THIRD DIVISION [G.R. No. 115286. August 11, 1994.] INTER-ORIENT MARITIME ENTERPRISES, INC.

, SEA HORSE SHIP MANAGEMENT, INC. and TRENDA WORLD SHIPPING (MANILA), INC., petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION and RIZALINO D. TAYONG, respondents. SYLLABUS 1. LABOR LAWS AND SOCIAL LEGISLATION; CONDITIONS OF EMPLOYMENT; CAPTAIN OF VESSEL A CONFIDENTIAL AND MANAGERIAL EMPLOYEE. — It is well settled in this jurisdiction that confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause as reasonably established in an appropriate investigation. Such employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws. The captain of a vessel is a confidential and managerial employee within the meaning of the above doctrine. A master or captain, for purposes of maritime commerce, is one who has command of a vessel. A captain commonly performs three (3) distinct roles: (1) he is a general agent of the shipowner; (2) he is also commander and technical director of the vessel; and (3) he is a representative of the country under whose flag he navigates. Of these roles, by far the most important is the role performed by the captain as commander of the vessel; for such role (which, to our mind, is analogous to that of "Chief Executive Officer" [CEO] of a present-day corporate enterprise) has to do with the operation and preservation of the vessel during its voyage and the protection of the passengers (if any) and crew and cargo. In his role as general agent of the shipowner, the captain has authority to sign bills of lading, carry goods aboard and deal with the freight earned, agree upon rates and decide whether to take cargo. The ship captain, as agent of the shipowner, has legal authority to enter into contracts with respect to the vessel and the trading of the vessel, subject to applicable limitations established by statute, contract or instructions and regulations of the shipowner. To the captain is committed the governance, care and management of the vessel. Clearly, the captain is vested with both management and fiduciary functions.

with the NLRC, are unable to hold that Captain Tayong's decision (arrived at after consultation with the vessel's Chief Engineer) to wait seven (7) hours in Singapore for the delivery on board the Oceanic Mindoro of the requisitioned supplies needed for the welding-repair, on board the ship, of the turbo-charger and the economizer equipment of the vessel, constituted merely arbitrary, capricious or grossly insubordinate behavior on his part. In the view of the NLRC, that decision of Captain Tayong did not constitute a legal basis for the summary dismissal of Captain Tayong and for termination of his contract with petitioners prior to the expiration of the term thereof. We cannot hold this conclusion of the NLRC to be a grave abuse of discretion amounting to an excess or loss of jurisdiction; indeed, we share that conclusion and make it our own. Clearly, petitioners were angered at Captain Tayong's decision to wait for delivery of the needed supplied before sailing from Singapore, and may have changed their estimate of their ability to work with him and of his capabilities as a ship captain. Assuming that to be petitioners' management prerogative, that prerogative is nevertheless not to be exercised, in the case at bar, at the cost of loss of Captain Tayong's rights under his contract with petitioner's and under Philippine law.

3. COMMERCIAL LAW; CODE OF COMMERCE; CAPTAIN'S CONTROL OF VESSEL AND REASONABLE DISCRETION AS TO ITS NAVIGATION. — A ship's captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage. The captain is held responsible, and properly so, for such safety. He is right there on the vessel, in command of its and (it must be presumed) knowledgeable as to the specific requirements of seaworthiness and the particular risks and perils of the voyage he is to embark upon. The applicable principle is that the captain has control of all departments of service in the vessel, and reasonable discretion as to its navigation. It is the right and duty of the captain, in the exercise of sound discretion and in good faith, to do all things with respect to the vessel and its equipment and conduct of the voyage which are reasonably necessary for the protection and preservation of the interests under his charge, whether those be of the shipowner, charterers, cargo owners or of underwriters. It is a basic principle of admiralty law that in navigating a merchantman, the master must be left free to exercise his own best judgment. The requirements of safe navigation compel us to reject any suggestion that the judgment and discretion of the captain of a vessel may be confined within a straitjacket, even in this age of electronic communications. Indeed, if the ship captain is convinced, as a reasonably prudent and competent mariner acting in good faith that the shipowner's or ship agent's instructions (insisted upon by radio or telefax from their officers thousand of miles away) 2. ID.; TERMINATION OF EMPLOYMENT; ILLEGAL DISMISSAL ESTABLISHED IN will result, in the very specific circumstances facing him, in imposing unacceptable risks of loss or CASE AT BAR. — It is plain from the records of the present petition that Captain Tayong was serious danger to ship or crew, he cannot casually seek absolution from his responsibility, if a denied any opportunity to defend himself. Petitioners curtly dismissed him from his command and marine casualty occurs, in such instructions. Compagnie de Commerce v. Hamburg is instructive summarily ordered his repatriation to the Philippines without informing him of the charge or in this connection. There, this Court recognized the discretionary authority of the master of a charges levelled against him, and much less giving him a change to refute any such charge. In vessel and his right to exercise his best judgment, with respect to navigating the vessel he fact, it was only on 26 October 1989 that Captain Tayong received a telegram dated 24 October commands. In Compagnie de Commerce, a charger party was executed between Compagnie de 1989 from Inter-Orient requiring him to explain why he delayed sailing to South Africa. We also Commerce and the owners of the vessel Sambia, under which the former as charterer loaded on find that the principal contention of petitioners against the decision of the NLRC pertains to facts, board the Sambia, at the port of Saigon, certain cargo destined for the Ports of Dunkirk and that is, whether or not there was actual and sufficient basis for the alleged loss of trust or Hamburg in Europe. The Sambia flying the German flag, could not, in the judgment of its master, confidence. We have consistently held that a question of "fact" is, as a general rule, the concern reach its ports of destination because war (World War I) had been declared between Germany and solely of an administrative body, so long as there is substantial evidence of record to sustain its France. The master of the Sambia decided to deviate from the stipulated voyage and sailed action. The record requires us to reject petitioners' claim that the NLRC's conclusion of fact were instead for the Port of Manila. Compagnie de Commerce sued in the Philippines for damages not supported by substantial evidence. Petitioner's rely on self-serving affidavits of their own arising from breach of the charter party and unauthorized sale of the cargo. In affirming the officers and employees predictably tending to support petitioners' allegation that Captain Tayong had performed acts inimical to petitioners' interests for which, supposedly, he was discharged. The decision of the trial court dismissing the complaint, our Supreme Court held that the master of the Sambia had reasonable grounds to apprehend that the vessel was in danger of seizure or capture official report of Mr. Clark, petitioners' representative, in fact supports the NLRC's conclusion that by the French authorities in Saigon was justified by necessity to elect the course which the took — private respondent Captain did not arbitrarily and maliciously delay the voyage to South Africa. i.e., to flee Saigon for the Port of Manila — with the result that the shipowner was relieved from There had been, Mr. Clark stated, a disruption in the normal functioning of the vessel's turbo liability for the deviation from the stipulated route and from liability for damage to the cargo. charger and economizer and that had prevented the full or regular operation of the vessel. Thus, Mr. Clark relayed to Captain Tayong instructions to "maintain reduced RPM" during the voyage to ID.; ID.; COMMERCIAL LAW; CODE OF COMMERCE; CAPTAIN'S CONTROL OF South Africa, instead of waiting in Singapore for the supplies that would permit shipboard repair of 4. VESSEL AND REASONABLE DISCRETION AS TO ITS NAVIGATION. — "The danger from the malfunctioning machinery and equipment. Under all the circumstances of this case, we, along

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His instructions were to replenish bunker and diesel fuel. as a direct result of Captain Tayong's delay. 3 On 29 July 1989. Captain Tayong followed-up the requisition by the former captain of the Oceanic Mindoro for supplies of oxygen and acetylene. who was in Tokyo and who could provide a solution for the supply of said oxygen and acetylene. as evidenced by an employment contract. Petitioners. Inc. 11 and was advised by Sea Horse to wait for the supplies at 0800 hrs. considering that the vessel's turbo-charger was leaking and the vessel was fourteen (14) years old. as well as its crew. mean an irresistible compelling power. Captain Tayong instituted a complaint for illegal dismissal before the Philippine Overseas Employment Administration ("POEA"). as Master of the vessel M/V Oceanic Mindoro. and under that obligation adopts a course which. Clark. Clark responded that by shutting off the water to the turbo charger and using the auxiliary boiler. there were no grounds for a 'reasonable apprehension of danger' from seizure by the French authorities. The ship agent stated that these could only be delivered at 0800 hours on August 1. According to petitioners. In the Master's sailing message. Mr. in rejecting this contention also. Inc. it must be proceeded with diligently. before deciding on the course he will adopt. and we cannot say that under the conditions existing at the time when the master elected to flee from that port. 5 The Chief Engineer reminded Captain Tayong that the oxygen and acetylene supplies had not been delivered. was employed on 6 July 1989 by petitioners Trenda World Shipping (Manila). If he delays. Captain Tayong received a weather report that a storm code-named "Gordon" would shortly hit Hongkong. 9 On the night of 31 July 1989. underwriter on ship and freight. he may claim a fair opportunity of carrying out a contract. indeed. When the vessel arrived at the port of Richard Bay. he cannot escape that obligation by pleading the absence of definite instructions from the owners of the cargo or their underwriters. or tranship. declared that: "But it is clear that the master could not be required to act on the very day of his arrival. or abandon the voyage. it may properly be said of the course so taken that it was in a mercantile sense necessary to take it. and therefore no necessity for flight. Precautionary measures were taken to secure the safety of the vessel. According to Mr. 2 Exhaust gas casing. He was instructed to shut down the economizer and use the auxiliary boiler instead. a man has the duty cast upon him of taking some action for another. without waiting for repairs.which the master of the Sambia fled a real and not merely an imaginary one as counsel for shipper contends. Clark received a call from Captain Tayong informing him that the vessel cannot said without the oxygen and acetylene for safety reasons due to the problems with the turbo charger and economizer. the vessel sailed from Hong Kong for Singapore. unless. for a period of one (1) year. though not inevitable. of course. where by the force of circumstances. cargo owner. there should be no further problem. or given up. A shipowner or shipmaster (if communication with the shipowner is impossible). cannot. Seizure at the hands of an 'enemy of the King'. however... Mr. to the judgment of a wise and prudent man. Mr. necessary for the welding-repair of the turbocharger and the economizer. the cargo is perishable. and if so done. what is meant by it in such cases is the force of circumstances which determine the course of a man ought to take. is apparently the best for the interest of the persons for whom he acts in a given emergency. 2 On 25 July 1989. since he has control of the cargo and is entitled to elect. But once the time has elapsed. the requisitioned supplies were delivered and Captain Tayong immediately sailed for Richard Bay. and likely to be injured by the delay. 7 Captain Tayong called the shipowner. to decide for himself as to the course which he should adopt to secure the interests of the absent owner of the property aboard the vessel. 13 He was not informed of the charges against him. while at the Pork of Hongkong and in the process of unloading cargo. Captain Tayong reported a water leak from M. Captain Tayong agreed with him that the vessel could sail as scheduled on 0100 hours on 1 August 1989 for South Africa. claiming his unpaid salary for the unexpired portion of the written employment contract. Where that is the case. J p: Private respondent Rizalino Tayong. or sold. petitioners' vessel was placed "off-hire" by the charterers refused to pay the 2 . The Supreme Court. will be allowed a reasonable time in which to decide what course he will adopt in such cases as those under discussion. of shipowner. he is bound to act promptly according as he has elected either to repair." Compagnie de Commerce contended that the shipowner should. Petitioners alleged that he had refused to said immediately to South Africa to the prejudice and damage of petitioners. Captain Tayong assumed command of petitioners' vessel at the port of Hongkong. and to balance the conflicting interests involved. after serving petitioners for a little more than two weeks. Captain Tayong reported that the vessel had stopped in mid-ocean for six (6) hours and forty-five (45) minutes due to a leaking economizer. denied that they had illegally dismissed Captain Tayong.000 metric tons of coal." DECISION FELICIANO. was a possible outcome of a failure to leave the port of Saigon. The master is entitled to delay for such a period as may be reasonable under the circumstances. and there to load 120. in London and informed them that the departure of the vessel for South Africa may be affected because of the delay in the delivery of the supplies. 1989 as the stores had closed. 8 Sea Horse advised Captain Tayong to contact its Technical Director. He was thereafter repatriated to the Philippines. as the case may be. The word 'necessity' when applied to mercantile affairs. the freighter will have no ground of complaint. or before he had a reasonable opportunity to ascertain whether he could hope to carry out his contract and earn his freight. On 16 July 1989. Clark. and owing to that delay a perishable cargo suffers damage. Turbo Charger No. Captain Tayong was instructed to turn-over his post to the new captain. 12 At 0800 hours on 1 August 1989. time must be allowed to him to ascertain the facts. where the judgment must in the nature of things be exercised. should the repair of the ship be undertaken. be held responsible for the deterioration in the value of the cargo incident to its long stay on board the vessel from the date of its arrival in Manila until the cargo was sold.E. to said forthwith to Richard Bay. through petitioner Inter-Orient Maritime Enterprises. in their answer to the complaint. the vessel arrived at the port of Singapore. he communicated to Sea Horse his reservations regarding proceeding to South Africa without the requested supplied. Thus. and upon failure to secure prompt advice. 1 This requisition had been made upon request of the Chief Engineer of the vessel and had been approved by the shipowner. it ought to be forwarded. On 15 July 1989. plus attorney's fees. while the vessel was en route to Singapore. 6 Captain Tayong inquired from the ship's agent in Singapore about the supplies. and earning the freight. at all events. and Sea Horse Ship Management. and that he should not be held responsible for a reasonable delay incident to an effort to ascertain the wishes of the freighter. although the consequent delay be a long one. whether by repairing or transshipping. South Africa on 16 August 1989. Inc. He was subsequently instructed to block off the cooling water and maintain reduced RPM unless authorized by the owners. which Sea Horse had arranged to be delivered on board the Oceanic Mindoro. 14 On 5 October 1989. 4 On 31 July 1989 at 0607 hrs. of 1 August 1989. Sea Horse Ship Management. South Africa. Ltc. 10 According to Captain Tayong. a licensed Master Mariner with experience in commanding ocean-going vessels. On 21 July 1989.

