Case Summary (G.R. No. 166391)
Factual and Procedural Antecedents
A private investigator and an NBI agent effectuated a test purchase of six CD-ROMs containing Microsoft software. A search warrant was procured and executed at the respondent’s business premises on November 19, 1997, resulting in seizure of several unauthorized copies of Microsoft programs. Microsoft filed an Affidavit‑Complaint with the DOJ. The public prosecutor recommended dismissal of the Section 29 P.D. 49 charge for lack of proof that the respondent printed, copied or reproduced the programs and instead suggested a possible charge under Article 189 of the Revised Penal Code. The DOJ denied Microsoft’s motions for reconsideration and petition for review. Microsoft filed certiorari in the Court of Appeals (CA), which affirmed the DOJ dismissals. The petition to the Supreme Court followed, challenging the DOJ’s dismissal as grave abuse of discretion.
Legal Issue Presented
Whether the mere sale of pirated copies of computer software — without proof that the accused personally performed the act of copying, printing or reproducing — suffices to establish probable cause and criminal liability for copyright infringement under Section 29 of Presidential Decree No. 49, and whether the DOJ and the CA erred in requiring proof that the respondent was the actual copier/printer/producer of the illicit copies.
Statutory Framework: Section 5 of P.D. No. 49 and Protected Works
Section 5 of P.D. No. 49 defines copyright as the exclusive right “to print, reprint, publish, copy, distribute, multiply, sell, and make photographs, photo‑engravings, and pictorial illustrations of the works,” among other exclusive acts. Section 2 enumerates classes of protected works and expressly includes computer programs. Under the decree, the performance of any of the exclusive acts listed in Section 5 without the copyright owner’s consent constitutes actionable infringement.
Standard of Review on Prosecutorial Determination of Probable Cause
The general rule is deference to the public prosecutor’s determination of probable cause as an executive function; however, the doctrine of judicial review permits intervention when that determination is tainted by grave abuse of discretion. Grave abuse exists where the prosecutor’s action is whimsical, arbitrary or shows flagrant disregard of facts or law such that the prosecutor acted beyond the limits of reason and justice.
Reasoning on Statutory Interpretation and the Conjunctive "And"
The CA read the conjunctive “and” in Section 5(a) as requiring that all enumerated acts be proven conjunctively (i.e., that sale alone does not constitute infringement unless accompanied by proof of copying/printing/reproduction by the accused). The Supreme Court rejected this literal and rigid construction as producing absurd and unreasonable consequences, noting that some listed works (e.g., musical compositions, cinematographic works, computer programs) cannot practically be subjected to every listed act (such as photographic or pictorial illustration). Applying established rules of statutory construction, the Court held that where literal reading would frustrate legislative purpose or lead to absurd results, conjunctive terms may be interpreted functionally or disjunctively to give effect to the law’s intent to protect the exclusive rights enumerated. The gravamen of infringement is the unauthorized performance of any of the exclusive acts; therefore sale of unauthorized copies is among the acts that may constitute infringement.
Application to Probable Cause and the DOJ’s Error
On the facts, the seizure of illicit Microsoft copies and the test purchase sufficiently established acts covered by Section 5 (notably distribution/sale) to support a well‑founded belief that copyright infringement had been committed and that the respondent was probably guilty. The DOJ and the CA erred by demanding direct proof that the respondent personally manufactured or reproduced the software. The Supreme Court concluded that the prosecutor’s dismissal for lack of evidence amounted to grave abuse of discretion because it disregarded the existence of acts that constitu
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Case Citation and Decision Panel
- Reported as 772 Phil. 14; 112 OG No. 26, 4006 (June 27, 2016); G.R. No. 166391, October 21, 2015.
- Decision authored by Justice Bersamin for the First Division.
- Justices Sereno, C.J., Velasco, Jr., Leonardo-De Castro, and Perlas-Bernabe concurred.
- Associate Justice Jose Portugal Perez was absent (on official business to Canada per Special Order No. 2253 dated October 14, 2015).
Parties and Characterization of Case
- Petitioner: Microsoft Corporation — identified as the copyright and trademark owner of all rights relating to various Microsoft software programs and their user guides/manuals.
- Respondent: Rolando D. Manansala and/or Mel Manansala, doing business as Dataman Trading Company and/or Comic Alley (business address: 3rd Floor, University Mall Building, Taft Ave., Manila).
- Nature of action: Petition for review on certiorari challenging the Department of Justice (DOJ) resolutions dismissing a criminal charge for violation of Section 29 of Presidential Decree No. 49 (Decree on Intellectual Property) for lack of probable cause; appeal from the Court of Appeals’ denial of petitioner’s certiorari petition and denial of motion for reconsideration.
Factual Background
- Petitioner asserted ownership of copyrights and trademarks covering multiple Microsoft computer programs (examples listed: MS‑DOS, Microsoft Encarta, Windows, Word, Excel, Access, Works, PowerPoint, Office, Flight Simulator, FoxPro) and their manuals.
- Private respondent Rolando Manansala, doing business as Dataman Trading Company/Comic Alley, was alleged to be distributing and selling Microsoft computer software programs without authority from petitioner.
- On November 3, 1997, a test purchase was effected: Mr. John Benedict A. Sacriz (private investigator) accompanied by an NBI agent purchased six CD‑ROMs containing various Microsoft programs from the respondent’s premises.
- Based on the test purchase, an NBI agent applied for a search warrant; a search warrant was issued on November 17, 1997.
- The search warrant was served on November 19, 1997, resulting in the seizure of several illegal copies of Microsoft programs from the respondent’s premises.
- Petitioner filed an Affidavit‑Complaint in the DOJ through Atty. Teodoro Kalaw IV, based on the search and seizure results.
DOJ Investigation, Resolutions, and Procedural Steps
- Resolution dated March 20, 2000: the public respondent State Prosecutor recommended dismissal of the charge under Section 29 of P.D. No. 49 for lack of evidence, while noting evidence showed respondent was selling Microsoft computer programs but there was “no proof that respondent was the one who really printed or copied the products of complainant for sale in his store,” and recommended charging respondent for violation of Article 189 of the Revised Penal Code instead.
- Petitioner filed a Motion for Partial Reconsideration arguing that printing or copying is not essential to the crime of copyright infringement under Section 29 of P.D. No. 49.
- Resolution dated May 15, 2001: the public respondent denied the Motion for Partial Reconsideration.
- Petitioner filed a Petition for Review with the DOJ, which was denied (resolution dated January 27, 2003).
- Petitioner filed a petition for certiorari with the Court of Appeals (CA) to annul the DOJ’s dismissal for alleged grave abuse of discretion amounting to lack or excess of jurisdiction.
Court of Appeals Ruling and Disposition
- CA rendered decision on February 27, 2004, denying the petition for certiorari and affirming the DOJ orders dated March 20, 2000, May 15, 2001, and January 27, 2003.
- CA’s reasoning (as summarized in the assailed decision): a reading of Section 5(a) of P.D. No. 49 showed the acts enumerated are joined by commas and the last phrase joined by “and,” which the CA interpreted as indicating a joinder/union such that all enumerated acts must be present and proven to hold a person liable; because petitioner failed to allege and prove that respondent performed the acts of copying, replicating or reproducing the software, “sale” alone of pirated copies did not constitute copyright infringement under P.D. No. 49.
Issue Presented to the Supreme Court
- Whether printing or copying is essential to the crime of copyright infringement under Section 29 of Presidential Decree No. 49, i.e., whether the mere selling of pirated computer software is sufficient to constitute copyright infringement such that the DOJ’s dismissal and the CA’s affirmation thereof constituted grave abuse of discretion.