FIRST DIVISION

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

NBI MICROSOFT CORPORATION & LOTUS DEVELOPMENT
CORP., petitioners, vs. 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, respondents.
D E C I S I O N
CARPIO, J p:
The Case
This is a petition for certiorari 1 of the Resolutions 2 of the Department of Justice
dismissing for "lack of merit and insufficiency of evidence" petitioner Microsoft
Corporation's complaint against respondents for copyright infringement and unfair
competition.
The Facts
Petitioner Microsoft Corporation ("Microsoft"), a Delaware, United States
corporation, owns the copyright and trademark to several computer software. 3
Respondents Benito Keh and Yvonne Keh are the President/Managing Director and
General Manager, respectively, of respondent Beltron Computer Philippines, Inc.
("Beltron"), a domestic corporation. Respondents Jonathan K. Chua, Emily K. Chua,
Benito T. Sanchez, and Nancy I. Velasco are Beltron's Directors. On the other hand,
respondents Alfonso Chua, Alberto Chua, Judy K. Chua Hwang, Sophia Ong, and
Deanna Chua are the Directors of respondent Taiwan Machinery Display & Trade
Center, Inc. ("TMTC"), also a domestic corporation. 4
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:
(i) . . . reproduce and install no more than one (1) copy of
[Microsoft] software on each Customer System hard disk or
Read Only Memory ("ROM"); [and]
(ii) . . . distribute directly or indirectly and license copies of the
Product (reproduced as per Section 2(a)(i) and/or acquired from
Authorized Replicator or Authorized Distributor) in object code
form to end users[.] . . . 5
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. 6
Afterwards, Microsoft learned that respondents were illegally copying and selling
Microsoft software. Consequently, Microsoft, through its Philippine agent, 7 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, PCS employee John Benedic 8 Sacriz ("Sacriz") and NBI
agent Dominador Samiano, Jr. ("Samiano"), posing as representatives of a computer
shop, 9 bought computer hardware (central processing unit ("CPU") and computer
monitor) and software (12 computer disks ("CDs") in read-only memory ("ROM")
format) from respondents. The CPU contained pre-installed 10 Microsoft Windows
3.1 and MS-DOS software. The 12 CD-ROMs, encased in plastic containers with
Microsoft packaging, also contained Microsoft software. 11 At least two of the CD-
ROMs were "installers," so-called because they contain several software (Microsoft
only or both Microsoft and non-Microsoft). 12 Sacriz and Samiano 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
Sacriz and Samiano for the CPU and monitor bore the heading "T.M.T.C. (PHILS.)
INC. BELTRON COMPUTER." 13 The receipt for the 12 CD-ROMs did not indicate its
source although the name "Gerlie" appears below the entry "delivered by." 14
On 17 November 1995, Microsoft applied for search warrants against respondents
in the Regional Trial Court, Branch 23, Manila ("RTC"). 15 The RTC granted
Microsoft's application and issued two search warrants ("Search Warrant Nos. 95-
684 and 95-685"). 16 Using Search Warrant Nos. 95-684 and 95-685, the NBI
searched the premises of Beltron and TMTC and seized several computer-related
hardware, software, accessories, and paraphernalia. Among these were 2,831
pieces of CD-ROMs containing Microsoft software. 17
Based on the articles obtained from respondents, Microsoft and a certain Lotus
Development Corporation ("Lotus Corporation") charged respondents 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") 18 and
with unfair competition under Article 189(1) 19 of the Revised Penal Code. In its
Complaint ("I.S. No. 96-193"), which the NBI indorsed, Microsoft alleged that
respondents illegally copied and sold Microsoft software. 20
In their joint counter-affidavit, respondents Yvonne Keh ("respondent Keh") and
Emily K. Chua ("respondent Chua") denied the charges against respondents.
Respondents Keh and Chua alleged that: (1) Microsoft's real intention in filing the
complaint under I.S. No. 96-193 was to pressure Beltron to pay its alleged unpaid
royalties, thus Microsoft should have filed a collection suit instead of a criminal
complaint; (2) TMTC bought the confiscated 59 boxes of MS-DOS CDs from a
Microsoft dealer in Singapore (R.R. Donnelly); (3) respondents are not the "source"
of the Microsoft Windows 3.1 software pre-installed in the CPU bought by Sacriz
and Samiano, but only of the MS-DOS software; (4) Microsoft's alleged proof of
purchase (receipt) for the 12 CD-ROMs is inconclusive because the receipt does not
indicate its source; and (5) respondents Benito Keh, Jonathan K. Chua, Alfonso
Chua, Alberto Chua, Judy K. Chua Hwang, Sophia Ong, and Deanna Chua are
stockholders of Beltron and TMTC in name only and thus cannot be held criminally
liable. 21
The other respondents did not file counter-affidavits.
Meanwhile, respondents moved to quash Search Warrant Nos. 95-684 and 95-685.
The RTC partially granted their motion in its Order of 16 April 1996. Microsoft
sought reconsideration but the RTC denied Microsoft's motion in its Order of 19 July
1996. Microsoft appealed to the Court of Appeals in CA-G.R. CV No. 54600. In its
Decision of 29 November 2001, the Court of Appeals granted Microsoft's appeal
and set aside the RTC Orders of 16 April 1996 and 19 July 1996. The Court of
Appeals' Decision became final on 27 December 2001.
The DOJ Resolutions
In the Resolution of 26 October 1999, DOJ State Prosecutor Jocelyn A. Ong ("State
Prosecutor Ong") recommended the dismissal of Microsoft's complaint for lack of
merit and insufficiency of evidence. State Prosecutor Ong also recommended the
dismissal of Lotus Corporation's complaint for lack of interest to prosecute and for
insufficiency of evidence. Assistant Chief State Prosecutor Lualhati R. Buenafe
("Assistant Chief State Prosecutor Buenafe") approved State Prosecutor Ong's
recommendations. 22 The 26 October 1999 Resolution reads in part:
[T]wo (2) issues have to be resolved in this case, namely:
a) Whether or not Beltron Computer and/or its stockholders
should be held liable for the offenses charged.
b) Whether or not prima facie case exist[s] against Taiwan
Machinery Display and Trade Center, Inc. (TMTC) for violation
of the offense charged.
Complainant had alleged that from the time the license
agreement was terminated, respondent/s is/are no longer
authorized to copy/distribute/sell Microsoft products. However,
respondent/s averred that the case is civil in nature, not
criminal, considering that the case stemmed only out of the
desire of complainant to collect from them the amount of
US$135,121.32 and that the contract entered into by the
parties cannot be unilaterally terminated.
