Summary of the Nice Agreement Concerning the

International Classification of Goods and Services for

the Purposes of the Registration of Marks (1957)
The Nice Agreement, concluded at Nice in 1957, revised at Stockholm in 1967 and at Geneva
in 1977, and amended in 1979, establishes a classification of goods and services for the purposes of
registering trademarks and service marks (the Nice Classification).

The competent offices of the Contracting States must indicate in official documents and in any
publication they issue in respect of the registration of marks the numbers of the classes of the
Classification to which the goods or services for which the mark is registered belong.

The Nice Agreement created a Union, which has an Assembly. Every State that is a member of the
Union and has adhered to the Stockholm Act or the Geneva Act of the Nice Agreement is a member
of the Assembly. Among the most important tasks of the Assembly is the adoption of the biennial
program and budget of the Union.

The Agreement also set up a Committee of Experts in which all members of the Union are
represented. The main task of the Committee is the periodical revision of the Classification.

The Agreement is open to States party to the Paris Convention for the Protection of Industrial
Property (1883). Instruments of ratification or accession must be deposited with the Director General
of WIPO.

About the Nice Classification

On this page:
 Revisions of the Nice Classification
 

 Editions of the Nice Classification

The International Classification of Goods and Services for the
Purposes of the Registration of Marks was established by an
Agreement concluded at the Nice Diplomatic Conference, on June
15, 1957, was revised at Stockholm, in 1967, and at Geneva, in 1977,
and was amended in 1979.

The countries party to the Nice Agreement constitute a Special Union within the framework of the
Paris Union for the Protection of Industrial Property. They have adopted and apply the Nice
Classification for the purposes of the registration of marks.
Each of the countries party to the Nice Agreement is obliged to apply the Nice Classification in
connection with the registration of marks, either as the principal classification or as a subsidiary
classification, and has to include in the official documents and publications relating to its registrations
of marks the numbers of the classes of the Classification to which the goods or services for which the
marks are registered belong.

Use of the Nice Classification is mandatory not only for the national registration of marks in countries
party to the Nice Agreement, but also for the international registration of marks effected by the African
Intellectual Property Organization (OAPI), the African Regional Intellectual Property Organization
(ARIPO), the Benelux Office for Intellectual Property (BOIP), the European Union Intellectual Property
Office (EUIPO) and the International Bureau of WIPO. The Nice Classification is also applied in a
number of countries not party to the Nice Agreement.

Revisions of the Nice Classification

The Nice Classification is based on the Classification prepared by the United International Bureaux
for the Protection of Intellectual Property (BIRPI) – predecessor of WIPO – in 1935. It was that
Classification, consisting of a list of 34 classes and an alphabetical list of goods, that was adopted
under the Nice Agreement and later expanded to embrace also eleven classes covering services and
an alphabetical list of those services.
The Nice Agreement provides for the setting-up of a Committee of Experts in which all countries party
to the Agreement are represented. The Committee of Experts decides on all changes in the
Classification, in particular the transfer of goods and services between various classes, the updating
of the alphabetical list and the introduction of necessary explanatory notes.
Since the entry into force of the Nice Agreement, on April 8, 1961, the Committee of Experts has,
amongst its most noticeable achievements, carried out the revision of the alphabetical list of goods
and services from the point of view of form (in the late 1970s); substantially modified the general
remarks, the class headings and the explanatory notes (in 1982); introduced a “basic number” for
each single product or service in the alphabetical list (in 1990), which number enables the user to find
the equivalent product or service in the alphabetical lists of other language versions of the
Classification; revised class 42 with the creation of classes 43 to 45 (in 2000); and undertaken a
general review of all class headings and explanatory notes with a view to harmonizing their form and
clarifying their content, in particular with the inclusion of specific examples within each class (from
2016 to 2020).

Editions of the Nice Classification

Since, the first edition of the Nice Classification published in 1963, editions are published and enter
into force usually every five years. Since 2013, the Nice Classification is revised once a year and a
new version of each edition is published annually and enters into force on January 1.

The authentic texts of the Nice Classification (in English and in French) are published online by
WIPO. By decision of the Committee of Experts, the paper publication has been discontinued, the
10th edition, published in June 2011, being the last printed edition.
Asia Brewery v. CA (G.R. No. 103543)

Facts:

Respondent San Miguel Corporation filed a complaint against petitioner Asia Brewery for trademark infringement and
unfair competition on account of the latter’s BEER PALE PILSEN or BEER NA BEER product which has been competing
with petitioner’s SAN MIGUEL PALE PILSEN for a share of the local beer market. The trial court dismissed the complaint.
On appeal, CA found petitioner guilty of trademark infringement.

Issues: (1) Whether or not the words ‘pale pilsen’ may be exclusively appropriated and used by SMC; (2) Whether or not
there is confusing similarity between the two trademarks.

Ruling:

(1) NO. The fact that the words ‘pale pilsen’ are part of ABI’s trademark does not constitute an infringement of SMC’s
trademark: SAN MIGUEL PALE PILSEN, for “pale pilsen” are generic words descriptive of the color (“pale”), of a type of
beer (“pilsen”), which is a light bohemian beer with a strong hops flavor that originated in the City of Pilsen in
Czechoslovakia and became famous in the Middle Ages. “Pilsen” is a “primarily geographically descriptive word,” hence,
non-registrable and not appropriable by any beer manufacturer. The words “pale pilsen” may not be appropriated by
SMC for its exclusive use even if they are part of its registered trademark: SAN MIGUEL PALE PILSEN. No one may
appropriate generic or descriptive words. They belong to the public domain.

(2) NO. There is hardly any dispute that the dominant feature of SMC’s trademark is the name of the product: SAN
MIGUEL PALE PILSEN, written in white Gothic letters with elaborate serifs at the beginning and end of the letters “S” and
“M” on an amber background across the upper portion of the rectangular design. On the other hand, the dominant
feature of ABI’s trademark is the name: BEER PALE PILSEN, with the word “Beer” written in large amber letters, larger
than any of the letters found in the SMC label.

The trial court perceptively observed that the word “BEER” does not appear in SMC’s trademark, just as the words “SAN
MIGUEL” do not appear in ABI’s trademark. Hence, there is absolutely no similarity in the dominant features of both
trademarks. Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be confusingly similar to SAN
MIGUEL PALE PILSEN. No one who purchases BEER PALE PILSEN can possibly be deceived that it is SAN MIGUEL PALE
PILSEN. No evidence whatsoever was presented by SMC proving otherwise. There is no confusing similarity between the
competing beers for the name of one is “SAN MIGUEL” while the competitor is plain “BEER” and the points of
dissimilarity between the two outnumber their points of similarity.
McDonald’s Corporation v. L.C. Big Mak Burger (G.R. No. 143993)

Facts:

Petitioner McDonald’s, an American corporation operating a global chain of fast-food restaurants, is the owner of the
‘Big Mac’ mark for its double-decker hamburger sandwich here and in the US. Meanwhile, respondent L.C., a domestic
corporation which operates fast-food outlets and snack vans applied for the registration of the ‘Big Mak’ mark for its
hamburger sandwiches. Petitioner opposed on the ground that ‘Big Mak’ was a colorable imitation of its registered ‘Big
Mac’ mark for the same food products. Respondents denied there is colorable imitation and argued that petitioner
cannot exclusively appropriate the mark ‘Big Mac’ because the word ‘Big’ is a generic and descriptive term. Petitioner
filed a complaint for trademark infringement and unfair competition. The trial court found for petitioners. CA held
otherwise.

