NBI, Microsoft Corporation vs Hwang
on February 12, 2012

Intellectual Property – Law on Copyright – Copyright Infringement
In May 1993, Microsoft and Beltron Computer Philippines, Inc. entered into a Licensing Agreement. Under Section 2(a) of the Agreement Microsoft authorized Beltron, for a fee, to: 1. 2. Reproduce and install no more than one copy of Windows on each Customer System hard disk; Distribute directly or indirectly and license copies of Windows (reproduced as per Section 2 of the Agreement and/or acquired from an Authorized Replicator or Authorized Distributor. Their agreement allowed either party to terminate if one fails to comply with their respective obligations. Microsoft terminated the Agreement in June 1995 by reason of Beltron’s non -payment of royalties. Later, Microsoft learned that Beltron was illegally copying and selling copies of Windows. Microsoft then sought the assistance of the National Bureau of Investigation. NBI agents made some purchase from Beltron where they acquired a computer unit pre-installed with Windows, 12 windows installer CDs packed as Microsoft products. The agents were not given the end-user license agreements, user manuals, and certificates of authenticity for the products purchased. They were given a receipt which has a header of “T.M.T.C. (Phils) Inc. BELTRON COMPUTER”. TMTC stands for Taiwan Machinery Display and Trade Center. A search warrant was subsequently issued where 2,831 CDs of Windows installers, among others, were seized. Based on the items seized from Beltron, Microsoft filed a case of copyright infringement against Beltron and TMTC as well as their officers (Hwang et al) before the Department of Justice (DOJ). Beltron, in its counter-affidavit, argued the following: 1. That Microsoft’s issue with Beltron was really just to have leverage in forcing Beltron to pay the unpaid royalties; and that Microsoft should have filed a collection suit. 2. That the computer unit allegedly purchased by the NBI agents from them cannot be decisively traced as coming from Beltron because the receipt issued to the agents did not list the computer unit as one of the items bought. 3. That the 12 installers purchased by the agents which are actually listed in the receipt were not manufactured by Beltron but rather they were genuine copies purchased by TMTC from an authorized Microsoft seller in Singapore. 4. That the 2,831 installers seized from them were not a property of Beltron but rather they were left to them by someone for safekeeping.

and infringement of copyright. Being the copyright and trademark owner of Microsoft software. the articles seized from Beltron are counterfeit per se because Microsoft does not (and could not have authorized anyone to) produce such CD installers The copying of the genuine Microsoft software to produce these fake CDs and their distribution are illegal even if the copier or distributor is a Microsoft licensee. HELD: No. which is a synonymous term in this connection. There is no basis for the DOJ to rule that Microsoft must await a prior “resolution from the proper court of whether or not the Agreement is still binding between the parties. any person who performs any of the acts under Section 5 without obtaining the copyright owner’s prior consent renders himself civilly and criminally liable for copyri ght infringement. ISSUE: Whether or not the DOJ Secretary is correct. Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the copyright. the Agreement (and the alleged question on the validity of its termination) is immaterial to the determination of Beltron’s liability for . The Secretary ruled that the issue of the authority of Beltron to copy and sell Microsoft products should first be resolved in a civil suit. the gravamen of copyright infringement is not merely the unauthorized “manufacturing” of intellectual works but rather the unauthorized performance of any of the acts covered by Section 5. and. Contrary to the DOJ’s ruling. Hence. or piracy. Beltron filed a motion to quash the search warrant before the RTC that issued the same. Microsoft acted well within its rights in filing the complaint before DOJ on the incriminating evidence obtained from Beltron. Section 5 of Presidential Decree 49 enumerates the rights vested exclusively on the copyright owner. consists in the doing by any person. As far as these installer CD-ROMs are concerned. Microsoft can neither be expected nor compelled to wait until Beltron decides to sue before Microsoft can seek remedies for violation of its intellectual property rights. it was highly irregular for the DOJ to hold that Microsoft sought the issuance of the search warrants and the filing of the complaint merely to pressure Beltron to pay its overdue royalties to Microsoft. Meanwhile. without the consent of the owner of the copyright. protected by law. The RTC partially granted the quashal.” Beltron has not filed any suit to question Microsoft’s termination of the Agreement.The DOJ secretary agreed with Beltron and dismissed the case. The Court of Appeals reversed the RTC. Hence. therefore. Hwang et al did not appeal the CA decision. Microsoft appealed the decision of the DOJ secretary before the Supreme Court. of anything the sole right to do which is conferred by statute on the owner of the copyright. Furthermore.

