Branch being correct, is entitled (to) weight and respect.
Furthermore, a closer review of Presidential Decree No. 49 reveals that
even with respect to works which are required under Section 26 thereof
to be registered and with copies to be deposited with the National
Library, such as books, including composite and cyclopedic works,
manuscripts, directories and gazetteers; and periodicals, including
pamphlets and newspapers; lectures, sermons, addresses, dissertations
prepared for oral delivery; and letters, the failure to comply with said
requirements does not deprive the copyright owner of the right to sue for
infringement. Such non-compliance merely limits the remedies available
to him and subjects him to the corresponding sanction.
The reason for this is expressed in Section 2 of the decree which prefaces
its enumeration of copyrightable works with the explicit statement that
“the rights granted under this Decree shall, from the moment of creation,
subsist with respect to any of the following classes of works.” This means
that under the present state of the law, the copyright for a work is
acquired by an intellectual creator from the moment of creation even in
the absence of registration and deposit. As has been authoritatively
clarified:
The registration and deposit of two complete copies or reproductions of
the work with the National Library within three weeks after the first
public dissemination or performance of the work, as provided for in
Section 26 (P.D. No. 49, as amended), is not for the purpose of securing a
copyright of the work, but rather to avoid the penalty for non-compliance
of the deposit of said two copies and in order to recover damages in an
infringement suit.
PEARL & DEAN VS. SHOEMART, INC.
Facts:
Pearl and Dean (Phil.), Inc. is a corporation engaged in the
manufacture of advertising display units simply referred to as light
boxes. These units utilize specially printed posters sandwiched
between plastic sheets and illuminated with back lights. Pearl and
Dean was able to secure a Certificate of Copyright Registration over
these illuminated display units. The advertising light boxes were
marketed under the trademark “Poster Ads”. From 1981 to about
1988, Pearl and Dean employed the services of Metro Industrial
Services to manufacture its advertising displays.
Two years later, Metro Industrial Services, the company formerly
contracted by Pearl and Dean to fabricate its display units, offered
to construct light boxes for Shoemart’s chain of stores. SMI
approved the proposal and ten (10) light boxes were subsequently
fabricated by Metro Industrial for SMI. After, Pearl and Dean,
received reports that exact copies of its light boxes were installed
at SM malls.
In the light of its discoveries, Pearl and Dean sent a letter to both
SMI and NEMI enjoining them to cease using the subject light boxes
and to remove the same from SMI’s establishments. It also
demanded the discontinued use of the trademark “Poster Ads,” and
the payment to Pearl and Dean of compensatory damages in the
amount of P20million.
Upon receipt of the demand letter, SMI suspended the leasing of
light boxes and NEMI took down its advertisements for “Poster
Ads” from the lighted display units in SMI’s stores. Claiming that
both SMI and NEMI failed to meet all its demands, Pearl and Dean
filed this instant case for infringement of trademark and copyright,
unfair competition and damages.
Issue:
Whether the engineering or technical drawings of an advertising
display unit (light box) are granted copyright protection (copyright
certificate of registration), is the light box depicted in such
engineering drawings ipso facto also protected by such copyright?
Ruling:
NO. Petitioner P & D’s complaint was that SMI infringed on its copyright
over the light boxes when SMI had the units manufactured by Metro and
EYD Rainbow Advertising for its own account. Obviously, petitioner’s
position was premised on its belief that its copyright over the engineering
drawings extended ipso facto to the light boxes depicted or illustrated in
said drawings
First, petitioner’s application for a copyright certificate clearly
stated that it was for a class “O” work under Section 2 (O) of PD 49 (The
Intellectual Property Decree) which was the statute then prevailing. Said
Section 2 expressly enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from
the moment of creation, subsist with respect to any of the
following works:
xxx xxx xxx
(O) Prints, pictorial illustrations, advertising copies,
labels, tags, and box wraps;
xxx xxx xxx
Although petitioner’s copyright certificate was entitled
“Advertising Display Units” (which depicted the box-type electrical
devices), its claim of copyright infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right.