Issues: (1) Whether or not the word ‘Big Mac’ can be exclusively appropriated by petitioner; (2) Whether or not there is
colorable imitation resulting in likelihood of confusion; (3) Whether or not there is unfair competition.

Ruling:

(1) YES. A mark is valid if it is “distinctive” and thus not barred from registration under Section 4 of RA 166. However,
once registered, not only the mark’s validity but also the registrant’s ownership of the mark is prima facie presumed.
The “Big Mac” mark, which should be treated in its entirety and not dissected word for word, is neither generic nor
descriptive. Generic marks are commonly used as the name or description of a kind of goods, such as “Lite” for beer or
“Chocolate Fudge” for chocolate soda drink. Descriptive marks, on the other hand, convey the characteristics, functions,
qualities or ingredients of a product to one who has never seen it or does not know it exists, such as “Arthriticare” for
arthritis medication. On the contrary, “Big Mac” falls under the class of fanciful or arbitrary marks as it bears no logical
relation to the actual characteristics of the product it represents. As such, it is highly distinctive and thus valid.
Significantly, the trademark “Little Debbie” for snack cakes was found arbitrary or fanciful.

(2) YES. In determining likelihood of confusion, jurisprudence has developed two tests, the dominancy test and the
holistic test. The dominancy test focuses on the similarity of the prevalent features of the competing trademarks that
might cause confusion. In contrast, the holistic test requires the court to consider the entirety of the marks as applied to
the products, including the labels and packaging, in determining confusing similarity. This Court, however, has relied on
the dominancy test rather than the holistic test. The test of dominancy is now explicitly incorporated into law in Section
155.1 of the Intellectual Property Code which defines infringement as the “colorable imitation of a registered mark xxx
or a dominant feature thereof.”

Applying the dominancy test, the Court finds that respondents’ use of the “Big Mak” mark results in likelihood of
confusion. Aurally the two marks are the same, with the first word of both marks phonetically the same, and the second
word of both marks also phonetically the same. Visually, the two marks have both two words and six letters, with the
first word of both marks having the same letters and the second word having the same first two letters. In spelling,
considering the Filipino language, even the last letters of both marks are the same. Clearly, respondents have adopted in
“Big Mak” not only the dominant but also almost all the features of “Big Mac.” Applied to the same food product of
hamburgers, the two marks will likely result in confusion in the public mind. Certainly, “Big Mac” and “Big Mak” for
hamburgers create even greater confusion, not only aurally but also visually. Indeed, a person cannot distinguish “Big
Mac” from “Big Mak” by their sound. When one hears a “Big Mac” or “Big Mak” hamburger advertisement over the
radio, one would not know whether the “Mac” or “Mak” ends with a “c” or a “k.”

(3) YES. The essential elements of an action for unfair competition are (1) confusing similarity in the general appearance
of the goods, and (2) intent to deceive the public and defraud a competitor. The confusing similarity may or may not
result from similarity in the marks, but may result from other external factors in the packaging or presentation of the
goods. The intent to deceive and defraud may be inferred from the similarity of the appearance of the goods as offered
for sale to the public. Actual fraudulent intent need not be shown. Unfair competition is broader than trademark
infringement and includes passing off goods with or without trademark infringement. Trademark infringement is a form
of unfair competition. Trademark infringement constitutes unfair competition when there is not merely likelihood of
confusion, but also actual or probable deception on the public because of the general appearance of the goods. There
can be trademark infringement without unfair competition as when the infringer discloses on the labels containing the
mark that he manufactures the goods, thus preventing the public from being deceived that the goods originate from the
trademark owner. Respondents’ goods are hamburgers which are also the goods of petitioners. Since respondents chose
to apply the “Big Mak” mark on hamburgers, just like petitioner’s use of the “Big Mac” mark on hamburgers,
respondents have obviously clothed their goods with the general appearance of petitioners’ goods. There is actually no
notice to the public that the “Big Mak” hamburgers are products of “L.C. Big Mak Burger, Inc.” and not those of
petitioners who have the exclusive right to the “Big Mac” mark. This clearly shows respondents’ intent to deceive the
public. We hold that as found by the RTC, respondent corporation is liable for unfair competition.
Kolin Electronics Co. Inc. v. Kolin Philippines International Inc., G.R. No. 228165,

On 9 February 2021, but uploaded only in the SC website on 15 June 2021, the Supreme Court, in an en banc decision,
laid down another groundbreaking ruling when it abandoned the Holistic Test as a tool to determine likelihood of
confusion between similar yet competing trademarks.

In this Kolin case, KPII filed a trademark application for the “kolin” mark covering televisions and DVD players. KECI, a
different entity, filed an opposition on the ground that it is the registered owner of the subject mark; and if registered,
KPII’s mark will cause confusion among the consumers.

KPII countered that KECI’s ownership over the “kolin” mark is limited only to goods such as automatic voltage regulator,
stereo booster and the like. The Intellectual Property Office (IPO) sided with KECI. The Court of Appeals (CA), however,
disagreed with the IPO.

Relying heavily on the earlier Taiwan Kolin case (G.R. No. 209843, 25 March 2015), wherein the SC allowed KPII’s
affiliated entity Taiwan Kolin Corporation Ltd. (TKC) to register the “kolin” mark, the CA equally allowed KPII to have the
“kolin” mark registered on the ground that the Taiwan Kolin case amounted to res judicata.

Surprisingly, the SC reversed the CA. The Court, through Justice Caguioa, noted that jurisprudence has flip-flopped over
the years between the Holistic and Dominancy Tests to determine similarity and likelihood of confusion in trademarks.
The Dominancy Test focuses on the similarity of the prevalent features of the competing marks.

Meanwhile, the Holistic Test requires that the entirety of the marks in question be considered in resolving confusing
similarity. There was no hard and fast rule in determining which test should be applied.

There are more Supreme Court decisions that applied the Dominancy Test.

Nevertheless, the Holistic Test was adopted in significant decisions, consistently, in fact, when it comes to jeans, and
notably, in the classic San Miguel Brewery v. Asia Brewery case involving the trademark “BEER Pale Pilsen.” In fact,
jurisprudence likewise abounds on the application of both tests in resolving likelihood of confusion in the use of
trademark.

In this 2021 Kolin case, the SC En Banc made it crystal clear that it is abandoning the Holistic Test in determining the
resemblance of similar marks.

The SC noted that only the Dominancy Test is incorporated in the Intellectual Property (IP) Code, particularly Section
155.1 thereof which defines trademark infringement as the “colorable imitation of a registered mark… or a dominant
feature thereof.

” Citing legislative deliberations leading to the enactment of the IP Code, the Supreme Court concluded that the
exclusion of the Holistic Test was intentional and that the Dominancy Test should be adopted to put an end to the
debate, once and for all.