In the order of Honorable William Bayhon dated July 19, 1996
[denying reconsideration to the Order partially quashing the
search warrants], he observed the following:
"It is further argued by counsel for respondent that the
act taken by private complainant is to spite revenge
against the respondent Beltron for the latter failed to
pay the alleged monetary obligation in the amount of
US$135,121.32. That respondent has some monetary
obligation to complainant which is not denied by the
complainant."
["]It appears therefore that prior to the issuance of the
subject search warrants, complainant had some
business transactions with the respondent [Beltron]
along the same line of products. Complainant failed to
reveal the true circumstances existing between the
two of them as it now appears, indeed the search
warrant[s] . . . [are] being used as a leverage to secure
collection of the money obligation which the Court
cannot allow."
From said order, it can be gleaned that the [RTC] . . . , had
admitted that the search warrants applied for by complainant
were merely used as a leverage for the collection of the alleged
monetary obligation of the respondent/s.
From said order, it can be surmise (sic) that the obligations
between the parties is civil in nature not criminal.
Moreover, complainant had time and again harped that
respondent/s is/are not authorized to sell/copy/distribute
Microsoft products at the time of the execution of the search
warrants. Still, this office has no power to pass upon said issue
for one has then to interpret the provisions of the contract
entered into by the parties, which question, should be raised in
a proper civil proceeding.
Accordingly, absen[t] a resolution from the proper court of (sic)
whether or not the contract is still binding between the parties
at the time of the execution of the search warrants, this office
cannot pass upon the issue of whether respondent/s is or are
liable for the offense charged.
As to the second issue, we find for the respondent/s. TMTC had
provided sufficient evidence such as pro-forma invoice from
R.R. Donnelley; Debt Advice of the Bank of Commerce; Official
Receipts from the Bureau of Customs; and Import Entry
Declaration of the Bureau of Customs to prove that indeed the
Microsoft software in their possession were bought from
Singapore.
Thus, respondent/s in this case has/have no intent to defraud
the public, as provided under Article 189 of the Revised Penal
Code, for they bought said Microsoft MS-DOS 6.0 from an
alleged licensee of Microsoft in Singapore, with all the
necessary papers. In their opinion, what they have are genuine
Microsoft software, therefore no unfair competition exist.
Moreover, violation of P.D. 49 does not exist, for respondent/s
was/were not the manufacturers of the Microsoft software
seized and were selling their products as genuine Microsoft
software, considering that they bought it from a Microsoft
licensee.
Complainant, on the other hand, considering that it has the
burden of proving that the respondent/s is/are liable for the
offense charged, has not presented any evidence that the items
seized namely the 59 boxes of MS-DOS 6.0 software are
counterfeit. SEACTH
The certification issued on December 12, 1995 by Christopher
Austin, Corporate Attorney of the complainant, does not
disclose this fact. For the term used by Mr. Austin was that the
items seized were unauthorized.
The question now, is whether the products were unauthorized
because TMTC has no license to sell Microsoft products, or is it
unauthorized because R.R. Donnelley has no authority to sell
said products here in the Philippines.
Still, to determine the culpability of the respondents,
complainant should present evidence that what is in the
possession of the respondent/s is/are counterfeit Microsoft
products.
This it failed to do. 23
Microsoft sought reconsideration and prayed for an ocular inspection of the articles
seized from respondents. However, in the Resolution of 3 December 1999, Assistant
Chief State Prosecutor Buenafe, upon State Prosecutor Ong's recommendation,
denied Microsoft's motion. 24
Microsoft appealed to the Office of the DOJ Secretary. In the Resolution of 3 August
2000, DOJ Undersecretary Regis V. Puno dismissed Microsoft's appeal. 25 Microsoft
sought reconsideration but its motion was denied in the Resolution of 22 December
2000. 26
Hence, this petition. Microsoft contends that:
I. THE DOJ ERRED IN RULING THAT THE LIABILITY OF
RESPONDENTS WAS ONLY CIVIL IN NATURE BY VIRTUE
OF THE LICENSE AGREEMENT.
II. THE DOJ MISAPPRECIATED THE FACT THAT RESPONDENTS
WERE ENGAGED IN THE ILLEGAL IMPORTATION, SALE
AND DISTRIBUTION OF COUNTERFEIT SOFTWARE AS
EVIDENCED BY THE ITEMS PURCHASED DURING THE
TEST-BUY AND THE ITEMS SEIZED FROM
RESPONDENTS' PREMISES.
III. THE DOJ MISAPPRECIATED THE LAW ON COPYRIGHT
INFRINGEMENT AND UNFAIR COMPETITION.
IV. ONLY TWO OUT OF THE NINE RESPONDENTS BOTHERED TO
FILE COUNTER-AFFIDAVITS; HENCE, THE CHARGES
AGAINST SEVEN [RESPONDENTS] REMAIN
UNCONTROVERTED. 27
In its Comment, filed by the Solicitor General, the DOJ maintains that it did not
commit grave abuse of discretion in dismissing Microsoft's complaint. 28
For their part, respondents allege in their Comment that Microsoft is guilty of
forum-shopping because its petition in CA-G.R. CV No. 54600 was filed ahead of,
and has a common interest with, this petition. On the merits, respondents
reiterate their claims in their motion to quash Search Warrant Nos. 95-684 and 95-
685 that the articles seized from them were either owned by others, purchased
from legitimate sources, or not produced by Microsoft. Respondents also insist that
the Agreement entitled Beltron to "copy and replicate or reproduce" Microsoft
products. On the confiscated 2,831 CD-ROMs, respondents allege that a certain
corporation 29 left the CD-ROMs with them for safekeeping. Lastly, respondents
claim that there is no proof that the CPU Sacriz and Samiano bought from them
contained pre-installed Microsoft software because the receipt for the CPU does
not indicate "[s]oftware hard disk." 30
In its Reply, Microsoft counters that it is not liable for forum-shopping because its
petition in CA-G.R. CV No. 54600 involved the Orders of the RTC partially quashing
Search Warrant Nos. 95-684 and 95-685 while this petition concerns the DOJ
Resolutions dismissing its complaint against respondents for copyright infringement
and unfair competition. On the merits, Microsoft maintains that respondents
should be indicted for copyright infringement and unfair competition. 31
The Issues
The petition raises the following issues:
(1) Whether Microsoft engaged in forum-shopping; and
(2) Whether the DOJ acted with grave abuse of discretion in not
finding probable cause to charge respondents with
copyright infringement and unfair competition.
