TAXATION

METROPOLITAN WATERWORKS SEWERAGE SYSTEM, Petitioner, v. THE

LOCAL GOVERNMENT OF QUEZON CITY, CITY TREASURER OF
QUEZON CITY, CITY ASSESSOR OF QUEZON CITY, SANGGUNIANG
PANLUNGSOD NG QUEZON CITY, AND CITY MAYOR OF QUEZON
CITY, Respondents.

G.R. No. 194388, November 07, 2018

SUMMARY: A government instrumentality exercising corporate powers is

not liable for the payment of real property taxes on its properties unless it is
alleged and proven that the beneficial use of its properties been extended to
a taxable person.

FACTS: Sometime in July 2007, MWSS received several Final Notices of Real

Property Tax Delinquency from the Local Government of Quezon City,
covering various taxable years, at P237,108,043.83 on the real properties
owned by MWSS in Quezon City. The Local Government of Quezon City
warned it that failure to pay would result in the issuance of warrants of levy
against its properties.

On August 7, 2007, the Treasurer's Office of Quezon City issued Warrants of

Levy on the properties due to MWSS's failure to pay. On September 10,
2007, the Local Government of Quezon City listed properties owned by
MWSS for auction sale.

Petition for Certiorari and Prohibition TRO prayer by MWSS. Argued that its
real properties in Quezon City were exclusively devoted to public use, and
thus, were exempt from real property tax.

CA issued TRO stopping auction sale. Writ of Preliminary Injunction issued.

CA denied petition. Lifted injuction.

CA said MWSS need not exhaust administrative remedies re a purely legal

question. CA did not dismiss on this ground.

CA said since MWSS was not a municipal corporation, it could not invoke the
immunity granted in Section 133(o) of the Local Government Code. Found
that even if MWSS was an instrumentality of the government, it was not
performing a purely governmental function. Thus, no immunity.

CA said taxed properties were not part of the public dominion, but were even
made the subject of concession agreements between MWSS and private
concessionaires due to its privatization in 1997. Proprietary functions; thus,
subject to real property tax.

QC issued warrants of levy. MWSS went to the SC. SC issued TRO.

ISSUE: Whether MWSS is exempt from realty taxes

HELD: The Executive and Legislative Branches, therefore, have already

categorized petitioner not as a government-owned and controlled
corporation but as a Government Instrumentality with Corporate
Powers/Government Corporate Entity like the Manila International Airport
Authority and the Philippine Fisheries Development Authority. Privileges
enjoyed by these Government Instrumentalities with Corporate
Powers/Government Corporate Entities should necessarily also extend to
petitioner. Hence, petitioner's real property tax exemption under Republic
Act No. 6234 is still valid as the proviso of Section 234 of the Local
Government Code is only applicable to government-owned and -controlled
corporations.
 MERCANTILE LAW

ABS-CBN CORPORATION, Petitioner, vs.
FELIPE GOZON, GILBERTO R. DUAVIT, JR., MARISSA L. FLORES,
JESSICA A. SORO, GRACE DELA PENA-REYES, JOHN OLIVER T.
MANALASTAS, JOHN DOES AND JANE DOES, Respondents.

G.R. No. 195956               March 11, 2015

SUMMARY: News should be differentiated from expression of the news,

particularly when the issue involves rebroadcast of news footage. The Court
of Appeals also erroneously held that good faith, as well as lack of
knowledge of infringement, is a defense against criminal prosecution for
copyright and neighboring rights infringement. In its current form, the
Intellectual Property Code is malum prohibitum and prescribes a strict
liability for copyright infringement. Good faith, lack of knowledge of the
copyright, or lack of intent to infringe is not a defense against copyright
infringement. Copyright, however, is subject to the rules of fair use and will
be judged on a case-to-case basis. Finding probable cause includes a
determination of the defendant's active participation, particularly when the
corporate veil is pierced in cases involving a corporation's criminal liability.