Thus, applying the Dominancy Test, the SC held that KPII’s “kolin” mark resembles KECI’s “KOLIN” mark because the
word “KOLIN” is the prevalent feature of both marks.

“Phonetically or aurally, the marks are exactly the same. Surely, the manner of pronouncing the word ‘KOLIN’ does not
change just because KPII’s mark is in lowercase and contains an italicized orange letter ‘i.’ In terms of connotation and
overall impression, there seems to be no difference between the two marks,”

The doctrine of res judicata is not applicable in this case. The ponencia sufficiently discussed why there is no identity of
causes of action in this case. KECI' s cause of action in the case at bar is based on its right as the registered TM owner of
KOLIN to prevent the registration of TM Application No. 4-2006-010021 covering kolin for use on televisions and DVD
players. On the other hand, KECI's cause of action in Taiwan Kolin is based on its right as the registered TM own~r of
KOLIN to prevent the registration of TM Application No. 4-1996-106310 covering KOLIN for use on televisions and DVD
players. Clearly, the first concept of res judicata is not applicable.

In the case of KPII’s “kolin” mark, the SC stressed that it resembled KECI’s “KOLIN” mark because the word “KOLIN” was
the “prevalent feature of both marks.”

“Surely, the manner of pronouncing the word ‘KOLIN’ does not change just because KPII’s mark is in lowercase and
contains an italicized orange letter ‘i.’ In terms of connotation and overall impression, there seems to be no difference
between the two marks,” read the decision.
It added that the goods covered by the former were related to those of the latter (automatic voltage, regulator,
converter, recharger, stereo booster, AC-DC regulated power supply, step-down transformer, PA amplified AC-DC). KPII’s
television sets and DVD players would fall within the normal potential expansion of the business of KECI.

The SC noted that there was already evidence of actual confusion between the two marks as shown by consumer
complaints about KPII’s appliances that were sent to KECI. It added that the sophistication of buyers would not be
enough to eliminate confusion.

The SC also found bad faith on KPII’s part, especially as it filed its application to register “kolin” barely two months after
KECI was declared the owner of the “KOLIN” mark and that the two companies were in the same line of business.

It held that allowing KPII to register the “kolin” mark would “effectively amount to a curtailment of KECI’s right to freely
use and enforce the KOLIN word mark, or any stylized version thereof, for its own range of goods/service.”

The SC disagreed with the CA that the former’s March 25, 2015 decision on “Taiwan Kolin Corporation, Ltd. versus Kolin
Electronics Co., Inc. (G.R. No. 209843)” amounted to res judicata, or a case or controversy already decided with finality.

It noted that the case of Taiwan Kolin, KPII’s parent company, only ruled that its trademark application for “KOLIN”
should be given due course. Meanwhile, KPII’s trademark application for “kolin” was a new application entirely.
Shangri-la International Hotel Management v. Developers Group of Companies (G.R. No. 159938)

Facts:

Respondent DGCI applied for and was granted registration of the ‘Shangri-La’ mark and ‘S’ logo in its restaurant
business. Petitioner Shangri-La, chain of hotels and establishments owned by the Kuok family worldwide, moved to
cancel the registration of the mark on the ground that it was illegally and fraudulently obtained and appropriated by
respondents. Petitioner also moved to register the mark and logo in its own name. Later, respondent DGCI filed before
the trial court a complaint for infringement against petitioner alleging that DGCI had been the prior exclusive user and
the registered owner in the Philippines of said mark and logo. Petitioner Shangri-La argued that respondent had no right
to apply for the registration because it did not have prior actual commercial use thereof. The trial court found for
respondent. CA affirmed.

Issue: Whether or not respondent’s prior use of the mark is a requirement for its registration.

Ruling: YES.

While the present law on trademarks has dispensed with the requirement of prior actual use at the time of registration,
the law in force at the time of registration must be applied. Under the provisions of the former trademark law, R.A. No.
166, as amended, hence, the law in force at the time of respondent’s application for registration of trademark, the root
of ownership of a trademark is actual use in commerce. Section 2 of said law requires that before a trademark can be
registered, it must have been actually used in commerce and service for not less than two months in the Philippines
prior to the filing of an application for its registration. Trademark is a creation of use and therefore actual use is a pre-
requisite to exclusive ownership and its registration with the Philippine Patent Office is a mere administrative
confirmation of the existence of such right.

While the petitioners may not have qualified under Section 2 of R.A. No. 166 as a registrant, neither did respondent
DGCI, since the latter also failed to fulfill the 2-month actual use requirement. What is worse, DGCI was not even the
owner of the mark. For it to have been the owner, the mark must not have been already appropriated (i.e., used) by
someone else. At the time of respondent DGCI’s registration of the mark, the same was already being used by the
petitioners, albeit abroad, of which DGCI’s president was fully aware.
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG vs. PHILIPPINE SHOE EXPO MARKETING CORPORATION G.R. No.
194307

FACTS:

Petitioner applied for various trademark registrations before the Philippine IPO, namely: a) “BIRKENSTOCK”; b)
“BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY SEAL AND REPRESENTATION OF A
FOOT, CROSS AND SUNBEAM”; c) “BIRKENSTOCK BAD HONNEF-RHEIN & DEVICE COMPRISING OF ROUND COMPANY
SEAL AND REPRESENTATION OF A FOOT, CROSS AND SUNBEAM”. However, the registration proceedings were
suspended in view of an existing registration of mark “BIRKENSTOCK AND DEVICE” in the name of Shoe Town
International and Industrial Corporation, the predecessor-in-interest of respondent Philippine Shoe Expo Marketing
Corporation. Here, petitioner filed a petition for cancellation of the registration on the ground that it is the lawful and
rightful owner of the Birkenstock marks.

Respondent filed an opposition, alleging that: a) it, together with its predecessor-in-interest, has been using Birkenstock
marks in the Philippines for more than 16 years through the mark “BIRKENSTOCK AND DEVICE”; b) the marks covered by
the subject applications are identical to the one covered by the registration and thus, petitioner has no right to the
registration of such marks; d) that while respondent failed to file the 10th Year DAU, it continued the use of
“BIRKENSTOCK AND DEVICE” in lawful commerce, among others.

The BLA rejected the petitioner’s application for registration. It ruled that the competing marks of the parties are
confusingly similar since they contained the work “BIRKENSTOCK” and are used on the same and related goods. It found
respondent as the prior user and adopter of “BIRKENSTOCK” in the Philippines.

IPO Director General reversed BLA’s ruling, and allowed the registration of petitioner’s application. CA reversed, and
reinstated BLA’s ruling.

ISSUE: Whether or not the subject marks should be allowed registration in the name of petitioner.

HELD:

Yes. Respondent is deemed to have abandoned the mark when it failed to file the 10th Year DAU for Registration on or
before the lawful period. As a consequence, it was deemed to have abandoned or withdrawn any right or interest over
the mark “BIRKENSTOCK”.

Petitioner has duly established its true and lawful ownership of the mark “BIRKENSTOCK”. Under Sec. 2 of RA 166, in
order to register a trademark, one must be the owner thereof and must have actually used the mark in commerce in the
Philippines for 2 months prior to the application for registration.