The Ruling of the Court
The petition has merit.
Microsoft did not Engage in Forum-Shopping
Forum-shopping takes place when a litigant files multiple suits involving the same
parties, either simultaneously or successively, to secure a favorable judgment. 32
Thus, it exists where the elements of litis pendentia are present, namely: (a) identity
of parties, or at least such parties who represent the same interests in both actions;
(b) identity of rights asserted and relief prayed for, the relief being founded on the
same facts; and (c) the identity with respect to the two preceding particulars in the
two cases is such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the other
case. 33 Forum-shopping is an act of malpractice because it abuses court processes.
34 To check this pernicious practice, Section 5, Rule 7 of the 1997 Rules of Civil
Procedure requires the principal party in an initiatory pleading to submit a
certification against forum-shopping. 35 Failure to comply with this requirement is a
cause for the dismissal of the case and, in case of willful forum-shopping, for the
imposition of administrative sanctions.
Here, Microsoft correctly contends that it is not liable for forum-shopping. What
Microsoft appealed in CA-G.R. CV No. 54600 were the RTC Orders partially quashing
Search Warrant Nos. 95-684 and 95-685. In the present case, Microsoft is appealing
from the DOJ Resolutions dismissing its complaint against respondents for copyright
infringement and unfair competition. Thus, although the parties in CA-G.R. CV No.
54600 and this petition are identical, the rights asserted and the reliefs prayed for
are not such that the judgment in CA-G.R. CV No. 54600 does not amount to res
judicata in the present case. This renders forum-shopping impossible here.
The DOJ Acted with Grave Abuse of Discretion
in not Finding Probable Cause to Charge Respondents with
Copyright Infringement and Unfair Competition
Generally, this Court is loath to interfere in the prosecutor's discretion in
determining probable cause 36 unless such discretion is shown to have been
abused. 37 This case falls under the exception.
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. As we explained
in Pilapil v. Sandiganbayan: 38
The term [probable cause] does not mean "actual and positive
cause" nor does it import absolute certainty. It is merely based
on opinion and reasonable belief. Thus, a finding of probable
cause does not require an inquiry into whether there is
sufficient evidence to procure a conviction. It is enough that it is
believed that the act or omission complained of constitutes the
offense charged. Precisely, there is a trial for the reception of
evidence of the prosecution in support of the charge.
PD 49 and Article 189(1)
Section 5 39 of PD 49 ("Section 5") enumerates the rights vested exclusively on the
copyright owner. Contrary to the DOJ's 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 40 and criminally 41
liable for copyright infringement. We held in Columbia Pictures, Inc. v. Court of
Appeals: 42
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. (Emphasis supplied)
Significantly, under Section 5(A), a copyright owner is vested with the exclusive
right to "copy, distribute, multiply, [and] sell" his intellectual works.
On the other hand, 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. 44
The element of intent to deceive may be inferred from the similarity of the
goods or their appearance. 45
On the Sufficiency of Evidence to
Support a Finding of Probable Cause
Against Respondents
In its pleadings filed with the DOJ, Microsoft invoked three clusters of evidence to
support its complaint against respondents, namely: (1) the 12 CD-ROMs containing
Microsoft software Sacriz and Samiano bought from respondents; (2) the CPU with
pre-installed Microsoft software Sacriz and Samiano also purchased from
respondents; and (3) the 2,831 CD-ROMs containing Microsoft software seized from
respondents. 46 The DOJ, on the one hand, refused to pass upon the relevance of
these pieces of evidence because: (1) the "obligations between the parties is civil
and not criminal" considering that Microsoft merely sought the issuance of Search
Warrant Nos. 95-684 and 95-685 to pressure Beltron to pay its obligation under the
Agreement, and (2) the validity of Microsoft's termination of the Agreement must
first be resolved by the "proper court." On the other hand, the DOJ ruled that
Microsoft failed to present evidence proving that what were obtained from
respondents were counterfeit Microsoft products. CAHTIS

This is grave abuse of discretion. 47
First. Being the copyright and trademark owner of Microsoft software, Microsoft
acted well within its rights in filing the complaint under I.S. No. 96-193 based on the
incriminating evidence obtained from respondents. Hence, it was highly irregular
for the DOJ to hold, based on the RTC Order of 19 July 1996, that Microsoft sought
the issuance of Search Warrant Nos. 95-684 and 95-685, and by inference, the filing
of the complaint under I.S. No. 96-193, merely to pressure Beltron to pay its
overdue royalties to Microsoft. Significantly, in its Decision in CA-G.R. CV No. 54600
dated 29 November 2001, the Court of Appeals set aside the RTC Order of 19 July
1996. Respondents no longer contested that ruling which became final on 27
December 2001.
Second. There is no basis for the DOJ to rule that Microsoft must await a prior
"resolution from the proper court of (sic) whether or not the [Agreement] is still
binding between the parties." Beltron has not filed any suit to question Microsoft's
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
respondents' liability for copyright infringement and unfair competition.
Lastly, Section 10(b) 48 of the Agreement provides that Microsoft's "rights and
remedies" under the contract are "not . . . exclusive and are in addition to any other
rights and remedies provided by law or [the] Agreement." Thus, even if the
Agreement still subsists, Microsoft is not precluded from seeking remedies under
PD 49 and Article 189(1) of the Revised Penal Code to vindicate its rights.
Third. The Court finds that the 12 CD-ROMs ("installer" and "non-installer") and the
CPU with pre-installed Microsoft software Sacriz and Samiano bought from
respondents and 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. On the other hand, the
illegality of the "non-installer" CD-ROMs purchased from respondents and of the
Microsoft software pre-installed in the CPU is shown by the absence of the standard
features accompanying authentic Microsoft products, namely, the Microsoft end-
user license agreements, user's manuals, registration cards or certificates of
authenticity.
On the 2,831 Microsoft CD-ROMs 49 seized from respondents, respondent Beltron,
the only respondent who was party to the Agreement, could not have reproduced
them under the Agreement as the Solicitor General 50 and respondents contend.
Beltron's rights 51 under the Agreement were limited to:
(1) the "reproduc[tion] and install[ation of] no more than one copy of [Microsoft]
software on each Customer System hard disk or Read Only Memory ("ROM")"; and
(2) the "distribut[ion] . . . and licens[ing of] copies of the [Microsoft] Product [as
reproduced above] and/or acquired from Authorized Replicator or Authorized
Distributor) in object code form to end users."