Being a mere statutory grant, the rights are limited to what the statute
confers. It may be obtained and enjoyed only with respect to the subjects
and by the persons, and on terms and conditions specified in the statute.
Accordingly, it can cover only the works falling within the statutory
enumeration or description.
P & D secured its copyright under the classification class “O” work.
This being so, petitioner’s copyright protection extended only to the
technical drawings and not to the light box itself because the latter was
not at all in the category of “prints, pictorial illustrations, advertising
copies, labels, tags and box wraps.” Stated otherwise, even as we find that
P & D indeed owned a valid copyright, the same could have referred only
to the technical drawings within the category of “pictorial illustrations.”
It could not have possibly stretched out to include the underlying light
box. The strict application1[9] of the law’s enumeration in Section 2
prevents us from giving petitioner even a little leeway, that is, even if its
copyright certificate was entitled “Advertising Display Units.” What the
law does not include, it excludes, and for the good reason: the light box
was not a literary or artistic piece which could be copyrighted under the
copyright law. And no less clearly, neither could the lack of statutory
authority to make the light box copyrightable be remedied by the
simplistic act of entitling the copyright certificate issued by the National
Library as “Advertising Display Units.”
In fine, if SMI and NEMI reprinted P & D’s technical drawings for
sale to the public without license from P & D, then no doubt they would
have been guilty of copyright infringement. But this was not the case.
SMI’s and NEMI’s acts complained of by P & D were to have units similar
or identical to the light box illustrated in the technical drawings
manufactured by Metro and EYD Rainbow Advertising, for leasing out to
different advertisers. Was this an infringement of petitioner’s copyright
over the technical drawings? We do not think so.
KHO VS. COURT OF APPEALS
Facts :
Kho is doing business under the name and style of KEC Cosmetics
Laboratory, the registered owner of the copyrights Chin Chun Su and Oval
Facial Cream Container/Case, that she also has patent rights on Chin
Chun Su & Device and Chin Chun Su for medicated cream after purchasing
the same from Quintin Cheng, the registered owner thereof in the
Supplemental Register of the Philippine Patent Office.
Summerville advertised and sold Kho’s cream products under the brand
name Chin Chun Su, in similar containers that Kho uses, thereby
misleading the public, and resulting in the decline in the Kho’s business
sales and income; and, that the Summerville should be enjoined from
allegedly infringing on the copyrights and patents of the Kho.
Summerville on the other hand, alleged as their defense that they are the
exclusive and authorized importer, re-packer and distributor of Chin
Chun Su products manufactured by Shun Yi Factory of Taiwan; that the
said Taiwanese manufacturing company authorized Summerville to
register its trade name Chin Chun Su Medicated Cream with the
Philippine Patent Office and other appropriate governmental agencies;
that KEC Cosmetics Laboratory of the of Kho obtained the copyrights
through misrepresentation and falsification; and, that the authority of
Quintin Cheng, assignee of the patent registration certificate, to distribute
and market Chin Chun Su products in the Philippines had already been
terminated by the said Taiwanese Manufacturing Company.
On December 20, 1991, Elidad C. Kho filed a complaint for injunction and
damages with a prayer for the issuance of a writ of preliminary
injunction, against the Summerville General Merchandising and Company
(Summerville, for brevity) and Ang Tiam Chay.
Issue:
Whether the copyright and patent over the name and container of a
beauty cream product would entitle the registrant to the use and
ownership over the same to the exclusion of others?
Ruling:

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.

Kho has no right to support her claim for the exclusive use of the subject
trade name and its container. The name and container of a beauty cream
product are proper subjects of a trademark inasmuch as the same falls
squarely within its definition. In order to be entitled to exclusively use the
same in the sale of the beauty cream product, the user must sufficiently
prove that she registered or used it before anybody else did. The
petitioner’s copyright and patent registration of the name and container
would not guarantee her right to the exclusive use of the same for the
reason that they are not appropriate subjects of the said intellectual
rights. Consequently, a preliminary injunction order cannot be issued for
the reason that the petitioner has not proven that she has a clear right
over the said name and container to the exclusion of others, not having
proven that she has registered a trademark thereto or used the same
before anyone did.