are entitled to security of tenure. is analogous to that of "Chief Executive Officer" [CEO] of a present-day corporate such instructions. due to time lost in the voyage. had caused them unnecessary damage. so long as there is substantial evidence of record to sustain its action. The NLRC found that Captain Tayong had not been afforded an opportunity to be heard and that no substantial evidence was adduced to establish the basis for petitioners' loss of trust or confidence in the Captain. that is. true copy of the decision of the NLRC dated 23 April 1994. the captain has authority to sign bills of lading. 18 Clearly.charter hire or compensation corresponding to twelve (12) hours. Petitioners allege that they had adduced sufficient evidence to establish the basis for private respondent's discharge. The Office of the Solicitor General asked for an extension of thirty (30) days to file its comment on behalf of the NLRC. carry goods aboard and deal with the freight earned. contract or instructions and regulations of the shipowner. supposedly. in imposing unacceptable risks of loss or serious danger to ship or crew. 15 Such employees.00. We note preliminary that petitioners failed to attach a clearly legible. agree upon rates and decide whether to take cargo. and much less giving him a change to refute any such charge. 21 It is a basic principle of admiralty law that in employment and the protection of labor laws. despite petitioner's firm assurances that the vessel was seaworthy for the voyage to South Africa. and (3) he is a (insisted upon by radio or telefax from their officers thousand of miles away) will result. The NLRC directed petitioners to pay the Captain (a) his salary for the unexpired portion of the contract at US$1. We have consistently held that a question of "fact" is. and reasonable discretion as to its navigation. if the ship captain is convinced. 22 Indeed. instead of waiting in Singapore for the supplies that would permit shipboard repair of the malfunctioning machinery and equipment. The POEA believed that the Captain had unreasonably refused to follow the instructions of petitioners and their representative. is one who has command of a electronic communications. in the very representative of the country under whose flag he navigates. claim that the NLRC had acted with grave abuse of discretion. Clark. it was only on 26 October 1989 that Captain Tayong received a telegram dated 24 October 1989 from Inter-Orient requiring him to explain why he delayed sailing to South Africa. the concern solely of an administrative body. petitioners' representative.900. 17 To the captain is committed the governance. The NLRC declared that he had only acted in accordance with his duties to maintain the seaworthiness of the vessel and to insure the safety of the ship and the crew. the National Labor Relations Commission ("NLRC") reversed and set aside the decision of the POEA. contrary to the conclusion reached by the NLRC. investigation. he was discharged. fair standards of charterers. in our mind. a disruption in the normal functioning of the vessel's turbo charger 19 and economizer and that had prevented the full or regular operation of the vessel. for purposes of maritime commerce. On appeal. care and management of the vessel. But the Court chose not to do so. Captain Tayong submitted his comment. cargo owners or of underwriters. as agent of the shipowner. It is plain from the records of the present petition that Captain Tayong was denied any opportunity to defend himself. (2) he is also commander and technical director of the vessel. he cannot casually seek absolution from his responsibility. a ship's captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage. Clark relayed to Captain Tayong instructions to "maintain reduced RPM" during the voyage to South Africa. if a marine casualty occurs. Clark stated. The captain is held responsible. We also find that the principal contention of petitioners against the decision of the NLRC pertains to facts. protection of the passengers (if any) and crew and cargo. A captain commonly performs three (3) distinct roles: (1) he is a general agent of the and competent mariner acting in good faith that the shipowner's or ship agent's instructions shipowner. We consider that the Solicitor General's comment may be dispensed with in this case. for such safety. There had been. even in this age of doctrine. whether those be of the shipowners. The applicable principle is that the captain has control of all departments of service in the vessel. in violation of requirement no. Petitioner's rely on self-serving affidavits of their own officers and employees predictably tending to support petitioners' allegation that Captain Tayong had performed acts inimical to petitioners' interests for which. and without cause as reasonably established in an appropriate protection and preservation of the interests under his charge. as a general rule. He is right there on the vessel.00 a month. In his role as general agent of the shipowner. The ship captain. including attorney's fees. Mr. in the exercise of sound discretion and in good faith. who must protect the interest of petitioners. Thus. Petitioners finally contend that the award to the Captain of his salary corresponding to the unexpired portion of the contract and one (1) month leave pay. subject to applicable limitations established by statute. properly certified. too. before this Court. for such role (which. Petitioners. the petition could have been dismissed. and (b) attorney's fees equivalent to ten percent (10%) of the total award due. The The captain of a vessel is a confidential and managerial employee within the meaning of the above requirements of safe navigation compel us to reject any suggestion that the judgment and discretion of the captain of a vessel may be confined within a straitjacket. the master must be left free to exercise his own best judgment.500. On this ground alone. The decision of the POEA placed considerable weight on petitioners' assertion that all the time lost as a result of the delay was caused by Captain Tayong and that his concern for the oxygen and acetylene was not legitimate as these supplies were not necessary or indispensable for running the vessel. by far the most important is the role performed by the captain as commander of the vessel. as a reasonably prudent vessel. also constituted grave abuse of discretion. in command of it and (it must be presumed) knowledgeable as to the specific requirements of seaworthiness and the particular risks and perils of the voyage he is to embark upon. cannot be compelled to keep in their employ a captain of a vessel in whom they have lost their trust and confidence. has legal authority to enter into contracts with respect to the vessel and the trading of the vessel. In fact. whether or not there was actual and sufficient basis for the alleged loss of trust or confidence. navigating a merchantman. More importantly. The record requires us to reject petitioners' claim that the NLRC's conclusion of fact were not supported by substantial evidence. They stated that they had dismissed private respondent for loss of trust and confidence. The petition must fail. The official report of Mr. and properly so. 23 enterprise) has to do with the operation and preservation of the vessel during its voyage and the 3 . the captain is vested with both management and fiduciary functions. 20 It is the right and duty of the It is well settled in this jurisdiction that confidential and managerial employees cannot be arbitrarily captain. The POEA dismissed Captain Tayong's complaint and held that there was valid cause for his untimely repatriation. as owners of the vessel. 3 of Revised Circular No. 1-88. to specific circumstances facing him. A master or captain. Petitioners curtly dismissed him from his command and summarily ordered his repatriation to the Philippines without informing him of the charge or charges levelled against him. 16 Of these roles. amounting to US $15. in view of the nature of question here raised and instead required private respondent to file a comment on the petition. Petitioners insist that Captain Tayong. plus one (1) month leave benefit. and that they. to do all things with respect to the vessel and its equipment and conduct of the voyage which are reasonably necessary for the dismissed at any time. Mr. in fact supports the NLRC's conclusion that private respondent Captain did not arbitrarily and maliciously delay the voyage to South Africa.

to the judgment of a wise and prudent man. is apparently the best for the interest of the persons for whom he acts in a given emergency. be held responsible for the deterioration in the value of the cargo incident to its long stay on board the vessel from the date of its arrival in Manila until the cargo was sold. though not inevitable. The Supreme Court. although the consequent delay be a long one. unless. If he delays. The master of the Sambia decided to deviate from the stipulated voyage and sailed instead for the Port of Manila. indeed. our Supreme Court held that the master of the Sambia had reasonable grounds to apprehend that the vessel was in danger of seizure or capture by the French authorities in Saigon was justified by necessity to elect the course which the took — i. Should the repair of the ship be undertaken. this Court recognized the discretionary authority of the master of a vessel and his right to exercise his best judgment.. In Compagnie de Commerce.D. and earning the freight." 26 (Emphasis supplied) The critical question. and therefore no necessity for flight. certain cargo destined for the Ports of Dunkirk and Hamburg in Europe. of the turbo-charger and the economizer equipment of the vessel. it is especially relevant to recall that. What is meant by it in such cases is the force of circumstances which determine the course of a man ought to take. underwriter on ship and freight. of course. he cannot escape that obligation by pleading the absence of definite instructions from the owners of the cargo or their underwriters. and under that obligation adopts a course which. 27 Equally relevant is the telex dated 2 August 1989 sent by Captain Tayong to Sea Horse after Oceanic Mindoro had left Singapore and was en route to South Africa. since he has control of the cargo and is entitled to elect. it must be proceeded with diligently. under which the former as charterer loaded on board the Sambia. he is bound to act promptly according as he has elected either to repair. Where that is the case. therefore. that decision of Captain Tayong did not constitute a legal basis for the summary dismissal of Captain Tayong and for termination of his contract with petitioners prior to the expiration of the term thereof. or given up. it may properly be said of the course so taken that it was in a mercantile sense necessary to take it. time must be allowed to him to ascertain the facts. at all events. on board the ship. We cannot hold this conclusion of the NLRC to be a grave abuse of discretion amounting to an excess or loss of jurisdiction. or sold. Inc." 28 (Emphasis partly in source and partly supplied) Under all the circumstances of this case. Robert Clark. and if so done. the cargo is perishable. Captain Tayong explained his decision to Sea Horse in the following terms: "I CAPT R. Clearly. along with the NLRC. Compagnie de Commerce sued in the Philippines for damages arising from breach of the charter party and unauthorized sale of the cargo. of shipowner. or tranship. A shipowner or shipmaster (if communication with the shipowner is impossible). where the judgment must in the nature of things be exercised. where by the force of circumstances. before deciding on the course he will adopt. indeed. the freighter will have no ground of complaint. Assuming that to be petitioners' management prerogative. and may have changed their estimate of their ability to work with him and of his capabilities as a ship captain. Thus. reach its ports of destination because war (World War I) had been declared between Germany and France. in rejecting this contention also. and owing to that delay a perishable cargo suffers damage. Hamburg 24 is instructive in this connection. The Sambia flying the German flag. But once the time has elapsed. the shipowner will be liable for that damage. as the case may be. we share that conclusion and make it our own. TAYONG RE: UR PROBLEM IN SPORE (SINGAPORE) I EXPLAIN AGN TO YOU THAT WE ARE INSECURITY/DANGER TO SAIL IN SPORE W/OUT HAVING SUPPLY OF OXY/ACET. or before he had a reasonable opportunity to ascertain whether he could hope to carry out his contract and earn his freight. at the port of Saigon. mean an irresistible compelling power. and likely to be injured by the delay. PLS. In the view of the NLRC. in the case at bar. and that he should not be held responsible for a reasonable delay incident to an effort to ascertain the wishes of the freighter. CLARK WE CONTACTED EACH OTHER BY PHONE IN PAPAN N HE ADVSED US TO SAIL TO RBAY N WILL SUPPLY OXY/ACET UPON ARRIVAL RBAY HE ALSO EXPLAINED TO MY C/E HOW TO FIND THE REMEDY W/OUT OXY/ACET BUT C/E HE DISAGREED MR. ECONOMIZER LEAKAGE N ETC WE COULD NOT FIX IT W/OUT OXY/ACET ONBOARD. In this telex. The word 'necessity' when applied to mercantile affairs. cannot. could not. in the judgment of its master. I AND MR. constituted merely arbitrary. CLARK IDEA. capricious or grossly insubordinate behavior on his part. UNDERSTAND UR SITUATION. without waiting for repairs.. PLS UNDERSTAND HV PLENTY TO BE DONE REPAIR FM MAIN ENGINE LIKE TURBO CHARGER PIPELINE. cargo owner. The Court said: "The danger from which the master of the Sambia fled a real and not merely an imaginary one as counsel for shipper contends. to decide for himself as to the course which he should adopt to secure the interests of the absent owner of the property aboard the vessel. 4 . to flee Saigon for the Port of Manila — with the result that the shipowner was relieved from liability for the deviation from the stipulated route and from liability for damage to the cargo. In this connection. we. and upon failure to secure prompt advice. according to the report of Mr. a man has the duty cast upon him of taking some action for another. He may claim a fair opportunity of carrying out a contract. THAT IS WHY WE URG REQUEST[ED] YR KIND OFFICE TO ARRANGE SUPPLY OXY/ACET BEFORE SAILING TO AVOID RISK/DANGER OR DELAY AT SEA N WE TOOK PRECAUTION UR TRIP FOR 16 DAYS FM SPORE TO RBAY. it ought to be forwarded. and to balance the conflicting interests involved. that prerogative is nevertheless not to be exercised. petitioners were angered at Captain Tayong's decision to wait for delivery of the needed supplies before sailing from Singapore." 25 (Emphasis supplied) Compagnie de Commerce contended that the shipowner should. there were no grounds for a 'reasonable apprehension of danger' from seizure by the French authorities. Seizure at the hands of an 'enemy of the King'. There. is whether or not Captain Tayong had reasonable grounds to believe that the safety of the vessel and the crew under his command or the possibility of substantial delay at sea required him to wait for the delivery of the supplies needed for the repair of the turbo-charger and the economizer before embarking on the long voyage from Singapore to South Africa. or abandon the voyage. and we cannot say that under the conditions existing at the time when the master elected to flee from that port. will be allowed a reasonable time in which to decide what course he will adopt in such cases as those under discussion. with respect to navigating the vessel he commands. are unable to hold that Captain Tayong's decision (arrived at after consultation with the vessel's Chief Engineer) to wait seven (7) hours in Singapore for the delivery on board the Oceanic Mindoro of the requisitioned supplies needed for the welding-repair. a charter party was executed between Compagnie de Commerce and the owners of the vessel Sambia. whether by repairing or transshipping. the Oceanic Mindoro had stopped in mid-ocean for six (6) hours and forty-five (45) minutes on its way to Singapore because of its leaking economizer. at the cost of loss of Captain Tayong's rights under his contract with petitioner's and under Philippine law.Compagnie de Commerce v. In affirming the decision of the trial court dismissing the complaint. declared that: "But it is clear that the master could not be required to act on the very day of his arrival. The master is entitled to delay for such a period as may be reasonable under the circumstances.e. Technical Director of petitioner Sea Horse Ship Management. was a possible outcome of a failure to leave the port of Saigon.