The Agreement defines an authorized replicator as "a third party approved by
[Microsoft] which may reproduce and manufacture [Microsoft] Product[s] for
[Beltron] . . ." 52 An authorized distributor, on the other hand, is a "third party
approved by [Microsoft] from which [Beltron] may purchase MED 53 Product." 54
Being a mere reproducer/installer of one Microsoft software copy on each
customer's hard disk or ROM, Beltron could only have acquired the hundreds of
Microsoft CD-ROMs found in respondents' possession from Microsoft distributors
or replicators.
However, respondents makes no such claim. What respondents contend is that
these CD-ROMs were left to them for safekeeping. But neither is this claim tenable
for lack of substantiation. Indeed, respondents Keh and Chua, the only respondents
who filed counter-affidavits, did not make this claim in the DOJ. These
circumstances give rise to the reasonable inference that respondents mass-
produced the CD-ROMs in question without securing Microsoft's prior
authorization.
The counterfeit "non-installer" CD-ROMs Sacriz and Samiano bought from
respondents also suffice to support a finding of probable cause to indict
respondents for unfair competition under Article 189(1) of the Revised Penal Code
for passing off Microsoft products. From the pictures of the CD-ROMs' packaging,
55 one cannot distinguish them from the packaging of CD-ROMs containing genuine
Microsoft software. Such replication, coupled with the similarity of content of these
fake CD-ROMs and the CD-ROMs with genuine Microsoft software, implies intent to
deceive. cAaTED
Respondents' contention that the 12 CD-ROMs Sacriz and Samiano purchased
cannot be traced to them because the receipt for these articles does not indicate its
source is unavailing. The receipt in question should be taken together with
Microsoft's claim that Sacriz and Samiano bought the CD-ROMs from respondents.
56 Together, these considerations point to respondents as the vendor of the
counterfeit CD-ROMs. Respondents do not give any reason why the Court should
not give credence to Microsoft's claim. For the same reason, the fact that the
receipt for the CPU does not indicate "[s]oftware hard disk" does not mean that the
CPU had no pre-installed Microsoft software. Respondents Keh and Chua admit in
their counter-affidavit that respondents are the "source" of the pre-installed MS-
DOS software.
WHEREFORE, we GRANT the petition. We SET ASIDE the Resolutions dated 26
October 1999, 3 December 1999, 3 August 2000, and 22 December 2000 of the
Department of Justice.
SO ORDERED.
FIRST DIVISION
[G.R. No. 140946. September 13, 2004.]
MICROSOFT CORPORATION and LOTUS DEVELOPMENT
CORPORATION, petitioners, vs. MAXICORP, INC., respondent.
D E C I S I O N
CARPIO, J p:
The Case
This petition for review on certiorari 1 seeks to reverse the Court of Appeals'
Decision 2 dated 23 December 1998 and its Resolution dated 29 November 1999 in
CA-G.R. SP No. 44777. The Court of Appeals reversed the Order 3 of the Regional
Trial Court, Branch 23, Manila ("RTC"), denying respondent Maxicorp, Inc.'s
("Maxicorp") motion to quash the search warrant that the RTC issued against
Maxicorp. Petitioners are the private complainants against Maxicorp for copyright
infringement under Section 29 of Presidential Decree No. 49 ("Section 29 of PD 49")
4 and for unfair competition under Article 189 of the Revised Penal Code ("RPC"). 5
Antecedent Facts
On 25 July 1996, National Bureau of Investigation ("NBI") Agent Dominador
Samiano, Jr. ("NBI Agent Samiano") filed several applications for search warrants in
the RTC against Maxicorp for alleged violation of Section 29 of PD 49 and Article
189 of the RPC. After conducting a preliminary examination of the applicant and his
witnesses, Judge William M. Bayhon issued Search Warrants Nos. 96-451, 96-452,
96-453 and 96-454, all dated 25 July 1996, against Maxicorp.
Armed with the search warrants, NBI agents conducted on 25 July 1996 a search of
Maxicorp's premises and seized property fitting the description stated in the search
warrants.
On 2 September 1996, Maxicorp filed a motion to quash the search warrants
alleging that there was no probable cause for their issuance and that the warrants
are in the form of "general warrants." The RTC denied Maxicorp's motion on 22
January 1997. The RTC also denied Maxicorp's motion for reconsideration.
The RTC found probable cause to issue the search warrants after examining NBI
Agent Samiano, John Benedict Sacriz ("Sacriz"), and computer technician Felixberto
Pante ("Pante"). The three testified on what they discovered during their respective
visits to Maxicorp. NBI Agent Samiano also presented certifications from petitioners
that they have not authorized Maxicorp to perform the witnessed activities using
petitioners' products.
On 24 July 1997, Maxicorp filed a petition for certiorari with the Court of Appeals
seeking to set aside the RTC's order. On 23 December 1998, the Court of Appeals
reversed the RTC's order denying Maxicorp's motion to quash the search warrants.
Petitioners moved for reconsideration. The Court of Appeals denied petitioners'
motion on 29 November 1999.
The Court of Appeals held that NBI Agent Samiano failed to present during the
preliminary examination conclusive evidence that Maxicorp produced or sold the
counterfeit products. The Court of Appeals pointed out that the sales receipt NBI
Agent Samiano presented as evidence that he bought the products from Maxicorp
was in the name of a certain "Joel Diaz."
Hence, this petition.
The Issues
Petitioners seek a reversal and raise the following issues for resolution:
1. WHETHER THE PETITION RAISES QUESTIONS OF LAW;
2. WHETHER PETITIONERS HAVE LEGAL PERSONALITY TO FILE
THE PETITION;
3. WHETHER THERE WAS PROBABLE CAUSE TO ISSUE THE
SEARCH WARRANTS;
4. WHETHER THE SEARCH WARRANTS ARE "GENERAL
WARRANTS." IaECcH
The Ruling of the Court
The petition has merit.
On Whether the Petition Raises Questions of Law
Maxicorp assails this petition as defective since it failed to raise questions of law.
Maxicorp insists that the arguments petitioners presented are questions of fact,
which this Court should not consider in a Rule 45 petition for review. Petitioners
counter that all the issues they presented in this petition involve questions of law.
Petitioners point out that the facts are not in dispute.