The registration of a trademark is not a mode of acquiring ownership. If the applicant is not the owner of the trademark,
he has no right to apply for its registration. Registration merely creates a prima facie presumption of validity of the
registration, of the registrant’s ownership of the trademark, and of the exclusive right to the use thereof. Clearly, it is not
the application or registration of a trademark that vests ownership thereof, but it is the ownership of a trademark that
confers the right to register the same.

Here, petitioner was able to establish that it is the owner of the mark “BIRKENSTOCK”. It has used it in commerce long
before respondent was able to register the same here in the Philippines.
Coffee Partners v. San Francisco Coffee &Roastery (G.R. No. 169504)

Facts:

Petitioner Coffee Partners entered into a franchise agreement with Coffee Partners Ltd. to operate coffee shops in the
country using the trademark ‘San Francisco Coffee.’ Respondent on the other hand, is a local corporation engaged in the
wholesale and retail sale of coffee and uses the business name ‘San Francisco Coffee &Roastery’ registered with the DTI.
Later, respondent filed an infringement and/or unfair competition complaint against petitioner alleging that the latter
was about to open a coffee shop under the name ‘San Francisco Coffee’ causing confusion in the minds of the public as it
bore a similar name and is engaged also in selling of coffee. Petitioner contended no infringement would arise because
respondent’s tradename was not registered.

Issue: Whether or not petitioner’s trademark would infringe respondent’s tradename.

Ruling: YES.

In Prosource International, Inc. v. Horphag Research Management SA, this Court laid down what constitutes
infringement of an unregistered trade name, thus:

(1) The trademark being infringed is registered in the Intellectual Property Office; however, in infringement of trade
name, the same need not be registered;

(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by the infringer;

(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or advertising of any goods,
business or services; or the infringing mark or trade name is applied to labels, signs, prints, packages, wrappers,
receptacles, or advertisements intended to be used upon or in connection with such goods, business, or services;

(4) The use or application of the infringing mark or trade name is likely to cause confusion or mistake or to deceive
purchasers or others as to the goods or services themselves or as to the source or origin of such goods or services or the
identity of such business; and

(5) It is without the consent of the trademark or trade name owner or the assignee thereof.

RA 8293, which took effect on 1 January 1998, has dispensed with the registration requirement. Section 165.2 of RA
8293 categorically states that trade names shall be protected, even prior to or without registration with the IPO, against
any unlawful act including any subsequent use of the trade name by a third party, whether as a trade name or a
trademark likely to mislead the public.

It is the likelihood of confusion that is the gravamen of infringement. Applying the dominancy test or the holistic test,
petitioner’s “SAN FRANCISCO COFFEE” trademark is a clear infringement of respondent’s “SAN FRANCISCO COFFEE &
ROASTERY, INC.” trade name. The descriptive words “SAN FRANCISCO COFFEE” are precisely the dominant features of
respondent’s trade name. Petitioner and respondent are engaged in the same business of selling coffee, whether
wholesale or retail. The likelihood of confusion is higher in cases where the business of one corporation is the same or
substantially the same as that of another corporation. In this case, the consuming public will likely be confused as to the
source of the coffee being sold at petitioner’s coffee shops.
Coca-Cola Bottlers Phils. Naga Plant v. Gomez (G.R. No. 154491)

Facts:

Petitioner Coca-Cola applied for a search warrant against Pepsi for hoarding empty Coke bottles in Pepsi’s yard, an act
allegedly penalized as unfair competition under the IP Code. MTC issued the search warrants and the local police seized
the goods. Later, a complaint against respondents was filed for violation of the IP Code. Respondent contended that the
hoarding of empty Coke bottles did not involve fraud and deceit for them to be liable for unfair competition. MTC
upheld the validity of the warrants. RTC voided the warrant for lack of probable cause of the commission of unfair
competition.

Issue: Whether or not respondent’s hoarding of Coke bottles constitute unfair competition.

Ruling: NO.

From jurisprudence, unfair competition has been defined as the passing off (or palming off) or attempting to pass off
upon the public the goods or business of one person as the goods or business of another with the end and probable
effect of deceiving the public. One of the essential requisites in an action to restrain unfair competition is proof of fraud;
the intent to deceive must be shown before the right to recover can exist. The advent of the IP Code has not significantly
changed these rulings as they are fully in accord with what Section 168 of the Code in its entirety provides. Deception,
passing off and fraud upon the public are still the key elements that must be present for unfair competition to exist.

As basis for this interpretative analysis, we note that Section 168.1 speaks of a person who has earned goodwill with
respect to his goods and services and who is entitled to protection under the Code, with or without a registered mark.
Section 168.2, as previously discussed, refers to the general definition of unfair competition. Section 168.3, on the other
hand, refers to the specific instances of unfair competition, with Section 168.3(a) referring to the sale of goods given the
appearance of the goods of another; Section 168.3(b), to the inducement of belief that his or her goods or services are
that of another who has earned goodwill; while the disputed Section 168.3(c) being a “catch all” clause whose coverage
the parties now dispute.

Under all the above approaches, we conclude that the “hoarding” – as defined and charged by the petitioner – does not
fall within the coverage of the IP Code and of Section 168 in particular. It does not relate to any patent, trademark, trade
name or service mark that the respondents have invaded, intruded into or used without proper authority from the
petitioner. Nor are the respondents alleged to be fraudulently “passing off” their products or services as those of the
petitioner. The respondents are not also alleged to be undertaking any representation or misrepresentation that would
confuse or tend to confuse the goods of the petitioner with those of the respondents, or vice versa. What in fact the
petitioner alleges is an act foreign to the Code, to the concepts it embodies and to the acts it regulates; as alleged,
hoarding inflicts unfairness by seeking to limit the opposition’s sales by depriving it of the bottles it can use for these
sales. In this light, hoarding for purposes of destruction is closer to what another law, R.A. No. 623 covers.
SAVAGE vs TAYPIN

FACTS:

Petitioners Savage, seek to nullify the search warrant issued by respondent Judge Aproniano B. Taypin of the Regional
Trial Court, Br. 12 Cebu City, which resulted in the seizure of certain pieces of wrought iron furniture from the factory of
petitioners located in Biasong, Talisay, Cebu.

The complaint was lodged by private respondent Eric Ng Mendoza, president and general manager of Mendco
Development Corporation (MENDCO), alleging that Savage’s products are the object of unfair competition involving
design patents, punishable under Art. 189 of the Revised Penal Code as amended. Savage contends however, that there
was no existence of offense leading to the issuance of a search warrant and eventual seizure of its products.

ISSUE: Whether or not unfair competition involving design patents are punishable under Article 189 of the Revised Penal
Code.

HELD: To provide a clear view, the Intellectual Property Code took effect on January 1, 1998. The repealing clause of the
IPC provides that Articles 188 and 189 of the Revised Penal Code (RPC), Presidential Decree No. 49, are hereby repealed
The issue involving the existence of "unfair competition" as a felony involving design patents, referred to in Art. 189 of
the Revised Penal Code, has been rendered moot and academic by the repeal of the article. Hence, the search warrant
cannot even be issued by virtue of a possible violation of the IPR Code.