] CHUNG TE. then the abandoned application filed by the junior party applicant becomes cogent evidence to show that he first used the trademark as of the date of its filing (Smith vs. the Petition for Certiorari is hereby DISMISSED. and its registration show that he first used the trademark in question as early as February 1952. 3 Respondent Director disregarded all the evidence submitted by both parties and relied exclusively on the filing dates of the applications in reaching his conclusion as to the dates of first use by the senior party applicant and the junior party applicant.." 2 granted the application of senior party applicant Ng Kian Giab. provided they are supported by substantial evidence (Anchor Trading Co. where the testimonial evidence for both parties has been entirely disregarded. The rule is that the findings of fact by the Director of Patents are conclusive on the Supreme Court provided they are supported by substantial evidence. FACTUAL FINDING CONCLUSIVE ON SUPREME COURT.R. SO ORDERED. EN BANC [G. PATENT OFFICE. 1 Ng Kian Giab stated in his application that he had been using the trademark on undershirts since December 6. 1957 by Ng Kian Giab. No. vs. (Exhibits X. respectively. although it was subsequently considered abandoned by reason of his failure to answer 4 the communication of 3.ACCORDINGLY. Romero. petitioner was the purchasing agent for his father-in-law. G. and when the business was officially launched in 1952. reliance is placed solely on the filing of the applications as proof of the respective dates of first Lebow Bros. 1955. But in the peculiar situation obtaining in carry back his first date of use to an earlier date. Bidin. Even if the evidence for both parties were entirely unreliable — and we do not find it so — we cannot completely disregard the fact that on March 13. No. 1956). November 23. 580). and reliance is placed solely on the filing dates of the applications as proof of the respective dates of first use. 1958. FILLING DATES OF APPLICATION AS PROOF OF THE DATE OF FIRST USE. For a long time in his name is hereby ordered. declared that neither of them "satisfactorily adduced definite and conclusive proof of their asserted dates of first use of the trademark "Marca Piña". and "clear and convincing evidence" of adoption and use as of that earlier date. Hall. Costs against petitioners. Petitioner filed his application on November 25. L-23791. an interference was declared as existing between the two applications. concur. Melo and Vitug. DECISION abandoned case was duly submitted in evidence and forms part of the record. ID. 1957 an application for the registration of the same trademark "MARCA PIÑA. petitioners having failed to show grave abuse of discretion amounting to loss or excess of jurisdiction on the part of the NLRC in rendering its assailed decision. NG KIAN GIAB and THE HONORABLE DIRECTOR OF PATENTS. however. petitioner. J p: Bureau of Internal Revenue. BURDEN OF PRESENTING CLEAR AND CONVINCING EVIDENCE OF the Principal Trademark Examiner dated September 25. when neither of the parties have (has) satisfactorily proven the date of first use alleged in their applications. continued therein as bookkeeper. ed. 5544 and thus finding that respondent had filed his application earlier then petitioner. Petitioner is The fact. but the Director declined to reconsider. 150 F. and Representation" was filed by Chung Te (Application No. 2. Chung Te avers that respondent Director erred (1) in not giving due weight to his documentary evidence which tends to prove that he has been using the trademark since 1951. Piña" and representation thereof. 81 L. such date shall be confined to the filing date of the said application. T-shirts. L-8004. Afterwards he decided to go into the same business for himself. Junior party applicant Chung Te moved for reconsideration of the decision. ID. hence this appeal. X-1. EFFECT ON. His father-in-law. 1951 he had been using the trademark on undershirts (de hilo). Jacinto for petitioner. and relying on the rule that "in inter plates cases. 5544). Jose Lim.. At the hearing both parties presented testimonial as well as documentary evidence to prove their respective claims of priority of adoption and use. ESTABLISHMENT OF FIRST USE. 1049). however. then the abandoned application filed by the junior party applicant becomes cogent evidence to show that he first used the trademark as of the date of its filing. (B. helped him with the preliminary paper work. 1966. the decision of the Director of Patents is reversed. (2) in not finding that respondent Ng Kian Giab had admitted he first used the trademark only in 1955. and rejecting his own application for registration of the same trademark and a similar representation. 7 Chung Te's petition in said 4. May 30. (3) in disregarding petitioner's prior application No. SYLLABUS 1.. and later on he wishes to abandoned application may not properly be considered. to OF DIRECTOR OF PATENTS. use.. 2d. Director of Patents. he then takes on the greater burden of presenting this case. ID. and baby dresses.R.. 5 To be sure. R. 8 whom he had engaged the previous year. vs.." transferred it to him. prior use and adoption of questioned trademark for which reason he and not respondent Ng Giab is entitled to registration thereof. vs. who theretofore DECISION had been using the trademark "Marca Piña. registered the factory's first books of accounts with the MAKALINTAL. for lack of merit. APPLICATION FOR TRADEMARK. JJ. and (4) in declaring respondent as the prior user when there is no substantial evidence in support thereof. Generoso V. In January 1951 petitioner started producing undershirts labeled "Marca Petitioner Chung Te interposed this appeal from the decision of the Director of Patents giving due course to the application of respondent Ng Kian Giab for registration of the trademark "Marca 5 . Federico Diaz for respondent. Respondent Director of Patents. respondents. Because of the confusing similarity between said trademark and that applied for on July 16. — The rule is that the findings of fact by the Director of Patents are conclusive on the Supreme Court. who owned the Liong Bee Shirt Factory. — Where an applicant for determining who was the junior party applicant in the interference 6 the filing date of said registration of a trademark states under oath the date of his earliest use. for the purpose of ADOPTION AND USE AT EARLIER DATE OF TRADEMARK. alleging therein that since January 8. — Where it appears that petitioner has established X-3). — Where the testimonial evidence for both parties has been entirely disregarded. In January 1951 he started laying the groundwork for his own factory. is that there is other substantial evidence adduced by petitioner tending to adjudged prior user of the trademark MARCA PIÑA and representation thereof. Baker Co. 1957. TRADEMARKS AND TRADENAMES.

and the resolution of this Court dated December 24. On January 31. On February 5. and which he could very well have sold without any label. It seems that it actually started operations on December 3. 1955.Piña". and these were attached to goods of better quality. 1965. his brother Ng Kian Kee. 1952 (Exhibits L-1 to L-9.000 "Marca Piña" shirt labels and 10. dated March 17. transferred the business to respondent. which used them in covering the cardboard boxes (a sample is Exhibit D) which petitioner had ordered from it (Exhibit S. Manufacturer of the well known brand 'Pineapple and Piña' the best 1955. 1. At the hearing he sought to prove 6 . U-1 to U3). October 25. in turn. On February 7. But in 1955 the factory was already in operation and producing undershirts to which labels were attached in the process of production. he. Yap Suy Yu had a store at Tabora Market. All these exhibits (Exhibits C. On the other hand. 1954 he bought 100. 1952 he paid the corresponding business taxes (Exhibits U. 12 in Batangas. both customers testified registration thereof. Noteworthy is the fact that in his Petitioner first sold skippers under his firm name "Liong Sun Shirt Factory" on February 1. 1952. 1952 the City of Manila granted petitioner a permit to operate a shirt factory (Exhibit T).000 sheets of "Pineapple Brand" shirt labels (Exhibit Q-2). as well as the legend indicating the size of the undershirt (Exhibit B-3) were pressed on the lower portion of the garment (Exhibits E and E-1). R-1 to R-10). 1 (Exhibit 4-A). Sarmiento. Santos testified that the stamped label used was only "Marca Piña" without any representation or name of the owner (Exhibit 1-D). 1952 he bought 5000 pieces of "Marca Piña" box labels (Exhibit Q). 1955. 1952 he purchased 100. Co In. the date of its Receipt No. In 1955 the father transferred the business to Ng Kian Kee. Julieta Francisco testified that she started working with petitioner in 1951. that what they bought had that label. said they had no store in 1954. According to Juanito Vitug. Costs against respondent Ng Kian Giab. Such testimonial evidence falls short of the kind of proof required of respondent. Petitioner also ordered boxes from the De Luxe Cardboard Box from Factory (Exhibits AA and AA-1). On February 1. 1951 the factory became a member of the Philippine Chinese Underwear Manufacturers Association (certificate of membership. It appears from his application that he had commenced business on February 1. manager of the Avenue Paper Box Factory. 7. "LIONG SUN Shirt Factory. On December 29. before a firm was admitted as member it was required to inform the association of the trademark it was using to identify its products. their supposed seamstress Genoveva Santos. 1955 (Exhibit 6). To explain the discrepancy. In his application for original registration of the business name "Hongkong T-Shirt Manufacturer. thus rendering her services unnecessary. 1955 (Receipt No. and its registration in his name is hereby ordered. the Sin Kian Ning Store. 1952 petitioner ordered from the Victory Printing Company 500 calendars that his business was that of Manufacturing T-shirts. Both of these about December 6. The substance of their testimony is as follows: since 1946 Ng Kian Soy operated a general merchandise store. When he decided to continue his studies in 1957. who testified later." which statement appears to be the truth. Written thereon are the words: the same was not yet in operation. who put up a factory — the Hongkong T-Shirt Manufacturer — and started producing undershirts bearing the trademark. On November 20. While Ng Kian Kee declared that they rebuilt their store several months after the fire in 1953. 9 that his family had been using it since 1946. However. (Exhibit B-2). WHEREFORE. (Exhibit Z). enjoining petitioner to According to the statement (Exhibit G-1) attached to the application (Exhibit G) of respondent Ng comply with the decision appealed from is set aside. The box labels were delivered by him to the Avenue Paper Box Factory.three kinds of labels used (Exhibits 1-A. The name of the store was changed to Hongkong Bazar. and he found that among the files of the association the sample labels "Marca Piña" (Exhibit O) submitted by petitioner when he applied for membership were included. After the fire in 1953 the family rebuilt their store and expanded the business by including undershirt with the same trademark.000 "Marca Piña" cover labels (Exhibit Q-1). attested that he used the "Marca Pina" box covers in covering the boxes which petitioner had ordered from him. And on July 21. one of which (Exhibit Z-1) was submitted in evidence. put together in half dozens by means of paper labels (Exhibits F and F-1). secretary of the association. who was supposed to be a regular customer. Kian Giab he first used the trademark on December 6.02 per label (which did not even bear his name) on polo shirts which he had purchased ready-made." trademark on December 5. The documentary evidence show clearly that respondent's use began only in 1955. and they resumed selling garments only in 1955. customers regularly bought skippers and undershirts by the dozens as shown by receipt dated From all the foregoing we are convinced that petitioner has established prior use and adoption of from that time up to July 14. at the time he bought undershirts. The trademark. declared that there were . Her job was to sew skippers and "sandos" and to affix the trademark "Marca Piña" (Exhibit B-1) and "Pineapple" on the nape of the neck of each finished undershirt. Santos declared that from 1954 up to the time the business moved to Manila (in 1958) her job was to sew labels on ready made polo shirts. He obtained the labels he was using from the Asiatic Press. two of which bore the representation of a pineapple. Exhibit R). where he sold polo shirts bearing the trademark. F-1 and D) bear the trademark in question. Exhibit N). for which reason he and not respondent Ng Giab is the one entitled to state that the merchandise purchased bore the trademark "Marca Piña". It is doubtful that respondent's father would pay Genoveva Santos as high as P0. From 1946 to 1955 they merely bought ready made polo shirts and undershirts to each of which they then sewed the label "Marca Piña" before resale to the public. 2. and two customers Diego Magpantay and Cleto Sarmiento. and later on he wishes to carry back his first date of use to an earlier date he then takes on the greater burden of presenting "clear and convincing evidence" of adoption and use as of that earlier date. and then placed on box containers (Exhibit D). 1952 to statement attached to the application respondent alleged that he first used the trademark "on or Tay Liong Kian (Receipt No. It sold its first half dozen undershirts bearing the cotton and De Hilo Skippers. manager of the Asiatic Printing Press." Ng Kian Kee stated On November 19. she added "undershirts". In answer to a leading question. she added. while Magpantay said there was the representation of a pineapple on the labels used by respondent's family. Sarmiento. 11 To prove such earlier date respondent relies purely on testimonial evidence consisting of the declarations of his father Ng Kian Soy. he sold them under the firm name of his father-in-law because he had yet no license in his own name. At the time of the hearing Tay Liong Kian 10 had a store in Yangco Market. F. Exhibits S-1 to S-7). The undershirts were then placed inside cellophane wrappers (Exhibit C). 1952 the Bureau of Commerce issued to him a certificate of registration as private merchant (Exhibit V) and two days later a certificate of registration of the business name "Liong Sun Shirt Factory" (Exhibit W). Petitioner is adjudged prior user of the trademark MARCA PIÑA and representation thereof. the decision of the Director of Patents is reversed. 1952. Although the receipts do not the questioned trademark. while Tan Dy. affirmed that petitioner had purchased "Marca Piña" labels from him. The business tax receipt in the name of Ng Kian Kee is dated October 18. 1-B and 1-C). Batangas. and that as of that date. Where an applicant for registration of a trademark states under oath the date of his earliest use. Exhibit Z) and Yap Suy Yu (Receipt No. 1955. Exhibit 4-G).

