Pearl & Dean (Phil.) Inc. vs. Shoemart, Inc.

GR No. 148222 15 August 2003

FACTS:
Pearl and Dean (Phil.), Inc. (PDI) is engaged in the manufacture of advertising display units
simply referred to as light boxes. PDI was able to secure a Certificate of Copyright
Registration, the advertising light boxes were marketed under the trademark “Poster Ads”.
In 1985, PDI negotiated with defendant-appellant Shoemart, Inc. (SMI) for the lease and
installation of the light boxes in certain SM Makati and SM Cubao. PDI submitted for
signature the contracts covering both stores, but only the contract for SM Makati, however,
was returned signed. Eventually, SMI’s informed PDI that it was rescinding the contract for
SM Makati due to non-performance of the terms thereof.
Years later, PDI found out that exact copies of its light boxes were installed at different SM
stores. It was further discovered that SMI’s sister company North Edsa Marketing Inc.
(NEMI), sells advertising space in lighted display units located in SMI’s different branches.
PDI sent a letter to both SMI and NEMI enjoining them to cease using the subject light
boxes, remove the same from SMI’s establishments and to discontinue the use of the
trademark “Poster Ads,” as well as the payment of compensatory damages.
Claiming that both SMI and NEMI failed to meet all its demands, PDI filed this instant case
for infringement of trademark and copyright, unfair competition and damages.
SMI maintained that it independently developed its poster panels using commonly known
techniques and available technology, without notice of or reference to PDI’s copyright. SMI
noted that the registration of the mark “Poster Ads” was only for stationeries such as
letterheads, envelopes, and the like. Besides, according to SMI, the word “Poster Ads” is a
generic term which cannot be appropriated as a trademark, and, as such, registration of
such mark is invalid. On this basis, SMI, aside from praying for the dismissal of the case,
also counterclaimed for moral, actual and exemplary damages and for the cancellation of
PDI’s Certification of Copyright Registration, and Certificate of Trademark Registration.
The RTC of Makati City decided in favour of PDI, finding SMI and NEMI jointly and severally
liable for infringement of copyright and infringement of trademark
On appeal, however, the Court of Appeals reversed the trial court.
ISSUES:
1. Whether the the light box depicted in such engineering drawings ipso facto also
protected by such copyright.
2. Whether there was a patent infringement.
3. Whether the owner of a registered trademark legally prevent others from using
such trademark if it is a mere abbreviation of a term descriptive of his goods,
services or business?
RULING:
ON THE ISSUE OF COPYRIGHT INFRINGEMENT
The Court of Appeals correctly held that the copyright was limited to the drawings alone
and not to the light box itself.
Although petitioner’s copyright certificate was entitled “Advertising Display Units” (which
depicted the box-type electrical devices), its claim of copyright infringement cannot be
sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Accordingly, it can
cover only the works falling within the statutory enumeration or description.
Even as we find that P & D indeed owned a valid copyright, the same could have referred
only to the technical drawings within the category of “pictorial illustrations.” It could not
have possibly stretched out to include the underlying light box. The light box was not a
literary or artistic piece which could be copyrighted under the copyright law.
The Court reiterated the ruling in the case of Kho vs. Court of Appeals, differentiating
patents, copyrights and trademarks, namely:
A trademark is any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods. In
relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and
artistic works which are original intellectual creations in the literary and artistic domain
protected from the moment of their creation. Patentable inventions, on the other hand,
refer to any technical solution of a problem in any field of human activity which is new,
involves an inventive step and is industrially applicable.
ON THE ISSUE OF PATENT INFRINGEMENT
Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights
which and could not legally prevent anyone from manufacturing or commercially using the
contraption. To be able to effectively and legally preclude others from copying and
profiting from the invention, a patent is a primordial requirement. No patent, no protection.
ON THE ISSUE OF TRADEMARK INFRINGEMENT
On the issue of trademark infringement, the petitioner’s president said “Poster Ads” was a
contraction of “poster advertising.” P & D was able to secure a trademark certificate for it,
but one where the goods specified were “stationeries such as letterheads, envelopes, calling
cards and newsletters.”Petitioner admitted it did not commercially engage in or market
these goods. On the contrary, it dealt in electrically operated backlit advertising units
which, however, were not at all specified in the trademark certificate.