A petition for review under Rule 45 of the Rules of Court should cover questions of
law. 6 Questions of fact are not reviewable. As a rule, the findings of fact of the
Court of Appeals are final and conclusive and this Court will not review them on
appeal, 7 subject to exceptions as when the findings of the appellate court conflict
with the findings of the trial court. 8
The distinction between questions of law and questions of fact is settled. A question
of law exists when the doubt or difference centers on what the law is on a certain
state of facts. A question of fact exists if the doubt centers on the truth or falsity of
the alleged facts. Though this delineation seems simple, determining the true
nature and extent of the distinction is sometimes problematic. For example, it is
incorrect to presume that all cases where the facts are not in dispute automatically
involve purely questions of law.
There is a question of law if the issue raised is capable of being resolved without
need of reviewing the probative value of the evidence. 9 The resolution of the issue
must rest solely on what the law provides on the given set of circumstances. Once it
is clear that the issue invites a review of the evidence presented, the question
posed is one of fact. 10 If the query requires a re-evaluation of the credibility of
witnesses, or the existence or relevance of surrounding circumstances and their
relation to each other, the issue in that query is factual. 11 Our ruling in Paterno v.
Paterno 12 is illustrative on this point:
Such questions as whether certain items of evidence should be
accorded probative value or weight, or rejected as feeble or
spurious, or whether or not the proofs on one side or the other
are clear and convincing and adequate to establish a
proposition in issue, are without doubt questions of fact.
Whether or not the body of proofs presented by a party,
weighed and analyzed in relation to contrary evidence
submitted by adverse party, may be said to be strong, clear and
convincing; whether or not certain documents presented by
one side should be accorded full faith and credit in the face of
protests as to their spurious character by the other side;
whether or not inconsistencies in the body of proofs of a party
are of such gravity as to justify refusing to give said proofs
weight all these are issues of fact.
It is true that Maxicorp did not contest the facts alleged by petitioners. But this
situation does not automatically transform all issues raised in the petition into
questions of law. The issues must meet the tests outlined in Paterno.
Of the three main issues raised in this petition the legal personality of the
petitioners, the nature of the warrants issued and the presence of probable cause
only the first two qualify as questions of law. The pivotal issue of whether there
was probable cause to issue the search warrants is a question of fact. At first glance,
this issue appears to involve a question of law since it does not concern itself with
the truth or falsity of certain facts. Still, the resolution of this issue would require
this Court to inquire into the probative value of the evidence presented before the
RTC. For a question to be one of law, it must not involve an examination of the
probative value of the evidence presented by the litigants or any of them. 13
Yet, this is precisely what the petitioners ask us to do by raising arguments requiring
an examination of the TSNs and the documentary evidence presented during the
search warrant proceedings. In short, petitioners would have us substitute our own
judgment to that of the RTC and the Court of Appeals by conducting our own
evaluation of the evidence. This is exactly the situation which Section 1, Rule 45 of
the Rules of Court prohibits by requiring the petition to raise only questions of law.
This Court is not a trier of facts. It is not the function of this court to analyze or
weigh evidence. 14 When we give due course to such situations, it is solely by way
of exception. Such exceptions apply only in the presence of extremely meritorious
circumstances. 15
Indeed, this case falls under one of the exceptions because the findings of the Court
of Appeals conflict with the findings of the RTC. 16 Since petitioners properly raised
the conflicting findings of the lower courts, it is proper for this Court to resolve such
contradiction.
On Whether Petitioners have the Legal Personality to File this Petition
Maxicorp argues that petitioners have no legal personality to file this petition since
the proper party to do so in a criminal case is the Office of the Solicitor General as
representative of the People of the Philippines. Maxicorp states the general rule but
the exception governs this case. 17 We ruled in Columbia Pictures Entertainment,
Inc. v. Court of Appeals 18 that the petitioner-complainant in a petition for review
under Rule 45 could argue its case before this Court in lieu of the Solicitor General if
there is grave error committed by the lower court or lack of due process. This
avoids a situation where a complainant who actively participated in the prosecution
of a case would suddenly find itself powerless to pursue a remedy due to
circumstances beyond its control. The circumstances in Columbia Pictures
Entertainment are sufficiently similar to the present case to warrant the application
of this doctrine.
On Whether there was Probable Cause to Issue the Search Warrants
Petitioners argue that the Court of Appeals erred in reversing the RTC based on the
fact that the sales receipt was not in the name of NBI Agent Samiano. Petitioners
point out that the Court of Appeals disregarded the overwhelming evidence that
the RTC considered in determining the existence of probable cause. Maxicorp
counters that the Court of Appeals did not err in reversing the RTC. Maxicorp
maintains that the entire preliminary examination that the RTC conducted was
defective.
The Court of Appeals based its reversal on two factual findings of the RTC. First, the
fact that the sales receipt presented by NBI Agent Samiano as proof that he bought
counterfeit goods from Maxicorp was in the name of a certain "Joel Diaz." Second,
the fact that petitioners' other witness, John Benedict Sacriz, admitted that he did
not buy counterfeit goods from Maxicorp.
We rule that the Court of Appeals erred in reversing the RTC's findings.
Probable cause means "such reasons, supported by facts and circumstances as will
warrant a cautious man in the belief that his action and the means taken in
prosecuting it are legally just and proper." 19 Thus, probable cause for a search
warrant requires such facts and circumstances that would lead a reasonably
prudent man to believe that an offense has been committed and the objects sought
in connection with that offense are in the place to be searched. 20
The judge determining probable cause must do so only after personally examining
under oath the complainant and his witnesses. The oath required must refer to "the
truth of the facts within the personal knowledge of the petitioner or his witnesses,
because the purpose thereof is to convince the committing magistrate, not the
individual making the affidavit and seeking the issuance of the warrant, of the
existence of probable cause." 21 The applicant must have personal knowledge of
the circumstances. "Reliable information" is insufficient. 22 Mere affidavits are not
enough, and the judge must depose in writing the complainant and his witnesses.
23
The Court of Appeals' reversal of the findings of the RTC centers on the fact that the
two witnesses for petitioners during the preliminary examination failed to prove
conclusively that they bought counterfeit software from Maxicorp. The Court of
Appeals ruled that this amounted to a failure to prove the existence of a connection
between the offense charged and the place searched.
The offense charged against Maxicorp is copyright infringement under Section 29 of
PD 49 and unfair competition under Article 189 of the RPC. To support these
charges, petitioners presented the testimonies of NBI Agent Samiano, computer
technician Pante, and Sacriz, a civilian. The offenses that petitioners charged
Maxicorp contemplate several overt acts. The sale of counterfeit products is but
one of these acts. Both NBI Agent Samiano and Sacriz related to the RTC how they
personally saw Maxicorp commit acts of infringement and unfair competition.