Reyes. 2d 580. The party whose application or registration involved in the interference has the latest filing date is the junior party and will be regarded as having the burden of proof.P. The two alternated in keeping the books of the factory. While the Patent Office file on the abandoned claim is not relied on as a prior publication. 074." B. and he was only 13 years old in 1952 when he started purchasing undershirts from petitioner. reasonably gives rise to the presumption of the use of the labels on the products sold. The same thing happened with respect to Julieta Francisco. from the date of the mailing of any action of the Principal Examiner. which certificate does 5. C. that the stenographer who took down his testimony had misheard his age when he stated it. Smith vs. 194 F. 6. 4765) filed on July 16.B. 1948 Ng Kian Soy was granted a municipal license for his general merchandise store (Exhibit 16). 1921. Sanchez and Castro. id. 4. (Rule 184. tradename. the applicant or his duly authorized representatives was required to submit a sample of the goods bearing "Marca Piña and Representation. or service mark. tradename. vs. (2) the application would Soy emphasized that he sold only polo shirts in his store. Hall. 1049. In all inter partes proceedings. although he paid the salary of only one employee.. vs. thus leading respondent Ng Kian Giab to brand her testimony as unworthy of credence because she was only 14 years old when she first started working for petitioner in 1951. Hartwell & Co.) 7 . Rule 180. International Shoe Co. He could not have been less than 18 years old when he made the purchases in 1952.) If an applicant fails to respond or to respond completely within three months after the date an action of the Principal Examiner was mailed. Anchor Trading Co.L.. In case no testimony is taken as to the date of use." within ten days from receipt of the communication. Bengzon. The applicant has three months. McKay. which facts naturally render his testimony suspect. Whenever application is made for the registration of a trademark. 10. JJ. Such purchase of labels together with proof of sale of garments produced by petitioner. 8. Republic Act No. 1956. Barrera. 81 L. must be duly disclaimed in the "Statement". Rule 73. 2d 114.. unless the junior party alleges in his application a date of use prior to the filing date of the senior party. id. the application shall be deemed to have been abandoned. (Rule 97. a greater burden of proof should be. An interference will not be declared between two applications or between an application and a registration. Lebow Bros. Elder Mfg. however. because some of the receipts show that he already had a residence certificate then. and was made by a member of the firm who certainly should have knowledge produced of the date of first use far greater than any of the witnesses produced. as to be likely when applied to the goods or when used in connection with the business or services of the applicant to cause confusion or mistake or to deceive purchasers. 2. J. Director of Patents. and is required in order to carry the date of use back to a prior date. he is then under a heavy burden. that the registrant was not the first user and is therefore not the owner of the trademark.. Actually petitioner engaged the services of Lim and his nephew Jose Tantioco. however. Respondent presented a certificate to the effect that on April 15. it is competent and cogent evidence to determine the nature and date of the invention which the inventor claims to have embodied in working form. the party will be limited to the filing date of the application as the date of his first use. Where one has under oath stated his earliest use and then amends his oath and by proof attempts to show an earlier date. be declared in interference with the application of Ng Kian Giab (Serial No. v. 1961. 9. 168. It will be seen that this application was made within a few months of the date set out in the application as the first date of use. id. Baker Co. Section 10-A. to respond thereto. (Rule 93. id. 11. L-8004. clearly stated that she was then almost 34 years old. concur. Footnotes 1. who. ed. 1922. May 30. Respondent Director did not believe this witness on the ground that since he was only 23 years old at the time he testified on August 7. who had been a member of the firm for many years. An interference is a proceeding instituted for the purpose of determining the question of priority of adoption and use of a trademark.R. 166. When such as affidavit has been made at about the time of the event. cannot be regarded as trademark use. the Principal Trademark Examiner stated that examination ex parte of the application disclosed the following defects: (1) the word "Marca" being commonly used not in any way prove use of the trademark as of the time. 150 F. Mr. and that the petitioner for cancellation was the first user and is the rightful owner of the trademark is a finding of fact which cannot be overturned upon review unless it is shown that the Director overlooked some matter of substance in evaluating the evidence. Note also that at the hearing Ng Kian in the trade to indicate mark. by Hall. 3. In his communication. the director may declare that an interference exists. It is apparent. tradename or service mark which so resembles a mark or tradename previously registered by another.) 7. A finding of the Director of Patents. in connection with an application to cancel a registered trademark. and (3) for verification purposes of trademark use. He was 33 years old when he testified. then he was only 10 years old in 1949 when he first became a merchant. The Director found that the mere purchase of labels and boxes. Dizon. J. Revised Rules of Practice before the Philippines Patent Office in Trademark Cases. as amended. 12. Regala.J. Zaldivar. During the course of her testimony she. the allegations of date of use in the application for registration of the applicant or of the registrant cannot be used as evidence in behalf of the party making the same.. verified the application for registration No. without more. 1962. 1957. or service mark between two or more parties claiming ownership of the same or substantially similar trademark. or for the registration of which another had previously made application. which was filed in the Patent Office on January 24. according to the stenographic notes was only 24 years old when she testified on June 16. and his proof must be "clear and convincing. Co.Concepcion. and in the application stated that the mark had been used since about October 1.

UM-5269 dated 2 June 1983 as well as Letters Patent No. del Rosario alleged that he was a patentee of or publications circulated within the country. respondents. an adjunct to a main suit. — Under Sec. there are only two requisites to be satisfied if an injunction is to issue. and the essential one being used for playback and the other. No. ITS NATURE.] ROBERTO L. In view thereof. contrary to the findings and conclusions of respondent Court of Appeals. ID. PROVISIONAL REMEDIES. respectively. — improved on his first patented model. or that both are used to play minus-one or standard cassette tapes for singing a threatened or continuous irremediable injury to some of the parties before their claims can be or for listening to. It is to be resorted to only when there is a pressing necessity to avoid injurious consequences which cannot be remedied under any standard the singing and the accompaniment. Notwithstanding the differences cited by respondent Injunction is a preservative remedy for the protection of substantive rights or interests. — It may be noted that respondent corporation failed to present before the trial court a clear. one or two tape mechanisms. Consequently. a machine or device must perform the same function. Clearly. 3. J p: directed are violative of said right. ID. WHAT CONSTITUTES AN INFRINGEMENT OF A PATENT. the existence of the right to be protected... such as the which is of practical utility is entitled to a patent for utility model. ID. UMso known. 37 of The Patent Law. ID. ID. ID. it appears. (g) both are encased in box-like cabinets. March 15.. in view of all the circumstances.. a legal right which must be shown to Roberto del Rosario petitions this Court to review the decision of the Court of Appeals 1 which set be clear and positive. aside the order of the Regional Trial Court of Makati granting a writ of preliminary injunction in his favor. ID. ID. REQUISITES FOR ITS of violation of his rights as patentee to justify the issuance of a writ of preliminary injunction in his ISSUANCE. and disregarded completely petitioner's Utility Model No. In order to infringe a patent. or if it is substantially similar to any other utility model an audio equipment and improved audio equipment commonly known as the sing-along system or karaoke under Letters Patent No. The controlling corporation. WHEN INJUNCTION MAY BE GRANTED. (f) both are equipped with cassette tape decks which are installed with of a special reason for such an order before the case can be regularly heard. used or described within the country. we find that petitioner had established before the trial court prima facie proof 2. The effectivity of both Letters Patents was for five (5) years and was extended for another five (5) years starting 2 June 1988 4. The application of the writ rests upon an alleged existence for an emergency or bass and other controls. 7. therefore. COURT OF APPEALS AND JANITO CORPORATION.. Thus he sought from the trial court 8 . of compensation. REMEDIAL LAW.R. treble. the same modes of operation and produce substantially the same if not identical results when used. — SYLLABUS The rights of petitioner as a patentee have been sufficiently established. INJUNCTION. Philippines for the term of the patent. machine or other subject matter alleged to infringe is substantially identical with the patent invention. (b) both are used to sing with a minus-one or multiplex tapes. Thus. under Sec. 6237 which 1. competent and reliable comparison between its own model and that of petitioner. and conditions for granting such temporary injunctive relief are that the complaint alleges facts which both may also be used to record a speaker's voice or instrumental playing. — A preliminary injunction may be granted at any time after the commencement of favor during the pendency of the main suit for damages resulting from the alleged infringement.. use and sell the patented machine. the action and before judgment when it is established that the defendant is doing. 115106.. or the device. namely. and that the facts against which the injunction is to be BELLOSILLO. 1996. — It is elementary that a patent may be infringed where the essential or substantial features of the patented invention are taken or appropriated. that the injunction is reasonably microphones.. WHEN A UTILITY MODEL IS NOT CONSIDERED "NEW" UNDER SECTION 55 OF THE PATENT LAW. petitioner as a patentee shall have the exclusive right to make. COMMERCIAL LAW. RIGHTS OF A PATENTEE UNDER SECTION 37 OF THE PATENT LAW. PETITIONER HAD SUFFICIENTLY ESTABLISHED A PRIMA FACIE PROOF OF VIOLATION OF HIS RIGHTS AS PATENTEE. WHEN ANY NEW MODEL OF IMPLEMENTS OR TOOLS IS ENTITLED TO A PATENT FOR UTILITY MODEL. He described his sing-along system as a handy multiof implements or tools of any industrial product even if not possessed of the quality of invention but purpose compact machine which incorporates an amplifier speaker. ID. Quisumbing Torres & Evangelista for petitioner. both petitioner's and respondent's models involve substantially necessary to protect the legal rights of plaintiff pending the litigation. (d) both are used to sing with live accompaniment and to record the same. or accomplish the same result by identical or substantially identical means and the principle or mode of operation must be substantially the same. It is not a cause of action in itself but merely a provisional remedy. article or product for the purpose of industry or commerce. 55 of The Patent Law a utility model shall not be considered "new" if before the application for a patent it has The antecedents: On 18 January 1993 petitioner filed a complaint for patent infringement against been publicly known or publicly used in this country or has been described in a printed publication private respondent Janito Corporation. ID.. some act probably in violation of the plaintiff's DECISION rights. DEL ROSARIO.. (c) both are used to sing with a minus-one tape and multiplex tape and to record thoroughly investigated and advisedly adjudicated.P. using or selling by any person without authorization of the patentee constitutes infringement of his patent. For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must be a present right. vs. with the whole system enclosed in one cabinet casing. threatens. like the guitar and other appear to be sufficient to constitute a cause of action for injunction and that on the entire showing instruments.FIRST DIVISION [G. — The Patent Law expressly acknowledges that any new model and 14 November 1991. echo or reverb to stimulate an opera hall or a studio sound. petitioner. or is procuring or suffering to be done. and (h) both can be used with one or more from both sides. it did not refute and disprove the allegations of petitioner before the trial court that: (a) reason for the existence of the judicial power to issue the writ is that the court may thereby prevent both are used by a singer to sing and amplify his voice. for recording the singer and the accompaniment. 2 Roberto L. or is about to do. Villanueva & Associates for private respondent. 6. J. 5. 6237 dated 14 November 1986 issued by the Director of Patents. THE PATENT LAW. optional tuner or radio and microphone mixer with features to enhance one's voice. throughout the territory of the In the early part of 1990 petitioner learned that private respondent was manufacturing a sing-along system bearing the trademark miyata or miyata karaoke substantially similar if not identical to the sing-along system covered by the patents issued in his favor. and such making. (e) both are used to enhance the voice of the singer using echo effect.

