Sanrio Company v. Lim
REITERATIONFacts
1. The Antecedents: Sanrio Company Limited, a Japanese corporation, owns copyrights to various animated characters. Its products are distributed in the Philippines by Gift Gate Incorporated (GGI), which in turn licenses local entities to manufacture and sell these products. In 2001, GGI, concerned about counterfeit Sanrio products, hired IP Manila Associates (IPMA) to investigate. IPMA identified respondent Edgar C. Lim, doing business as Orignamura Trading, as selling imitation Sanrio products. Following IPMA's affidavit, the National Bureau of Investigation (NBI) obtained a search warrant and seized imitation Sanrio products from Orignamura Trading. 2. Procedural History: On April 4, 2002, Sanrio filed a complaint-affidavit with the Task-Force on Anti-Intellectual Property Piracy (TAPP) of the Department of Justice (DOJ) against Lim for violation of the Intellectual Property Code. Lim asserted he was merely a retailer who purchased merchandise from authorized manufacturers and did not know the items were counterfeit. The TAPP dismissed the complaint due to insufficient evidence, finding that Lim relied on the representations of legitimate sources. The DOJ affirmed this dismissal, and the Office of the Chief State Prosecutor also affirmed the TAPP's resolution. Sanrio then filed a petition for certiorari with the Court of Appeals (CA), which dismissed the petition on the ground of prescription, citing Act 3326. The CA also found no grave abuse of discretion by the DOJ. 3. The Petition: Sanrio filed this petition for review on certiorari under Rule 45 of the Rules of Court, arguing that the CA erred in concluding the alleged violations had prescribed, asserting that the pendency of a preliminary investigation tolls the prescriptive period. Sanrio also contended that the CA erred in finding no grave abuse of discretion by the DOJ, arguing that Lim was liable for copyright infringement even if he obtained merchandise from legitimate sources, as he sold counterfeit goods. The Supreme Court denied the petition, holding that the filing of the complaint with the DOJ tolled the prescriptive period and that the DOJ did not commit grave abuse of discretion in its findings.
Issue(s)
Whether the Court of Appeals erred in concluding that the alleged violations of the Intellectual Property Code had prescribed. Whether the Department of Justice committed grave abuse of discretion in dismissing the complaint against the respondent.
Ruling
The petition is DENIED. The Supreme Court affirmed the dismissal of the complaint but for reasons partially different from the Court of Appeals. While the Court agreed that the DOJ did not commit grave abuse of discretion, it clarified that the filing of the complaint-affidavit with the TAPP did interrupt the prescriptive period.
Ratio Decidendi
On the issue of prescription: The Supreme Court held that the filing of the complaint-affidavit on April 4, 2002, with the TAPP for purposes of preliminary investigation interrupted the prescriptive period for the alleged violation of the Intellectual Property Code. This interruption is consistent with Section 2 of Act 3326, which states that prescription is tolled when proceedings are instituted against the guilty person. The Court cited the case of Brillantes v. Court of Appeals to affirm that the filing of a complaint for preliminary investigation suspends the running of the prescriptive period. Therefore, the alleged violation had not yet prescribed when the complaint was filed, contrary to the CA's finding. On the issue of grave abuse of discretion by the DOJ: The Supreme Court affirmed the DOJ's finding that no probable cause existed against the respondent. The Court reiterated that in a preliminary investigation, the public prosecutor determines the existence of probable cause, and courts generally do not interfere with such findings unless there is a clear showing of grave abuse of discretion, defined as an arbitrary, capricious, whimsical, or despotic exercise of power. The prosecutors in this case carefully evaluated the evidence presented by both parties and arrived at their conclusion after a thorough assessment. The Court found that their decision to dismiss the complaint was not tainted with grave abuse of discretion, as they acted within their sound judgment based on the evidence before them.
Main Doctrine
The filing of a complaint-affidavit for purposes of preliminary investigation before the Task-Force on Anti-Intellectual Property Piracy (TAPP) interrupts the prescriptive period for violations of special laws, even if no information is immediately filed in court. Furthermore, the Supreme Court will not disturb the factual findings of the Department of Justice (DOJ) in preliminary investigations absent a clear showing of grave abuse of discretion.