During the preliminary examination, the RTC subjected the testimonies of the
witnesses to the requisite examination. NBI Agent Samiano testified that he saw
Maxicorp display and offer for sale counterfeit software in its premises. He also saw
how the counterfeit software were produced and packaged within Maxicorp's
premises. NBI Agent Samiano categorically stated that he was certain the products
were counterfeit because Maxicorp sold them to its customers without giving the
accompanying ownership manuals, license agreements and certificates of
authenticity.
Sacriz testified that during his visits to Maxicorp, he witnessed several instances
when Maxicorp installed petitioners' software into computers it had assembled.
Sacriz also testified that he saw the sale of petitioners' software within Maxicorp's
premises. Petitioners never authorized Maxicorp to install or sell their software.
The testimonies of these two witnesses, coupled with the object and documentary
evidence they presented, are sufficient to establish the existence of probable cause.
From what they have witnessed, there is reason to believe that Maxicorp engaged
in copyright infringement and unfair competition to the prejudice of petitioners.
Both NBI Agent Samiano and Sacriz were clear and insistent that the counterfeit
software were not only displayed and sold within Maxicorp's premises, they were
also produced, packaged and in some cases, installed there.
The determination of probable cause does not call for the application of rules and
standards of proof that a judgment of conviction requires after trial on the merits.
As implied by the words themselves, "probable cause" is concerned with
probability, not absolute or even moral certainty. The prosecution need not present
at this stage proof beyond reasonable doubt. The standards of judgment are those
of a reasonably prudent man, 24 not the exacting calibrations of a judge after a full-
blown trial.
No law or rule states that probable cause requires a specific kind of evidence. No
formula or fixed rule for its determination exists. 25 Probable cause is determined
in the light of conditions obtaining in a given situation. 26 Thus, it was improper for
the Court of Appeals to reverse the RTC's findings simply because the sales receipt
evidencing NBI Agent Samiano's purchase of counterfeit goods is not in his name.
For purposes of determining probable cause, the sales receipt is not the only proof
that the sale of petitioners' software occurred. During the search warrant
application proceedings, NBI Agent Samiano presented to the judge the computer
unit that he purchased from Maxicorp, in which computer unit Maxicorp had pre-
installed petitioners' software. 27 Sacriz, who was present when NBI Agent Samiano
purchased the computer unit, affirmed that NBI Agent Samiano purchased the
computer unit. 28 Pante, the computer technician, demonstrated to the judge the
presence of petitioners' software on the same computer unit. 29 There was a
comparison between petitioners' genuine software and Maxicorp's software pre-
installed in the computer unit that NBI Agent Sambiano purchased. 30 Even if we
disregard the sales receipt issued in the name of "Joel Diaz," which petitioners
explained was the alias NBI Agent Samiano used in the operation, there still remains
more than sufficient evidence to establish probable cause for the issuance of the
search warrants.
This also applies to the Court of Appeals' ruling on Sacriz's testimony. The fact that
Sacriz did not actually purchase counterfeit software from Maxicorp does not
eliminate the existence of probable cause. Copyright infringement and unfair
competition are not limited to the act of selling counterfeit goods. They cover a
whole range of acts, from copying, assembling, packaging to marketing, including
the mere offering for sale of the counterfeit goods. The clear and firm testimonies
of petitioners' witnesses on such other acts stand untarnished. The Constitution
and the Rules of Court only require that the judge examine personally and
thoroughly the applicant for the warrant and his witnesses to determine probable
cause. The RTC complied adequately with the requirement of the Constitution and
the Rules of Court. LibLex
Probable cause is dependent largely on the opinion and findings of the judge who
conducted the examination and who had the opportunity to question the applicant
and his witnesses. 31 For this reason, the findings of the judge deserve great
weight. The reviewing court should overturn such findings only upon proof that the
judge disregarded the facts before him or ignored the clear dictates of reason. 32
Nothing in the records of the preliminary examination proceedings reveal any
impropriety on the part of the judge in this case. As one can readily see, here the
judge examined thoroughly the applicant and his witnesses. To demand a higher
degree of proof is unnecessary and untimely. The prosecution would be placed in a
compromising situation if it were required to present all its evidence at such
preliminary stage. Proof beyond reasonable doubt is best left for trial.
On Whether the Search Warrants are in the Nature of General Warrants
A search warrant must state particularly the place to be searched and the objects to
be seized. The evident purpose for this requirement is to limit the articles to be
seized only to those particularly described in the search warrant. This is a protection
against potential abuse. It is necessary to leave the officers of the law with no
discretion regarding what articles they shall seize, to the end that no unreasonable
searches and seizures be committed. 33
In addition, under Section 4, Rule 126 of the Rules of Criminal Procedure, a search
warrant shall issue "in connection with one specific offense." The articles described
must bear a direct relation to the offense for which the warrant is issued. 34 Thus,
this rule requires that the warrant must state that the articles subject of the search
and seizure are used or intended for use in the commission of a specific offense.
Maxicorp argues that the warrants issued against it are too broad in scope and lack
the specificity required with respect to the objects to be seized. After examining the
wording of the warrants issued, the Court of Appeals ruled in favor of Maxicorp and
reversed the RTC's Order thus:
Under the foregoing language, almost any item in the
petitioner's store can be seized on the ground that it is "used or
intended to be used" in the illegal or unauthorized copying or
reproduction of the private respondents' software and their
manuals. 35
The Court of Appeals based its reversal on its perceived infirmity of paragraph
(e) of the search warrants the RTC issued. The appellate court found that
similarly worded warrants, all of which noticeably employ the phrase "used or
intended to be used," were previously held void by this Court. 36 The disputed
text of the search warrants in this case states:
a) Complete or partially complete reproductions or copies of
Microsoft software bearing the Microsoft copyrights
and/or trademarks owned by MICROSOFT
CORPORATION contained in CD-ROMs, diskettes and
hard disks;
b) Complete or partially complete reproductions or copies of
Microsoft instruction manuals and/or literature
bearing the Microsoft copyrights and/or trademarks
owned by MICROSOFT CORPORATION;
c) Sundry items such as labels, boxes, prints, packages,
wrappers, receptacles, advertisements and other
paraphernalia bearing the copyrights and/or
trademarks owned by MICROSOFT CORPORATION;
d) Sales invoices, delivery receipts, official receipts, ledgers,
journals, purchase orders and all other books of
accounts and documents used in the recording of the
reproduction and/or assembly, distribution and sales,
and other transactions in connection with fake or
counterfeit products bearing the Microsoft copyrights
and/or trademarks owned by MICROSOFT
CORPORATION;
e) Computer hardware, including central processing units
including hard disks, CD-ROM drives, keyboards,
monitor screens and diskettes, photocopying machines
and other equipment or paraphernalia used or
intended to be used in the illegal and unauthorized
copying or reproduction of Microsoft software and
their manuals, or which contain, display or otherwise
exhibit, without the authority of MICROSOFT
CORPORATION, any and all Microsoft trademarks and
copyrights; and
f) Documents relating to any passwords or protocols in order to
access all computer hard drives, data bases and other
information storage devices containing unauthorized
Microsoft software. 37 (Emphasis supplied)
It is only required that a search warrant be specific as far as the circumstances will
ordinarily allow. 38 The description of the property to be seized need not be
technically accurate or precise. The nature of the description should vary according
to whether the identity of the property or its character is a matter of concern. 39
Measured against this standard we find that paragraph (e) is not a general warrant.