he has satisfied the legal requisites to justify the order of the trial court directing the issuance of the writ of injunction. selling and advertising the miyata or miyata karaoke brand. and that the facts against which the injunction is to be directed are violative of said right. it is not entitled to the injunctive relief granted by respondent appellate court. construction or composition.the issuance of a writ of preliminary injunction to enjoin private respondent. except as otherwise herein provide . known as The Patent Law. For the writ to issue the interest of petitioner in the controversy or the right he seeks to be protected must be a present right. The application of the writ rests upon an alleged existence of an emergency or of a special reason for such an order before the case can be regularly heard. . (d) there was no basis for the Court of Appeals to grant a writ of preliminary injunction in favor of private respondent. petitioner is a holder of Letters Patent No. the injunction to be made permanent after trial. Design patents and patents for utility models. — (a) Any new. On the other hand.A. 55. in the absence of a patent to justify the manufacture and sale by private respondent of sing-along systems. and the essential conditions for granting such temporary injunctive relief are that the complaint alleges facts which appear to be sufficient to constitute a cause of action for injunction and that on the entire showing from both sides. Thus. provides — On 15 November 1993 respondent appellate court granted the writ and set aside the questioned order of the trial court. UM-6237 for a term of five (5) years from the grant of a Utility Model described as — In an audio equipment consisting of a first cubical casing having an opening at its rear and upper rear portion and a partition therein forming a rear compartment and a front compartment serving as a loud speaker baffle. the improvement wherein said a threatened or continuous irremediable injury to some of the parties before their claims can be control panel being removably fitted to said first cubical casing and further comprises a set of tape thoroughly investigated and advisedly adjudicated. In this regard Sec. its officers and everybody elsewhere acting on its behalf. said transistorized amplifier circuit capable of being operated from outside. The motion to reconsider the grant of the writ was denied. and that the karaoke system was a universal product manufactured. The controlling said control panel. or is about to do. that respondent court should not have disturbed but respected instead the factual findings of the trial court. . On 5 February 1993 the trial court temporarily restrained private respondent from manufacturing. This petition alleges that: (a) it was improper for the Court of Appeals to consider questions of fact in a certiorari proceeding. (c) the Court of Appeals erred in disregarding the findings of fact of the trial court. that the injunction is reasonably necessary to protect the legal rights of plaintiff pending the litigation. 5 Petitioner argues that in a certiorari proceeding. a loud speaker fitted inside said front compartment of said casing and connected to the output of the main audio amplifier section of said transistorized amplifier circuit and a tape player mounted on the top wall of said casing and said tape player being connected in conventional manner to said transistorized amplifier circuit. Thus. on 14 November 1986 petitioner was granted Letters Patent No. configuration. and praying for damages. 7 its own sing-along system under the brand name miyata which was substantially similar to the patented utility model 3 of petitioner. threatens. It is to be resorted to only when there is a recorder and tape player mounted on the vertical section of said control panel and said recorder pressing necessity to avoid injurious consequences which cannot be remedied under any standard and player are likewise connected to said transistorized amplifier circuit. It is not a transistorized amplifier circuit wired in at least two printed circuit boards attached at the back of cause of action in itself but merely a provisional remedy. (b) the Court of Appeals erred in taking judicial notice of private respondent's self-serving presentation of facts. 6 A preliminary injunction may be granted at any time after the commencement of the action and before judgment when it is established that the defendant is doing. of compensation. petitioner herein claims. and. questions of fact are not generally permitted the inquiry being limited essentially to whether the tribunal has acted without or in excess of jurisdiction or with grave abuse of discretion. may be protected by the author thereof. Sec. said cubical (casing) having a vertical partition wall therein defining a rear compartment and a front compartment. a first loud speaker fitted inside said first compartment of such first casing and reason for the existence of the judicial power to issue the writ is that the court may thereby prevent connected to the output of said transistorized amplifier circuit. from using. and said front compartment serving as a speaker baffle. attorney's fees and costs of suit. in view of all the circumstances. the existence of the that without his approval and consent private respondent was admittedly manufacturing and selling right to be protected. which does not possess the quality of invention but which is of practical utility by reason of its form. Private respondent assailed the order of 24 February 1993 directing the issuance of the writ by way of a petition for certiorari with prayer for the issuance of a writ of preliminary injunction and a temporary restraining order before respondent Court of Appeals. 55 of R. a transistorized amplifier circuit having an echo section and writhed in at least the printed circuit boards placed inside said rear compartment of said casing and attached to said vertical partition wall. a Injunction is a preservative remedy for the protection of substantive rights or interests. On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on the basis of its finding that petitioner was a holder of a utility model patent for a sing-along system and there are only two requisites to be satisfied if an injunction is to issue. that the movant has a clear legal right to be protected and that there is a violation of such right by private respondent. 8 Again. advertised and marketed in most countries of the world long before the patents were issued to petitioner. an adjunct to a main suit. 165 as amended. and ornamental design for an article of manufacture and (b) new model of implements or tools or of any industrial product or of part of the same. The crux of the controversy before us hinges on whether respondent Court of Appeals erred in finding the trial court to have committed grave abuse of discretion in enjoining private respondent from manufacturing. original. selling and advertising the miyata karaoke brand sing-along system for being substantially similar if not identical to the audio equipment covered by letters patent issued to petitioner. the instant petition for review. namely. a second cubical casing 9 . a legal right which must be shown to be clear and positive. or is procuring or suffering to be done. the former by a patent for a design and the latter by a patent for a utility model. it appears. 4 hence. It expressed the view that there was no infringement of the patents of petitioner by the fact alone that private respondent had manufactured the miyata karaoke or audio system. some act probably in violation of the plaintiff's rights. through various controls mounted on said control panel of such casing. Admittedly. in the same manner and subject to the same provisions and requirements as relate to patents for inventions insofar as they are applicable. UM-5629 dated 2 June 1985 issued for a term of five (5) years from the grant of a Utility Model herein described — The construction of an audio equipment comprising a substantially cubical casing having a window at its rear and upper corner fitted with a slightly inclined control panel. a control panel formed by vertical and horizontal sections. using and/or selling and advertising the miyata sing-along system or any sing-along system substantially identical to the sing-along system patented by petitioner until further orders.

The decision of the Director of Patents in granting the patent is always presumed to be correct. and the burden then shifts to respondent to overcome this presumption by competent evidence. Panasonic 1986 is also wrong? Panasonic I think. In issuing. This is evident from the testimony of Janito Cua. I am sure you were the one who provided him with the information about the many other companies selling the sing-along system. Musicmate and Asahi. The Patent Law expressly acknowledges that any new model of implements or tools of any industrial product even if not possessed of the quality of invention but which is of practical utility is entitled to a patent for utility model. the Director decides not only questions of law but also questions of fact. No. xxx xxx Q. more or less? Sanyo is wrong. More than that because . National by Precision Electronic 1986 this is also wrong? I think earlier. 14 November 1991. 55 of The Patent Law a utility model shall not be considered "new" if before the application for a patent it has been publicly known or publicly used in this country or has been described in a printed publication or publications circulated within the country. Now do you recall that your lawyer filed with this Honorable Court an Urgent Motion to Lift Temporary Restraining Order of this Honorable Court. the Director of Patents determines whether the patent is new and whether the machine or device is the proper subject of patent. said rear compartment being provided with a door and enclosing therein a set of tape racks and said front compartment serving as loud speaker baffle. Yupangco 1981 this is more or less? You are not also sure? Q. Electone by DICO 1989 is this correct or wrong? Correct. You mean your lawyer was wrong in alleging to this Court that Sharp manufactured and sold (in) 1985 as found in the Urgent Motion? A. del Rosario and as a matter of fact you mentioned Sanyo. A. . Q.e. A. A. whether there has been a prior public use or sale of the article sought to be patented. A. It is not 1985? Sanyo is 1979 I think. and a second loud speaker fitted inside said front compartment of said casing and connected to the output of said amplifier circuit. xxx Maybe I informed him already. You mean your lawyer was wrong when he put the word Sharp 1985? 10 . Q. Mr. used or described within the country. Sony and Sharp. Q. A. Nakabutshi by Asahi Electronics that is also wrong? No. reissuing or withholding patents and extensions thereof. Earlier. or if it is substantially similar to any other utility model so known. Q. . A. during the hearing on the issuance of the injunction. So that means all your allegations here from 2 to 5 are wrong? OK. Q. if it is in due form. 9 The terms of both Letters Patents were extended for another five (5) years each. So you don't think this is also correct. Q. that is 1979. this is also correct or wrong? A.having an opening at its rear. The same also with Sanyo 1985 which you put. A. Respondent corporation failed to present before the trial court competent evidence that the utility models covered by the Letters Patents issued to petitioner were not new. The date? So you don't think also that this allegation here that they manufacture in 1986 is correct? Wrong. More or less. Q. Now you will agree with me that in your statement Sharp you put the date as 1985 agreed? A. to wit — Q. A. A. you testified that there are (sic) so many other companies which already have (sic) the sing-along system even before the patent application of Mr. Q. 12 Under Sec. it affords a prima facie presumption of its correctness and validity. A.A. Q. 11 Where petitioner introduces the patent in evidence. By Philipps Philippines 1986. Skylers 1985 is that correct or wrong? It is more or less because it is urgent. Since it is urgent it is more or less. We don't have time to exact the date. A. the first beginning 2 June 1988 and the second. Cua. Q. there is no dispute that the letters patent issued to petitioner are for utility models of audio equipment. said second cubical casing being adapted to said first cubical casing so that said first and second casings are secured together in compact and portable form. More or less. Q. Q. Musicmate of G. 10 Here. In passing on an application. i. President of respondent Janito Corporation. is that right? These 18 which you enumerated here. We said more or less. Q. So this is also wrong. said second cubical casing having (being ?) provided with a vertical partition therein defining a rear compartment and a front compartment. is that right? A.

