G.R. No. 249715 - M.Y. Intercontinental Trading Corporation, Tedwin T. Uy, and Allianz Marketing and Publishing Corporation vs. St. Mary's Publishing Corporation and Jerry Vicente S. Catabijan

St. Mary’s Publishing Corporation (St. Mary’s) is the registered copyright owner of Pagpapaunlad ng Kasanayan sa Pagbasa (Binagong Edisyon) 1–6 and Developing Reading Power (Enhanced-Combined Edition) 1–6. Its President is Jerry Vicente S. Catabijan.
Petitioners M.Y. Intercontinental Trading Corporation (MITC), Tedwin T. Uy, and Allianz Marketing and Publishing Corporation (Allianz) entered a 2005 venture: MITC as printing agent and sole distributor of Fujian New Technology Color Making and Printing Co., Ltd. (Fujian), Uy as principal funder, and Allianz as marketer/importer.

Under Contract No. SMPCMY 76M 009 (Nov. 11, 2008), MITC loaned St. Mary’s PHP 76,748,494.68 for printing costs in China, at 2% monthly interest, payable Dec. 2008–June 2010 by post-dated checks; delays incur 2.5% penalty/month.
St. Mary’s issued multiple purchase orders to MITC to avail of the loan; notably, Dec. 7, 2009 PO for PHP 11,347,781.08 covering 301,000 copies of the subject textbooks, which were not delivered due to payment default.

To secure payment, St. Mary’s and Catabijan executed (a) a February 26, 2010 promissory note and Declaration of Pledge of real properties; (b) a March 12, 2010 Memorandum of Agreement to deposit 2009–2010 sales proceeds into a joint account (70% to MITC, 30% to St. Mary’s).
St. Mary’s continued to default; multiple post-dated checks bounced; no delivery or demand for the books after April 2010 meeting where St. Mary’s treated the PO as rescinded.

In April 2010, Catabijan purportedly executed a Deed of Assignment transferring all copyrights of the subject textbooks to Uy “in payment” of indebtedness; MITC registered Copyright Registration Nos. A2012-24 to A2012-35 in its name on January 18, 2012.
No valid delivery of the books occurred; St. Mary’s requested cancellation of MITC’s registrations, which was denied.

On October 22, 2010, MITC filed for declaratory relief in RTC Mandaluyong (Civil Case No. MC-10-5078), claiming unpaid-seller rights.
The RTC declared MITC an unpaid seller (Art. 1525 NCC), granting lien, resale, and contract rescission rights; applied the first-sale doctrine to permit import and resale without infringing copyright.

On March 13, 2013, St. Mary’s sued MITC, Uy, Fujian, and Allianz in RTC Manila, Branch 24 (Civil Case No. 13-129631) for copyright infringement, seeking injunction and damages.
RTC Decision (Dec. 8, 2017): held the Deed of Assignment forged (for lack of proper notarization and expert reports), voided MITC’s registrations, found infringement by petitioners, and awarded:

Injunction against infringing acts;
Actual damages of PHP 18,060,000.00 (20% of gross sales);
Moral damages PHP 1,000,000.00; exemplary damages PHP 2,000,000.00; attorneys’ fees PHP 500,000.00; costs.

Court of Appeals (Apr. 11, 2019) affirmed in toto; SC petition filed contesting forgery finding, infringement ruling, damages, and denial of petitioners’ counterclaims.

Whether the Deed of Assignment and subsequent copyright registrations in favor of MITC are valid.
Whether petitioners’ importation, marketing, and sale of the textbooks constitute copyright infringement.
Whether the Mandaluyong RTC declaratory relief ruling bars or affects the infringement case.
Whether the damages, moral/exemplary damages, and attorneys’ fees awarded are properly computed and justified.
Whether petitioners’ counterclaims for unpaid loan obligations are compulsory and should have been resolved without additional docket fees.