Assuming arguendo that “Poster Ads” could validly qualify as a trademark, the failure of P &
D to secure a trademark registration for specific use on the light boxes meant that there
could not have been any trademark infringement since registration was an essential
element thereof.
ON THE ISSUE OF UNFAIR COMPETITION
There was no evidence that P & D’s use of “Poster Ads” was distinctive or well-known. As
noted by the Court of Appeals, petitioner’s expert witnesses himself had testified that ”
‘Poster Ads’ was too generic a name. So it was difficult to identify it with any company,
honestly speaking.”This crucial admission that “Poster Ads” could not be associated with P
& D showed that, in the mind of the public, the goods and services carrying the trademark
“Poster Ads” could not be distinguished from the goods and services of other entities.
“Poster Ads” was generic and incapable of being used as a trademark because it was used in
the field of poster advertising, the very business engaged in by petitioner. “Secondary
meaning” means that a word or phrase originally incapable of exclusive appropriation with
reference to an article in the market might nevertheless have been used for so long and so
exclusively by one producer with reference to his article that, in the trade and to that
branch of the purchasing public, the word or phrase has come to mean that the article was
his property.
The petition is DENIED

E.I. DUPONT DE NEMOURS & CO. v. DIRECTOR EMMA C. FRANCISCO ,

GR No. 174379 August 31, 2016

Facts:
E.I. Dupont Nemours... is an American corporation
It is the assignee of inventors
1987
E.I. Dupont Nemours filed Philippine Patent Application No. 35526... for Angiotensin II
Receptor Blocking Imidazole (losartan)... treatment of hypertension and congestive heart
failure.
The patent application was handled by Atty. Nicanor D. Mapili (Atty. Mapili), a local
resident agent
2000
E.I. Dupont Nemours' new counsel, Ortega, Del Castillo, Bacorro, Odulio, Calma, and
Carbonell,[10] sent the Intellectual Property Office[11] a letter requesting that an office
action be issued on Philippine Patent Application No. 35526.
Patent Examiner
The reconstituted documents provided no documents that will show that the authority to
prosecute the instant application is now transferred to the present counsel.
On May 29, 2002, E.I. Dupont Nemours replied to the office action by submitting a Power of
Attorney... it also filed a Petition for Revival
In its Petition for Revival, E.I. Dupont Nemours argued that its former counsel, Atty. Mapili,
did not inform it about the abandonment of the application, and it was not aware that Atty.
Mapili had already died.
the Director of Patents denied the Petition for Revival for having been filed out of time.
the Office cannot revive the abandoned application because of the limitations provided in
Rule 115. Clearly, the Petition for Revival was filed beyond the reglementary period.
In the Decision[25] dated October 22, 2003, Director-General Emma C. Francisco denied
the appeal and affirmed the Resolution of the Director of Patents.
petitioner filed before the Court of Appeals a Petition for Review... the Court of Appeals
stated:... there is sufficient justification to relax the application of the above-cited doctrine
in this case... to afford petitioner some relief from the gross negligence committed by its
former lawyer, Atty. Nicanor D. Mapili
Therapharma, Inc. moved for leave to intervene and admit the Attached Motion for
Reconsideration... directly affects its "vested" rights to sell its own product.
Therapharma, Inc. alleged that on January 4, 2003, it filed before the Bureau of Food and
Drugs its own application for a losartan product "Lifezar," a medication for hypertension,
which the Bureau granted.
In this exchange, Merck informed Therapharma, Inc. that it was pursuing a patent on the
losartan products in the Philippines and that it would pursue any legal action necessary to
protect its product.
On January 31, 2006, the Court of Appeals issued the Resolution[35] granting the Motion
for Leave to Intervene.
On August 30, 2006, the Court of Appeals resolved both Motions for Reconsideration and
rendered the Amended Decision[39] reversing its August 31, 2004 Decision.
Court of Appeals ruled that the public interest would be prejudiced by the revival of E.I.
Dupont Nemours' application.
the revival of the application prejudiced Therapharma, Inc.'s interest
Issues:
whether the Court of Appeals erred in allowing the intervention of respondent
Therapharma, Inc. in petitioner's appeal;... whether the Court of Appeals erred in denying
petitioner's appeal for the revival of its patent application on the grounds that (a)
petitioner committed inexcusable negligence in the prosecution of its patent application;
and (b) third-party rights and the public interest would be prejudiced by the appeal;...
whether Schuartz applies to this case in that the negligence of a patent applicant's counsel
binds the applicant... whether the invention has already become part of public domain.