there is no other way but to use 2 loud speakers connected to the amplifier. with the front compartment consisting of a loud speaker baffle. article or product for the purpose of industry or commerce. Witness so you are now trying to tell this Honorable Court that all your allegations here of the dates in this Urgent Motion except for Musicmate which you are only 95% sure they are all wrong or they are also more or less or not sure. is that right? A. miyata. Fourth. any advertisement. (e) both are used to 5269. Q. contrary to the findings and conclusions of respondent Court of Appeals. But you have not brought the product in (sic) this Honorable Court. . No. using or selling by any person without authorization of the patentee constitutes infringement of his patent. A. Mr. Consequently. Notwithstanding the differences cited by respondent corporation. respondent only confined its comparison to the first model. Third. Under Utility Model 5269. . and such making. while in the miyata equipment the amplifier is mainly IC (Integrated Circuit) — powered with 8 printed circuit boards almost all of which are IC controlled. with a minus-one tape and multiplex tape and to record the singing and the accompaniment. or accomplish the same result by identical or also alleged that both his own patented audio equipment and respondent's sing-along system substantially identical means and the principle or mode of operation must be substantially the were constructed in a casing with a control panel. I have the product. the printed circuit board having 1 amplifier and 1 echo. a loud speaker fitted inside the front compartment of the casing is connected to the output of the main audio amplifier section of the transistorized amplifier circuit. 95% sure. Under Utility Model 5269. Second. you don't also have a proof that Akai instrument that you said was also in the market before 1982? You don't have any written proof. 1 echo IC. or the device. the cubical casing has a vertical partition wall defining a rear compartment and a front compartment serving as a speaker baffle. . the casing having a vertical partition wall same. . Q. 2 tape players are used mounted side by side at the front. In order to infringe a patent. while in miyata. while in the miyata. a tape player is mounted on the top wall of the casing. (g) both are equipped with cassette tape decks which are installed with one being used for playback and the by respondent corporation. do you have it? A. it must be emphasized. Q. it has only a front compartment horizontally divided into 3 compartments like a 3-storey building. 1 instrument and 1 wireless microphone. and that both had loud speakers fitted inside the front compartment of the casing and connected to the output of the main audio amplifier section both having a tape recorder and a tape player mounted on the control panel with the tape recorder and tape player being both connected to the transistorized amplifier circuit. 15 these differences are — other. and both may also be used to record a speaker's voice or instrumental playing. But. a machine or device must perform the same function. (c) both are used to sing Respondent Janito Corporation denied that there was any violation of petitioner's patent rights. anything in writing that would show that all these instruments are in the market. throughout the territory of the Philippines for the term of the patent. both are used to sing with live accompaniment and to record the same. for recording the singer and the accompaniment. 16 defining the rear compartment from the front compartment. 14 It may be noted that respondent corporation failed to present before the trial court a clear. Fifth. It is elementary that a patent may be infringed where the essential or substantial features of the patented invention are taken or appropriated. or that both are used to play minus-one or standard cassette tapes for singing or for listening to. I am satisfied with your answer. 37 of The Patent Law.A. 1 tape pream. Under Utility Model 5269. use Seventh. bass and other controls. and completely disregarded Utility Model No. He alleged to infringe is substantially identical with the patented invention. the 2nd also the speaker. with 1 amplifier with power supply. petitioner as a patentee shall have the exclusive right to make. (h) both are encased in a box-like cabinets. First. right? No. No. competent and reliable comparison between its own model and that of petitioner. it did not refute and disprove the allegations of petitioner before the trial court that: (a) both are used by a singer to sing and amplify his voice. the rights of petitioner as a patentee have been sufficiently established. while in and sell the patented machine. a transistorized amplifier circuit with an echo section wired in at least 2 printed circuit boards is placed inside the rear compartment of the casing and attached to the vertical partition wall. machine or other subject matter Petitioner established before the trial court that respondent Janito Corporation was manufacturing a similar sing-along system bearing the trademark miyata which infringed his patented models. Now Mr. 17 11 . 1 main tuner. while the miyata equipment is a substantially rectangular casing with panel vertically positioned. 1 equalizer (3-band). both containing a transistorized amplifier circuit capable of being operated from outside through various controls mounted on the control panel. the 7 printed circuit boards (PCB) are attached to the front panel and 1 attached to the horizontal divider. Under Utility Model No. Q. the unit is a substantially cubical casing with a window at its rear and upper corner fitted with slightly inclined control panel. Utility Model No. while the miyata equipment has no rear compartment and front compartment in its rectangular casing. under Sec. More or less. A. any advertisement? A. the various controls are all separated from the printed circuit boards and the various controls are all attached thereto. This one because . (b) both are used to sing with a minus-one or multiplex tapes. while in miyata. Now you are sure 1981. the 1st compartment being a kit. Under Utility Model 5269. 5269. As described enhance the voice of the singer using echo effect. 13 Sixth. (d) and cited the differences between its miyata equipment and petitioner's audio equipment. like the guitar and other instruments. and disregarded completely petitioner's Utility Model No. As may be gleaned herein. there are various controls mounted on the control panel of the casing. treble. I don't have it because . 6237 which improved on his first patented model. and the 3rd are kits. Witness. 4 printed circuits are placed inside the compartment of its casing attached to the vertical partition wall. Now do you have any proof. Under Utility Model 5269. Under Utility Model 5269. and (i) both can be used with one or more microphones. 1 IC controlled volume control. 6237 which improved on the first. Q.

AND ALOYSIUS M. with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction. and IBC Channel 13. the Bureau of Legal Affairs (BLA) of the IPO granted ABS-CBN‘s application for a temporary restraining order. Kapunan. On July 12. SO ORDERED.e. 88092 and 90762. The trial court is directed to continue with the proceedings on the main action pending before it in order to resolve with dispatch the issues therein presented. 2002 by ABS-CBN allegedly due to PMSI‘s inability to ensure the prevention of illegal retransmission and further rebroadcast of its signals. SP No. GMA Channel 7. In view thereof.Clearly. thus enriching the lives of the residents thereof through the dissemination of social. 2000 to install. Colayco. and Aloysius M. therefore. on April 25. 10-2004-0002. 175769-70 January 19. EN BANC G. RPN Channel 9. Thus. PMSI was granted a legislative franchise under Republic Act No. REYES.7 PMSI replied that the rebroadcasting was in accordance with the authority granted it by NTC and its obligation under NTC Memorandum Circular No. 04-08-88. 86305 on May 7. ABS-CBN filed with the IPO a complaint for ―Violation of Laws Involving Property Rights. the negotiations were terminated on April 4. 4 It broadcasts television programs by wireless means to Metro Manila and nearby provinces.. however. Inc. 2002. SP Nos. ABS-CBN also owns regional television stations which pattern their programming in accordance with perceived demands of the region. NBN. the Decision of the Court of Appeals dated 15 November 1993 is REVERSED and SET ASIDE and the Order of the trial court dated 24 February 1993 granting petitioner the writ of injunction is REINSTATED. Jr. DE MESA. Cesar G.‖ which was docketed as IPV No. It also submitted a letter dated December 20. 2009 Philippines. which affirmed the December 20. operate and maintain a nationwide DTH satellite service. and by satellite to provincial stations through Channel 2 on Very High Frequency (VHF) and Channel 23 on Ultra High Frequency (UHF). DECISION YNARES-SANTIAGO. to the direct-to-home (DTH) pay television services of Philippine Multi-Media System. Raul B. De Mesa. as well as the adverse effect of the rebroadcasts on the business operations of its regional television stations. On July 2. on mandatory carriage of television broadcast signals. No. Borje to PMSI stating as follows: This refers to your letter dated December 16. are members of PMSI‘s Board of Directors.: This petition for review on certiorari1 assails the July 12. economic.R. 1998 and was given a Provisional Authority by the National Telecommunications Commission (NTC) on February 1. Inc. Channel 4. 2002 requesting for regulatory guidance from this Commission in connection with the application and coverage of NTC Memorandum Circular No. FRANCIS CHUA (ANG BIAO). Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is licensed under the laws of the Republic of the Philippines to engage in television and radio broadcasting. together with other paid premium program channels. However. educational information and cultural programs. particularly Section 6 thereof. When it commenced operations. The DTH pay television services of PMSI is equipped to provide nationwide DTH satellite services. Vitug. Respondents. which was docketed as CA-G. 4-08-88. 2002. both DTH pay television and cable television services are broadcast services.6 ABS-CBN demanded for PMSI to cease and desist from rebroadcasting Channels 2 and 23. 2002. 408-88. vs. CESAR G.R. Manuel F. Preliminarily. PMSI suspended its retransmission of Channels 2 and 23 and likewise filed a petition for certiorari with the Court of Appeals. RAUL B. (PMSI) is the operator of Dream Broadcasting System. Subsequently.8 Section 6. 2006 Resolution3 denying the motion for reconsideration. Francis Chua. 2004 Decision of the Director-General of the Intellectual Property Office (IPO) in Appeal No. television programs shown in Metro Manila and nearby provinces are not necessarily shown in other provinces. 2001. Reyes.. PHILIPPINE MULTI-MEDIA SYSTEM. Concededly. 71597. Respondent Philippine Multi-Media System. Also assailed is the December 11. JJ. both petitioner's and respondent's models involve substantially the same modes of operation and produce substantially the same if not identical results when used. Padilla. 10-2002-0004. Petitioners.. PMSI‘s DTH pay television services covers very much wider areas in terms of ABS-CBN BROADCASTING CORPORATION. INC. Both can carry broadcast signals to the remote areas. 2001.9 Thereafter. and Hermosisima. Abellada. On April 27. negotiations ensued between the parties in an effort to reach a settlement. J. PMSI filed with the BLA a Manifestation reiterating that it is subject to the mustcarry rule under Memorandum Circular No. we find that petitioner had established before the trial court prima facie proof of violation of his rights as patentee to justify the issuance of a writ of preliminary injunction in his favor during the pendency of the main suit for damages resulting from the alleged infringement. 2002 of then NTC Commissioner Armi Jane R. It delivers digital direct-to-home (DTH) television via satellite to its subscribers all over the 12 . (PMSI).10 On May 13. the former by satellite and the latter by cable). it offered as part of its program line-up ABS-CBN Channels 2 and 23. ABELLADA. WHEREFORE. The programs aired over Channels 2 and 23 are either produced by ABS-CBN or purchased from or licensed by other producers. MANUEL F. It alleged that PMSI‘s unauthorized rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright. ABC Channel 5. concur.R. COLAYCO. 2006 Decision2 of the Court of Appeals in CA-G. the only difference being the medium of delivering such services (i.2 of which requires all cable television system operators operating in a community within Grade ―A‖ or ―B‖ contours to carry the television signals of the authorized television broadcast stations. Herein individual respondents.

On February 6. in addition to your obligations under MC 10-10-2003. MC 4-08-88 remains valid. Bello of the International Broadcasting Corporation (IBC-Channel 13) complaining that your company. The Documentation.‖ Article 6. In view of the foregoing and the spirit and intent of NTC memorandum Circular No. that as duly licensed direct-to-home satellite television service provider authorized by this Commission. 2003 from the NTC enjoining strict and immediate compliance with the must-carry rule under Memorandum Circular No. particularly section 6 thereof. xxxx The Commission maintains that. 10-10-2003 amended Memorandum Circular No. including areas not reachable by cable television services thereby providing a better medium of dissemination of information to the public. this has been going on. the Director-General of the IPO rendered a decision15 in favor of PMSI. ABS-CBN filed a petition for review with prayer for issuance of a temporary restraining order and writ of preliminary injunction with the Court of Appeals. premises considered. on October 10. along with cable television operators.carriage of broadcast signals. Abellada: Last July 22. PMSI filed an appeal with the Office of the Director-General of the IPO which was docketed as Appeal No. DTH pay television services should be deemed covered by such NTC Memorandum Circular. (Emphasis added)12 Meanwhile. We were told that. therefore. 04-08-88. one of which is IBC-13. 13 . the NTC issued Memorandum Circular No. Said directive equally applies to your company as the circular was issued to give consumers and the public a wider access to more sources of news. to air the programs of IBC-13. Please be advised. with a provisional authority (PA) from the NTC. Dream Broadcasting System. 2003-01 dated 22 December 2003 of the Director of Bureau of Legal Affairs is hereby REVERSED and SET ASIDE. Please be advised that as a direct broadcast satellite operator. 2003 that: To address your query on whether or not the provisions of MC 10-10-2003 would have the effect of amending the provisions of MC 4-08-88 on mandatory carriage of television signals. the answer is in the negative. and the records be returned to her for proper disposition. SP No. on mandatory carriage of television broadcast signals. 2003. hereby directs you to immediately restore the signal of IBC-13 in your network programs. a free-to-air television. 10-10-2003. On December 20. This Commission.. 04-08-88. information. subsisting and enforceable. 2004. 2004. the BLA rendered a decision14 finding that PMSI infringed the broadcasting rights and copyright of ABS-CBN and ordering it to permanently cease and desist from rebroadcasting Channels 2 and 23. your company continues to be bound by the guidelines provided for under MC 04-08-88.16 Thus. 10-2004-0002. and taking into consideration the paramount interest of the public in general. Inc. supervision and control over all public services. which includes direct broadcast satellite operators. are mandated to strictly comply with the existing policy of NTC on mandatory carriage of television broadcast signals as provided under Memorandum Circular No. On whether Memorandum Circular No. This mandatory coverage provision under Section 6. to wit: Dear Mr. as the governing agency vested by laws with the jurisdiction. which was granted in a resolution dated February 17. the dispositive portion of which states: WHEREFORE. (Emphasis added)11 On August 26. the instant appeal is hereby GRANTED. requires all cable television system operators. specifically your obligation under its mandatory carriage provisions. Alternatively. 88092. without any notice or explanation whatsoever. Decision No. entertainment and other programs/contents. the reception. Let a copy of this Decision be furnished the Director of the Bureau of Legal Affairs for appropriate action. PMSI filed another Manifestation with the BLA that it received a letter dated July 24. it also filed with the Court of Appeals a ―Motion to Withdraw Petition. 04-08-88. the NTC explained to PMSI in a letter dated November 3. has cut-off. SP No. 2003. Memorandum of the Petition for Certiorari‖ in CA-G. your company. On December 23. 2003. 2003. 4-08-88. Section 8 thereof states: As a general rule. 2004.2 of said Memorandum Circular. SO ORDERED. 71597. 2003 from President/COO Rene Q. 2005. Accordingly. the National Telecommunications Commission (NTC) received a letter dated July 17. which was docketed as CA-G. distribution and/or transmission by any CATV/DBS operator of any television signals without any agreement with or authorization from program/content providers are prohibited. operating a direct-to-home (DTH) broadcasting system. (Emphasis added) Please be guided accordingly. entitled ―Implementing Rules and Regulations Governing Community Antenna/Cable Television (CATV) and Direct Broadcast Satellite (DBS) Services to Promote Competition in the Sector.13 On December 22. For strict compliance. until now. pursuant to existing circulars and regulations of the Commission.R. also known as the Revised Rules and Regulations Governing Cable Television System in the Philippines.R. For your guidance. to the detriment of the public. Information and Technology Transfer Bureau is also given a copy for library and reference purposes. operating in a community within the Grade “A” or “B” contours to “must-carry” the television signals of the authorized television broadcast stations.

