Intellectual Property Law on Copyright Must-Carry Rule Philippine Multi-Media System Inc (PMSI) is a signal provider which has

as cable and satellite services. It is providing its satellite services through Dream Broadcasting System. PMSI has its Free TV and Premium Channels. The Free TV includes ABS-CBN, GMA-7 and other local networks. The premium channels include AXN, Jack TV, etc which are paid by subscribers before such channels can be transmitted as feeds to a subscribers TV set which has been installed with a Dream satellite. ABS-CBN is a television and broadcasting corporation. It broadcasts television programs by wireless means to Metro Manila and nearby provinces, and by satellite to provincial stations through Channel 2 and Channel 23. The programs aired over Channels 2 and 23 are either produced by ABS-CBN or purchased from or licensed by other producers. ABS-CBN also owns regional television stations which pattern their programming in accordance with perceived demands of the region. Thus, television programs shown in Metro Manila and nearby provinces are not necessarily shown in other provinces. In May 2002, ABS-CBN sued PMSI for allegedly engaging in rebroadcasting and thereby infringing on ABS-CBNs copyrights; that the transmission of Channels 2 and 23 to the provinces where these two channels are not usually shown altered ABS-CBNs programming for the said provinces. PMSI argued that it is not infringing upon ABS-CBNs copyrights because it is operating under the Must-Carry Rule outlined in NTC (National Telecommunications Commission) Circular No. 4-08-88. ISSUE: Whether or not PMSI infringed upon the copyrights of ABS-CBN. HELD: No. The Must-Carry Rule under NTC Circular No. 4-08-88 falls under the limitations on copyright. The Filipino people must be given wider access to more sources of news, information, education, sports event and entertainment programs other than those provided for by mass media and afforded television programs to attain a well informed, well-versed and culturally refined citizenry and enhance their socio-economic growth. The very intent and spirit of the NTC Circular will prevent a situation whereby station owners and a few networks would have unfettered power to make time available only to the highest bidders, to communicate only their own views on public issues, people, and to permit on the air only those with whom they agreed contrary to the state policy that the (franchise) grantee like ABS-CBN, and other TV station owners and even the likes of PMSI, shall provide at all times sound and balanced programming and assist in the functions of public information and education. PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which similarly states that it shall provide adequate public service time to enable the government, through the said broadcasting stations, to reach the population on important public issues; provide at all times sound and balanced programming; promote public participation such as in community programming; assist in the functions of public information and education. The Must-Carry Rule favors both broadcasting organizations and the public. It prevents cable television companies from excluding broadcasting organization especially in those places not reached by signal. Also, the rule prevents cable television companies from depriving viewers in far-flung areas the enjoyment of programs available to city viewers.

Intellectual Property Law on Copyright Copyright Infringement In May 1993, Microsoft and Beltron Computer Philippines, Inc. entered into a Licensing Agreement. Under Section 2(a) of the Agreement Microsoft authorized Beltron, for a fee, to: 1. Reproduce and install no more than one copy of Windows on each Customer System hard disk; 2. Distribute directly or indirectly and license copies of Windows (reproduced as per Section 2 of the Agreement and/or acquired from an Authorized Replicator or Authorized Distributor.

1. 2.

3.

4.

