Sanrio Company Limited v. Lim (G.R. No. 168662)

Facts:

Petitioner Sanrio Company, a Japanese corporation, is the copyright owner of various animated characters sold locally by its exclusive distributor, Gift Gate Incorporated, which allowed local entities to manufacture petitioner’s products. A search warrant was issued against respondent Lim alleged to be selling imitations of petitioner’s products. Thereafter, petitioner filed a complaint for copyright infringement with the Task-Force on Anti-Intellectual Property Piracy (TAPP) of the DOJ. Respondent asserted that he obtained his merchandise from petitioner’s authorized manufacturers. The complaint was dismissed. CA affirmed and further held that the offense had already prescribed.

Issues:

(1) Whether or not the action had prescribed.

(2) Whether or not there is copyright infringement.

Ruling:

(1) NO. Section 2 of Act 3326 provides that the prescriptive period for violation of special laws starts on the day such offense was committed and is interrupted by the institution of proceedings against respondent (i.e., the accused). Petitioner in this instance filed its complaint-affidavit 1 year, 10 months and 4 days after the NBI searched respondent’s premises and seized Sanrio merchandise therefrom. Although no information was immediately filed in court, respondent’s alleged violation had not yet prescribed. In the recent case of Brillantes v. Court of Appeals, we affirmed that the filing of the complaint for purposes of preliminary investigation interrupts the period of prescription of criminal responsibility. Thus, the prescriptive period for the prosecution of the alleged violation of the IPC was tolled by petitioner’s timely filing of the complaint-affidavit before the TAPP.

(2) NO. To be criminally liable for violation of Section 217.3 of the IPC, the following requisites must be present:

  1. possession of the infringing copy and
  2. knowledge or suspicion that the copy is an infringement of the genuine article.

The prosecutors in this case consistently found that no probable cause existed against respondent for violation of the IPC. The TAPP found that: Evidence on record would show that respondent bought his merchandise from legitimate sources. While it appears that some of the items seized during the search are not among those products which [GGI] authorized these establishments to produce, the fact remains that respondent bought these from the abovecited legitimate sources. At this juncture, it bears stressing that respondent relied on the representations of these manufacturers and distributors that the items they sold were genuine. As such, it is not incumbent upon respondent to verify from these sources what items [GGI] only authorized them to produce. Thus, as far as respondent is concerned, the items in his possession are not infringing copies of the original [petitioner’s] products.

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