PATENT CASES

SMITH KLINE BECKMAN CORPORATION vs. THE HONORABLE COURT OF APPEALS

and TRYCO PHARMA CORPORATION
G. R. No. 126627, August 14, 2003
FACTS:
Smith Kline is a US corporation licensed to do business in the Philippines. In
1981, a patent was issued to it for its invention entitled “Methods and
Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5
Propylthio-2-Benzimidazole Carbamate.” The invention is a means to fight off
gastrointestinal parasites from various cattle and pet animals.
Tryco Pharma is a local corporation engaged in the same business as
Smith Kline.
Smith Kline sued Tryco Pharma because the latter was selling a veterinary
product called Impregon which contains a drug called Albendazole which
fights off gastro-intestinal roundworms, lungworms, tapeworms and fluke
infestation in carabaos, cattle and goats.
Smith Kline is claiming that Albendazole is covered in their patent
because it is substantially the same as methyl 5 propylthio-2-benzimidazole
carbamate covered by its patent since both of them are meant to combat
worm or parasite infestation in animals. And that Albendazole is actually
patented under Smith Kline in the US.

ISSUE:
Whether or not there is patent infringement in this case

HELD:
None.
The Supreme Court said that Smith Kline failed to prove that Albendazole
is a compound inherent in the patented invention. Nowhere in the patent is the
word Albendazole found. When the language of its claims is clear and distinct,
the patentee is bound thereby and may not claim anything beyond them.
Further, there was a separate patent for Albendazole given by the US which
implies that Albendazole is indeed separate and distinct from the patented
compound here.
A scrutiny of Smith Kline’s evidence fails to prove the substantial sameness
of the patented compound and Albendazole. While both compounds have the
effect of neutralizing parasites in animals, identity of result does not amount to
infringement of patent unless Albendazole operates in substantially the same
way or by substantially the same means as the patented compound, even
though it performs the same function and achieves the same result. In other
words, the principle or mode of operation must be the same or substantially the
same.
 The doctrine of equivalents thus requires satisfaction of the function-
means-and-result test, the patentee having the burden to show that all three
components of such equivalency test are met.

PEARL & DEAN (PHIL.), INC. vs. SHOEMART, INC., and NORTH EDSA MARKETING,
INC.
G.R. No. 148222, August 15, 2003 (409 SCRA 231)

FACTS:
Pearl & Dean (Phil), Inc. is a corporation engaged in the manufacture of
advertising display units called light boxes. In January 1981, Pearl & Dean was
able to acquire copyrights over the designs of the display units. In 1988, their
trademark application for “Poster Ads” was approved; they used the same
trademark to advertise their light boxes.
In 1985, Pearl & Dean negotiated with Shoemart, Inc. (SM) so that the
former may be contracted to install light boxes in the ad spaces of SM.
Eventually, SM rejected Pearl & Dean’s proposal.
Two years later, Pearl & Dean received report that light boxes, exactly the
same as theirs, were being used by SM in their ad spaces. They demanded SM
to stop using the light boxes and asked for damages amounting to P20M. SM
refused to pay damages though they removed the light boxes. Pearl & Dean
eventually sued SM. SM argued that it did not infringe on Pearl & Dean’s
trademark because Pearl & Dean’s trademark is only applicable to envelopes
and stationeries and not to the type of ad spaces owned by SM. SM also
averred that “Poster Ads” is a generic term hence it is not subject to trademark
registration. SM also averred that the actual light boxes are not copyrightable.
The RTC ruled in favor of Pearl & Dean. But the Court of Appeals ruled in favor of
SM.

ISSUE:
Whether or not the light box be registered separately and protected by a
patent issued by the Bureau of Patents Trademarks and Technology Transfer
(now Intellectual Property Office) — in addition to the copyright of the
engineering drawings?

HELD:

Yes.

The Supreme Court stated that to be able to effectively and legally

preclude others from copying and profiting from the invention, a patent is a
primordial requirement. No patent, no protection. The ultimate goal of a patent
system is to bring new designs and technologies into the public domain through
disclosure. Ideas, once disclosed to the public without the protection of a valid
patent, are subject to appropriation without significant restraint.
 For some reason or another, petitioner never secured a patent for the light
boxes. It therefore acquired no patent rights which could have protected its
invention, if in fact it really was. And because it had no patent, petitioner could
not legally prevent anyone from manufacturing or commercially using the
contraption.

The patent law has a three-fold purpose: "first, patent law seeks to foster
and reward invention; second, it promotes disclosures of inventions to stimulate
further innovation and to permit the public to practice the invention once the
patent expires; third, the stringent requirements for patent protection seek to
ensure that ideas in the public domain remain there for the free use of the
public."

ROMA DRUG and ROMEO RODRIGUEZ, as Proprietor of ROMA DRUG vs. THE
REGIONAL TRIAL COURT OF GUAGUA, PAMPANGA, THE PROVINCIAL PROSECUTOR
OF PAMPANGA, BUREAU OF FOOD & DRUGS (BFAD) and GLAXO SMITHKLINE,
G.R. No. 149907, April 16, 2009

FACTS:

In 2000, Roma Drug, owned by Romeo Rodriguez, was raided by the NBI
upon request of Smithkline – a pharmaceutical company (now Glaxo
Smithkline). RD is apparently one of 6 pharmacies who were directly importing 5
medicine brands produced by Smithkline from abroad. RD is not purchasing
those medicines via local Smithkline – the authorized distributor of Smithkline in
the Philippines. Smithkline Phil. avers that because the medicines were not
purchased from a Philippine registered counterpart of Smithkline then the
products imported by RD are considered as counterfeit or “unregistered
imported drug product” – as defined by R.A. No. 8203 or the “Special Law on
Counterfeit Drugs.” Notwithstanding RD’s motion for reconsideration, the
provincial prosecutor recommended that Rodriguez be tried. Rodriguez assails
the constitutionality of RA 8203 averring, among other things, that it has violated
his right to equal protection as it banned him access from such medicines.

ISSUE:

Whether Roma Drug be allowed to import questioned medicines

HELD:

Yes.

Section 7 of Rep. Act No. 9502 amends Section 72 of the Intellectual

Property Code in that the latter law unequivocally grants third persons the right
to import drugs or medicines whose patent were registered in the Philippines by
the owner of the product.

The unqualified right of private third parties such as petitioner to import or

possess unregistered imported drugs in the Philippines is further confirmed by the
Implementing Rules to Republic Act No. 9502 promulgated on 4 November 2008.
The relevant provisions thereof read:

Rule 9. Limitations on Patent Rights. The owner of a patent has no right to

prevent third parties from performing, without his authorization, the acts referred
to in Section 71 of the IP Code as enumerated hereunder:

(i) Introduction in the Philippines or Anywhere Else in the World.