Ruling:
Under Chapter VII, Section 111(a) of the 1962 Revised Rules of Practice, a patent
application is deemed abandoned if the applicant fails to prosecute the application within
four months from the date of the mailing of the notice of the last action by the Bureau of
Patents, Trademarks, and Technology Transfer, and not from applicant's actual notice.
According to the records of the Bureau of Patents, Trademarks, and Technology Transfer
Chemical Examining Division, petitioner filed Philippine Patent Application No. 35526 on
July 10, 1987. It was assigned to an examiner on June 7, 1988. An Office Action was mailed
to petitioner's agent, Atty. Mapili, on July 19, 1988. Because petitioner failed to respond
within the allowable period, the application was deemed abandoned on September 20,
1988.[140] Under Section 113, petitioner had until January 20, 1989 to file for a revival of
the patent application. Its Petition for Revival, however, was filed on May 30, 2002,[141] 13
years after the date of abandonment.
Section 113 has since been superseded by Section 133.4 of the Intellectual Property Code,
Rule 930 of the Rules and Regulations on Inventions, and Rule 929 of the Revised
Implementing Rules and Regulations for Patents, Utility Models and Industrial Design. The
period of four (4) months from the date of abandonment, however, remains unchanged.
The Intellectual Property Code even provides for a shorter period of three (3) months
within which to file for revival
The rules do not provide any exception that could extend this four (4)-month period to 13
years.
Petitioner's patent application, therefore, should not be revived since it was filed beyond
the allowable period.
Even assuming that the four (4)-month period could be extended, petitioner was
inexcusably negligent in the prosecution of its patent application.
Negligence is inexcusable if its commission could have been avoided through ordinary
diligence and prudence.[142] It is also settled that negligence of counsel binds the client as
this "ensures against the resulting uncertainty and tentativeness of proceedings if clients
were allowed to merely disown their counsels' conduct."
Petitioner tries to disown Atty. Mapili's conduct by arguing that it was not informed of the
abandonment of its patent application or of Atty. Mapili's death. By its own evidence,
however, petitioner requested a status update from Atty. Mapili only on July 18, 1995, eight
(8) years after the filing of its application.[144] It alleged that it only found out about Atty.
Mapili's death sometime in March 1996, as a result of its senior patent attorney's visit to
the Philippines.
Even if Atty. Mapili's death prevented petitioner from submitting a petition for revival on
time, it was clearly negligent when it subsequently failed to immediately apprise itself of
the status of its patent application.
Contrary to the posturing of petitioner, Schuartz is applicable.
[Petitioners lost sight of the fact that the petition could not be granted because of laches.
Prior to the filing of the petition for revival of the patent application with the Bureau of
Patents, an unreasonable period of time had lapsed due to the negligence of petitioners'
counsel. By such inaction, petitioners were deemed to have forfeited their right to revive
their applications for patent.
Petitioner attempts to distinguish itself from Schuartz by arguing that the petitioners in
Schuartz had actual notice of abandonment while petitioner here was only able to have
actual notice when it received Paper No. 2.The four (4)-month period in Section 111[156]
of the 1962 Revised Rules of Practice, however, is not counted from actual notice of
abandonment but from mailing of the notice.
The right of priority given to a patent applicant is only relevant when there are two or
more conflicting patent applications on the same invention. Because a right of priority does
not automatically grant letters patent to an applicant, possession of a right of priority does
not confer any property rights on the applicant in the absence of an actual patent.
Petitioner argues that its patent application was filed on July 10, 1987, within 12 months
from the prior filing of a U.S. patent application on July 11, 1986.[158] It argues that it is
protected from becoming part of the public domain because of convention priority under
the Paris Convention for the Protection of Industrial Property and Section 9 of Republic Act
No. 165.
Under Section 31 of the Intellectual Property Code, a right of priority is given to any patent
applicant who has previously applied for a patent in a country that grants the same
privilege to Filipinos.
