Microsoft Corporation v. Manansala
REITERATIONFacts
The Antecedents: Petitioner Microsoft Corporation, the copyright and trademark owner of various software programs, alleged that respondents Rolando D. Manansala and/or Mel Manansala, doing business as Dataman Trading Company and/or Comic Alley, were engaged in the distribution and sale of pirated Microsoft computer software. Following a test-purchase operation by a private investigator accompanied by an NBI agent, a search warrant was issued and executed, yielding several illegal copies of Microsoft programs. Based on these findings, Microsoft Corporation filed an Affidavit-Complaint with the Department of Justice (DOJ) for violation of Section 29 of Presidential Decree No. 49 (Decree on Intellectual Property). Procedural History: The State Prosecutor initially recommended the dismissal of the charge for violation of Section 29 of P.D. 49, suggesting instead a charge for violation of Article 189 of the Revised Penal Code, citing lack of proof that the respondent was the one who printed or copied the products. The DOJ subsequently denied Microsoft's motion for partial reconsideration and later denied its petition for review. Aggrieved, Microsoft filed a petition for certiorari with the Court of Appeals (CA), seeking to annul the DOJ's dismissal orders. The CA, however, affirmed the DOJ's dismissal, leading to the present appeal. The Petition: Microsoft Corporation filed a petition for review on certiorari with the Supreme Court, arguing that the CA erred in upholding the DOJ's dismissal. The core of Microsoft's argument is that printing or copying is not essential for copyright infringement under Section 29 of P.D. 49, and that the mere selling of pirated computer software constitutes copyright infringement. Microsoft contends that the DOJ and CA gravely abused their discretion by misinterpreting Section 5(a) of P.D. 49, which enumerates the exclusive rights of a copyright owner, and by requiring proof of actual copying or reproduction, thereby leading to an absurd and unreasonable interpretation of the law.
Issue(s)
Whether the Department of Justice and the Court of Appeals committed grave abuse of discretion in dismissing the charge of copyright infringement, and whether the mere selling of pirated computer software programs constitutes copyright infringement under Section 29 of Presidential Decree No. 49, even without proof that the seller was the one who copied or reproduced the software.
Ruling
The appeal is meritorious. The Court GRANTS the petition for review on certiorari, REVERSES and SETS ASIDE the decision of the Court of Appeals, and DIRECTS the Department of Justice to render the proper resolution to charge the respondent for copyright infringement.
Ratio Decidendi
On the issue of grave abuse of discretion and whether mere selling constitutes copyright infringement: The Supreme Court held that the DOJ committed grave abuse of discretion in sustaining the dismissal of the copyright infringement charge. The Court found that the acts of selling pirated software were sufficient to establish probable cause. The CA erred in its interpretation of Section 5(a) of PD 49, which enumerates the exclusive rights of a copyright owner. The CA's literal interpretation of the conjunctive word "and" in Section 5(a) to mean that all enumerated acts (print, reprint, publish, copy, distribute, multiply, sell, and make photographs, photo-engravings, and pictorial illustrations) must be present to constitute infringement would lead to absurd and unreasonable consequences, especially concerning works like computer programs. The Court emphasized that laws should be construed to avoid absurdity and to uphold the legislative intent. Therefore, the mere sale of illicit copies of software programs was sufficient to constitute copyright infringement under Section 29 of PD 49, and there was no need to prove that the respondent was the one who copied or reproduced the software. The Court clarified that Section 5 of PD 49 defines copyright as consisting of exclusive rights, including the right to sell. The commission of any of these acts without the copyright owner's consent constitutes infringement. Citing Columbia Pictures, Inc. v. Court of Appeals and NBI-Microsoft Corporation v. Hwang, the Court reiterated that the gravamen of copyright infringement is not merely the unauthorized manufacturing but the unauthorized performance of any of the acts covered by Section 5. Therefore, the mere sale of pirated computer software programs, without the copyright owner's consent, is sufficient to establish copyright infringement under Section 29 of PD 49, and the DOJ and CA erred in requiring proof of copying or reproduction by the seller.
Main Doctrine
The mere sale of pirated computer software programs, without proof of the seller being the one who copied or reproduced them, constitutes copyright infringement under Section 29 of Presidential Decree No. 49, as the enumerated acts in Section 5(a) should not be interpreted literally to require all acts to be present, especially when such interpretation leads to absurd results.