Using a patented product which has been put on the market in the
Philippines by the owner of the product, or with his express consent,
insofar as such use is performed after that product has been so put
on the said market: Provided, That, with regard to drugs and
medicines, the limitation on patent rights shall apply after a drug or
medicine has been introduced in the Philippines or anywhere else in
the world by the patent owner, or by any party authorized to use
the invention: Provided, further, That the right to import the drugs
and medicines contemplated in this section shall be available to
any government agency or any private third party.

The drugs and medicines are deemed introduced when they have been
sold or offered for sale anywhere else in the world.

PHIL. PHARMAWEALTH, INC., vs. PFIZER, INC. and PFIZER (PHIL.) INC.,
G.R. No. 167715, November 17, 2010

FACTS:
Pfizer is the registered owner of a patent pertaining to Sulbactam
Ampicillin. It is marketed under the brand name “Unasyn.” Sometime in January
and February 2003, Pfizer discovered that Pharmawealth submitted bids for the
supply of Sulbactam Ampicillin to several hospitals without the Pfizer’s consent.
Pfizer then demanded that the hospitals cease and desist from accepting such
bids. Pfizer also demanded that Pharmawealth immediately withdraw its bids to
supply Sulbactam Ampicillin. Pharmawealth and the hospitals ignored the
demands.
Pfizer then filed a complaint for patent infringement with a prayer for
permanent injunction and forfeiture of the infringing products.

ISSUE:
Whether Pfizer still holds monopoly over the substance by virtue of their
issued Patent over the same?

HELD:

No.
 Section 37 of Republic Act No. 165, which was the governing law at the
time of the issuance of respondents' patent, provides:
Section 37. Rights of patentees. A patentee shall have the exclusive right
to make, use and sell the patented machine, article or product, and to use the
patented process for the purpose of industry or commerce, throughout the
territory of the Philippines for the term of the patent; and such making, using, or
selling by any person without the authorization of the patentee constitutes
infringement of the patent.
It is clear from the above-quoted provision of law that the exclusive right
of a patentee to make, use and sell a patented product, article or process exists
only during the term of the patent. In the instant case, Philippine Letters Patent
No. 21116, which was the basis of respondents in filing their complaint with the
BLA-IPO, was issued on July 16, 1987. This fact was admitted by respondents
themselves in their complaint. They also admitted that the validity of the said
patent is until July 16, 2004, which is in conformity with Section 21 of RA 165,
providing that the term of a patent shall be seventeen (17) years from the date
of issuance thereof. Section 4, Rule 129 of the Rules of Court provides that an
admission, verbal or written, made by a party in the course of the proceedings
in the same case, does not require proof and that the admission may be
contradicted only by showing that it was made through palpable mistake or
that no such admission was made. In the present case, there is no dispute as to
respondents' admission that the term of their patent expired on July 16, 2004.
Neither is there evidence to show that their admission was made through
palpable mistake. Hence, contrary to the pronouncement of the CA, there is no
longer any need to present evidence on the issue of expiration of respondents'
patent.

JESSIE G. CHING vs. WILLIAM M. SALINAS, SR., WILLIAM M. SALINAS, JR.,

JOSEPHINE L. SALINAS, JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE, JOHN
ERIC I. SALINAS, NOEL M. YABUT (Board of Directors and Officers of WILAWARE
PRODUCT CORPORATION)
G.R. No. 161295, June 29, 2005
FACTS:
Petitioner Ching is a maker and manufacturer of a utility model, Leaf
Spring Eye Bushing for Automobile, for which he holds certificates of copyright
registration. Petitioner’s request to the NBI to apprehend and prosecute illegal
manufacturers of his work led to the issuance of search warrants against
respondent Salinas, alleged to be reproducing and distributing said models in
violation of the IP Code. Respondent moved to quash the warrants on the
ground that petitioner’s work is not artistic in nature and is a proper subject of a
patent, not copyright. Petitioner insists that the IP Code protects a work from the
moment of its creation regardless of its nature or purpose. The trial court
quashed the warrants. Petitioner argues that the copyright certificates over the
model are prima facie evidence of its validity. CA affirmed the trial court’s
decision.
ISSUES:
(1) Whether or not petitioner’s model is an artistic work subject to copyright
protection
(2) Whether or not petitioner is entitled to copyright protection on the basis of
the certificates of registration issued to it.
HELD:
(1) NO.
As gleaned from the specifications appended to the application for a
copyright certificate filed by the petitioner, the said Leaf Spring Eye Bushing for
Automobile and Vehicle Bearing Cushion are merely utility models. As gleaned
from the description of the models and their objectives, these articles are useful
articles which are defined as one having an intrinsic utilitarian function that is not
merely to portray the appearance of the article or to convey information.
Plainly, these are not literary or artistic works. They are not intellectual creations
in the literary and artistic domain, or works of applied art. They are certainly not
ornamental designs or one having decorative quality or value. Indeed, while
works of applied art, original intellectual, literary and artistic works are
copyrightable, useful articles and works of industrial design are not. A useful
article may be copyrightable only if and only to the extent that such design
incorporates pictorial, graphic, or sculptural features that can be identified
separately from, and are capable of existing independently of the utilitarian
aspects of the article. In this case, the bushing and cushion are not works of art.
They are, as the petitioner himself admitted, utility models which may be the
subject of a patent.
(2) NO.
No copyright granted by law can be said to arise in favor of the petitioner
despite the issuance of the certificates of copyright registration and the deposit
of the Leaf Spring Eye Bushing and Vehicle Bearing Cushion. Indeed, in Joaquin,
Jr. v. Drilon and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,
the Court ruled that:
Copyright, in the strict sense of the term, is purely a statutory right. It is a
new or independent right granted by the statute, and not simply a pre-existing
right regulated by it. Being a statutory grant, the rights are only such as the
statute confers, and may be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and conditions specified in the
statute. Accordingly, it can cover only the works falling within the statutory
enumeration or description.
Trademark cases

TAIWAN KOLIN CORPORATION, LTD. vs. KOLIN ELECTRONICS CO., INC.,

G.R. No. 209843, March 25, 2015

In trademark registration, while both competing marks refer to the word “KOLIN”
written in upper case letters and in bold font, but one is italicized and colored
black while the other is white in pantone red color background and there are
differing features between the two, registration of the said mark could be
granted. It is hornbook doctrine that emphasis should be on the similarity of the
products involved and not on the arbitrary classification or general description
of their properties or characteristics. The mere fact that one person has adopted
and used a trademark on his goods would not, without more, prevent the
adoption and use of the same trademark by others on unrelated articles of a
different kind.
FACTS:

Taiwan Kolin filed with the IPO, then BPTTT, a trademark application, for
the use of “KOLIN” on a combination of goods with Taiwan Kolin electing Class 9
as the subject of its application. Kolin Electronics opposed Taiwan Kolin’s
application arguing that the mark Taiwan Kolin seeks to register is identical, if not
confusingly similar, with its registered “KOLIN” mark covering products under
Class 9 of the NCL.
BLA-IPO denied Taiwan Kolin’s application, citing Sec. 123(d) of the IP
Code that a mark cannot be registered if it is identical with a registered mark
belonging to a different proprietor in respect of the same or closely-related
goods. Accordingly, Kolin Electronics, as the registered owner of the mark
“KOLIN” for goods falling under Class 9 of the NCL, should then be protected
against anyone who impinges on its right, including Taiwan Kolin who seeks to
register an identical mark to be used on goods also belonging to Class 9 of the
NCL.