There is no mention of any crime of "unfair competition" involving design patents in the controlling provisions on Unfair
Competition of the RPC. It is therefore unclear whether the crime exists at all, for the enactment of RA 8293 did not
result in the reenactment of Art. 189 of the Revised Penal Code.

The court is are prevented from applying these principles, along with the new provisions on Unfair Competition found in
the IPR Code, to the alleged acts of the petitioners, for such acts constitute patent infringement as defined by the same
Code

Although the case traces its origins to the year 1997 or before the enactment of the IPR Code, Article 22 of the Revised
Penal Code provides that penal laws shall be applied retrospectively, if such application would be beneficial to the
accused. Since the IPR Code effectively obliterates the possibility of any criminal liability attaching to the acts alleged,
then RPC provisions must be applied.
Solid Triangle Sales Corporation vs the Sheriff of RTC QC 370 scra 491 Nov. 23, 2001

FACTS:

Judge Bruselas,Jr., Presiding Judge of RTC, Quezon City, upon application of the Economic Intelligence and Investigation
Bureau(EIIB), issued a search warrant against herein private respondent Sanly Corporation for violation of Sec. 168 of
R.A No. 8293 for unfair competition. The private respondent corporation contends that there is no unfair competition
being committed since the products that he sells, particularly Mitsubishi photographic color paper, are genuine products
of Mitsubishi that he buys from Hong Kong while the complainant purchases the same kind of paper from Japan.

ISSUE: whether or not there was probable cause that the crime of unfair competition under the IPC Code has been
committed by the respondents?

HELD: No. The SC disagreed with petitioners and find that the evidence presented before the trial court does not prove
unfair competition under Section 168 of the Intellectual Property Code. Under SEC. 168.Unfair Competition, Rights,
Regulation and Remedies. – 168.1 A person who has identified in the mind of the public goods he manufactures or deals
in, his business or services from those of others, whether or not a registered mark is employed, has a property right in
the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other
property rights. 168.2 Any person who shall employ deception or any other means contrary to good faith by which he
shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one
having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor. 168.3 In particular, and without in any way limiting the scope of
protection against unfair competition, the following shall be deemed guilty of unfair competition: (a) Any person, who is
selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the
goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in
any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered
are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the
goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent
vendor of such goods or any agent of any vendor engaged in selling such goods with a lie purpose;

(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that
such person is offering the service of another who has identified such services in the mind of the public; or (c) Any
person who shall make any false statement in the course of trade or who shall commit any other act contrary to good
faith of a nature calculated to discredit the goods, business or services of another. 168.4 The remedies provided by
Sections 156, 157 and 161 shall apply mutatis mutandis.

Sanly Corporation did not pass off the subject goods as that of another. Indeed, it admits that the goods are genuine
Mitsubishi photographic paper, which it purchased from a supplier in Hong Kong. Petitioners also allege that private
respondents “made it appear that they were duly authorized to sell or distribute Mitsubishi Photo Paper in the
Philippines.” Assuming that this act constitutes a crime, there is no proof to establish such an allegation.
Petron Corp. v. Yao, Sr., G.R. No. 243328, 18 March 2021

FACTS:

Petitioner Petron Corporation is a corporation duly organized and existing under the Philippine law and one of the bulk
suppliers of Liquefied Petroleum Gas (LPG) in the Philippines. It uses the trademark "GASUL" for its LPG products and the
only entity in the Philippines authorized to refill, use, sell and distribute Petron Gasul LPG containers and/or products. It
has come to the attention of Petron that some entities/establishments were engaged in the unauthorized refilling, sale
and distribution of Petron-owned Gasul LPG cylinders. Among them was the Masagana Gas Corp (Masagana). Pursuant
to said reports, Petron engaged the services of BernabeAlajar of Able Research and Consulting Services, Inc., for the
investigation of reported violations of the corporation's intellectual property rights and to gather evidence as may be
necessary, among others things. Mr. Alajar then coordinated with the National Bureau of Investigation (NBI) for the
investigation ofMasagana's illegal activities. Thus, sometime in February 2003, the NBI agents, together with Mr. Alajar
conducted a discreet surveillance operation on the Masagana refilling plant located in TreceMartires, Cavite. On
February 13 and February 27, 2003, NBI agent Riche N. Oblanca and Mr. Alajar conducted test-buys at the Masagana
refilling plant in TreceMartires, Cavite wherein they personally witnessed Masagana employees in the act of refilling
Petron Gasul LPG cylinders and selling it to them. Cash invoices were issued to them after they purchased the said LPG
tanks.During.their surveillance on February 18, 2003, the NBI agents and Mr. Alajar followed a ten wheeler truck
ofMasagana carrying Petron Gasul LPG cylinders from its refilling plant in TreceMartirez, Cavite to its warehouse located
in Makati City. Upon arrival at the Makati warehouse, they noticed tb,at another four-wheeler truck containing Petron
Gasul LPG cylinders was ~arked in front of said warehouse. Acting on the Complaint Affidavit of Mr. Alajar, on March 8,
2010, the Task Force on Intellectual Property Piracy of the Department of Justice (DOJ) issued a Resolution and
recommended that two (2) separate informations for violation of Section 168.3 in relation to Section 170 ofRA 8293 x be
filed against respondents. RTC Quashed the Info. Petron filed with the CA a petition for certiorari alleging grave abuse of
discretion committed by the RTC ofMakati City but was dismissed.

ISSUE: W/N CA acted with GAD in quashing the Information.

RULING: NO

Unfair competition is characterized as a continuing offense because of the very nature of the crime. Section 168 of
Republic Act No. 8293, known as the Intellectual Property Code of the Philippines, describes the acts constituting the
crime of unfair competition, to wit: SECTION 168. Unfair Competition, Rights, Regulation and Remedies.

From jurisprudence, unfair competition has been defined as the passing off ( or palming off) or attempting to pass off
upon the public of the goods or business of one person as the goods or business of another with the end and probable
effect of deceiving the public. Passing off ( or palming off) takes place where the defendant, by imitative devices on the
general appearance of the goods, misleads prospective purchasers into buying his merchandise under the impression
that they are buying that of his competitors. Thus, the main element of unfair competition is passing off and one way of
committing the crime is by sale.

In transitory or continuing offenses in which some acts material and essential to the crime and requisite to its
consummation occur in one province and some in another, the court of either province has jurisdiction to try the case.
Here, both the RTC of Cavite and Mak:ati City have jurisdiction to try the case for unfair competition filed against
respondents. However, it has been held that in cases of concurrent jurisdiction, the court first acquiring jurisdiction
excludes the other courts. 16 Since it is the RTC ofTreceMartires City, Cavite which had earlier acquired jurisdiction over
the case of unfair competition filed against respondents, the RTC of Makati City correctly quashed the Information filed
with it for lack of jurisdiction. The crime of unfair competition is a continuing crime and cannot be considered as
delitocontinuado. In Santiago v. Hon. Justice Garchitorena, 17 we discussed the concept of delitocontinuado or
continuous or continued crimes The rule which protects against unfair competition is primarily for the protection of the
party against whom such competition is directed, and only incidentally for the protection of the public. In some of the
cases language is used which would suggest that the public is under the protection of the court, but in fact the liability of
the article to mislead the public is only an element of proof in the plaintiff's case, the evidence showing that he has been
or may be injured by the fraudulent acts of the defendant. The court therefore, does not interfere for the purpose of
preventing the public from being misled, except in so far as it is necessary to protect the owner of a business from its
fraudulent invasion by others. If what is done tends to mislead the public, it naturally diverts customers from the
complainant, to the injury of his business. The prohibition is upon so acting as to beguile the public, and thus mislead an
intending purchaser into buying the goods of one person under the belief that he is buying those of a rival.
Law on Copyright

Chingvs Salinas Sr.