A patent applicant with the right of priority is given preference in the grant of a patent
when there are two or more applicants for the same invention. Section 29 of the
Intellectual Property Code provides
Since both the United States[162] and the Philippines[163] are signatories to the Paris
Convention for the Protection of Industrial Property, an applicant who has filed a patent
application in the United States may have a right of priority over the same invention in a
patent application in the Philippines.[164] However, this right of priority does not
immediately entitle a patent applicant the grant of a patent. A right of priority is not
equivalent to a patent. Otherwise, a patent holder of any member-state of the Paris
Convention need not apply for patents in other countries where it wishes to exercise its
patent.
It was, therefore, inaccurate for petitioner to argue that its prior patent application in the
United States removed the invention from the public domain in the Philippines. This
argument is only relevant if respondent Therapharma, Inc. had a conflicting patent
application with the Intellectual Property Office. A right of priority has no bearing in a case
for revival of an abandoned patent application.
The grant of a patent is to provide protection to any inventor from any patent infringement.
[165] Once an invention is disclosed to the public, only the patent holder has the exclusive
right to manufacture, utilize, and market the invention.
The grant of a patent provides protection to the patent holder from the indiscriminate use
of the invention. However, its mandatory publication also has the correlative effect of
bringing new ideas into the public consciousness. After the publication of the patent, any
person may examine the invention and develop it into something further than what the
original patent holder may have envisioned. After the lapse of 20 years,[172] the invention
becomes part of the public domain and is free for the public to use.
In addition, a patent holder of inventions relating to food or medicine does not enjoy
absolute monopoly over the patent. Both Republic Act No. 165 and the Intellectual Property
Code provide for compulsory licensing. Compulsory licensing is defined in the Intellectual
Property Code as the "grant a license to exploit a patented invention, even without the
agreement of the patent owner."
Under Republic Act No. 165, a compulsory license may be granted to any applicant three
(3) years after the grant of a patent if the invention relates to food or medicine necessary
for public health or safety.[
The patent holder's proprietary right over the patent only lasts for three (3) years from the
grant of the patent, after which any person may be allowed to manufacture, use, or sell the
invention subject to the payment of royalties
Public interest will be prejudiced if, despite petitioner's inexcusable negligence, its Petition
for Revival is granted. Even without a pending patent application and the absence of any
exception to extend the period for revival, petitioner was already threatening to pursue
legal action against respondent Therapharma, Inc. if it continued to develop and market its
losartan product, Lifezar.[192] Once petitioner is granted a patent for its losartan products,
Cozaar and Hyzaar, the loss of competition in the market for losartan products may result
in higher prices. For the protection of public interest, Philippine Patent Application No.
35526 should be considered a forfeited patent application.

DERMALINE v. MYRA PHARMACEUTICALS

GR No. 190065, August 16, 2010

Facts:
On October 21, 2006, petitioner Dermaline, Inc. (Dermaline) filed before the Intellectual
Property Office (IPO) an application for registration of the trademark "DERMALINE
DERMALINE, INC."
On May 8, 2007, respondent Myra Pharmaceuticals, Inc. (Myra) filed a Verified
Opposition[4] alleging that the trademark sought to be registered by Dermaline so
resembles its trademark "DERMALIN" and will likely cause confusion, mistake and
deception to the... purchasing public.
Issues:
The CA likewise denied Dermaline's motion for reconsideration; hence, this petition raising
the... issue of whether the CA erred in upholding the IPO's rejection of Dermaline's
application for registration of trademark.
Ruling:
In determining likelihood of confusion, case law has developed two (2) tests, the
Dominancy Test and the Holistic or Totality Test.
The Dominancy Test focuses on the similarity of the prevalent features of the competing
trademarks that might cause confusion or deception.
The important issue is... whether the use of the marks involved would likely cause
confusion or mistake in the mind of or deceive the ordinary purchaser, or one who is
accustomed to buy, and therefore to some extent familiar with, the goods in question
The test of dominancy is now explicitly incorporated into law in
Section 155.1 of R.A. No. 8293 which provides--
155.1. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant feature thereof in connection with
the sale, offering for sale, distribution, advertising of any goods or... services including
other preparatory steps necessary to carry out the sale of any goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to
deceive; (emphasis supplied)
On the other hand, the Holistic Test entails a consideration of the entirety of the marks as
applied to the products, including labels and packaging, in determining confusing
similarity.