Taiwan Kolin appealed the above Decision to the Office of the Director
General of the IPO which gave due course to the appeal ratiocinating that
product classification alone cannot serve as the decisive factor in the resolution
of whether or not the goods are related and that emphasis should be on the
similarity of the products involved and not on the arbitrary classification or
general description of their properties or characteristics. Kolin Electronics
elevated the case to the CA which found for Kolin Electronics on the strength of
the following premises: (a) the mark sought to be registered by Taiwan Kolin is
confusingly similar to the one already registered in favor of Kolin Electronics; (b)
there are no other designs, special shape or easily identifiable earmarks that
would differentiate the products of both competing companies; and (c) the
intertwined use of television sets with amplifier, booster and voltage regulator
bolstered the fact that televisions can be considered as within the normal
expansion of Kolin Electronics, and is thereby deemed covered by its trademark
as explicitly protected under Sec. 138 of the IP Code.
ISSUE:

Whether or not Taiwan Kolin is entitled to its trademark registration of

“KOLIN” over its specific goods of television sets and DVD players.
RULING:
Yes, Taiwan Kolin is entitled.

Whether or not the products covered by the trademark sought to be

registered by Taiwan Kolin, on the one hand, and those covered by the prior
issued certificate of registration in favor of Kolin Electronics, on the other, fall
under the same categories in the NCL is not the sole and decisive factor in
determining a possible violation of Kolin Electronics’ intellectual property right
should Taiwan Kolin’s application be granted. It is hornbook doctrine that
emphasis should be on the similarity of the products involved and not on the
arbitrary classification or general description of their properties or characteristics.
The mere fact that one person has adopted and used a trademark on his goods
would not, without more, prevent the adoption and use of the same trademark
by others on unrelated articles of a different kind.

It must be noted that the products covered by Taiwan Kolin’s application

and Kolin Electronics’ registration are unrelated.

A certificate of trademark registration confers upon the trademark owner

the exclusive right to sue those who have adopted a similar mark not only in
connection with the goods or services specified in the certificate, but also with
those that are related thereto.

In resolving one of the pivotal issues in this case––whether or not the

products of the parties involved are related––the doctrine in Mighty Corporation
is authoritative. There, the Court held that the goods should be tested against
several factors before arriving at a sound conclusion on the question of
relatedness. Among these are:
(a) the business (and its location) to which the goods belong;
(b) the class of product to which the goods belong;

(c) the product’s quality, quantity, or size, including the nature of the
package, wrapper or container;
(d) the nature and cost of the articles;

(e) the descriptive properties, physical attributes or essential

characteristics with reference to their form, composition, texture or quality;
(f) the purpose of the goods;

(g) whether the article is bought for immediate consumption, that is, day-
to-day household items;
(h) the fields of manufacture;
(i) the conditions under which the article is usually purchased; and
 (j) the channels of trade through which the goods flow, how they are
distributed, marketed, displayed and sold

As mentioned, the classification of the products under the NCL is merely

part and parcel of the factors to be considered in ascertaining whether the
goods are related. It is not sufficient to state that the goods involved herein are
electronic products under Class 9 in order to establish relatedness between the
goods, for this only accounts for one of many considerations enumerated in
Mighty Corporation.

Clearly then, it was erroneous for Kolin Electronics to assume over the CA
to conclude that all electronic products are related and that the coverage of
one electronic product necessarily precludes the registration of a similar mark
over another. In this digital age wherein electronic products have not only
diversified by leaps and bounds, and are geared towards interoperability, it is
difficult to assert readily, as Kolin Electronics simplistically did, that all devices
that require plugging into sockets are necessarily related goods.

As a matter of fact, while both competing marks refer to the word

“KOLIN” written in upper case letters and in bold font, the Court at once notes
the distinct visual and aural differences between them: Kolin Electronics’ mark is
italicized and colored black while that of Taiwan Kolin is white in pantone red
color background. The differing features between the two, though they may
appear minimal, are sufficient to distinguish one brand from the other.

UFC PHILIPPINES, INC. v. BARRIO FIESTA MANUFACTURING CORPORATION

G.R. No. 198889, January 20, 2016

FACTS:

Petitioner Nutri-Asia, Inc. (petitioner) is a corporation duly organized and

existing under Philippine laws. It is the emergent entity in a merger with UFC
Philippines, Inc. Respondent Barrio Fiesta Manufacturing Corporation
(respondent) is likewise a corporation organized and existing under Philippine
laws. On April 4, 2002, respondent filed Application No. 4-2002-002757 for the
mark "PAPA BOY & DEVICE" for goods under Class 30, specifically for "lechon
sauce." The Intellectual Property Office (IPO) published said application for
opposition in the IP Phil. e-Gazette released on September 8, 2006. Petition filed
an opposition to his application.

In its verified opposition before the IPO, petitioner contended that "PAPA
BOY & DEVICE" is confusingly similar with its "PAPA" marks inasmuch as the former
incorporates the term "PAPA," which is the dominant feature of petitioner's
"PAPA" marks. Petitioner averred that respondent's use of "PAPA BOY & DEVICE"
mark for its lechon sauce product, if allowed, would likely lead the consuming
public to believe that said lechon sauce product originates from or is authorized
by petitioner, and that the "PAPA BOY & DEVICE" mark is a variation or derivative
of petitioner's "PAPA" marks. Petitioner argued that this was especially true
considering that petitioner's ketchup product and respondent's lechon sauce
product are related articles that fall under the same Class 30.

Petitioner alleged that the registration of respondent's challenged mark

was also likely to damage the petitioner, considering that its former sister
company, Southeast Asia Food, Inc., and the latter's predecessors-in-interest,
had been major manufacturers and distributors of lechon and other table
sauces since 1965, such as products employing the registered "Mang Tomas"
mark.

In its comment, respondent claims that petitioner's marks have either

expired and/or "that no confusing similarity exists between them and
respondent's "PAPA BOY & DEVICE' mark." Respondent alleges that under
Section 15 of Republic Act No. 166, a renewal application should be filed within
six months before the expiration of the period or within three months after such
expiration. It avers that the expiration of the 20-year term for the "PAPA" mark
issued on August 11, 1983 was August 11, 2003. The sixth month before August
11, 2003 was February 11, 2003 and the third month after August 11, 2003 was
November 11, 2003. Respondent claims that the application that petitioner filed
on October 28, 2005 was almost two years late. Thus, it was not a renewal
application, but could only be considered a new application under the new
Trademark Law, with the filing date reckoned on October 28, 2005. The
registrability of the mark under the new application was examined again, and
any certificate issued for the registration of "PAPA" could not have been a
renewal certificate.