Facts:

Petitioner Ching is a maker and manufacturer of a utility model, Leaf Spring Eye Bushing for Automobile, for which he
holds certificates of copyright registration. Petitioner’s request to the NBI to apprehend and prosecute illegal
manufacturers of his work led to the issuance of search warrants against respondent Salinas, alleged to be reproducing
and distributing said models in violation of the IP Code. Respondent moved to quash the warrants on the ground that
petitioner’s work is not artistic in nature and is a proper subject of a patent, not copyright. Petitioner insists that the IP
Code protects a work from the moment of its creation regardless of its nature or purpose. The trial court quashed the
warrants. Petitioner argues that the copyright certificates over the model are prima facie evidence of its validity. CA
affirmed the trial court’s decision.

Issues: (1) Whether or not petitioner’s model is an artistic work subject to copyright protection. (2) Whether or not
petitioner is entitled to copyright protection on the basis of the certificates of registration issued to it.

Ruling:

(1) NO. As gleaned from the specifications appended to the application for a copyright certificate filed by the petitioner,
the said Leaf Spring Eye Bushing for Automobile and Vehicle Bearing Cushion are merely utility models. As gleaned from
the description of the models and their objectives, these articles are useful articles which are defined as one having an
intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information. Plainly,
these are not literary or artistic works. They are not intellectual creations in the literary and artistic domain, or works of
applied art. They are certainly not ornamental designs or one having decorative quality or value. Indeed, while works of
applied art, original intellectual, literary and artistic works are copyrightable, useful articles and works of industrial
design are not. A useful article may be copyrightable only if and only to the extent that such design incorporates
pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently
of the utilitarian aspects of the article. In this case, the bushing and cushion are not works of art. They are, as the
petitioner himself admitted, utility models which may be the subject of a patent.

(2) NO. No copyright granted by law can be said to arise in favor of the petitioner despite the issuance of the certificates
of copyright registration and the deposit of the Leaf Spring Eye Bushing and Vehicle Bearing Cushion. Indeed, in Joaquin,
Jr. v. Drilon and Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated, the Court ruled that:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted by the
statute, and not simply a pre-existing right regulated by it. Being a statutory grant, the rights are only such as the statute
confers, and may be obtained and enjoyed only with respect to the subjects and by the persons, and on terms and
conditions specified in the statute. Accordingly, it can cover only the works falling within the statutory enumeration or
description.

Ownership of copyrighted material is shown by proof of originality and copyrightability. To discharge his burden, the
applicant may present the certificate of registration covering the work or, in its absence, other evidence. A copyright
certificate provides prima facie evidence of originality which is one element of copyright validity. It constitutes prima
facie evidence of both validity and ownership and the validity of the facts stated in the certificate.
ABS-CBN vsGozon

FACTS:

Overseas Filipino worker Angelo dela Cruz was kidnapped by Iraqi militants and as a condition for his release, a demand
was made for the withdrawal of Filipino troops in Iraq. After negotiations, he was released by his captors and was
scheduled to return to the country in the afternoon of 22 July 2004. Occasioned by said homecoming and the public
interest it generated, both GMA Network, Inc. and [petitioner] made their respective broadcasts and coverage of the live
event. ABS-CBN “conducted live audio-video coverage of and broadcasted the arrival of Angelo dela Cruz at the Ninoy
Aquino International Airport (NAIA) and the subsequent press conference.” ABS-CBN allowed Reuters Television Service
(Reuters) to air the footages it had taken earlier under a special embargo agreement which states that any of the
footages ABS-CBN took would be for the “use of Reuter’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, to which Gozon, Duavit, Jr.,
Flores, Soho, Dela Peña-Reyes, and Manalastas are connected, “assigned and stationed news reporters and technical
men at the NAIA for its live broadcast and non-live news coverage of the arrival of dela Cruz.” 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 news feed in its program “Flash Report,” together with its live broadcast.
Allegedly, GMA-7 did not receive any notice or was not aware that Reuters was airing footages of ABS-CBN. 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. On August 13, 2004, ABS-CBN filed the Complaint for copyright infringement under
Sections 177 and 211 of the Intellectual Property Code. Prosecutor’s Resolution: issued the Resolution finding probable
cause to indict Dela Peña-Reyes and Manalastas. Consequently, the Information for violation of the Intellectual Property
Code was filed on December 17, 2004. Secretary Gonzales’Resolution: ruled in favor of respondents and held that good
faith may be raised as a defense in the case. Both parties moved for reconsideration of the Gonzalez Resolution.
Meanwhile, on January 19, 2005, the trial court granted the Motion to Suspend Proceedings filed earlier by Dela Peña-
Reyes and Manalastas. Secretary Agra’s Resolution: issued the Resolution (Agra Resolution) that reversed the Gonzalez
Resolution and found probable cause to charge Dela Peña-Reyes and Manalastas for violation of the Intellectual
Property Code. Secretary Agra also found probable cause to indict Gozon, Duavit, Jr., Flores, and Soho for the same
violation. Respondents assailed the Agra Resolution through the Petition for Certiorari with prayer for issuance of a
temporary restraining order and/or Writ of Preliminary Injunction on September 2, 2010 before the Court of Appeals.

On November 9, 2010, the Court of Appeals rendered the Decision granting the Petition and reversing and setting aside
the Agra Resolution. The Court of Appeals held that Secretary Agra committed errors of jurisdiction in issuing the
assailed Resolution. ABS-CBN’s Motion for Reconsideration was denied. It then filed its Petition for Review before this
court assailing the Decision and Resolution of the Court of Appeals.

ISSUE: Whether or not a news coverage is subject to the laws on copyright.

HELD: YES. It is true that under Section 175 of the Intellectual Property Code, “news of the day and other miscellaneous
facts having the character of mere items of press information” are considered unprotected subject matter. However, the
Code does not state that expression of the news of the day, particularly when it underwent a creative process, is not
entitled to protection. P.D. No. 49, §2, in enumerating what are subject to copyright, refers to finished works and not to
concepts. The copyright does not extend to an idea, procedure, process, system, method of operation, concept,
principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

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.” 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. Broadcasting organizations are entitled to several
rights and to the protection of these rights under the Intellectual Property Code. Respondents’ argument that the
subject news footage is not copyrightable is erroneous. The Court of Appeals, in its assailed Decision, correctly
recognized the existence of ABS-CBN’s copyright over the news footage: Surely, private respondent has a copyright of its
news coverage. Seemingly, for airing said video feed, petitioner GMA is liable under the provisions of the Intellectual
Property Code, which was enacted purposely to protect copyright owners from infringement.

