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Microsoft Corp. vs.

Hwang
Citation: G.R. No. 147043, June 21, 2005 Topic: Infringement

Facts of the case:

Microsoft Corporation ("Microsoft"), a Delaware, United States corporation, owns the


copyright and trademark to several computer software. Beltron Computer Philippines, Inc.
("Beltron") and Taiwan Machinery Display & Trade Center, Inc. ("TMTC") are domestic
corporations.

In May 1993, Microsoft and Beltron entered into a Licensing Agreement ("Agreement").
Under Section 2(a) of the Agreement, as amended in January 1994, Microsoft authorized
Beltron, for a fee, to:

(1) reproduce and install no more than one (1) copy of Microsoft software on each
Customer System hard disk or Read Only Memory ("ROM")

(2) distribute directly or indirectly and license copies of the Product in object code form to
end users

The Agreement also authorized Microsoft and Beltron to terminate the contract if the other
fails to comply with any of the Agreements provisions. Microsoft terminated the
Agreement effective 22 June 1995 for Beltrons non-payment of royalties.

Afterwards, Microsoft learned that Beltron were illegally copying and selling Microsoft
software. Consequently, Microsoft, through its Philippine agent, hired the services of
Pinkerton Consulting Services ("PCS"), a private investigative firm. Microsoft also sought
the assistance of the National Bureau of Investigation ("NBI").

On 10 November 1995, a PCS employee and an NBI agent posing as representatives of


a computer shop, bought computer hardware (central processing unit ("CPU") and
computer monitor) and software (12 computer disks ("CDs") in read-only memory
("ROM") format) from Beltron. The CPU contained pre-installed Microsoft Windows 3.1
and MS-DOS software. The 12 CD-ROMs, encased in plastic containers with Microsoft
packaging, also contained Microsoft software. At least two of the CD-ROMs were
"installers," so-called because they contain several software (Microsoft only or both
Microsoft and non- Microsoft). The PCS employee and the NBI agent were not given the
Microsoft end-user license agreements, users manuals, registration cards or certificates
of authenticity for the articles they purchased. The receipt issued to them for the CPU and
monitor bore the heading "T.M.T.C. (PHILS.) INC. BELTRON COMPUTER."

The NBI searched the premises of Beltron and TMTC and seized several computer-
related hardware, software, accessories, and paraphernalia based on the search warrant
applied by Microsoft.
Based on the articles obtained from Beltron and TMC, Microsoft and a certain Lotus
Development Corporation ("Lotus Corporation") charged Beltron and TMC before the
Department of Justice ("DOJ") with copyright infringement under Section 5(A) in relation
to Section 29 of Presidential Decree No. 49, as amended, ("PD 49") and with unfair
competition under Article 189(1) of the Revised Penal Code. Microsoft alleged that
respondents illegally copied and sold Microsoft software.

Issues :

Whether or not Beltron and TMC are liable for copyright infringement and unfair
competition?

Held :

The gravamen of copyright infringement is not merely the unauthorized "manufacturing"


of intellectual works but rather the unauthorized performance of any of the acts covered
by Section 5. Hence, any person who performs any of the acts under Section 5 without
obtaining the copyright owners prior consent renders himself civilly and criminally liable
for copyright infringement.

Infringement of a copyright is a trespass on a private domain owned and occupied by the


owner of the copyright, and, therefore, protected by law, and infringement of copyright, or
piracy, which is a synonymous term in this connection, consists in the doing by any
person, without the consent of the owner of the copyright, of anything the sole right to do
which is conferred by statute on the owner of the copyright.

Significantly, under Section 5(A), a copyright owner is vested with the exclusive right to
"copy, distribute, multiply, [and] sell" his intellectual works.

The elements of unfair competition under Article 189(1)43 of the Revised Penal Code are:

(a) That the offender gives his goods the general appearance of the goods of another
manufacturer or dealer;
(b) That the general appearance is shown in the

(1) goods themselves, or in the


(2) wrapping of their packages, or in the (3) device or words therein, or in
(4) any other feature of their appearance

(c) That the offender offers to sell or sells those goods or gives other persons a chance
or opportunity to do the same with a like purpose[; and]
(d) That there is actual intent to deceive the public or defraud a competitor.
The element of intent to deceive may be inferred from the similarity of the goods or their
appearance.

Bayanihan Music Phils., Inc. vs. BMG Records

Citation: G.R. No. 166337, March 7, 2005

Facts of the case:

On July 16, 1973, private respondent Jose Mari Chan (Chan) entered into a contract with
petitioner Bayanihan Music Philippines, Inc. (Bayanihan), whereunder the former
assigned to the latter all his rights, interests and participation over his musical composition
"Can We Just Stop and Talk A While". On March 11, 1976, the parties entered into a
similar contract over Chan's other musical composition entitled "Afraid For Love To Fade".