As for petitioner's other mark "PAPA BANANA CATSUP LABEL," respondent

claims that its 20-year term also expired and that petitioner only filed its
application for the new "PAPA LABEL DESIGN" on November 15, 2006. Having
been filed three years beyond the renewal application deadline, petitioner was
not able to renew its application on time, and cannot claim a "continuous
existence of its rights over the 'PAPA BANANA CATSUP LABEL."' Respondent
claims that the two marks are different from each other and that the registration
of one is independent of the other. Respondent concludes that the certificate
of registration issued for "PAPA LABEL DESIGN" is "not and will never be a renewal
certificate.

The IPO ruled in favor of the petitioner, applying the dominance test. This
was reversed by the CA (using the holistic test); hence, this petition.
ISSUE:
Whether the CA erred in applying the holistic test
RULING:

Yes. The dominancy test should have been applied. This Court has relied
on the dominancy test rather than the holistic test. The dominancy test considers
the dominant features in the competing marks in determining whether they are
confusingly similar. Under the dominancy test, courts give greater weight to the
similarity of the appearance of the product arising from the adoption of the
dominant features of the registered mark, disregarding minor differences. Courts
will consider more the aural and visual impressions created by the marks in the
public mind, giving little weight to factors like prices, quality, sales outlets and
market segments.

The Court agreed that respondent's mark cannot be registered.

Respondent's mark is related to a product, lechon sauce, an everyday all-
purpose condiment and sauce, that is not subjected to great scrutiny and care
by the casual purchaser, who knows from regular visits to the grocery store
under what aisle to find it, in which bottle it is contained, and approximately
how much it costs. Since petitioner's product, catsup, is also a household
product found on the same grocery aisle, in similar packaging, the public could
think that petitioner had expanded its product mix to include lechon sauce, and
that the "PAPA BOY" lechon sauce is now part of the "PAPA" family of sauces,
which is not unlikely considering the nature of business that petitioner is in. Thus, if
allowed. registration, confusion of business may set in, and petitioner's hard-
earned goodwill may be associated to the newer product introduced by
respondent, all because of the use of the dominant feature of petitioner's mark
on respondent's mark, which is the word "PAPA."

The words "Barrio Fiesta" are not included in the mark, and although
printed on the label of respondent's lechon sauce packaging, still do not
remove the impression that "PAPA BOY" is a product owned by the
manufacturer of "PAPA" catsup, by virtue of the use of the dominant feature. It is
possible that petitioner could expand its business to include lechon sauce, and
that would be well within petitioner's rights, but the existence of a "PAPA BOY"
lechon sauce would already eliminate this possibility and deprive petitioner of its
rights as an owner of a valid mark included in the Intellectual Property Code.

The Court of Appeals likewise erred in finding that "PAPA," being a

common term of endearment for one's father, is a word over which petitioner
could not claim exclusive use and ownership. The Merriam-Webster dictionary
defines "Papa" simply as "a person's father." True, a person's father has no logical
connection with catsup products, and that precisely makes "PAPA" as an
arbitrary mark capable of being registered, as it is distinctive, coming from a
family name that started the brand several decades ago. What was registered
was not the word "Papa" as defined in the dictionary, but the word "Papa" as
the last name of the original owner of the brand. In fact, being part of several of
petitioner's marks, there is no question that the IPO has found "PAPA" to be a
registrable mark.

Respondent had an infinite field of words and combinations of words to

choose from to coin a mark for its lechon sauce. While its claim as to the origin
of the term "PAPA BOY" is plausible, it is not a strong enough claim to overrule
the rights of the owner of an existing and valid mark. Furthermore, this Court
cannot equitably allow respondent to profit by the name and reputation
carefully built by petitioner without running afoul of the basic demands of fair
play.
 SHANG PROPERTIES REALTY CORPORATION (formerly THE SHANG GRAND
TOWER CORPORATION) and SHANG PROPERTIES, INC. (formerly EDSA PROPERTIES
HOLDINGS, INC.), v. ST. FRANCIS DEVELOPMENT CORPORATION

G.R. No. 190706, July 21, 2014

FACTS:

St. Francis Development Corporation (SFDC) — a domestic corporation

engaged in the real estate business and the developer of the St. Francis Square
Commercial Center, built sometime in 1992, located at Ortigas Center,
Mandaluyong City, Metro Manila (Ortigas Center) — filed an intellectual
property violation case for unfair competition, false or fraudulent declaration,
and damages arising from Shang Properties’ use and filing of applications for
the registration of the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS
SHANGRI-LA PLACE” against Shang Properties before the IPO Bureau of Legal
Affairs (BLA).

In its complaints, SFDC alleged that it has used the mark “ST. FRANCIS” to
identify its numerous property development projects located at Ortigas Center.
SFDC added that as a result of its continuous use of the mark “ST. FRANCIS” in its
real estate business, it has gained substantial goodwill with the public that
consumers and traders closely identify the said mark with its property
development projects.

Shang Properties contended that SFDC is barred from claiming ownership

and exclusive use of the mark “ST. FRANCIS” because the same is
geographically descriptive of the goods or services for which it is intended to be
used. This is because SFDC’s as well as Shang Properties’ real estate
development projects are located along the streets bearing the name “St.
Francis,” particularly, St. Francis Avenue and St. Francis Street (now known as
Bank Drive), both within the vicinity of the Ortigas Center.

The BLA rendered a decision and found that Shang Properties committed
acts of unfair competition against SFDC by its use of the mark “THE ST. FRANCIS
TOWERS” but not with its use of the mark “THE ST. FRANCIS SHANGRI-LA PLACE.”
The BLA considered SFDC to have gained goodwill and reputation for its mark,
which therefore entitles it to protection against the use by other persons, at
least, to those doing business within the Ortigas Center.

Both parties appealed the BLA decision. The IPO Director-General

reversed the BLA’s finding that Shang Properties committed unfair competition
through their use of the mark “THE ST. FRANCIS TOWERS,” thus dismissing such
charge. He found that SFDC could not be entitled to the exclusive use of the
mark “ST. FRANCIS,” even at least to the locality where it conducts its business,
because it is a geographically descriptive mark, considering that it was Shang
Properties as well as SFDC’s intention to use the mark “ST. FRANCIS” in order to
identify, or at least associate, their real estate development projects/businesses
with the place or location where they are situated/conducted, particularly, St.
Francis Avenue and St. Francis Street (now known as Bank Drive), Ortigas Center.
 SFDC elevated the case to the CA. The appellate court found Shang
Properties guilty of unfair competition not only with respect to their use of the
mark “THE ST. FRANCIS TOWERS” but also of the mark “THE ST. FRANCIS SHANGRI-
LA PLACE.” It ruled that SFDC — which has exclusively and continuously used the
mark “ST. FRANCIS” for more than a decade, and, hence, gained substantial
goodwill and reputation thereby — is very much entitled to be protected
against the indiscriminate usage by other companies of the trademark/name it
has so painstakingly tried to establish and maintain.