The articles to be seized were not only sufficiently identified physically, they were
also specifically identified by stating their relation to the offense charged.
Paragraph (e) specifically refers to those articles used or intended for use in the
illegal and unauthorized copying of petitioners' software. This language meets the
test of specificity. 40
The cases cited by the Court of Appeals are inapplicable. In those cases, the Court
found the warrants too broad because of particular circumstances, not because of
the mere use of the phrase "used or intended to be used." In Columbia Pictures, Inc.
v. Flores, the warrants ordering the seizure of "television sets, video cassette
recorders, rewinders and tape cleaners . . ." were found too broad since the
defendant there was a licensed distributor of video tapes. 41 The mere presence of
counterfeit video tapes in the defendant's store does not mean that the machines
were used to produce the counterfeit tapes. The situation in this case is different.
Maxicorp is not a licensed distributor of petitioners. In Bache & Co. (Phil.), Inc., et al.
v. Judge Ruiz, et al., the Court voided the warrants because they authorized the
seizure of records pertaining to "all business transactions" of the defendant. 42 And
in 20th Century Fox Film Corp. v. Court of Appeals, the Court quashed the warrant
because it merely gave a list of articles to be seized, aggravated by the fact that
such appliances are "generally connected with the legitimate business of renting
out betamax tapes." 43
However, we find paragraph (c) of the search warrants lacking in particularity.
Paragraph (c) states:
c) Sundry items such as labels, boxes, prints, packages,
wrappers, receptacles, advertisements and other
paraphernalia bearing the copyrights and/or
trademarks owned by MICROSOFT CORPORATION;
The scope of this description is all-embracing since it covers property used for
personal or other purposes not related to copyright infringement or unfair
competition. Moreover, the description covers property that Maxicorp may
have bought legitimately from Microsoft or its licensed distributors. Paragraph
(c) simply calls for the seizure of all items bearing the Microsoft logo, whether
legitimately possessed or not. Neither does it limit the seizure to products used
in copyright infringement or unfair competition.
Still, no provision of law exists which requires that a warrant, partially defective in
specifying some items sought to be seized yet particular with respect to the other
items, should be nullified as a whole. A partially defective warrant remains valid as
to the items specifically described in the warrant. 44 A search warrant is severable,
the items not sufficiently described may be cut off without destroying the whole
warrant. 45 The exclusionary rule found in Section 3(2) of Article III of the
Constitution renders inadmissible in any proceeding all evidence obtained through
unreasonable searches and seizure. Thus, all items seized under paragraph (c) of
the search warrants, not falling under paragraphs a, b, d, e or f, should be returned
to Maxicorp.
WHEREFORE, we PARTIALLY GRANT the instant petition. The Decision of the Court
of Appeals dated 23 December 1998 and its Resolution dated 29 November 1999 in
CA-G.R. SP No. 44777 are REVERSED and SET ASIDE except with respect to articles
seized under paragraph (c) of Search Warrants Nos. 96-451, 96-452, 96-453 and 96-
454. All articles seized under paragraph (c) of the search warrants, not falling under
paragraphs a, b, d, e or f, are ordered returned to Maxicorp, Inc. immediately.
SO ORDERED. SA
THIRD DIVISION
[G.R. No. 166337. March 7, 2005.]
BAYANIHAN MUSIC PHILIPPINES, INC., petitioner, vs. BMG
RECORDS (PILIPINAS) AND JOSE MARI CHAN, ET AL.,
respondent.
Gentlemen:
Quoted hereunder, for your information, is a resolution of the Third Division of this
Court dated March 7, 2005.
Subject of this petition for review on certiorari is the Decision dated December 14,
2004 1 of the Court of Appeals in CA-G.R. SP No. 69626, upholding the Order dated
August 24, 2001 of the Regional Trial Court at Quezon City, Branch 90, which found
no merit in petitioner's application for the issuance of a writ of preliminary
injunction, along with the Order dated January 10, 2002, which denied petitioner's
motion for reconsideration.
On July 16, 1973, private respondent Jose Mari Chan (Chan) entered into a contract
with petitioner Bayanihan Music Philippines, Inc. (Bayanihan), whereunder the
former assigned to the latter all his rights, interests and participation over his
musical composition "Can We Just Stop and Talk A While". On March 11, 1976, the
parties entered into a similar contract over Chan's other musical composition
entitled "Afraid For Love To Fade".
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, thus: November 19, 1973, for the song "Can We Just
Stop and Talk A While" and on May 21, 1980, for the song "Afraid for Love To Fade."
Apparently, without the knowledge and consent of petitioner Bayanihan, Chan
authorized his co-respondent BMG Records (Pilipinas) [BMG] to record and
distribute the aforementioned musical compositions in a then recently released
album of singer Lea Salonga.
In separate letters both dated December 7, 1999, petitioner Bayanihan informed
respondents 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, on August 8, 2000, Bayanihan filed with the Regional Trial Court at Quezon
City a complaint 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.
In its answer, BMG contended, among others, that: (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; and (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. BMG also pleaded a
cross-claim against its co-respondent Chan for violation of his warranty that his
musical compositions are free from claims of third persons, and a counterclaim for
damages against petitioner Bayanihan.
Chan, for his part, filed his own answer to the complaint, thereunder alleging that:
(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; and (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. Chan also included in his answer a counterclaim for damages
against Bayanihan.