Relative to the question on confusion of marks and trade names, jurisprudence has noted
two (2) types of confusion, viz: (1) confusion of goods (product confusion), where the
ordinarily prudent purchaser would be induced to purchase one product in the belief that
he was... purchasing the other; and (2) confusion of business (source or origin confusion),
where, although the goods of the parties are different, the product, the mark of which
registration is applied for by one party, is such as might reasonably be assumed to originate
with the... registrant of an earlier product, and the public would then be deceived either
into that belief or into the belief that there is some connection between the two parties,
though inexistent.
Further, Dermaline's stance that its product belongs to a separate and different
classification from Myra's products with the registered trademark does not eradicate the
possibility of mistake on the part of the purchasing public to associate the former with the
latter,... especially considering that both classifications pertain to treatments for the skin.
Thus, the public may mistakenly think that Dermaline is connected to or associated with
Myra, such that, considering the current proliferation of health and beauty products in the
market, the purchasers would likely be misled that Myra has already expanded its business
through
Dermaline from merely carrying pharmaceutical topical applications for the skin to health
and beauty services.
Principles:
Verily, when one applies for the registration of a trademark or label which is almost the
same or that very closely resembles one already used and registered by another, the
application should be rejected and dismissed outright, even without any opposition on the
part of the... owner and user of a previously registered label or trademark.  This is intended
not only to avoid confusion on the part of the public, but also to protect an already used and
registered trademark and an established goodwill.
ABS-CBN CORPORATION v. FELIPE GOZON,
GR No. 195956 March 11, 2015
Facts:
ABS-CBN allowed Reuters Television Service (Reuters) to air the... footages it had taken
earlier under a special embargo agreement.
ABS-CBN alleged that under the special embargo agreement, any of the footages it took
would be for the "use of Renter's international subscribers only, and shall be considered
and treated by Reuters under 'embargo' against use by other subscribers in the Philippines.
. . . [N]o... other Philippine subscriber of Reuters would be allowed to use ABS-CBN footage
without the latter's consent."
GMA-7... subscribes to both Reuters and Cable News Network (CNN). It received a live
video feed of the coverage of Angelo dela Cruz's arrival from Reuters.
GMA-7 immediately carried the live newsfeed in its program "Flash Report," together with
its live broadcast.[13] Allegedly, GMA-7 did not receive any notice or was not aware that
Reuters was airing footages of ABS-CBN.[14] GMA-7's news... control room staff saw
neither the "No Access Philippines" notice nor a notice that the video feed was under
embargo in favor of ABS-CBN.
ABS-CBN filed the Complaint for copyright infringement under Sections 177[16] and
211[17] of the Intellectual Property Code.
Assistant City Prosecutor Dindo Venturanza issued the Resolution[19] finding probable
cause to indict Dela Peñ a-Reyes and Manalastas.
Department of Justice Secretary Raul M. Gonzalez (Secretary Gonzalez) ruled in favor of...
respondents and held that good faith may be raised as a defense in the case.
Department of Justice Acting Secretary Alberto C. Agra (Secretary Agra) issued the
Resolution (Agra Resolution) that reversed the Gonzalez Resolution and found probable
cause
He ruled that:
Court of Appeals rendered the Decision granting the Petition and reversing and setting
aside the Agra Resolution.
Court of Appeals said:
However, it is an admitted fact that petitioner GMA had only aired a five (5) second footage
of the disputed live video feed that it had received from Reuters and CNN as a subscriber.
Indeed, petitioners had no notice of the right of ownership of private respondent over the...
same. Without notice of the "No Access Philippines" restriction of the live video feed,
petitioner cannot he faulted for airing a live video feed from Reuters and CNN.
Verily, as aptly opined by Secretary Gonzalez in his earlier Resolution, the act of petitioners
in airing the five (5) second footage was undeniably attended by good faith and it thus
serves to exculpate them from criminal liability under the Code.  While the
Intellectual Properly Code is a special law, and thus generally categorized as malum
prohibitum, it bears to stress that the provisions of the Code itself do not ipso facto
penalize a person or entity for copyright infringement by the mere fact that one had used
a... copyrighted work or material.
