Case Digest (G.R. No. L-6652-54)
Facts:
NBI Microsoft Corporation & Lotus Development Corp. v. Judy C. Hwang et al., G.R. No. 147043, June 21, 2005, the Supreme Court First Division, Carpio, J., writing for the Court.Petitioner Microsoft Corporation (with Lotus Development Corporation initially joined) alleged that respondents — officers and stockholders of Beltron Computer Philippines, Inc. and Taiwan Machinery Display & Trade Center, Inc. (TMTC) and several individuals — reproduced and sold unauthorized copies of Microsoft software in the Philippines in violation of P.D. No. 49 and Article 189(1) of the Revised Penal Code. Microsoft had entered a Licensing Agreement with Beltron in May 1993, which Microsoft terminated effective 22 June 1995 for nonpayment of royalties; the Agreement limited Beltron’s reproduction and distribution rights and preserved Microsoft’s other remedies under law and contract.
In November 1995 Microsoft, acting through a Philippine agent and with private investigators and the NBI, conducted test buys: on 10 November 1995 PCS employee Sacriz and NBI agent Samiano posed as a computer-shop representative and purchased a CPU with pre-installed Microsoft software and 12 CD‑ROMs from respondents; some CD‑ROMs were installer discs. On 17 November 1995 Microsoft obtained two search warrants from the Regional Trial Court, Branch 23, Manila, and the NBI seized numerous items from Beltron and TMTC, including 2,831 CD‑ROMs and other computer paraphernalia.
Microsoft and Lotus charged respondents before the Department of Justice (I.S. No. 96‑193) with copyright infringement under Section 5(A) in relation to Section 29 of P.D. No. 49 and with unfair competition under Article 189(1) of the Revised Penal Code. Respondents filed counter‑affidavits denying the charges, claiming legitimate importation, lack of proof that seized articles were counterfeit, and that some seized items belonged to third parties or were left for safekeeping. Respondents also moved to quash the search warrants; the RTC partially granted the motion (Order of 16 April 1996) and denied Microsoft’s motion for reconsideration (Order of 19 July 1996). Microsoft appealed the RTC orders to the Court of Appeals (CA‑G.R. CV No. 54600), which on 29 November 2001 set aside the RTC orders; that decision became final on 27 December 2001.
The DOJ, through State Prosecutor Ong and Assistant Chief State Prosecutor Buenafe, recommended dismissal of Microsoft’s complaint for lack of merit and insufficiency of evidence (Resolution dated 26 October 1999), concluding among other things that the dispute appeared civil in nature and that Microsoft had not proved the seized items were counterfeit; Microsoft’s motions for reconsideration and for ocular inspection were denied (3 December 1999). Microsoft appealed to the Office of the DOJ Secretary; Undersecretary Puno dismissed the appeal (3 August 2000) and denied reconsideration (22 December 2000). Lotus later desisted from its ...(Subscriber-Only)
Issues:
- Did Microsoft engage in forum‑shopping?
- Did the Department of Justice commit grave abuse of discretion in finding no probable cause to charge respondents with copyright infringement under Section 5(A) of P.D. No. 49 (in relation to Section 29) and unfair competition under Article 189(1) of t...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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