ISSUE:

Whether or not Shang Properties companies are guilty of unfair

competition in using the marks “THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS
SHANGRI-LA PLACE.”
RULING:

No. Shang Properties are not guilty of unfair competition in using the marks
“THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE.”

Section 168 of Republic Act No. 8293, otherwise known as the “Intellectual
Property Code of the Philippines” (IP Code), provides for the rules and
regulations on unfair competition. Section 168.2 proceeds to the core of the
provision, describing forthwith who may be found guilty of and subject to an
action of unfair competition — that is, “any person who shall employ deception
or any other means contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or services for those of
the one having established such goodwill, or who shall commit any acts
calculated to produce said result x x x.”

The “true test” of unfair competition has thus been “whether the acts of
the defendant have the intent of deceiving or are calculated to deceive the
ordinary buyer making his purchases under the ordinary conditions of the
particular trade to which the controversy relates.” It is therefore essential to
prove the existence of fraud, or the intent to deceive, actual or probable,
determined through a judicious scrutiny of the factual circumstances attendant
to a particular case.

Here, the Court finds the element of fraud to be wanting; hence, there
can be no unfair competition. What the CA appears to have disregarded or
been mistaken in its disquisition, however, is the geographically-descriptive
nature of the mark “ST. FRANCIS” which thus bars its exclusive appropriability,
unless a secondary meaning is acquired.
The records are bereft of any showing that Shang Properties gave their
goods/services the general appearance that it was SFDC which was offering
the same to the public. Neither did Shang Properties employ any means to
induce the public towards a false belief that it was offering SFDC’s
goods/services. Nor did Shang Properties make any false statement or commit
acts tending to discredit the goods/services offered by SFDC. Accordingly, the
element of fraud which is the core of unfair competition had not been
established.

Besides, SFDC was not able to prove its compliance with the requirements
stated in Section 123.2 of the IP Code to be able to conclude that it acquired a
secondary meaning — and, thereby, an exclusive right — to the “ST. FRANCIS”
mark, which is, as the IPO Director-General correctly pointed out,
geographically-descriptive of the location in which its realty developments have
been built. While it is true that SFDC had been using the mark “ST. FRANCIS”
since 1992, its use thereof has been merely confined to its realty projects within
the Ortigas Center. As its use of the mark is clearly limited to a certain locality, it
cannot be said that there was substantial commercial use of the same
recognized all throughout the country. Neither is there any showing of a mental
recognition in buyers’ and potential buyers’ minds that products connected
with the mark “ST. FRANCIS” are associated with the same source — that is, the
enterprise of SFDC. Thus, absent any showing that there exists a clear
goods/service-association between the realty projects located in the aforesaid
area and herein SFDC as the developer thereof, the latter cannot be said to
have acquired a secondary meaning as to its use of the “ST. FRANCIS” mark.

ROBERTO CO vs. KENG HUAN JERRY YEUNG and EMMA YEUNG

G.R. No. 212705, September 10, 2014

FACTS:
At the core of the controversy is the product Greenstone Medicated Oil
Item No. 16 (Greenstone) which is manufactured by Greenstone
Pharmaceutical, a traditional Chinese medicine manufacturing firm based in
Hong Kong and owned by Keng Huan Jerry Yeung (Yeung), and is exclusively
imported and distributed in the Philippines by Taka Trading owned by Yeung’s
wife, Emma Yeung (Emma).

Sps. Yeung filed a civil complaint for trademark infringement and unfair
competition before the RTC against Ling Na Lau, her sister Pinky Lau, and Cof or
allegedly conspiring in the sale of counterfeit Greenstone products to the
public. In the complaint, Sps. Yeung averred that, Emma’s brother, Jose Ruivivar
III (Ruivivar), bought a bottle of Greenstone from Royal Chinese Drug Store
(Royal) in Binondo, Manila, owned by Ling Na Lau. However, when he used the
product, Ruivivar doubted its authenticity considering that it had a different
smell, and the heat it produced was not as strong as the original Greenstone he
frequently used. Having been informed by Ruivivar of the same, Yeung, together
with his son, John Philip, went to Royal to investigate the matter, and, there,
found seven (7) bottles of counterfeit Greenstone on display for sale. He was
then told by Pinky– the store’s proprietor – that the items came from Co of Kiao
An Chinese Drug Store. According to Pinky, Co offered the products on as
"Tienchi Fong Sap Oil Greenstone" (Tienchi) which she eventually availed from
him. Upon Yeung’s prodding, Pinky wrote a note stating these events.

In defense, Co denied having supplied counterfeit items to Royal and

maintained that the stocks of Greenstone came only from Taka Trading.
Meanwhile, the Laus denied selling Greenstone and claimed that the seven (7)
items of Tienchi were left by an unidentified male person at the counter of their
drug store and that when Yeung came and threatened to report the matter to
the authorities, the items were surrendered to him. As to Pinky’s note, it was
claimed that she was merely forced by Yeung to sign the same.

The RTC ruled in favor of Sps. Yeung. The CA affirmed the RTC Decision.
The Laus and Co respectively moved for reconsideration but were, however,
denied. Hence, Co filed the instant petition.

ISSUE:
Whether or not the CA correctly upheld Co’s liability for unfair competition.

RULING:
The petition is without merit.

Unfair competition is defined as the passing off (or palming off) or

attempting to pass off upon the public of the goods or business of one person as
the goods or business of another with the end and probable effect of deceiving
the public. This takes place where the defendant gives his goods the general
appearance of the goods of his competitor with the intention of deceiving the
public that the goods are those of his competitor.

Here, it has been established that Co conspired with the Laus in the
sale/distribution of counterfeit Greenstone products to the public, which were
even packaged in bottles identical to that of the original, thereby giving rise to
the presumption of fraudulent intent. In light of the foregoing definition, it is thus
clear that Co, together with the Laus, committed unfair competition, and
should, consequently, be held liable therefor.

Although liable for unfair competition, the Court deems it apt to clarify
that Co was properly exculpated from the charge of trademark infringement
considering that the registration of the trademark "Greenstone" – essential as it is
in a trademark infringement case – was not proven to have existed during the
time the acts complained of were committed, i.e., in May 2000. In this relation,
the distinctions between suits for trademark infringement and unfair competition
prove useful: (a) the former is the unauthorized use of a trademark, whereas the
latter is the passing off of one's goods as those of another; (b) fraudulent intent is
unnecessary in the former, while it is essential in the latter; and (c) in the former,
prior registration of the trademark is a pre-requisite to the action, while it is not
necessary in the latter.
COPYRIGHT CASES

ABS-CBN CORPORATION v. FELIPE GOZON, GILBERTO R. DUAVIT, JR., MARISSA L.