Certainly so, in the exercise of one's moral and economic or copyrights, the very provisions
of Part IV of the Intellectual Property Code provide for the scope and limitations on
copyright protection under Section 184 and in fact permit fair use of copyrighted work
under Section
185. With the aforesaid statutory limitations on one's economic and copyrights
and the allowable instances where the other persons can legally use a copyrighted
work, criminal culpability clearly attaches only when the infringement had been
knowingly and intentionally... committed.
Issues:
whether there is probable cause to charge respondents with infringement under Republic
Act No. 8293, otherwise known as the Intellectual Property Code
Third, whether there was fair use of the broadcast material;
Fourth, whether lack of knowledge that a material is copyrighted is a defense against
copyright infringement;
Fifth, whether good faith is a defense in a criminal prosecution for violation of the
Intellectual Property Code
Ruling:
V
ABS-CBN claims that news footage is subject to copyright and prohibited use of copyrighted
material is punishable under the Intellectual Property Code. It argues that the new footage
is not a "newsworthy event" but "merely an account of the arrival of Angelo dela Cruz in the
Philippines — the latter being the newsworthy event":
On the other hand, respondents argue that ABS-CBN's news footage of Angelo dela Cruz's
arrival is not copyrightable or subject to protection
Certainly, the arrival of Angelo [d]ela Cruz, which aroused public attention and the
consciousness of the Filipino people with regard to their countrymen, OFWs working in
foreign countries and how the Philippine government responds to the issues concerning
them,... is "news". There is no ingenuity or inventiveness added in the said news footage.
The news footage is copyrightable.
News or the event itself is not copyrightable. However, an event can be captured and
presented in a specific medium. As recognized by this court in Joaquin, television "involves
a whole spectrum of visuals and effects, video and audio."[95] News... coverage in television
involves framing shots, using images, graphics, and sound effects. It involves creative
process and originality. Television news footage is an expression of the news.
Pacific & Southern Co. v. Duncan,[98] which involves a News Monitoring Service's
videotaping and sale of WXIA-TVs news broadcasts:... it is equally well-settled that
copyright protection does extend to the reports themselves, as distinguished from the
substance of... the information contained in the reports.
Copyright protects the manner of expression of news reports, "the particular form or
collocation of words in which the writer has communicated it"
The idea/expression dichotomy is a complex matter if one is trying to determine whether a
certain material is a copy of another.101 This dichotomy would be more relevant in
determining, for instance, whether a stage play was an infringement of an author's book
involving the same... characters and setting. In this case, however, respondents admitted
that the material under review — which is the subject of the controversy — is an exact
copy of the original. Respondents did not subject ABS-CBN's footage to any editing of their
own. The news footage did not... undergo any transformation where there is a need to track
elements of the original.
VI
Respondents point out that upon seeing ABS-CBN's reporter Dindo Amparo on the footage,
GMA-7 immediately shut off the broadcast. Only five (5) seconds passed before the footage
was cut. They argue that this shows that GMA-7 had no prior knowledge of ABS-CBN's
ownership of the... footage or was notified of it. They claim that the Angelo dela Cruz
footage is considered a short excerpt of an event's "news" footage and is covered by fair
use.
This court defined fair use as "a privilege to use the copyrighted material in a reasonable
manner without the consent of the copyright owner or as copying the theme or ideas rather
than their expression."[115] Fair use is an exception to the copyright... owner's monopoly
of the use of the work to avoid stifling "the very creativity which that law is designed to
foster."
Determining fair use requires application of the four-factor test. Section 185 of the
Intellectual Property Code lists four (4) factors to determine if there was fair use of a
copyrighted work:
The purpose and character of the use, including whether such use is of a commercial nature
or is for non-profit educational purposes;
The nature of the copyrighted work;
The amount and substantiality of the portion used in relation to the copyrighted work as a
whole; and
The effect of the use upon the potential market for or value of the copyrighted work.
First, the purpose and character of the use of the copyrighted material must fall under
those listed in Section 185, thus: "criticism, comment, news reporting, teaching including
multiple copies for classroom use, scholarship, research, and similar purposes."[117] The
purpose and character requirement is important in view of copyright's goal to promote
creativity and encourage creation of works. Hence, commercial use of the copyrighted work
can be weighed against fair use.
The "transformative test" is generally used in reviewing the purpose and character of the
usage of the copyrighted work.[118] This court must look into whether the copy of the
work adds "new expression, meaning or message" to transform it into something... else.
