Microsoft Corporation vs Maxicorp, Inc.

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September 13, 2004 | Carpio, J.
Copyright Infringement; Primary Infringement

DOCTRINE: Copyright infringement and unfair competition are not limited to the act of selling counterfeit
goods. They cover a whole range of acts, from copying, assembling, packaging to marketing, including
the mere offering for sale of the counterfeit goods.
SUMMARY: NBI agents filed applications for search warrants against respondent for alleged violations of
copyright infringement and unfair competition. After examining agents’ testimonies, RTC found probable
cause to issue the same. The agents testified that during their visit to Maxicorp, they witnessed
counterfeit software not only displayed and sold within Maxicorp's premises, but were also produced,
packaged and in some cases, installed there. CA reversed decision holding that evidence was
insufficient. Supreme Court ruled that the CA erred, and held that there was probably cause, based on the
testimonies and object/documentary evidence presented, that Maxicrop produced or sold the counterfeit
products.

FACTS:
o July 25 1996 – NBI Agent Dominador Samiano filed several applications for search warrants in the
RTC against Maxicorp for alleged violation of Section 29 of PD 49 (copyright infringement) and Article
189 of the RPC.
o RTC found probable cause after examining NBI Agent Samiano, John Benedict Sacriz, and computer
technician Felixberto Pante, who testified on what they discovered during their respective visits to
Maxicorp
o NBI Agent Samiano testified that he saw Maxicorp display and offer for sale counterfeit
software in its premises, and how counterfeit software were produced and packaged within
Maxicorp's premises.
 He also presented certifications from petitioners Microsoft that they have not
authorized Maxicorp to perform the witnessed activities using petitioners' products
o NBI Agent Samiano categorically stated that he was certain the products were counterfeit
because Maxicorp sold them to its customers without giving the accompanying ownership
manuals, license agreements and certificates of authenticity
o Sacriz testified that during his visits to Maxicorp, he witnessed several instances when
Maxicorp installed petitioner Microsoft’s software into computers it had assembled, and the
sale of the same.
 Petitioners never authorized Maxicorp to install or sell their software.
o Judge William M. Bayhon issued said Search Warrants
o NBI agents proceedd to search Maxicorp's premises and seized property Btting the description stated
in the search warrants
o Maxicorp Bled a motion to quash the search warrants alleging that there was no probable cause, and
that these were in the form of general warrants. RTC denied their motion and subsequent MR.
o RTC found probable cause after examining NBI Agent Samiano, John Benedict Sacriz, and computer
technician Felixberto Pante
o 23 Dec 1998 – CA reversed RTC’s decision, holding that NBI Agent Samiano failed to present during
the preliminary examination conclusive evidence that Maxicorp produced or sold the counterfeit
software products
o The sales receipt NBI Agent Samiano presented as evidence that he bought the products
from Maxicorp was in the name of a certain "Joel Diaz."

ISSUE: W/N there is probable cause, that respondent violated the intellectual property right of the
petitioner, to issue the search warrant?

RULING:
o Yes. Court ruled that there is probable cause. The testimonies of Samiano and Sacriz, coupled
with the object and documentary evidence they presented, are sufficient to establish the
 existence of probable cause that there is reason to believe that Maxicorp engaged in copyright
infringement and unfair competition to the prejudice of petitioners.
a. The determination of probable cause does not call for the application of rules and
standards of proof that a judgment of conviction requires after trial on the merits. The
standards are those of a prudent man
b. The fact that Sacriz did not actually purchase counterfeit software from Maxicorp
does not eliminate the existence of probable cause. Copyright infringement and
unfair competition are not limited to the act of selling counterfeit goods. They
cover a whole range of acts, from copying, assembling, packaging to marketing,
including the mere offering for sale of the counterfeit goods.
i. The clear and firm testimonies of petitioners' witnesses on such other acts stand
untarnished.
c. The sales receipt by Samiano is not the only proof that the sale of petitioners' software
occurred. During the search warrant application proceedings, Samiano presented to the
judge the computer unit that he purchased from Maxicorp, in which computer unit
Maxicorp had pre-installed petitioners' software
i. Pante, the computer technician, demonstrated to the judge the presence of
petitioners' software on the same computer unit.

o As to the queston if the search warrants were in the nature, of general warrants, Court held that
paragraph (e) is not a general warrant, as argued by the responents, but held that paragraph (c)
of the search warrants was lacking in particularlity and was in the nature of a general warrant
o Paragraph (e) states Computer hardware, including central processing units including
hard disks, CD-ROM drives, keyboards, monitor screens and diskettes, photocopying
machines and other equipment or paraphernalia used or intended to be used in the illegal
and unauthorized copying or reproduction of Microsoft software and their manuals, or
which contain, display or otherwise exhibit, without the authority of MICROSOFT
CORPORATION, any and all Microsoft trademarks and copyrights; and
 Paragraph (e) specifically refers to those articles used or intended for use in the
illegal and unauthorized copying of petitioners' software. This language meets
the test of specificity
o Paragraph (c) reads: Sundry items such as labels, boxes, prints, packages, wrappers,
receptacles, advertisements and other paraphernalia bearing the copyrights and/or
trademarks owned by MICROSOFT CORPORATION;
 The scope of this description is all-embracing since it covers property used for
personal or other purposes not related to copyright infringement or unfair
competition. Moreover, the description covers property that Maxicorp may have
bought legitimately from Microsoft or its licensed distributors. Paragraph (c)
simply calls for the seizure of all items bearing the Microsoft logo, whether
legitimately possessed or not.
o Thus, all items seized under paragraph (c) of the search warrants, not falling under
paragraphs a, b, d, e or f, should be returned to Maxicorp.

DISPOSITION: WHEREFORE, we PARTIALLY GRANT the instant petition