Jose Mari Chan (Chan) entered into a contract with Bayanihan Music Philippines, Inc.
(Bayanihan), whereunder the former assigned to the latter all his rights, interests and
participation over his musical composition "Can We Just Stop and Talk A While". Three
years after the parties entered into a similar contract over Chan's other musical
composition entitled "Afraid For Love To Fade".

On the strength of the abovementioned contracts, Bayanihan applied for and was granted
by the National Library a Certificate of Copyright Registration for each of the two musical
compositions.Apparently, without the knowledge and consent of petitioner Bayanihan,
Chan authorized BMG Records (BMG) to record and distribute the aforementioned
musical compositions in a then recently released album of singer Lea Salonga.

Bayanihan informed Chan and BMG of its existing copyrights over the subject musical
compositions and the alleged violation of such right by the two. Demands were made on
both to settle the matter with Bayanihan. However no settlement was reached by the
parties.

Hence, Bayanihan filed a against Chan and BMG for violation of Section 216 of Republic
Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines, with
a prayer for the issuance of Temporary Restraining Order (TRO) and/or writ of preliminary
injunction, enjoining respondent BMG from further recording and distributing the subject
musical compositions in whatever form of musical products, and Chan from further
granting any authority to record and distribute the same musical compositions.

BMG Arguments:
(1) the acts of recording and publication sought to be enjoined had already been
consummated, thereby rendering moot Bayanihan's prayer for TRO and/or preliminary
injunction;
(2) there is no clear showing that petitioner Bayanihan would be greatly damaged by the
refusal of the prayed for TRO and/or preliminary injunction.

Chan Arguments:
(1) it was never his intention to divest himself of all his rights and interest over the musical
compositions in question;
(2) the contracts he entered into with Bayanihan are mere music publication agreements
giving Bayanihan, as assignee, the power to administer his copyright over his two songs
and to act as the exclusive publisher thereof;
(3) he was not cognizant of the application made by and the subsequent grant of
copyrights to Bayanihan;
(4) Bayanihan was remissed in its obligations under the contracts because it failed to
effectively advertise his musical compositions for almost twenty (20) years, hence, he
caused the rescission of said contracts in 1997.

Issues

Whether or not Bayanihan as assignee of the copyrights over the musical compositions
in question has a clear legal right to a writ of preliminary injunction?

Held

No, Bayanihan has no right for right for injunction over the subject musical compositions.

The issuance of an injunctive writ if the following requisites provided for by law are:
(1) there must be a right in esse or the existence of a right to be protected;

(2) the act against which the injunction is to be directed is a violation of such right, the
trial court threaded the correct path in denying petitioner's prayer therefor.

Chan, the composer and author of the lyrics of the two (2) songs, is protected by the mere
fact alone that he is the creator thereof, conformably with Republic Act No. 8293,
otherwise known as the Intellectual Property Code, Section 172.2 of which reads:

172.2. Works are protected by the sole fact of their creation, irrespective of their mode or
form of expression, as well as of their content, quality and purpose.
The copyrights obtained by Bayanihan on the basis of the selfsame two (2) contracts,
suffice it to say 'that such purported copyrights are not presumed to subsist in accordance
with Section 218[a] and [b], of the Intellectual Property Code, because respondent Chan
had put in issue the existence thereof. `

PHILIP MORRIS, INC., BENSON & HEDGES (CANADA), INC., and FABRIQUES DE
TABAC REUNIES, S.A., (now known as PHILIP MORRIS PRODUCTS S.A.), Petitioners,
vs. FORTUNE TOBACCO CORPORATION, Respondent.

Citation : G.R. No. 158589 June 27, 2006

Facts of the case:

Petitioner Philip Morris, Inc., a corporation organized under the laws of the State of
Virginia, United States of America, is, per Certificate of Registration No. 18723 issued on
April 26, 1973 by the Philippine Patents Office (PPO), the registered owner of the
trademark "MARK VII" for cigarettes. Similarly, petitioner Benson & Hedges (Canada),
Inc., a subsidiary of Philip Morris, Inc., is the registered owner of the trademark "MARK
TEN" for cigarettes as evidenced by PPO Certificate of Registration No. 11147. And as
can be seen in Trademark Certificate of Registration No. 19053, another subsidiary of
Philip Morris, Inc., the Swiss company Fabriques de Tabac Reunies, S.A., is the assignee
of the trademark "LARK," which was originally registered in 1964 by Ligget and Myers
Tobacco Company. On the other hand, respondent Fortune Tobacco Corporation, a
company organized in the Philippines, manufactures and sells cigarettes using the
trademark "MARK."

The legal dispute between the parties started when the herein petitioners, on the claim
that an infringement of their respective trademarks had been committed, filed, on August
18, 1982, a Complaint for Infringement of Trademark and Damages against respondent
Fortune Tobacco Corporation, docketed as Civil Case No. 47374 of the Regional Trial
Court of Pasig, Branch 166.
Issue:

(1) whether or not petitioners, as Philippine registrants of trademarks, are entitled to


enforce trademark rights in this country; and

(2) whether or not respondent has committed trademark infringement against petitioners
by its use of the mark "MARK" for its cigarettes, hence liable for damages.