FACTS: FACTS: On August 13, 2004, petitioner ABS-CBN filed a criminal

complaint against respondent GMA for (alleged) act of copyright
infringement under Sections 177 and 211 of the Intellectual Property Code
(RA 8293, as amended), because the respondent aired footage of the arrival
and homecoming of OFW Angelo dela Cruz at NAIA from Iraq without the
petitioner's consent. ABS-CBN stated that it has an agreement with Reuter's
that the petition will contribute news and content that it owns and makes to
Reuters in exchange of the latter's news and video material, and Reuters will
ensure that ABS-CBN's materials cannot be aired in the country. The
respondent was a subscriber of Reuter's and CNN live feeds. After it received
the live feed of Angelo Dela Cruz's arrival and homecoming from Reuter's, it
immediately aired the video from that news feed. The respondent alleged
that its news staff was not aware that there was (a news embargo)
agreement between ABSCBN and Reuters. Respondent alleged that it was
not also aware that it aired petitioner's footage. Assistant City Prosecutor
Dindo Venturanza issued resolution on 3 December 2004 which found
probable cause to indict Dela Peña-Reyes and Manalastas. The respondents
appealed the Prosccutor's resolution before DOJ. DOJ Secretary Raul M.
Gonzalez ruled in favor of respondents in his resolution dated 1 August 2005
and held that good faith may be raised as a defense in the case. Meanwhile,
DOJ Acting Secretary Alberto C. Agra issued a resolution on 29 June 2010
which reversed Sec. Gonzalez's resolution and found probable cause to
charge Dela Peña-Reyes, Manalastas, as well as to indict Gozon, Duavit, Jr.,
Flores, and Soho for violation of the Intellectual Property Code (due to
copyright infringement). The Court of Appeals rendered a decision on 9
November 2010, which granted the Petition for Certiorari to reverse and set
aside DOJ Sec. Alberto Agra's resolution and a prayer for issuance of a
temporary restraining order and/or Writ of Preliminary Injunction. The
appellate court stated that the petitioner has copyright of its news coverage,
but respondents’ act of airing five (5) seconds of the homecoming footage
without notice of the “No Access Philippines” restriction of the live Reuter's
video feed, was undeniably attended by good faith and thus, serves to
exculpate from criminal liability under the Intellectual Property Code.

ISSUE: Whether or not there is probable cause to find respondents to be

held liable criminally for the case of copyright infringement under the
Intellectual Property Law (RA 8293, as amended).

HELD: The Supreme Court PARTIALLY GRANTED ABS-CBN’s petition and

ordered RTC Q.C. Branch 93 to continue with the criminal proceedings
against Grace Dela PeñaReyes and John Oliver Manalastas due to copyright
infringement. The other respondents, Atty. Felipe Gozon, Gilberto Duavit Jr.,
Marissa L. Flores, and Jessica A. Soho were held not liable for the (criminal)
act of copyright infringement. The Court held that their mere membership in
GMA7's Board of Directors does not mean that they have knowledge,
approval, or participation in the criminal act of copyright infringement., as
there is a need for their direct/active participation in such act. Also, there
was lack of proof that they actively participated or exercised moral
ascendancy over Manalastas and Dela Cruz-Pena. Contrary to GMA’s
contention, the Supreme Court deemed GMA's mere act of rebroadcast of
ABS-CBN’s news footage (arrival and homecoming of OFW Angelo dela Cruz
at NAIA from Iraq last 22 July 2004) for 2 mins and 40 secs. without the
latter's authority creates probable cause to find GMA's news personnel
Manalastas and Dela Peña-Reyes criminally liable for violating provisions of
Intellectual Property Code (Section 216217 of RA 8293, as amended) that
imposes strict liability for copyright infringement, since they have not been
diligent in their functions to prevent that footage from being aired on
television. They knew that there would be consequences in carrying ABS-
CBN’s footage in their broadcast – which is why they allegedly cut the feed
from Reuters upon seeing ABS-CBN’s logo and reporter. The difference of an
act mala in se and mala prohibita was stated in the present case. Acts mala
in se requires presence of criminal intent and the person's knowledge of the
nature of his/her act, while in acts mala prohibita, presence of criminal
intent and the person's knowledge is not necessary. The Court also stated
that Philippine laws on copyright infringement does not require criminal
intent (mens rea) and does not support good faith as a defense. analogous
to cinematography or any process for making audiovisual recordings.” It also
stated that news or the event itself is not copyrightable. The Court
differentiated idea and expression – idea meant as “a form, the look or
appearance of a thing” while expression is its reality or the “external,
perceptible world of articulate sounds and visible written symbols that others
can understand.” Thus, the Supreme Court stated that “only the expression
of an idea is protected by copyright, not the idea itself”, citing the US
Supreme Court's decision in Baker vs Selden (101 U.S. 99). In the present
case, expression applies to the event captured and presented in a specific
medium via cinematography or processes analogous to it.

The Court also gave the four-fold test under the Fair Use Doctrine (stated in
section 185 of RA 8293 or the Intellectual Property Code, as amended) to
determine fair use: a. The purpose and character of the use, including
whether such use is of a commercial nature or is for non-profit educational
purposes; b. The nature of the copyrighted work; c. The amount and
substantiality of the portion used in relation to the copyrighted work as a
whole; and d. The effect of the use upon the potential market for or value of
the copyrighted work. Fair use, which is an exception to copyright owner’s
monopoly of the work's usage, was defined by the Supreme Court as
privilege to use the copyrighted material in a reasonable manner without the
copyright owner's consent or by copying the material's theme or idea rather
than its expression. It also said that 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. infringement and not the intent is the
one that causes the damage. It held that ABS-CBN's video footage is
copyrightable because it is under “audiovisual works and cinematographic
works and works produced by a process.