FLORES, JESSICA A. SOHO, GRACE DELA PEÑA-REYES, JOHN OLIVER T.
MANALASTAS, JOHN DOES AND JANE DOES
G.R. No. 195956, March 11, 2015

Facts:

Overseas Filipino worker Angelo dela Cruz was kidnapped by Iraqi

militants and as a condition for his release, a demand was made for the
withdrawal of Filipino troops in Iraq. After negotiations, he was released by his
captors and was scheduled to return to the country in the afternoon of 22 July
2004.

Occasioned by said homecoming and the public interest it generated,

both GMA Network, Inc. and Petitioner made their respective broadcasts and
coverage of the live event. ABS-CBN conducted live audio-video coverage of
and broadcasted the arrival of Angelo dela Cruz at the Ninoy Aquino
International Airport (NAIA) and the subsequent press conference. ABS-CBN
allowed Reuters Television Service (Reuters) to air the footages it had taken
earlier under a special embargo agreement.

ABS-CBN alleged that under the special embargo agreement, any of the
footages it took would be for the use of Renter's international subscribers only,
and shall be considered and treated by Reuters under 'embargo' against use by
other subscribers in the Philippines. No other Philippine subscriber of Reuters
would be allowed to use ABS-CBN footage without the latter's consent.

GMA-7 subscribes to both Reuters and Cable News Network (CNN). It

received a live video feed of the coverage of Angelo dela Cruz's arrival from
Reuters. GMA-7 immediately carried the live newsfeed in its program "Flash
Report," together with its live broadcast. Allegedly, GMA-7 did not receive any
notice or was not aware that Reuters was airing footages of ABS-CBN. GMA-7's
news control room staff saw neither the "No Access Philippines" notice nor a
notice that the video feed was under embargo in favor of ABS-CBN.

ABS-CBN filed the Complaint for copyright infringement under Sections

177 and 211 of the Intellectual Property Code for the alleged unauthorized
rebroadcast.

ISSUES:

1. Whether news footage is copyrightable under the law

2. Whether there was fair use of the broadcast material

3. Whether good faith is a defense in a criminal prosecution for violation of the

Intellectual Property Code

HELD:

1.

The event itself or the arrival of Angelo dela Cruz is not copyrightable
because that is a newsworthy event. However, any footage created from the
event itself, in this case the arrival of Angelo dela Cruz, are intellectual creations
which are copyrightable. Thus, the footage created by ABS-CBN during the
arrival of Angelo dela Cruz are copyrightable and protected by the laws on
copyright.

The Intellectual Property Code is clear about the rights afforded to authors
of various kinds of work. Under the Code, works are protected by the sole fact of
their creation, irrespective of their mode or form of expression, as well as of their
content, quality and purpose. These include audio-visual works and
cinematographic works and works produced by a process analogous to
cinematography or any process for making audiovisual recordings.

It is true that under Section 175 of the Intellectual Property Code, news of
the day and other miscellaneous facts having the character of mere items of
press information are considered unprotected subject matter. However, the
Code does not state that expression of the news of the day, particularly when it
underwent a creative process, is not entitled to protection.

News or the event itself is not copyrightable. However, an event can be

captured and presented in a specific medium. Television involves a whole
spectrum of visuals and effects, video and audio. News coverage in television
involves framing shots, using images, graphics, and sound effects. It involves
creative process and originality. Television news footage is an expression of the
news.

2.

This court defined fair use as a privilege to use the copyrighted material in a
reasonable manner without the consent of the copyright owner or as copying
the theme or ideas rather than their expression. Fair use is an exception to the
copyright owner's monopoly of the use of the work to avoid stifling the very
creativity which that law is designed to foster.

In determining fair use, several factors are considered, including the nature of
the copyrighted work, and the amount and substantiality of the person used in
relation to the copyrighted work as a whole.
 Determining fair use requires application of the four-factor test. Section 185 of
the Intellectual Property Code lists four (4) factors to determine if there was fair
use of a copyrighted work:

a. The purpose and character of the use, including whether such use is of a
commercial nature or is for non-profit educational purposes;

b. The nature of the copyrighted work;

c. The amount and substantiality of the portion used in relation to the

copyrighted work as a whole; and

d. The effect of the use upon the potential market for or value of the
copyrighted work.

Whether the alleged five-second footage of Petitioner that GMA-7 aired may
be considered fair use is a matter of defense. We emphasize that the case
involves determination of probable cause at the preliminary investigation stage.
Raising the defense of fair use does not automatically mean that no
infringement was committed. The investigating prosecutor has full discretion to
evaluate the facts, allegations, and evidence during preliminary investigation.
Defenses raised during preliminary investigation are subject to further proof and
evaluation before the trial court. Given the insufficiency of available evidence,
determination of whether the Angelo dela Cruz footage is subject to fair use is
better left to the trial court where the proceedings are currently pending.

3.

Respondents argue that live broadcast of news requires a different

treatment in terms of good faith, intent, and knowledge to commit infringement.
For cases referring to film and literary work, there is obviously "copying" from an
existing material because the copier knows that he is copying from an existing
material not owned by him. But respondent argues that in this case, there was
no way they could have known that what they were "copying” was not theirs
because they were merely receiving live video feed from Reuters and CNN from
which they are subscribed.

Respondents' arguments must fail.

Respondents are involved and experienced in the broadcasting business.

They knew that there would be consequences in carrying A.BS-CBN's footage in
their broadcast. That is why GMA-7 allegedly cut the feed from Reuters upon
seeing ABS-CBN's logo and reporter. To admit a different treatment for
broadcasts would mean abandonment of a broadcasting organization's
minimum rights, including copyright on the broadcast material and the right
against unauthorized re broadcast of copyrighted material. The nature of
broadcast technology is precisely why related or neighboring rights were
created and developed. Carving out an exception for live broadcasts would
go against our commitments under relevant international treaties and
agreements, which provide for the same minimum rights.
 One does not need to know that he or she is copying a work without
consent to violate copyright law. Notice of fact of the embargo from Reuters or
CNN is not material to find probable cause that respondents committed
infringement. Knowledge of infringement is only material when the person is
charged of aiding and abetting a copyright infringement under Section 217 of
the Intellectual Property Code.

Thus, unless clearly provided in the law, offenses involving infringement of

copyright protections should be considered malum prohibitum. It is the act of
infringement, not the intent, which causes the damage. To require or assume
the need to prove intent defeats the purpose of intellectual property protection.