After hearing the parties, the lower court came out with an order denying
Bayanihan's prayer for TRO, saying, thus:
After carefully considering the arguments and evaluating the
evidence presented by counsels, this Court finds that the
plaintiff has not been able to show its entitlement to the relief
of TRO as prayed for in its verified complaint (see Section 4, Rule
58 of the 1997 Rules of Civil Procedure, as amended), hence,
this Court is of the considered and humble view that the ends of
justice shall be served better if the aforecited application is
denied.
IN VIEW OF THE FOREGOING, the aforecited application or
prayer for the issuance of a TRO is denied.
SO ORDERED.
Thereafter, the same court, in its subsequent Order dated August 24, 2001, 2
likewise denied Bayanihan's prayer for a writ of preliminary injunction, to wit:
After carefully going over the pleadings and the pertinent
portions of the records insofar as they are pertinent to the issue
under consideration, this Court finds that the plaintiff has not
been able to show its entitlement to the relief of preliminary
injunction as prayed for in its verified complaint (see Section 4,
Rule 58 of the 1997 Rules of Civil Procedure, as amended),
hence, this Court is of the considered and humble view that the
ends of justice shall be served better if the aforecited
application is denied. (see also Order dated July 16, 2001).
IN VIEW OF THE FOREGOING, the application or prayer for the
issuance of a writ of preliminary injunction is denied.
SO ORDERED.
Its motion for a reconsideration of the same order having been likewise denied by
the trial court in its next Order of January 10, 2002, 3 petitioner Bayanihan then
went to the Court of Appeals on a petition for certiorari, thereat docketed as CA-
G.R. SP No. 69626, imputing grave abuse of discretion on the part of the trial court
in issuing the Orders of August 24, 2001 and January 10, 2001, denying its prayers
for a writ of preliminary injunction and motion for reconsideration, respectively.
In the herein assailed Decision dated December 14, 2004, the Court of Appeals
upheld the challenged orders of the trial court and accordingly dismissed Bayanihan
petition, thus:
WHEREFORE, finding neither flaw of jurisdiction nor taint of
grave abuse of discretion in the issuance of the assailed Orders
of the respondent court dated August 24, 2001 and January 10,
2002, the instant petition is DISMISSED. No costs.
SO ORDERED. 4
Hence, Bayanihan's present recourse.
It is petitioner's submission that the appellate court committed reversible error
when it dismissed its petition for certiorari and upheld the trial court's denial of its
application for a writ of preliminary injunction. Petitioner insists that as assignee of
the copyrights over the musical compositions in question, it has a clear legal right to
a writ of preliminary injunction; that respondents BMG and Chan violated its
copyrights over the same musical compositions; that despite knowledge by
respondent BMG of petitioner's copyrights over the said musical compositions,
BMG continues to record and distribute the same, to petitioner's great and
irreparable injury.
We DENY.
We have constantly reminded courts that there is no power, the exercise of which is
more delicate and requires greater caution, deliberation and sound discretion, or
which is more dangerous in a doubtful case, than the issuance of an injunction. A
court should, as much as possible, avoid issuing the writ which would effectively
dispose of the main case without trial.
Here, nothing is more evident than the trial court's abiding awareness of the
extremely difficult balancing act it had to perform in dealing with petitioner's prayer
for injunctive reliefs. Conscious, as evidently it is, of the fact that there is manifest
abuse of discretion in the issuance of an injunctive writ if the following requisites
provided for by law are not present: (1) there must be a right in esse or the
existence of a right to be protected; and (2) the act against which the injunction is
to be directed is a violation of such right, 5 the trial court threaded the correct path
in denying petitioner's prayer therefor. For, such a writ should only be granted if a
party is clearly entitled thereto. 6
Of course, while a clear showing of the right to an injunctive writ is necessary albeit
its existence need not be conclusively established, 7 as the evidence required
therefor need not be conclusive or complete, still, for an applicant, like petitioner
Bayanihan, to be entitled to the writ, he is required to show that he has the
ostensible right to the final, relief prayed for in its complaint. 8 Here, the trial court
did not find ample justifications for the issuance of the writ prayed for by
petitioner.
Unquestionably, respondent Chan, being undeniably 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.
An examination of petitioner's verified complaint in light of the two (2) contracts
sued upon and the evidence it adduced during the hearing on the application for
preliminary injunction, yields not the existence of the requisite right protectable by
the provisional relief but rather a lingering doubt on whether there is or there is no
such right. The two contracts between petitioner and Chan relative to the musical
compositions subject of the suit contain the following identical stipulations:
7. It is also hereby agreed to by the parties herein that in the
event the PUBLISHER [petitioner herein] fails to use in any
manner whatsoever within two (2) years any of the
compositions covered by this contract, then such composition
may be released in favor of the WRITER and excluded from this
contract and the PUBLISHER shall execute the necessary release
in writing in favor of the WRITER upon request of the WRITER;
xxx xxx xxx
9. This contract may be renewed for a period of two-and-one-
half (2 1/2) years at the option of the PUBLISHER. Renewal may
be made by the PUBLISHER by advising the WRITER of such
renewal in writing at least five (5) days before the expiration of
this contract. 9
It would thus appear that the two (2) contracts expired on October 1, 1975 and
March 11, 1978, respectively, there being neither an allegation, much less proof,
that petitioner Bayanihan ever made use of the compositions within the two-year
period agreed upon by the parties.
Anent the copyrights obtained by petitioner 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,
10 because respondent Chan had put in issue the existence thereof.
It is noted that Chan revoked and terminated said contracts, along with others, on
July 30, 1997, or almost two years before petitioner Bayanihan wrote its sort of
complaint/demand letter dated December 7, 1999 regarding the recent
"use/recording of the songs 'Can We Just Stop and Talk A While' and 'Afraid for Love
to Fade,"' or almost three (3) years before petitioner filed its complaint on August 8,
2000, therein praying, inter alia, for injunctive relief. By then, it would appear that
petitioner had no more right that is protectable by injunction.
Lastly, petitioner's insinuation that the trial court indulged in generalizations and
was rather skimpy in dishing out its reasons for denying its prayer for provisional
injunctive relief, the same deserves scant consideration. For sure, the manner by
which the trial court crafted its challenged orders is quite understandable, lest it be
subjected to a plausible suspicion of having prejudged the merits of the main case.
WHEREFORE, petition is hereby DENIED.
SO ORDERED.