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NBI-Microsoft Corporation & Lotus Development Corporation v. Judy C.

Hwang, Benito Keh & Yvonne K. Chua/Beltron Computer Philippines Inc.,

Jonathan K. Chua, Emily K. Chua, Benito T. Sanchez, Nancy I. Velasco, Alfonso
Chua, Alberto Chua, Sophia Ong, Deanna Chua/Taiwan Machinery Display &
Trade Center, Inc., and The Secretary of Justice (G.R. No. 147043, 21 June
Microsoft Corp. and Beltron Computer Phils., Inc. entered into a Licensing
Agreement where Beltron was authorized to reproduce and install no more than one
copy of Microsoft software on each customer system hard disk. Microsoft Corp.
terminated the agreement for non-payment of royalties. Upon learning that Beltron
was illegally copying and selling Microsoft software, Microsoft Corp. secured search
warrants leading to the search of Beltrons premises which resulted in the seizure of
counterfeit Microsoft software.
Microsoft filed a complaint for copyright infringement and unfair competition with the
Department of Justice. The DOJ dismissed the complaint on the ground that Beltron
had no intent to defraud the public as the software products seized came from an
alleged Microsoft licensee in Singapore, and that it did not manufacture the seized
software products.
The Supreme Court ruled in favor of Microsoft Corp. and held that copyright
infringement under the Presidential decree 49 (the Old Copyright Law) is not
confined to the unauthorized manufacturing of intellectual works but covers the
unauthorized performance of any of the acts covered by Section 05 of the said Law
(i.e., copying, distributing, multiplying and selling), which acts were done by Beltron
to the prejudice and damage of Microsoft Corp. Moreover, the Supreme Court held
that the counterfeit cd-roms bought from Beltron suffice to support a finding of
probable cause for unfair competition under Article 189 (1) of the Revised Penal
Code (now repealed by the IP Code) considering that the packaging of these
products could not be distinguished from those of authentic Microsoft software. Such
replication, together with the similarity in the content of the counterfeit cd-roms,
implies an intent to deceive the public.