JESSIE G. CHING v. WILLIAM M. SALINAS, SR., et al. WILLIAM M. SALINAS, JR.,

JOSEPHINE L. SALINAS, JENNIFER Y. SALINAS, ALONTO SOLAIMAN SALLE,
JOHN ERIC I. SALINAS, NOEL M. YABUT (Board of Directors and Officers of
WILAWARE PRODUCT CORPORATION)

G.R. No. 161295. June 29, 2005

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. The warrants were granted.
The respondents filed a motion to quash the search warrants on the
following ground that the copyright registration of Ching was issued in violation
of the Intellectual Property Code.
The respondents averred that the works covered by the certificates issued
by the National Library are not artistic in nature; they are considered automotive
spare parts and pertain to technology. They aver that the models are not
original, and as such are the proper subject of a patent, not copyright.

Issue:
Whether the automotive spare parts produced by petitioner may be the subject
of a copyright.

Held:

As gleaned from the specifications appended to the application for a

copyright certificate filed by the petitioner, the said Leaf Spring Eye Bushing for
Automobile is merely a utility model described as comprising a generally
cylindrical body having a co-axial bore that is centrally located and provided
with a perpendicular flange on one of its ends and a cylindrical metal jacket
surrounding the peripheral walls of said body, with the bushing made of plastic
that is either polyvinyl chloride or polypropylene.
Plainly, these are not literary or artistic works. They are not intellectual
creations in the literary and artistic domain, or works of applied art. They are
certainly not ornamental designs or one having decorative quality or value.
It bears stressing that the focus of copyright is the usefulness of the artistic
design, and not its marketability. The central inquiry is whether the article is a
work of art. Works for applied art include all original pictorials, graphics, and
sculptural works that are intended to be or have been embodied in useful
article regardless of factors such as mass production, commercial exploitation,
and the potential availability of design patent protection.
As gleaned from the description of the models and their objectives, these
articles are useful articles which are defined as one having an intrinsic utilitarian
function that is not merely to portray the appearance of the article or to convey
information. Indeed, while works of applied art, original intellectual, literary and
artistic works are copyrightable, useful articles and works of industrial design are
not. A useful article may be copyrightable only if and only to the extent that
such design incorporates pictorial, graphic, or sculptural features that can be
identified separately from, and are capable of existing independently of the
utilitarian aspects of the article.
The authors intellectual creation, regardless of whether it is a creation with
utilitarian functions or incorporated in a useful article produced on an industrial
scale, is protected by copyright law. However, the law refers to a work of
applied art which is an artistic creation. It bears stressing that there is no
copyright protection for works of applied art or industrial design which have
aesthetic or artistic features that cannot be identified separately from the
utilitarian aspects of the article. Functional components of useful articles, no
matter how artistically designed, have generally been denied copyright
protection unless they are separable from the useful article.
In this case, the petitioners models are not works of applied art, nor artistic
works. They are utility models, useful articles, albeit with no artistic design or
value.

Additional reading for this case:

Ownership of copyrighted material is shown by proof of originality and
copyrightability. By originality is meant that the material was not copied, and
evidences at least minimal creativity; that it was independently created by the
author and that it possesses at least same minimal degree of creativity. Copying
is shown by proof of access to copyrighted material and substantial similarity
between the two works. The applicant must thus demonstrate the existence and
the validity of his copyright because in the absence of copyright protection,
even original creation may be freely copied.
To discharge his burden, the applicant may present the certificate of
registration covering the work or, in its absence, other evidence. A copyright
certificate provides prima facie evidence of originality which is one element of
copyright validity. It constitutes prima facie evidence of both validity and
ownership and the validity of the facts stated in the certificate. The presumption
of validity to a certificate of copyright registration merely orders the burden of
proof. The applicant should not ordinarily be forced, in the first instance, to
prove all the multiple facts that underline the validity of the copyright unless the
respondent, effectively challenging them, shifts the burden of doing so to the
applicant.
A certificate of registration creates no rebuttable presumption of copyright
validity where other evidence in the record casts doubt on the question. In such
a case, validity will not be presumed.

PACITA I. HABANA, ALICIA L. CINCO and JOVITA N. FERNANDO v. FELICIDAD C.

ROBLES and GOODWILL TRADING CO., INC.,

G.R. No. 131522. July 19, 1999

Facts:

Petitioners are authors and copyright owners of duly issued certificates of

copyright registration covering their published works, produced through their
combined resources and efforts, entitled COLLEGE ENGLISH FOR TODAY (CET for
brevity), Books 1 and 2, and WORKBOOK FOR COLLEGE FRESHMAN ENGLISH,
Series 1.
Respondent Felicidad Robles and Goodwill Trading Co., Inc. are the
author/publisher and distributor/seller of another published work entitled
DEVELOPING ENGLISH PROFICIENCY (DEP for brevity), Books 1 and 2 (1985
edition) which book was covered by copyrights issued to them.
In the course of revising their published works, petitioners scouted and
looked around various bookstores to check on other textbooks dealing with the
same subject matter. By chance they came upon the book of respondent
Robles and upon perusal of said book they were surprised to see that the book
was strikingly similar to the contents, scheme of presentation, illustrations and
illustrative examples in their own book, CET.
Robles denied the allegations of plagiarism and stressed that (1) the book
DEP is the product of her independent researches, studies and experiences; (2)
DEP followed the scope and sequence or syllabus which are common to all
English grammar writers as recommended by the Association of Philippine
Colleges of Arts and Sciences (APCAS), so any similarity between the
respondents book and that of the petitioners was due to the orientation of the
authors to both works and standards and syllabus; and (3) the similarities may be
due to the authors exercise of the right to fair use of copyrigthed materials, as
guides.

Issue:

Whether despite the apparent textual, thematic and sequential similarity

between DEP and CET, respondents committed no copyright infringement.

Held:

A perusal of the records yields several pages of the book DEP that are similar
if not identical with the text of CET.
We believe that respondent Robles act of lifting from the book of petitioners
substantial portions of discussions and examples, and her failure to
acknowledge the same in her book is an infringement of petitioners copyrights.
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.
The respondents claim that the copied portions of the book CET are also
found in foreign books and other grammar books, and that the similarity
between her style and that of petitioners cannot be avoided since they come
from the same background and orientation may be true.
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.
The next question to resolve is to what extent can copying be injurious to the
author of the book being copied. Is it enough that there are similarities in some
sections of the books or large segments of the books are the same?
In the case at bar, there is no question that petitioners presented several
pages of the books CET and DEP that more or less had the same contents. It
may be correct that the books being grammar books may contain materials
similar as to some technical contents with other grammar books, such as the
segment about the Author Card. However, the numerous pages that the
petitioners presented showing similarity in the style and the manner the books
were presented and the identical examples cannot pass as similarities merely
because of technical consideration.
The respondents claim that their similarity in style can be attributed to the
fact that both of them were exposed to the APCAS syllabus and their respective
academic experience, teaching approach and methodology are almost
identical because they were of the same background.
However, we believe that even if petitioners and respondent Robles were of
the same background in terms of teaching experience and orientation, it is not
an excuse for them to be identical even in examples contained in their
books. The similarities in examples and material contents are so obviously
present in this case.
We consider as indicia of guilt or wrongdoing the act of respondent Robles
of pulling out from Goodwill bookstores the book DEP upon learning of
petitioners complaint while pharisaically denying petitioners demand. It was
further noted that when the book DEP was re-issued as a revised version, all the
pages cited by petitioners to contain portion of their book College English for
Today were eliminated.
In cases of infringement, copying alone is not what is prohibited. The
copying must produce an injurious effect. Here, the injury consists in that
respondent Robles lifted from petitioner’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 petitioners as her source.
Hence, there is a clear case of appropriation of copyrighted work for her
benefit that respondent Robles committed. Petitioners 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.
In the case at bar, the least that respondent Robles could have done was to
acknowledge petitioners Habana et. al. as the source of the portions of DEP. The
final product of an author’s toil is her book. To allow another to copy the book
without appropriate acknowledgment is injury enough.
 NBI MICROSOFT CORPORATION & LOTUS DEVELOPMENT CORP. v. JUDY C.
HWANG, BENITO KEH & YVONNE K. CHUA/BELTRON COMPUTER PHILIPPINES
INC., JONATHAN K. CHUA, EMILY K. CHUA, BENITO T. SANCHEZ, NANCY I.
VELASCO, ALFONSO CHUA, ALBERTO CHUA, SOPHIA ONG, DEANNA
CHUA/TAIWAN MACHINERY DISPLAY & TRADE CENTER, INC., and THE
SECRETARY OF JUSTICE

G.R. No. 147043. June 21, 2005

Facts:

Microsoft and Beltron entered into a Licensing Agreement where Microsoft

authorized Beltron, for a fee, to reproduce and install no more than one (1)
copy of Microsoft software on each Customer System hard disk. Microsoft
terminated the Agreement for Beltrons non-payment of royalties.
Afterwards, Microsoft learned that respondents were illegally copying and
selling Microsoft software. The NBI searched the premises of Beltron and seized
several computer-related hardware, software, accessories, and paraphernalia.
Among these were 2,831 pieces of CD-ROMs containing Microsoft software.
Based on the articles obtained from respondents, Microsoft charged
respondents before the Department of Justice (DOJ) with copyright
infringement and unfair competition.

Issue:

Whether Beltron should be charged with the crime of Copyright

Infringement.

Held:

Yes.
Unlike the higher quantum of proof beyond reasonable doubt required to
secure a conviction, it is the lower standard of probable cause which is applied
during the preliminary investigation to determine whether the accused should
be held for trial. This standard is met if the facts and circumstances incite a
reasonable belief that the act or omission complained of constitutes the offense
charged.
Contrary to the DOJs 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 owners prior consent renders himself civilly and criminally liable for
copyright infringement.
 Significantly, under Section 5(A), a copyright owner is vested with the
exclusive right to copy, distribute, multiply, and sell his intellectual works.
There is no basis for the DOJ to rule that Microsoft must await a prior
resolution from the proper court to know whether or not the [Agreement] is still
binding between the parties. Beltron has not filed any suit to question Microsofts
termination of the Agreement. Microsoft can neither be expected nor
compelled to wait until Beltron decides to sue before Microsoft can seek
remedies for violation of its intellectual property rights.
Furthermore, some of the counterfeit CD-ROMs bought from respondents
were installer CD-ROMs containing Microsoft software only or both Microsoft and
non-Microsoft software. These articles are counterfeit per se because Microsoft
does not (and could not have authorized anyone to) produce such CD-ROMs.
The copying of the genuine Microsoft software to produce these fake CD-ROMs
and their distribution are illegal even if the copier or distributor is a Microsoft
licensee. As far as these installer CD-ROMs are concerned, the Agreement (and
the alleged question on the validity of its termination) is immaterial to the
determination of respondent’s liability for copyright infringement and unfair
competition.
The Court finds that the 2,831 Microsoft CD-ROMs seized from respondents
suffice to support a finding of probable cause to indict respondents for
copyright infringement under Section 5(A) in relation to Section 29 of PD 49 for
unauthorized copying and selling of protected intellectual works. The installer
CD-ROMs with Microsoft software, to repeat, are counterfeit per se.

WILSON ONG CHING KIAN CHUAN vs. HON. COURT OF APPEALS

and LORENZO TAN

G.R. No. 130360. August 15, 2001

Facts:

Petitioner Wilson Ong Ching Kian Chuan (Ong), imports vermicelli from China
National Cereals Oils and Foodstuffs Import and Export Corporation , based in
Beijing, China, under the firm name C.K.C. Trading. He repacks it in cellophane
wrappers with a design of two-dragons and the TOWER trademark on the
uppermost portion. Ong acquired a Certificate of Copyright Registration from
the National Library on the said design.
Ong discovered that private respondent Lorenzo Tan repacked
his vermicelli he imports from the same company but based in Qingdao, China
in a nearly identical wrapper. Ong filed against Tan a verified complaint for
infringement of copyright with damages and prayer for temporary restraining
order or writ of preliminary injunction with the Regional Trial Court in Quezon City.
Ong alleged that he was the holder of a Certificate of Copyright Registration
over the cellophane wrapper with the two-dragon design, and that Tan used an
identical wrapper in his business. In his prayer for a preliminary injunction in
addition to damages, he asked that Tan be restrained from using the wrapper.
Tan alleged that Ong was not entitled to an injunction. According to Tan,
Ong did not have a clear right over the use of the trademark Pagoda and
Lungkow vermicelli as these were registered in the name of CHINA NATIONAL
CEREALS OIL AND FOODSTUFFS IMPORT AND EXPORT CORPORATION,
SHANDONG CEREALS AND OILS BRANCH (hereafter Ceroilfood Shandong),
based in Qingdao, China. Further, Tan averred that he was the exclusive
distributor in the Philippines of the Pagoda and Lungkow vermicelli and was
solely authorized to use said trademark. He added that Ong merely copied the
two-dragon design from Ceroilfood Shandong which had the Certificates of
Registration issued by different countries. He concluded that Ongs Certificate of
Copyright Registration was not valid for lack of originality.

Issue:

Whether an injunction should be granted in favor of Ong.

Held:

A person, to be entitled to a copyright, must be the original creator of the

work. He must have created it by his own skill, labor and judgment without
directly copying or evasively imitating the work of another.
The grant of preliminary injunction in a case rests on the sound discretion of
the court with the caveat that it should be made with extreme caution. Its grant
depends chiefly on the extent of doubt on the validity of the copyright,
existence of infringement, and the damages sustained by such infringement.
In our view, the copies of the certificates of copyright registered in the name
of Ceroilfood Shandong sufficiently raise reasonable doubt. With such a doubt,
the preliminary injunction is unavailing.