News as expressed in a video footage is entitled to copyright protection. Broadcasting organizations have not only
copyright on but also neighboring rights over their broadcasts. Copyrightability of a work is different from fair use of a
work for purposes of news reporting.

ISSUE: Whether or not the news footage falls under the rule on Fair Use.
HELD: NO. 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.” 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:

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.

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.” The “transformative test” is generally used in reviewing the purpose and character of the usage of the
copyrighted work. This court must look into whether the copy of the work adds “new expression, meaning or message”
to transform it into something else. “Meta-use” can also occur without necessarily transforming the copyrighted work
used. 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.

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.
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.

ISSUE: Whether or not good faith is a defense in copyright infringement

HELD: NO. Infringement under the Intellectual Property Code is malumprohibitum. The Intellectual Property Code is a
special law. The general rule is that acts punished under a special law are malumprohibitum. “An act which is declared
malumprohibitum, malice or criminal intent is completely immaterial.”

In contrast, crimes mala in seconcern inherently immoral acts. Not every criminal act, however, involves moral
turpitude. It is for this reason that “as to what crime involves moral turpitude, is for the Supreme Court to determine”. In
resolving the foregoing question, the Court is guided by one of the general rules that crimes mala in se involve moral
turpitude, while crimes mala prohibita do not.

Crimes mala in se pre suppose that the person who did the felonious act had criminal intent to do so, while crimes mala
prohibita do not require knowledge or criminal intent.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 mensrea, 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 mensrea or culpa. Respondents
argue that live broadcast of news requires a different treatment in terms of good faith, intent, and knowledge to commit
infringement. Respondents’ arguments must fail. Respondents are involved and experienced in the broadcasting
business. They knew that there would be consequences in carrying ABS-CBN’s footage in their broadcast. That is why
GMA-7 allegedly cut the feed from Reuters upon seeing ABS-CBN’s ogo and reporter.
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 rebroadcast 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.Respondents argue that GMA-7’s officers and employees
cannot be held liable for infringement under the Intellectual Property Code since it does not expressly provide direct
liability of the corporate officers.They explain that “(i) a corporation may be charged and prosecuted for a crime where
the penalty is fine or both imprisonment and fine, and if found guilty, may be fined; or (ii) a corporation may commit a
crime but if the statute prescribes the penalty therefore to be suffered by the corporate officers, directors or employees
or other persons, the latter shall be responsible for the offense.”

ISSUE: Whether or not Corporate Officers of respondent may be held criminally liable.

HELD: NO. Petitioners, being corporate officers and/or directors, through whose act, default or omission the corporation
commits a crime, may themselves be individually held answerable for the crime. The existence of the corporate entity
does not shield from prosecution the corporate agent who knowingly and intentionally caused the corporation to
commit a crime. Thus, petitioners cannot hide behind the cloak of the separate corporate personality of the corporation
to escape criminal liability. A corporate officer cannot protect himself behind a corporation where he is the actual,
present and efficient actor.

However, the criminal liability of a corporation’s officers or employees stems from their active participation in the
commission of the wrongful act.We find that the Department of Justice committed grave abuse of discretion when it
resolved to file the Information against respondents despite lack of proof of their actual participation in the alleged
crime.The City Prosecutor found respondents Dela Peña-Reyes and Manalastas liable due to the nature of their work
and responsibilities.We agree with the findings as to respondents Dela Peña-Reyes and Manalastas. Both respondents
committed acts that promoted infringement of ABS-CBN’s footage. We note that embargoes are common occurrences in
and between news agencies and/or broadcast organizations. Under its Operations Guide, Reuters has two (2) types of
embargoes: transmission embargo and publication embargo. Under ABS-CBN’s service contract with Reuters, Reuters
will embargo any content contributed by ABS-CBN from other broadcast subscribers within the same geographical
location. There is probable cause that respondents Dela Peña-Reyes and Manalastas directly committed copyright
infringement of ABS-CBN’s news footage to warrant piercing of the corporate veil. They are responsible in airing the
embargoed Angelo dela Cruz footage. They could have prevented the act of infringement had they been diligent in their
functions as Head of News Operations and Program Manager. Secretary Agra, however, committed grave abuse of
discretion when he ordered the filing of the Information against all respondents despite the erroneous piercing of the
corporate veil. Respondents Gozon, Duavit, Jr., Flores, and Soho cannot be held liable for the criminal liability of the
corporation.Mere membership in the Board or being President per se does not mean knowledge, approval, and
participation in the act alleged as criminal. There must be a showing of active participation, not simply a constructive
one.Insum, the trial court erred in failing to resume the proceedings after the designated period. The Court of Appeals
erred when it held that Secretary Agra committed errors of jurisdiction despite its own pronouncement that ABS-CBN is
the owner of the copyright on the news footage. 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 malumprohibitum 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.
Filipino Society of Composers vs. Tan 148 SCRA 461 (1987)

FACTS:

Plaintiff-appellant is a non-profit association of authors, composers and publishers duly organized under the Corporation
Law of the Philippines and registered with the Securities and Exchange Commission. Said association is the owner of
certain musical compositions among which are the songs entitled: “DahilSa Iyo”, “SapagkatIkaw Ay Akin,” “Sapagkat
Kami Ay Tao Lamang” and “The Nearness Of You.”

On the other hand, defendant-appellee is the operator of a restaurant known as “Alex Soda Foundation and Restaurant”
where a combo with professional singers, hired to play and sing musical compositions to entertain and amuse customers
therein, were playing and singing the above-mentioned compositions without any license or permission from the
appellant to play or sing the same. Accordingly, appellant demanded from the appellee payment of the necessary license
fee for the playing and singing of aforesaid compositions but the demand was ignored.

Hence, on November 7, 1967, appellant filed a complaint with the lower court for infringement of copyright against
defendant-appellee for allowing the playing in defendant-appellee’s restaurant of said songs copyrighted in the name of
the former.

ISSUE:Whether or not the playing and signing of musical compositions which have been copyrighted under the
provisions of the Copyright Law (Act 3134) inside the establishment of the defendant-appellee constitute a public
performance for profit within the meaning and contemplation of the Copyright Law of the Philippines

RULING:

Playing of music in dine and dance establishment which was paid for by the public in purchases of food and constitutes
“performance for profit” within the Copyright Law. Nevertheless, defendant cannot be held to have violated the
Copyright Law because the composers of the contested musical compositions are deemed to have waived their rights in
favor of the general public because they have failed to comply with the regulation requiring an intellectual creation to
be copyrighted within 30 days after publication.
 Article 6bis

(1) Independently of the author's economic rights, and even after the transfer of the said rights, the author shall have
the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other
derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation.

(2) The rights granted to the author in accordance with the preceding paragraph shall, after his death, be maintained, at
least until the expiry of the economic rights, and shall be exercisable by the persons or institutions authorized by the
legislation of the country where protection is claimed. However, those countries whose legislation, at the moment of
their ratification of or accession to this Act, does not provide for the protection after the death of the author of all the
rights set out in the preceding paragraph may provide that some of these rights may, after his death, cease to be
maintained.