G. argue that PMSI‘s rebroadcasting of Channels 2 and 23 is sanctioned by Memorandum Circular No. rebroadcasting Appellee‘s signals in violation of Sections 211 and 177 of the IP Code. and 2.‖ On the other hand.‖ The Director-General of the IPO correctly found that PMSI is not engaged in rebroadcasting and thus cannot be considered to have infringed ABS-CBN‘s broadcasting rights and copyright. such transmission by satellite is also ‗broadcasting‘ where the means for decrypting are provided to the public by the broadcasting organization or with its consent. After a careful review of the facts and records of this case.18that Memorandum Circular No. 2005. this petition. SP No.6). SP No.20 Section 202. the Court of Appeals ordered the consolidation of CA-G. we affirm the findings of the DirectorGeneral of the IPO and the Court of Appeals. ABS-CBN contends that PMSI‘s unauthorized rebroadcasting of Channels 2 and 23 is an infringement of its broadcasting rights and copyright under the Intellectual Property Code (IP Code). Section 202. The means for decrypting are provided to the public by the broadcasting organization or with its consent. authorize or prevent the public performance of the work (Section 177. The transmission by satellite for the public reception of sounds or of images or of representations thereof where the means for decrypting are provided to the public by the broadcasting organization or with its consent. hence. 04-08-88 excludes DTH satellite television operators. On November 14.R. The transmission is for public reception. There is no merit in ABS-CBN‘s contention that PMSI violated its broadcaster‘s rights under Section 211 of the IP Code which provides in part: Chapter XIV BROADCASTING ORGANIZATIONS Sec. 90762 since it found no need to exercise its power of contempt.On July 18. on the other hand. the Court of Appeals sustained the findings of the Director-General of the IPO and dismissed both petitions filed by ABS-CBN. thus: That the Appellant‘s [herein respondent PMSI] subscribers are able to view Appellee‘s [herein petitioner ABS-CBN] programs (Channels 2 and 23) at the same time that the latter is broadcasting the same is undisputed. 2006. The elements of such category are as follows: 1. the Court of Appeals issued a temporary restraining order.R. 90762 without requiring respondents to file comment. 88092 and 90762.R. Respondents.7). rebroadcasting as defined in Article 3(g) of the International Convention for the Protection of Performers. and that the Court of Appeals correctly dismissed CA-G.7 of the IP Code defines broadcasting as ―the transmission by wireless means for the public reception of sounds or of images or of representations thereof. 14 . and other communication to the public of the work (Section 177. 3. The transmission is through satellite. Scope of Right. Thereafter. authorize or prevent any of the following acts: 211. that the Court of Appeals‘ interpretation of the must-carry rule violates Section 9 of Article III19 of the Constitution because it allows the taking of property for public use without payment of just compensation. 2. It is under the second category that Appellant‘s DTH satellite television service must be examined since it is satellite-based. may be arrived at. The rebroadcasting of their broadcasts.1. to wit: 1. 04-08-88.Subject to the provisions of Section 212. that the Court of Appeals erred in dismissing the petition for contempt docketed as CA-G. otherwise known as the 1961 Rome Convention.7 of the IP Code. broadcasting organizations shall enjoy the exclusive right to carry out. The transmission by wireless means for the public reception of sounds or of images or of representations thereof. ABSCBN filed a petition for contempt against PMSI for continuing to rebroadcast Channels 2 and 23 despite the restraining order. . 21 is ―the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization. In the assailed Decision dated July 12. The case was docketed as CA. The question however is. would the Appellant in doing so be considered engaged in broadcasting. provides two instances wherein there is broadcasting. 90762. It is only the presence of all the above elements can a determination that the DTH is broadcasting and consequently.7 of the IP Code states that broadcasting means ―the transmission by wireless means for the public reception of sounds or of images or of representations thereof. xxxx Neither is PMSI guilty of infringement of ABS-CBN‘s copyright under Section 177 of the IP Code which states that copyright or economic rights shall consist of the exclusive right to carry out. SP Nos. SP No. There is transmission of sounds or images or of representations thereof.‖ Section 202. of which the Republic of the Philippines is a signatory.17 ABS-CBN‘s motion for reconsideration was denied. thus. such transmission by satellite is also ‗broadcasting‘ where the means for decrypting are provided to the public by the broadcasting organization or with its consent.R. and 4. 211. 2005. Producers of Phonograms and Broadcasting Organizations. that the must-carry rule under the Memorandum Circular is a valid exercise of police power.

In the case at hand. limits the recipients to those who are connected. cable operators can retransmit both domestic and foreign over the air broadcasts simultaneously to their subscribers without permission from the broadcasting organizations or other rightholders and without obligation to pay remuneration. that is via satellite. Insofar as Channels 2 and 23 are concerned. One only has to have a receiver.‖ as described in the Working Paper. Appellant did not make and transmit on its own but merely carried the existing signals of the Appellee. and investment in.25 (Emphasis xxxx added) This Office also finds no evidence on record showing that the Appellant has provided decrypting means to the public indiscriminately. it cannot be said that it is engaged in rebroadcasting Channels 2 and 23. ABS-CBN creates and transmits its own signals. and in case of television signals. one is not required to subscribe or to pay any fee. The use of wire in transmitting signals. 184. which is punitive in fact. they might be unaltered or altered. in wire-based transmissions. particularly in so-called ―shadow zones. When a radio or television program is being broadcast.Accordingly. In general. PMSI does not produce. Limitations on Copyright. thus. it is not enough that one wants to be connected and possesses the equipment. this protection does not extend to cable retransmission. select. cable operators now The only limitation to such dispersal of signals in the air is the technical capacity of the transmitters often receive signals from satellites before retransmitting them in an unaltered form to their and other equipment employed by the broadcaster. the term “retransmission” seems to be reserved for such undiscriminating as long as it [is] within the range of the transmitter and equipment of the transmissions which are both simultaneous and unaltered. The retransmission of ABS-CBN‘s signals by PMSI – which functions essentially as a cable television – does not therefore constitute rebroadcasting in violation of the former‘s intellectual property rights under the IP Code. Appellant is not the origin nor does it claim to be the origin of the programs broadcasted by the Appellee. On this score. The definition of broadcasting. PMSI does not perform the functions of a broadcasting organization.‖ The Working Paper23 prepared by the Secretariat of the Standing Committee on Copyright and Related Rights defines broadcasting organizations as ―entities that take the financial and editorial responsibility for the selection and arrangement of. It remains that the Appellant‘s transmission of signals via its DTH satellite television service cannot be 49. Clearly.‖ or to distribute the signals in large buildings or building complexes. this is merely a business strategy or decision and not an inherent limitation when transmission is through cable. the nature of broadcasting is to scatter the signals in its widest area of coverage as Furthermore. it does not pass itself off as the origin or author of such programs. The service provider. such as cable television companies may choose its subscribers. Accordingly. rebroadcasting is ―the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization. this Office is of the view that the transmission contemplated under Section 202. The Director-General of the IPO and the Court of Appeals also correctly found that PMSI‘s services are similar to a cable television system because the services it renders fall under cable ―retransmission. PMSI merely carries such signals which the viewers receive in its unaltered form. the rebroadcasted program is attributed to the rebroadcaster. cable retransmission can be either simultaneous with the broadcast over-the-air or delayed (deferred transmission) on the basis of a fixation or a reproduction of a fixation.‖24 Evidently. In the early days of cable television. would not qualify as a broadcasting organization because it does not have the aforementioned responsibilities imposed upon broadcasting organizations. Accordingly. this Office finds that there is no rebroadcasting on the part of the Appellant of the Appellee‘s programs on Channels 2 and 23. wherein it is required that the transmission is wireless. the transmitted content. When Appellant‘s subscribers view Appellee‘s programs in Channels 2 and 23. a program that is broadcasted is attributed to the broadcaster. the signals are scattered or dispersed in the air. transmitter to limit its coverage. it was mainly used to improve signal reception. It must be emphasized that the law on copyright is not absolute. 22 Under the Rome Convention. With regard to its premium channels. however. In the same manner. does not diminish the fact that it operates and functions as a cable television. There is no restriction as to its number. however. such as ABS-CBN. the burden of proving the existence of the elements constituting the acts punishable rests on the shoulder of the complainant. and to tune-in to the right channel/frequency. they know that the origin thereof was the Appellee. it buys the channels from content providers and transmits on an as-is basis to its viewers. Hence. Considering the nature of this case. In principle. it can be retransmitted to new audiences by means of cable or wire. it is imperative to discern the nature of broadcasting. PMSI Thus. such as cable television. 184. When a broadcaster transmits. type or class of recipients. for example through replacement of commercials. Anybody may pick-up these signals. considered within the purview of broadcasting. a television set. While the broadcaster may use a less powerful subscribers through cable. The Rome Convention does not grant rights against unauthorized cable retransmission. or determine the programs to be shown in Channels 2 and 23. Aptly. Notwithstanding the provisions of Chapter V. the undiscriminating dispersal of signals in the air is possible only through wireless means. Apparently.7 of the IP Code presupposes that the origin of the signals is the broadcaster. all the more supports this discussion. That the medium through which the Appellant carries the Appellee‘s signal. possible.1. to wit: (G) Cable Retransmission 47. To receive the signals. With improvements in technology. as defined under the Rome Convention. x x x Without such a right. The IP Code provides that: Sec. PMSI merely retransmits the same in accordance with Memorandum Circular 04-08-88. Unlike wireless transmissions. broadcaster. Likewise. the following acts shall not constitute infringement of copyright: 15 . it may be said that making public means that accessibility is etc. while the Rome Convention gives broadcasting organizations the right to authorize or prohibit the rebroadcasting of its broadcast. 48.

and it explains why certain products of ingenuity that are concealed from the public are outside the pale of protection afforded by the law. by the National Library or by educational. alteration or repeal by the Congress when the common good so requires. 04-08-88 is under the direction and control of the government though the NTC which is vested with exclusive jurisdiction to supervise. . to amendment by Congress in accordance with the constitutional provision that ―any such franchise or right granted . Airwave frequencies have to be allocated as there are more individuals who want to broadcast than there are frequencies to assign.30 Indeed. Section 4 of which similarly states that it ―shall provide adequate public service time to enable the government. of the Phils. promote public participation such as in community programming.33 and 2434 of Article II on the Declaration of Principles and State Policies. among other things. sports event and entertainment programs other than those provided for by mass media and afforded television programs to attain a well informed. is licensed by the government. 31 Indeed. 8630. Section 1 of which authorizes it ―to construct.35 ABS-CBN was granted a legislative franchise under Republic Act No. shall provide at all times sound and balanced programming and assist in the functions of public information and education. which is paramount.‖ xxxx [T]he 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. COMELEC. shall be subject to amendment. radio and television broadcasting facilities. provide at all times sound and balanced programming.36 the Court held that a franchise is a mere privilege which may be reasonably burdened with some form of public service. This is the essence of intellectual property laws. promote public participation such as in community programming. as the national information highway to the countryside. to reach the population on important public issues. regulate and control telecommunications and broadcast services/facilities in the Philippines. assist in the functions of public information and education x x x. broadcast stations may be required to give free air time to candidates in an election. A franchise is thus a privilege subject. Inc. after due process. assist in the functions of public information and education x x x. to communicate only their own views on public issues.‖ Nor indeed can there be any constitutional objection to the requirement that broadcast stations give free air time.29 The Court of Appeals likewise correctly observed that: Further. This is for the first time that we have a structure that works to accomplish explicit state policy goals. & Broadcast Attys. not the right of the broadcasters. to encourage a larger and more effective use of communications. XII. writes: 16 . people. whether by radio or by television stations. as public safety and interest may require. as correctly observed by the Court of Appeals. particularly the voters.‖ Section 4 thereof mandates that it ―shall provide adequate public service time to enable the government. For this purpose. v.‖ What better measure can be conceived for the common good than one for free air time for the benefit not only of candidates but even more of the public. private respondent and other TV station owners. and to maintain effective competition among private entities in these activities whenever the Commission finds it reasonably feasible.xxxx (h) The use made of a work by or under the direction or control of the Government. well-versed and culturally refined citizenry and enhance their socio-economic growth: WHEREAS.27 As correctly observed by the Director-General of the IPO: Accordingly.28 to wit: The Filipino people must be given wider access to more sources of news. It also explains why the author or the creator enjoys no more rights than are consistent with public welfare. education.‖ Section 5.‖ In Telecom. 436. local and overseas. there are responsible scholars who believe that government controls on broadcast media can constitutionally be instituted to ensure diversity of views and attention to public affairs to further the system of free expression. scientific or professional institutions where such use is in the public interest and is compatible with fair use. Professor Cass R.. and to permit on the air only those with whom they agreed – contrary to the state policy that the (franchise) grantee like the petitioner. 7966. television and radio broadcasting in and throughout the Philippines x x x. paragraph 2 of the same law provides that ―the radio spectrum is a finite resource that is a part of the national patrimony and the use thereof is a privilege conferred upon the grantee by the State and may be withdrawn anytime. operate and maintain. for commercial purposes and in the public interest. to reach the population on important public issues. . provide at all times sound and balanced programming. Art. Thus. in urging reforms in regulations affecting the broadcast industry. cable television (CATV) systems could support or supplement the services provided by television broadcast facilities. The carriage of ABS-CBN‘s signals by virtue of the must-carry rule in Memorandum Circular No.‖ PMSI was likewise granted a legislative franchise under Republic Act No. information. through the said broadcasting stations. Thus: All broadcasting. the must-carry rule as well as the legislative franchises granted to both ABS-CBN and PMSI are in consonance with state policies enshrined in the Constitution. through the said broadcasting stations. 4-08-88 falls under the foregoing category of limitations on copyright. provisions for COMELEC Time have been made by amendment of the franchises of radio and television broadcast stations and. specifically Sections 9. such provisions had not been thought of as taking property without just compensation. until the present case was brought. §11 of the Constitution authorizes the amendment of franchises for ―the common good.32 17. so that they will be fully informed of the issues in an election? ―[I]t is the right of the viewers and listeners. intellectual property protection is merely a means towards the end of making society benefit from the creation of its men and women of talent and genius. Even in the United States. the ―Must-Carry Rule‖ under NTC Circular No. This Office agrees with the Appellant [herein respondent PMSI] that the ―Must-Carry Rule‖ is in consonance with the principles and objectives underlying Executive Order No. Sunstein of the University of Chicago Law School.26 The imposition of the must-carry rule is within the NTC‘s power to promulgate rules and regulations.