Held:

1. No. registrants or ordinary users, like respondent. But while petitioners enjoy the
statutory presumptions arising from

such registration, i.e., as to the validity of the registration, ownership and the exclusive
right to use the registered marks, they may not successfully sue on the basis alone of
their respective certificates of registration of trademarks. For, petitioners are still foreign
corporations. As such, they ought, as a condition to availment of the rights and privileges
vis--vis their trademarks in this country, to show proof that, on top of Philippine
registration, their country grants substantially similar rights and privileges to Filipino
citizens pursuant to Section 21-Aof R.A. No. 166.

In Leviton Industries v. Salvador, the Court further held that the aforementioned
reciprocity requirement is a condition sine qua non to filing a suit by a foreign corporation
which, unless alleged in the complaint, would justify dismissal thereof, a mere allegation
that the suit is being pursued under Section 21-A of R.A. No. 166 not being sufficient. In
a subsequent case, however, the Court held that where the complainant is a national of
a Paris Convention- adhering country, its allegation that it is suing under said Section 21-
A would suffice, because the reciprocal agreement between the two countries is
embodied and supplied by the Paris Convention which, being considered part of
Philippine municipal laws, can be taken judicial notice of in infringement suits.

2. NO . The "likelihood of confusion" is the gravamen of trademark infringement.But


likelihood of confusion is a relative concept, the particular, and sometimes peculiar,
circumstances of each case being determinative of its existence. Thus, in trademark
infringement cases, more than in other kinds of litigation, precedents must be evaluated
in the light of each particular case.
Since the word "MARK," be it alone or in combination with the word "TEN" and the Roman
numeral "VII," does not point to the origin or ownership of the cigarettes to which they
apply, the local buying public could not possibly be confused or deceived that
respondents "MARK" is the product of petitioners and/or originated from the U.S.A.,
Canada or Switzerland. And lest it be overlooked, no actual commercial use of petitioners
marks in local commerce was proven. There can thus be no occasion for the public in this
country, unfamiliar in the first place with petitioners marks, to be confused.

CANON KABUSHIKI KAISHA vs. COURT OF APPEALS

Citation: G.R. No. 120900, July 20, 2000

Facts of the case:

On January 15, 1985, private respondent NSR Rubber Corporation filed an application
for registration of the mark CANON for sandals in the Bureau of Patents, Trademarks,
and Technology Transfer (BPTTT). Canon Kabushiki Kaisha filed a Verified Notice of
Opposition alleging that it will be damaged by the registration of the trademark CANON
in the name of private respondent since they were using the same trademark for their
footwear line of products. The private respondent will also use the name Canon for its
footwear products.

Based on the records, the evidence presented by petitioner consisted of its certificates of
registration for the mark CANON in various countries covering goods belonging to class
2, paints, chemical products, toner, and dye stuff. Petitioner also submitted in evidence
its Philippine Trademark Registration No. 39398, showing its ownership over the
trademark CANON.

The BPTTT, on November 10, 1992, issued its decision dismissing the opposition of
petitioner and giving due course to NSR's application for the registration of the trademark
CANON. Canon Kabushiki Kaisha filed an appeal with the Court of Appeals that
eventually affirmed the decision of the BPTTT.

Issue:
Is the use of trademark, CANON, by the private respondent affects the business
of Canon Kabushiki Kaisha who has an existing ownership of a trademark also known as
CANON?

Held:

The Supreme Court says that ordinarily, the ownership of a trademark or


tradename is a property right that the owner is entitled to protect as mandated by the
Trademark Law. However, when a trademark is used by a party for a product in which the
other party does not deal, the use of the same trademark on the latter's product cannot
be validly objected to.

The BPTTT correctly ruled that since the certificate of registration of petitioner for
the trademark CANON covers class 2 (paints, chemical products, toner, dyestuff), private
respondent can use the trademark CANON for its goods classified as class 25 (sandals).
Clearly, there is a world of difference between the paints, chemical products, toner, and
dyestuff of petitioner and the sandals of private respondent.

The Convention of Paris for the Protection of Industrial Property, otherwise known as the
Paris Convention, of which both the Philippines and Japan, the country of petitioner, are
signatories, is a multilateral treaty that seeks to protect industrial property consisting of
patents, utility models, industrial designs, trademarks, service marks, trade names and
indications of source or appellations of origin, and at the same time aims to repress unfair
competition. We agree with public respondents that the controlling doctrine with respect
to the applicability of Article 8 of the Paris Convention is that established in Kabushi
Kaisha Isetan vs. IAC. As pointed out by the BPTTT: Regarding the applicability of Article
8 of the Paris Convention, this Office believes that there is no automatic protection
afforded an entity whose tradename is alleged to have been infringed through the use of
that name as a trademark by a local entity. To illustrate if a taxicab or bus company in
a town in the United Kingdom or India happens to use the tradename Rapid
Transportation, it does not necessarily follow that Rapid can no longer be registered in
Uganda, Fiji, or the Philippines.