Their agreement allowed either party to terminate if one fails to comply with their respective obligations. Microsoft terminated the Agreement in June 1995 by reason of Beltro ns non-payment of royalties. Later, Microsoft learned that Beltron was illegally copying and selling copies of Windows. Microsoft then sought the assistance of the National Bureau of Investigation. NBI agents made some purchase from Beltron where they acquired a computer unit pre-installed with Windows, 12 windows installer CDs packed as Microsoft products. The agents were not given the end-user license agreements, user manuals, and certificates of authenticity for the products purchased. They were given a receipt which has a header of T.M.T.C. (Phils) Inc. BELTRON COMPUTER. TMTC stands for Taiwan Machinery Display and Trade Center. A search warrant was subsequently issued where 2,831 CDs of Windows installers, among others, were seized. Based on the items seized from Beltron, Microsoft filed a case of copyright infringement against Beltron and TMTC as well as their officers (Hwang et al) before the Department of Justice (DOJ). Beltron, in its counter-affidavit, argued the following: That Microsofts issue with Beltron was really just to have leverage in forcing Beltron to pay the unpaid royalties; and that Microsoft should have filed a collection suit. That the computer unit allegedly purchased by the NBI agents from them cannot be decisively traced as coming from Beltron because the receipt issued to the agents did not list the computer unit as one of the items bought. That the 12 installers purchased by the agents which are actually listed in the receipt were not manufactured by Beltron but rather they were genuine copies purchased by TMTC from an authorized Microsoft seller in Singapore. That the 2,831 installers seized from them were not a property of Beltron but rather they were left to them by someone for safekeeping. The DOJ secretary agreed with Beltron and dismissed the case. The Secretary ruled that the issue of the authority of Beltron to copy and sell Microsoft products should first be resolved in a civil suit. Microsoft appealed the decision of the DOJ secretary before the Supreme Court. Meanwhile, Beltron filed a motion to quash the search warrant before the RTC that issued the same. The RTC partially granted the quashal. The Court of Appeals reversed the RTC. Hwang et al did not appeal the CA decision. ISSUE: Whether or not the DOJ Secretary is correct. HELD: No. Section 5 of Presidential Decree 49 enumerates the rights vested exclusively on the copyright owner. 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. 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. Being the copyright and trademark owner of Microsoft software, Microsoft acted well within its rights in filing the complaint before DOJ on the incriminating evidence obtained from Beltron. Hence, it was highly irregular for the DOJ to hold that Microsoft sought the issuance of the search warrants and the filing of the complaint merely to pressure Beltron to pay its overdue royalties to Microsoft. There is no basis for the DOJ to rule that Microsoft must await a prior resolution from the proper court of 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 c an 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, the articles seized from Beltron are counterfeit per se because Microsoft does not (and could not have authorized anyone to) produce such CD installers The copying of the genuine Microsoft software to produce these fake CDs 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 Beltrons liability for copyright infringement and unfair competition. Beltrons defense that the box of CD instal lers found in their possession was only left to them for safekeeping is not tenable.

Intellectual Property Law on Copyright Probable Cause in Issuing Search Warrant In 1996, Dominador Samiano, an agent of the National Bureau of Investigation (NBI) conducted a surveillance against Maxicorp Inc. He observed that Microsoft Software (Windows Operating Systems) were being produced and packaged within the premises of Maxicorp. Samiano, together with a civilian witness (John Benedict Sacriz) then bought a computer unit from Maxicorp. The unit was pre-installed with a pirated copy of Windows. For their purchase, they were issued a receipt, however, the receipt was in the name of a certain Joel Diaz. Subsequently, Samiano applied for a search warrant before the RTC. He brought with him Sacriz as witness. He also brought the computer unit they bought as evidence as well as the receipt. He even added an additional witness (Felixberto Pante), a computer technician, who showed the judge that the software in the computer unit bought by Samiano from Maxicorp was pirated. The RTC judge, convinced that there is a probable cause for a case of copyright infringement and unfair competition committed by Maxicorp, issued the corresponding warrant. Maxicorp assailed the legality of the warrant before the Court of Appeals. The Court of Appeals ruled in favor of Maxicorp and in its decision it highlighted the fact that the receipt issued was not in Samianos or Sacriz name hence the proceeding in the trial court was infirm from the onset. ISSUE: Whether or not the Court of Appeals is correct. HELD: No. The testimonies of the 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 Microsoft. Both NBI Agent Samiano and Sacriz were clear and insistent that the counterfeit software were not only displayed and sold within Maxicorps premises, they were also produced, packaged and in some cases, installed there. The fact that the receipt issued was not in Samianos name nor was it in Sacriz name does not render the issuance of the warrant void. No law or rule states that probable cause requires a specific kind of evidence. No formula or fixed rule for its determination exists. Probable cause is determined in the light of conditions obtaining in a given situation.Thus, it was improper for the Court of Appeals to reverse the RTCs findings simply because the sales receipt evidencing NBI Agent Samianos purchase of counterfeit goods is not in his name.