[119] "Meta-use" can also occur without necessarily transforming the copyrighted work
used.[120]
Second, the nature of the copyrighted work is significant in deciding whether its use was
fair. If the nature of the work is more factual than creative, then fair use will be weighed in
favor of the user.
Third, the amount and substantiality of the portion used is important to determine whether
usage falls under fair use. An exact reproduction of a copyrighted work, compared to a
small portion of it, can result in the conclusion that its use is not fair. There may also be
cases... where, though the entirety of the copyrighted work is used without consent, its
purpose determines that the usage is still fair.121 For example, a parody using a
substantial amount of copyrighted work may be permissible as fair use as opposed to a
copy of a work produced purely... for economic gain.
Lastly, the effect of the use on the copyrighted work's market is also weighed for or against
the user. If this court finds that the use had or will have a negative impact on the
copyrighted work's market, then the use is deemed unfair.
the primary reason for copyrighting newscasts by broadcasters would seem to be to
prevent competing stations from rebroadcasting current news from the station with the
best... coverage of a particular news item, thus misappropriating a portion of the market
share.
However, there are also many caveats with these exceptions. A common exception is that
some stations rebroadcast the news of others. The caveat is that generally, the two stations
are not... competing for market share. CNN, for example, often makes news stories available
to local broadcasters.
Whether the alleged five-second footage may be considered fair use is a matter of defense.
We emphasize that the case involves determination of probable cause at the preliminary
investigation stage. Raising the defense of fair use does not automatically mean that no
infringement... was committed. The investigating prosecutor has full discretion to evaluate
the facts, allegations, and evidence during preliminary investigation. Defenses raised
during preliminary investigation are subject to further proof and evaluation before the trial
court. Given the... insufficiency of available evidence, determination of whether the Angelo
dela Cruz footage is subject to fair use is better left to the trial court where the proceedings
are currently pending.
GMA-7's rebroadcast of ABS-CBN's news footage without the latter's consent is not an
issue. The mere act of rebroadcasting without authority from the owner of the broadcast
gives rise to the probability that a crime was committed under the Intellectual Property
Code.
VII
Respondents cannot invoke the defense of good faith to argue that no probable cause
exists.
Infringement under the Intellectual Property Code is malum prohibitum. The Intellectual
Property Code is a special law. Copyright is a statutory creation
The general rule is that acts punished under a special law are malum prohibitum.[129] "An
act which is declared malum prohibitum, malice or criminal intent is completely
immaterial."
Unlike other jurisdictions that require intent for a criminal prosecution of copyright
infringement, the Philippines does not statutorily support good faith as a defense. Other
jurisdictions provide in their intellectual property codes or relevant laws that mens rea,...
whether express or implied, is an element of criminal copyright infringement.
The Intellectual Property Code requires strict liability for copyright infringement whether
for a civil action or a criminal prosecution; it does not require mens rea or culpa
Respondents argue that live broadcast of news requires a different treatment in terms of
good faith, intent, and knowledge to commit infringement. To argue this point, they rely on
the differences of the media used in Habana et al. v. Robles, Columbia Pictures v. Court of
Appeals, and this case:
Petitioner ABS-CBN argues that lack of notice that the Angelo dela Cruz was under embargo
is not a defense in copyright infringement and cites the case of Columbia Pictures vs. Court
of Appeals and Habana et al. vs. Robles (310 SCRA 511). However, these cases... refer to film
and literary work where obviously there is "copying" from an existing material so that the
copier knew that he is copying from an existing material not owned by him. But, how could
respondents know that what they are "copying was not [theirs]" when they... were not
copying but merely receiving live video feed from Reuters and CNN which they aired? What
they knew and what they aired was the Reuters live video feed and the CNN feed which
GMA-7 is authorized to carry in its news broadcast, it being a subscriber of... these
companies[.]
It is apt to stress that the subject of the alleged copyright infringement is not a film or
literary work but live broadcast of news footage. In a film or literary work, the infringer is
confronted face to face with the material he is allegedly copying and... therefore knows, or
is presumed to know, that what he is copying is owned by another. Upon the other hand, in
live broadcast, the alleged infringer is not confronted with the fact that the material he airs
or re-broadcasts is owned by another, and therefore, he... cannot be charged of knowledge
of ownership of the material by another.