The Supreme Court ruled in favor of Microsoft Corp. Microsoft Corp. Benito T. and The Secretary of Justice (G. entered into a Licensing Agreement where Beltron was authorized to reproduce and install no more than one copy of Microsoft software on each customer system hard disk. Velasco. Jonathan K. Alberto Chua. Benito Keh & Yvonne K.. Sophia Ong. Upon learning that Beltron was illegally copying and selling Microsoft software.. terminated the agreement for non-payment of royalties. Beltron’s defense that the box of CD installers found in their possession was only left to them for safekeeping is not tenable. distributing. Sanchez. Such replication. Deanna Chua/Taiwan Machinery Display & Trade Center. Microsoft Corp. Chua/Beltron Computer Philippines Inc. Chua. implies an intent to deceive the public. and Beltron Computer Phils. Inc. 21 June 2005) Microsoft Corp.R. Microsoft filed a complaint for copyright infringement and unfair competition with the Department of Justice. which acts were done by Beltron to the prejudice and damage of Microsoft Corp.. Judy C. multiplying and selling). and that it did not manufacture the seized software products. Alfonso Chua. secured search warrants leading to the search of Beltron’s premises which resulted in the seizure of counterfeit Microsoft software. and held that copyright infringement under the Presidential decree 49 (the Old Copyright Law) is not confined to the unauthorized “manufacturing” of intellectual works but covers the unauthorized performance of any of the acts covered by Section 05 of the said Law (i. the Supreme Court held that the counterfeit cd-roms bought from Beltron suffice to support a finding of probable cause for unfair competition under Article 189 (1) of the Revised Penal Code (now repealed by the IP Code) considering that the packaging of these products could not be distinguished from those of authentic Microsoft software. The DOJ dismissed the complaint on the ground that Beltron had no intent to defraud the public as the software products seized came from an alleged Microsoft licensee in Singapore. Hwang. Chua.  NBI-Microsoft Corporation & Lotus Development Corporation v.. Moreover.e. copying. Inc. Nancy I.copyright infringement and unfair competition. 147043. . Emily K. together with the similarity in the content of the counterfeit cd-roms. No.

method or operation. While watching the television. process. No.8. Ruling: The Supreme Court held that the format of a show is not copyrightable as provided by Section 2 of PD no. Similarly. 1971 of “Rhoda and Me” which is a dating show aired from 1970 to 1977. Petitioner filed a complaint in violation of PD No. the idea of a dating game show is a non-copyrightable material. City Prosecutor before the Department of Justice. JOAQUIN V. Apart from the manner in which it is actually expressed. Joaquin vs Drilon on February 9. of copyrightable materials as defined and enumerated in Section 2 of PD. (BJPI) was the holder of copyright over the show Rhoda and Me. and illustrated or embodied in the work. He wrote a letter to IXL’s president Gabriel Zosa informing him that BJPI has a copyright of the same format as shown on their “It’s a Date” show in their “Rhoda and Me” show. In 1991. in whole or in part. however. which is basically the same as Rhoda and Me. Zosa sought to register IXL’s copyright to theirfirst episode of “It’s a Date” to the National Library. Inc (BJPI) is a holder of a Certificate of Copyright no. He eventually sued Gabriel Zosa. concept. PD 49 enumerates the works subject to copyright protection which refers to finished works and not on concepts. Drilon reversed the findings of the fiscal and directed him to dismiss the case against Zosa. It submitted to the National Library an addendum its certificate of copyright specifying the show’s format and style of presentation. or schemes in their abstract form clearly do not fall within the class of . procedure. Issue: Whether or not the format or mechanics of the petitioner’s television show is entitled to a copyright protection. Francisco Joaquin saw on RPN Channel 9 the episode on “It’s a Date” pr oduced by IXL Productions. Respondent sought a review of the resolution from the Asst. M922 issued on January 28. concepts. 49 (Copyright Law). Ideas. It holds rights over the show’s format and style of presentation. its President. 2012 Intellectual Property – Law on Copyright – Game Show – Ideas and Concepts Not Covered by Copyright BJ Productions Inc. the manager of the show It’s a Date. Zosa later sought a review of the prosecutor’s resolution before the Secretary of Justice (Drilon). explained. The essence of copyright infringement is the copying. principles or discovery regardless of the form to which it is described. the Intellectual Property Code of the Philippines provides that format or mechanics of a television show is not included in the list of the protected work by the copyright law of the Philippines. DRILON Facts: BJ Productions. system. ISSUE: Whether or not the decision of Drilon is valid. 49 against the respondent before the RTC of Quezon City. of Justice Franklin Drilon directed to move for dismissal of the case against the respondents and denied the petitioner’s motion for reconsideration hence this petition before the Supreme Court. BJPI’s president Francisco Joaquin saw on TV RPN 9’s show It’s a Date. 49 otherwise known as the Decree on Intellectual Property which enumerates the classes of work that are covered by the copyright protection. It does not extend to an idea. HELD: Yes. Sec. formats. RA 8293.

Further. Though BJPI did provide a lot of written evidence and description to show the linkage between the shows. What is covered by BJPI’s copyright is the specific episodes of the show Rhoda and Me. 49. the same were not enough. This is based on the ruling in 20th Century Fox vs CA (though this has been qualified by Columbia Pictures vs CA. A television show includes more than mere words can describe because it involves a whole spectrum of visuals and effects. BJPI should have presented the master videotape of the show in order to show the linkage between the copyright show (Rhoda and Me) and the infringing show (It’s a Date). .works or materials susceptible of copyright registration as provided in PD. this is still good law). video and audio. No. such that no similarity or dissimilarity may be found by merely describing the general copyright/format of both dating game shows.

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