television is a business.49 The rationale behind its issuance can be found in the whereas clauses which state: 17 . thus allowing its customers to go beyond the limits of ―Free TV and Cable TV. Appellee‘s [herein petitioner ABS-CBN] broadcast signals can reach almost every corner of the archipelago. and extrapolate the effects of the rule. it chooses to maintain regional stations. Other broadcasting organizations with free-to-air signals such as GMA-7. PMSI‘s carriage of Channels 2 and 23 is material in arriving at the ratings and audience share of ABS-CBN and its programs. the availability of its signals allegedly enhances PMSI‘s attractiveness to potential customers. x x x37 There is likewise no merit to ABS-CBN‘s claim that PMSI‘s carriage of its signals is for a commercial purpose. one of ABS-CBN‘s responsibilities is to scatter its signals to the widest area of coverage as possible. RPN-9. ABS-CBN presented no substantial evidence to prove that PMSI carried its signals for profit. ABC-5. we find that the Court of Appeals correctly upheld the decision of the IPO Director-General that PMSI did not infringe on ABS-CBN‘s intellectual property rights under the IP Code. and AXN. which are given franchises.48 as in the instant case. statistical data or information have been submitted in evidence. The complainant has the burden of proving by substantial evidence the allegations in the complaint. In the case of PMSI.45 The Director-General correctly observed. the exercise of the privilege may reasonably be burdened with the performance by the grantee of some form of public service. regional stations and the Metro Manila station will benefit the public as such competition will most as well as from direct sales. this Office finds the rule more burdensome on the part of the cable television companies. No payment is required to view the said channels42 because these broadcasting networks do not generate revenue from subscription from number of Appellant‘s subscribers in one region as compared to non-subscribing television owners.‖43 It does not advertise itself as a local channel carrier because these local channels can be viewed with or without DTH television. if this Office is to engage in conjecture. cable and DTH television earn revenues from viewer subscription.44 Moreover.[39] no studies. it offers its customers premium paid channels from content providers like Star Movies. The latter carries the television signals and shoulders the costs without any recourse of charging. There is no merit to ABS-CBN‘s argument that PMSI‘s carriage of Channels 2 and 23 resulted in competition between its Metro Manila and regional stations. and is not equivalent to proof. ABS-CBN is free to decide to pattern All told. likely result in the production of better television programs. It prevents cable television companies from excluding broadcasting organization especially in those places not reached by signal. or that such carriage adversely affected the business operations of its regional stations. and in the interest of stability of the governmental structure. it cannot impose this kind of programming on the regional viewers who are also entitled to the free-to-air channels. Relevantly. Administrative charges cannot be based on mere speculation or conjecture. are afforded great weight by the courts. 38 or that the unauthorized carriage of its signals by PMSI has created competition between its Metro Manila and regional stations. that its being the country‘s top broadcasting company.41 its regional programming in accordance with perceived demands of the region. The right of the viewers and listeners to the most diverse choice of programs available is paramount. They carry even more weight when the Court of Appeals affirms the factual findings of a lower fact-finding body. Jack TV. In fact. radio and television broadcasting companies. That the ―MustCarry Rule‖ adversely affects the profitability of maintaining such regional stations since there will be competition between them and its Metro Manila station is speculative and an attempt to Anyone in the country who owns a television set and antenna can receive ABS-CBN‘s signals for free. is a business decision. the signals that are carried by cable television companies are dispersed and scattered by the television stations and anybody with a television set is free to pick them up. There was not even a showing on part of the Appellee the IBC-13 can likewise be accessed for free. the rule prevents cable television companies from depriving viewers in far-flung areas the enjoyment of programs available to city viewers. On the other hand. In any event. however. Since a franchise is a mere privilege. These ratings help commercial advertisers and producers decide whether to buy airtime from the network. they are conclusive. should not be disturbed. however. Indeed. Section 6. It must be emphasized that.xxxx In truth.40 Mere allegation is not evidence. as a national broadcasting organization. That it should limit its signal reach for the sole purpose of gaining profit for its regional stations undermines public interest and deprives the viewers of their right to access to information. That in spite of such capacity. such carriage of signals takes up channel space which can otherwise be utilized for other premium paid channels. among others. As discussed above. such competition between the their viewers but from airtime revenue from contracts with commercial advertisers and producers. the carriage of free-to-air signals imposes a burden to cable and DTH television providers such as PMSI. do not own the airwaves and frequencies through which they transmit broadcast signals and images. They are merely given the temporary privilege of using them.‖46 In contrast. There is likewise no merit to ABS-CBN‘s contention that the Memorandum Circular excludes from its coverage DTH television services such as those provided by PMSI. and in the absence of substantial showing that such findings are made from an erroneous estimation of the evidence presented. Star World. The findings of facts of administrative bodies charged with their specific field of expertise. PMSI uses none of ABS-CBN‘s resources or equipment and carries the signals and shoulders the costs without any recourse of charging. Thus. the factual findings of the Court of Appeals are conclusive on the parties and are not reviewable by the Supreme Court. Except for the testimonies of its witnesses. 47 Moreover.2 of the Memorandum Circular requires all cable television system operators operating in a community within Grade ―A‖ or ―B‖ contours to carry the television signals of the authorized television broadcast stations. Appellant‘s DTH satellite television services is of limited subscription. With its enormous resources and vaunted technological capabilities. On the other hand. the welfare of the people must not be sacrificed in the pursuit of profit. thus: The ―Must-Carry Rule‖ favors both broadcasting organizations and the public. the must-carry rule is actually advantageous to the broadcasting networks because it provides them with increased viewership which attracts commercial advertisers and producers. Also.

88092 and ordered the dismissal of both petitions. the question of constitutionality must be raised at the earliest opportunity so that if not raised in the pleadings. 90762. regulations and guidelines. Cable Television Systems or Community Antenna Television (CATV) have shown their ability to offer additional programming and to carry much improved broadcast signals in the remote areas. 88092.R. International Communication Corporation. Whereas. for PMSI‘s alleged disobedience to the Resolution and Temporary Restraining Order. In Eastern Telecommunications Philippines. It bears stressing that the proceedings for punishment of indirect contempt are criminal in nature. hence. ordinarily it may not be raised in the trial.60 we held: We decline to rule on the issue of constitutionality as all the requisites for the exercise of judicial review are not present herein. and is necessary to a determination of the case. both dated July 18. Whereas. the national government supports the promotes the orderly growth of the Cable Television industry within the framework of a regulated fee enterprise. it will not be considered on appeal.59 In Philippine Veterans Bank v. v. while the Memorandum Circular refers to cable television. economic. The policy of the courts is to avoid ruling on constitutional questions and to 50 The records show that petitioner assailed the constitutionality of Memorandum Circular No. Consequently. being the government agency entrusted with the regulation of activities coming under its special and technical forte.Whereas. if the controversy can be settled on other grounds.R. In its December 20. Court of Appeals. SP No. the only relevance of the circular in this case is whether or not compliance therewith should be considered manifestation of Whereas. In Philippine National Bank v.54 we held: As a rule. 52 With regard to the issue of the constitutionality of the must-carry rule. The Court has consistently yielded and accorded great respect to the interpretation by administrative agencies of their own rules unless there is an error of law. abuse of power.53 In Spouses Mirasol v.62 ABS-CBN filed a verified petition before the Court of Appeals. the constitutionality of a law cannot be collaterally attacked. This presumption is based on the doctrine of separation of powers. 2005. educational information and cultural programs. whether such lack of intent is a valid defense or prohibited. complying with the requirements for filing initiatory pleadings. lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of the law. the question of constitutionality will not be passed upon by the Court unless. educational information and cultural programs. SP No. to achieve the same. One of the essential requisites for a successful judicial inquiry into constitutional questions is that the resolution of the constitutional question must be necessary in deciding the case. which can be resolved without going into the constitutionality of Memorandum Circular No. ABS-CBN argues that the Court of Appeals erred in dismissing the petition for contempt without having ordered respondents to comment on the same. the National Telecommunications Commission hereby promulgates the following rules and regulations on Cable Television Systems.56 media. and if it is. absent a clear and unmistakable showing to the contrary. pursuant to Act 3846 as amended and Executive Order 205 granting the National Telecommunications Commission the authority to set down rules and regulations in order to protect the public and promote the general welfare. thereby enriching the lives of the rest of the population through the dissemination of social. it would have us reinstate CA-G. As held by the Court of Appeals. No. the NTC explained that both DTH and cable television services are of a similar nature. This means that the measure had first been carefully studied by the legislative and executive departments and found to be in accord with the Constitution before it was finally enacted and approved. To doubt is to sustain. it is clear that DTH television should be deemed covered by the Memorandum Circular. we find that the dismissal of the petition for contempt filed by ABS-CBN is in order.51 we held: The NTC. the Court finds that its resolution is not necessary in the disposition of the instant case. 04-08-88. A law is deemed valid unless declared null and void by a competent court. It ruled on the merits of CA-G. They can carry broadcast signals to the remote areas and possess the capability to enrich the lives of the residents thereof through the dissemination of social. 90762 and order respondents to show cause why they should not be held in contempt. which was docketed CA G. it should be understood as to include DTH television which provides essentially the same services. at the first opportunity. 2002 letter. the cable TV industry is made part of the broadcast against the complaint of petitioner.R. issued in CA-G. it is properly raised and presented in an appropriate case. adequately argued. 04-0888 by way of a collateral attack before the Court of Appeals. Court of Appeals. Indirect contempt may either be initiated (1) motu proprio by the court by issuing an order or any other formal charge requiring the respondent to show cause why he should not be punished for contempt or (2) by the filing of a verified petition. The policy of the Memorandum Circular is to carry improved signals in remote areas for the good of the general public and to promote dissemination of information. The modes of procedure and rules of evidence adopted in contempt proceedings are similar in 18 . public interest so requires that monopolies in commercial mass media shall be regulated lack of intent to commit infringement.x x x61 Finally. Inc. Consequently.57 we ruled that for reasons of public policy. Palma. and possessing the necessary rule-making power to implement its objectives.58 As a general rule. the courts will not resolve the constitutionality of a law. after the cases were consolidated. and if not raised in the trial court. presume that the acts of the political departments are valid. the only difference being the medium of delivering such services.55 The instant case was instituted for violation of the IP Code and infringement of ABS-CBN‘s broadcasting rights and copyright. However. economic. In line with this policy. Notwithstanding the different technologies employed. which is a hallmark of a democratic society. more so when the issue has not been duly pleaded in the trial court. is in the best position to interpret its own rules. both DTH and cable television have the ability to carry improved signals and promote dissemination of information because they operate and function in the same way. particularly where the issue of constitutionality is the very lis mota presented. SP No. the Court of Appeals did not require PMSI to comment on the petition for contempt. Specifically.R.

Where the issues have become moot. there is no justiciable controversy. and the December 11. the issue has been rendered moot in light of our ruling on the merits. thereby rendering the resolution of the same of no practical use or value.nature to those used in criminal prosecutions. are AFFIRMED. SO ORDERED.R. SP Nos. the petition is DENIED. The July 12. 64 WHEREFORE. 2006 Resolution denying the motion for reconsideration. 63 While it may be argued that the Court of Appeals should have ordered respondents to comment. To order respondents to comment and have the Court of Appeals conduct a hearing on the contempt charge when the main case has already been disposed of in favor of PMSI would be circuitous. 88092 and 90762. sustaining the findings of the Director-General of the Intellectual Property Office and dismissing the petitions filed by ABS-CBN Broadcasting Corporation. 19 . 2006 Decision of the Court of Appeals in CAG.

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