Respondents' arguments must fail.
To admit a... different treatment for broadcasts would mean abandonment of a
broadcasting organization's minimum rights, including copyright on the broadcast material
and the right against unauthorized re broadcast of copyrighted material.  The nature of
broadcast technology is precisely... why related or neighboring rights were created and
developed.  Carving out an exception for live broadcasts would go against our
commitments under relevant international treaties and agreements, which provide for the
same minimum rights.
Contrary to respondents' assertion, this court in Habana,[150] reiterating the ruling in
Columbia Pictures,[151] ruled that lack of knowledge of infringement is not a valid defense.
Habana and Columbia
Pictures may have different factual scenarios from this case, but their rulings on copyright
infringement are analogous. In Habana, petitioners were the authors and copyright owners
of English textbooks and workbooks. The case was anchored on the protection of... literary
and artistic creations such as books. In Columbia Pictures, video tapes of copyrighted films
were the subject of the copyright infringement suit.
In Habana, knowledge of the infringement is presumed when the infringer commits the
prohibited act:
WHEREFORE, the Petition is partially GRANTED.  The Department of Justice Resolution
dated June 29, 2010 ordering the filing of the Information is hereby REINSTATED as to
respondents Grace Dela Peñ a-Reyes and John Oliver T. Manalastas. Branch 93 of the
Regional Trial Court of Quezon City is directed to continue with the proceedings in Criminal
Case No. Q-04-131533.
[115] Habana v. Robles, 369 Phil. 764 (1999) [Per J. Pardo, First Division], citing 18 AM JUR
2D §109, in turn citing Toksvig v. Bruce Pub.  Co.,  (CA7 Wis)  181  F2d 664 [1950];
Bradbury v. Columbia Broadcasting
System, Inc., (CA9 Cal) 287 F2d 478, cert den 368 US 801, 7 L ed 2d 15, 82 S Ct 19 [1961];
Shipman v. R.K.O. Radio Pictures, Inc., (CA2 NY) 100 F2d 533 [1938].
[116] See Matthew D. Bunker, TRANSFORMING THE NEWS: COPYRIGHT AND FAIR USE IN
NEWS-RELATED CONTEXTS, 52 J. COPYRIGHT SOC'Y U.S.A. 309, 311 (2004-2005), citing
Iowa St. Univ. Research Found., Inc. v. Am. Broad. Cos., 621 F.2d 57, 60 (2d Cir.
1980). The four factors are similarly codified under the United States Copyright Act of
1976, sec. 107:
§ 107 . Limitations on exclusive rights: Fair use Notwithstanding the provisions of sections
106 and 106 A, the fair use of a copyrighted work, including such use by reproduction in
copies or phonorecords or by any other means specified by that section, for purposes
such ... as criticism, comment,  news reporting, teaching (including multiple copies for
classroom use), scholarship, or research, is not an infringement of copyright. In
determining whether the use made of a work in any particular case is a fair use the factors
to be considered... shall include—
(1) the purpose and character of the use, including whether such use is of a commercial
nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as
a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a Finding of fair use if such finding is
made upon consideration of all the above factors.
[117] Rep. Act No. 8293 (1997), sec. 185.
[118] See Matthew D. Bunker, Transforming The News: Copyright And Fair Use In News-
Related Contexts, 52 J. COPYRIGHT SOCY U.S.A. 309, 311 (2004-2005).
[119] Id., citing Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).
[120] Id. at 317, citing Nunez v. Caribbean International News Corp., 235 F.3d 18 (1st Cir.
2000) and Psihoyos v. National Examiner, 49 U.S.P.Q.2d 1766 (S.D. N.Y. 1998).  Bunker
proposes the term "meta-use" for the kind of use that does... not necessarily transform the
original work by adding expression, meaning, or message, but only changes the purpose of
the work. "[Psihoyos] distinguished between using the photograph to 'show what it
depict[ed]' versus commenting upon the photograph in some... way.   Certainly the Nunez
use was for purposes of commentary on the photos - the photos had engendered significant
controversy, and the news article reported on that controversy.  Thus, the Nunez use was
what we might refer to as a 'meta-use' of the photos that... went beyond simply using a
photograph to illustrate a news story - as in Psihoyos - and instead consisted of a news
story about the photographs themselves, or at least public reaction to them.