(3) The means of redress for safeguarding the rights granted by this Article shall be governed by the legislation of the
country where protection is claimed.

Article 14

(1) Authors of literary or artistic works shall have the exclusive right of authorizing:

 (i) the cinematographic adaptation and reproduction of these works, and the distribution of the works thus
adapted or reproduced;
 (ii) the public performance and communication to the public by wire of the works thus adapted or reproduced.

(2) The adaptation into any other artistic form of a cinematographic production derived from literary or artistic works
shall, without prejudice to the authorization of the author of the cinematographic production, remain subject to the
authorization of the authors of the original works.

(3) The provisions of Article 13 (1) shall not apply.

Summary of the Beijing Treaty on Audiovisual Performances (2012)

The Beijing Treaty on Audiovisual Performances was adopted by the Diplomatic Conference on the
Protection of Audiovisual Performances, which took place in Beijing from June 20 to 26, 2012. The
Treaty deals with the intellectual property rights of performers in audiovisual performances.

It grants performers four kinds of economic rights for their performances fixed in audiovisual
fixations, such as motion pictures: (i) the right of reproduction; (ii) the right of distribution; (iii) the right
of rental; and (iv) the right of making available.
 The right of reproduction is the right to authorize direct or indirect reproduction of the
performance fixed in an audiovisual fixation in any manner or form.
 The right of distribution is the right to authorize the making available to the public of the
original and copies of the performance fixed in an audiovisual fixation through sale or other transfer
of ownership.
 The right of rental is the right to authorize the commercial rental to the public of the original
and copies of the performance fixed in an audiovisual fixation.
 The right of making available is the right to authorize the making available to the public, by
wire or wireless means, of any performance fixed in an audiovisual fixation, in such a way that
members of the public may access the fixed performance from a place and at a time individually
chosen by them. This right covers, in particular, on-demand, interactive making available through
the Internet.
As to unfixed (live) performances, the Treaty grants performers three kinds of economic
rights: (i) the right of broadcasting (except in the case of rebroadcasting); (ii) the right of
communication to the public (except where the performance is a broadcast performance); and (iii) the
right of fixation.
The Treaty also grants performers moral rights, that is, the right to claim to be identified as the
performer (except where such an omission would be dictated by the manner of the use of the
performance); and the right to object to any distortion, mutilation or other modification that would be
prejudicial to the performer's reputation, taking into account the nature of the audiovisual fixations.
The Treaty provides that performers shall enjoy the right to authorize the broadcasting and
communication to the public of their performances fixed in audiovisual fixations. However, Contracting
Parties may notify that instead of the right of authorization, they will establish a right to equitable
remuneration for the direct or indirect use of performances fixed in audiovisual fixations for
broadcasting or communication to the public. Any Contracting Party may restrict or – provided that it
makes a reservation to the Treaty – deny this right. In the case and to the extent of a reservation by a
Contracting Party, the other Contracting Parties are permitted to deny, vis-à-vis the reserving
Contracting Party, national treatment ("reciprocity").
As to the transfer of rights, the Treaty provides that Contracting Parties may stipulate in their
national laws that once a performer has consented to the audiovisual fixation of a performance, the
exclusive rights mentioned above are transferred to the producer of the audiovisual fixation (unless a
contract between the performer and producer states otherwise). Independent of such a transfer of
rights, national laws or individual, collective or other agreements may provide the performer with the
right to receive royalties or equitable remuneration for any use of the performance, as provided for
under the Treaty.
As to limitations and exceptions, Article 13 of the Beijing Treaty incorporates the so-called "three-
step" test to determine limitations and exceptions, as provided for in Article 9(2) of the Berne
Convention, extending its application to all rights. The accompanying Agreed Statement provides that
the Agreed Statement of Article 10 of the WCT applies similarly to the Beijing Treaty, that is, that such
limitations and exceptions as established in national law in compliance with the Berne Convention
may be extended to the digital environment. Contracting States may devise new exceptions and
limitations appropriate to the digital environment. The extension of existing or the creation of new
limitations and exceptions is allowed if the conditions of the "three-step" test are met.
The term of protection must be at least 50 years.

The enjoyment and exercise of the rights provided for in the Treaty cannot be subject to any formality.

The Treaty obliges Contracting Parties to provide for legal remedies against the circumvention of
technological measures (e.g., encryption) used by performers in connection with the exercise of their
rights, and against the removal or altering of information – such as the indication of certain data that
identify the performer, performance and the audiovisual fixation itself – necessary for the
management (e.g., licensing, collecting and distribution of royalties) of the said rights ("rights
management information").

An Agreed Statement related to the interplay between technological measures and limitations and
exceptions clarifies that nothing prevents a Contracting Party from adopting effective and necessary
measures to ensure that a beneficiary may enjoy limitations and exceptions, where technological
measures have been applied to an audiovisual performance and the beneficiary has legal access to
that performance. The above effective and necessary measures may be needed only where
appropriate and effective measures have not been taken by rights holders in relation to that
performance to enable the beneficiary to enjoy the limitations and exceptions under that Contracting
Party's national law. Without prejudice to the legal protection of an audiovisual work in which a
performance is fixed, the obligations concerning technological measures of protection are not
applicable to performances unprotected or no longer protected under the national law giving effect to
the Treaty.

Contracting Parties shall accord protection under this Treaty to fixed performances that exist at the
time of entry into force of the Treaty and to all performances made after its entry into force for each
Contracting Party. However, a Contracting Party may declare that it will not apply the provisions
concerning some or all of the exclusive rights of reproduction, distribution, rental, making available of
fixed performances, and broadcasting and communication to the public in respect of performances
that existed at the time of the entry into force of this Treaty in each Contracting Party. Other
Contracting Parties may then reciprocally limit the application of these rights in relation to that
Contracting Party.

The Treaty obliges each Contracting Party to adopt, in accordance with its legal system, the
measures necessary to ensure the application of the Treaty. In particular, each Contracting Party
must ensure that enforcement procedures are available under its law so as to permit effective action
against any act of infringement of rights covered by the Treaty. Such action must include expeditious
remedies to prevent infringement as well as remedies that constitute a deterrent to further
infringement.

The Treaty establishes an Assembly of the Contracting Parties whose main task is to address matters
concerning the maintenance and development of the Treaty. It entrusts to the Secretariat of WIPO the
administrative tasks concerning the Treaty.

The Beijing Treaty will enter into force three months after 30 eligible parties have deposited their
instruments of ratification or accession. The Treaty is open to States members of WIPO and to the
European Union. The Assembly constituted by the Treaty may decide to admit other
intergovernmental organizations to become party to the Treaty. Instruments of ratification or
accession must be deposited with the Director General of WIPO.
Pearl & Dean v. Shoemart (CASE DIGEST)

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: Whether the the light box depicted in such engineering drawings ipso facto also protected by such copyright;
Whether there was a patent infringement; 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.
RELATED LAWS AND ISSUANCES

A.M. No. 10-3-10-SC