Case Digest (G.R. No. 147043)
Facts:
In Microsoft Corporation vs. Judy C. Hwang et al., decided on 21 June 2005, petitioner Microsoft Corporation, a Delaware corporation owning exclusive copyrights and trademarks to various software products, filed criminal complaints for copyright infringement under Section 5(A) in relation to Section 29 of Presidential Decree No. 49 (PD 49) and for unfair competition under Article 189(1) of the Revised Penal Code. Respondents include officers and directors of Beltron Computer Philippines, Inc. (Beltron)—Benito Keh (President/Managing Director), Yvonne Keh (General Manager), Jonathan K. Chua, Emily K. Chua, Benito T. Sanchez, Nancy I. Velasco—and officers and directors of Taiwan Machinery Display & Trade Center, Inc. (TMTC)—Alfonso Chua, Alberto Chua, Judy C. Hwang, Sophia Ong, Deanna Chua. In May 1993, Microsoft and Beltron entered into a licensing agreement authorizing Beltron to reproduce, install, distribute, and license Microsoft software subject to royalty payments. MicrosofCase Digest (G.R. No. 147043)
Facts:
- Parties and Licensing Agreement
- Petitioner Microsoft Corporation, a Delaware corporation, owns copyrights and trademarks on software such as Windows, MS-DOS, Office suite, etc.
- Respondents include Beltron Computer Philippines, Inc. (Beltron) and Taiwan Machinery Display & Trade Center, Inc. (TMTC), plus their officers and stockholders.
- Termination of Agreement
- May 1993 (amended January 1994): Microsoft granted Beltron a nonexclusive license to reproduce/install one copy per customer system and to distribute object-code copies acquired from authorized replicators or distributors.
- June 22, 1995: Microsoft terminated the Agreement for Beltron’s non-payment of royalties; post-termination obligations provided under Agreement Sec. 11.
- Investigation and Test Buy
- Microsoft engaged Pinkerton Consulting Services and the NBI.
- November 10, 1995: NBI agent and PCS employee, posing as computer-shop representatives, purchased from respondents:
- A CPU with pre-installed Microsoft Windows 3.1 and MS-DOS software.
- Twelve CD-ROMs in Microsoft packaging (including “installer” CDs); none came with end-user license agreements, manuals, registration cards, or authenticity certificates.
- Receipts: One for CPU/monitor labeled “T.M.T.C. (PHILS.) INC. BELTRON COMPUTER”; the CD-ROM receipt showed only a “Gerlie” delivery reference.
- Search Warrants and Seizure
- November 17, 1995: RTC Branch 23, Manila, issued two search warrants on Microsoft’s application.
- NBI executed warrants at Beltron and TMTC premises, seizing hardware, accessories, and 2,831 CD-ROMs containing Microsoft software (plus other paraphernalia).
- DOJ Preliminary Investigation
- Microsoft and Lotus Development Corp. filed criminal complaints for:
- Copyright infringement under PD 49 Sec. 5(A) in relation to Sec. 29.
- Unfair competition under RPC Art. 189(1).
- Respondents’ defenses included:
- The dispute is civil (royalty collection), not criminal.
- TMTC legitimately imported MS-DOS CDs from R.R. Donnelley (Singapore).
- Only MS-DOS was pre-installed on the CPU.
- Receipts did not establish source of CD-ROMs.
- Some individuals are nominal stockholders only.
- October 26, 1999 DOJ Resolution dismissed complaints for lack of merit and insufficient evidence; found no prima facie case; held matters of contract validity to be civil.
- Subsequent motions for reconsideration (December 3, 1999) and appeals to DOJ Secretary (August 3, 2000; December 22, 2000) were denied.
Issues:
- Whether Microsoft engaged in forum-shopping.
- Whether the DOJ gravely abused its discretion in finding no probable cause for (a) copyright infringement and (b) unfair competition.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)