View full case

COLUMBIA PICTURES v. CA

FACTS:

The case involves a petition for review on certiorari regarding a decision by the Court of Appeals and an order by the Regional Trial Court of Makati concerning the quashing of Search Warrant No. 87-053. The search warrant was initially issued on November 22, 1988, for violations of Section 56 of Presidential Decree No. 49, also known as the "Decree on the Protection of Intellectual Property." The case commenced when the complainants, represented by their counsel, filed a formal complaint with the National Bureau of Investigation (NBI) for film piracy violations. Following the complaint, NBI agents, led by Senior Agent Lauro C. Reyes, and private researchers conducted surveillance on various video establishments, including Sunshine Home Video Inc., owned and operated by Danilo A. Pelindario. On November 14, 1987, Agent Reyes applied for a search warrant to seize pirated video tapes of copyrighted films, televisions, and other related equipment from Sunshine Home Video. The application included affidavits and depositions from Reyes, another witness named Rene C. Baltazar, and Atty. Rico V. Domingo, which led to the issuance of Search Warrant No. 87-053 after the court found probable cause. The search warrant was executed on December 14, 1987, resulting in the seizure of various pirated video tapes and equipment. Subsequently, Sunshine Home Video filed a "Motion to Lift the Order of Search Warrant," which was initially denied but later reconsidered by the court, citing the non-presentation of master tapes of the copyrighted films during the search warrant proceedings. This led to the quashal of the search warrant, prompting the petitioners to appeal the decision, ultimately bringing the case before the Supreme Court. Among other issues, the petitioners challenge the retroactive application of a ruling from the 20th Century Fox Film Corporation vs. Court of Appeals case, which required the presentation of master tapes to establish probable cause for issuing search warrants in copyright infringement cases.

ISSUES:

  1. Whether the foreign corporations (petitioners) had legal standing to sue in Philippine courts without a license to do business in the Philippines.

  2. Whether the retroactive application of the ruling in 20th Century Fox Film Corporation vs. Court of Appeals was valid, given it wasn't established at the time the search warrant was issued.

RULING:

  1. Legal Standing of Foreign Corporations:

    • The Supreme Court ruled that the petitioners have legal standing to sue as they are not transacting business in the Philippines in a capacity that requires a license. Ownership of exclusive distribution rights or the appointment of an attorney-in-fact for protection does not amount to doing business.

  2. Retroactive Application of 20th Century Fox Ruling:

    • The Court held that the ruling in 20th Century Fox Film Corporation vs. Court of Appeals cannot be applied retroactively to quash the search warrant. The legal and jurisprudential standards that were in effect at the time the search warrant was issued must be used to assess probable cause, and these standards were adequately met. The 20th Century Fox ruling was promulgated after the issuance of the search warrant and thus should not affect the finding of probable cause determined under the earlier standards.

PRINCIPLES:

  • Prospectivity of Judicial Decisions: Judicial decisions, particularly those that establish new doctrines, are to be applied prospectively and should not affect parties who relied on the old doctrines.

  • Definition of "Doing Business": The term "doing business" includes acts implying continuity of commercial dealings or arrangements. However, mere ownership of distribution rights or appointing an attorney-in-fact for protection of such rights does not constitute doing business.

  • Requirements for Issuance of Search Warrants: The determination of probable cause for a search warrant should consider the standards in effect at the time of issuance. The presentation of master tapes is not a strict necessity for determining probable cause in copyright infringement cases unless there is specific doubt regarding the nexus between the master tape and the pirated copies.

  • Section 133 of the Corporation Code: Foreign corporations not engaged in business in the Philippines are not barred from suing in local courts, even if they lack a business license.

  • Legis Interpretation Legis Vim Obtinet: The interpretation placed upon the written law by competent courts has the force of law, ensuring stability and predictability in the legal system.

  • Intellectual Property Rights: Protection of intellectual property rights must be balanced with procedural fairness and evidence requirements, promoting vigilance against piracy.