SC: Forged Deed of Assignment Cannot Transfer Copyright
December 12, 2023
While copyright may be assigned, the assignment must be valid before the assignee can enjoy the rights and possess the remedies of the assignor of the copyright.
Thus held the Supreme Court’s Second Division, in a Decision penned by Senior Associate Justice Marvic M.V.F. Leonen, partly granting the petition for review on certiorari filed by M.Y. Intercontinental Trading Corporation (M.Y. Intercontinental), Tedwin T. Uy (Uy), and Allianz Marketing and Publishing Corporation (Allianz Marketing). The petition challenged the rulings of the Court of Appeals (CA) which had affirmed the Regional Trial Court’s (RTC) finding that petitioners committed copyright infringement against St. Mary’s Publishing Corporation (St. Mary’s Publishing).
St. Mary’s Publishing is the copyright owner of the textbooks Pagpapaunlad ng Kasanayan sa Pagbasa (Binagong Edisyon) 1 to 6 and Developing Reading Power Enhanced-Combined Edition 1 to 6 (subject textbooks). In 2005, its Publisher and President, Jerry Vicente S. Catabijan, entered into a business venture with M.Y. Intercontinental, which is the agent and sole distributor of Fujian New Technology Color Making and Printing Company Ltd. (Fujian), and Uy to fund the printing of St. Mary’s Publishing’s books in China. Pursuant to their financing agreement, St. Mary’s Publishing was granted a loan payable to M.Y. Intercontinental. The former in turn issued several authorities to print its textbooks in favor of Fujian.
St. Mary’s Publishing later started defaulting on its obligations, resulting in the non-delivery of books. Uy then claimed that Catabijan gave him a signed Deed of Assignment of all St. Mary’s Publishing’s copyright. M.Y. Intercontinental subsequently registered the Deed of Assignment under its name, resulting in the issuance of Copyright Registration Nos. A2012-24 to A2012-35 over the subject textbooks in favor of M.Y. Intercontinental.
St. Mary’s Publishing was prompted to file a complaint with the RTC for copyright infringement against petitioners upon learning that M.Y. Intercontinental sold the subject textbooks to the City of Cabuyao and that Fujian authorized M.Y. Intercontinental to market and sell the subject textbooks in the Philippines, with Allianz Marketing importing and selling the books on the strength of M.Y. Intercontinental’s registered copyright over the subject books.
The RTC decided in favor of St. Mary’s Publishing, finding that the Deed of Assignment invoked by petitioners was forged. The CA affirmed the RTC’s findings, prompting the present petition.
In resolving the petition, the Court stressed that copyright owners have exclusive economic rights in the reproduction and distribution of the original copy of their work through sale and other forms of transfer of ownership. The owners, by themselves or through others, may also authorize the conduct of these activities.
While these rights may be assigned, entirely or partly, the assignment, must be contained in a written declaration, stating the intention to assign the copyright in whole or in part, said the Court.
In the present case, the Court upheld the findings of the RTC, as affirmed by the CA, as to the validity of the Deed of Assignment.
“The totality of the evidence shows that Catabijan’s signature in the Deed of Assignment was forged. The trial judge personally examined and compared Catabijan’s signatures on the documents on record and found significant differences in his signature in the Deed of Assignment and the other documents,” held the Court, which also appreciated the findings of the Quezon City Police District Crime Laboratory and the National Bureau of Investigation that the signatures were not made by one and the same person.
The Court added that since Catabijan’s signature was forged, there was no consent given to perfect the contract of assignment, rendering the Deed of Assignment fictitious and void. Thus, St. Mary’s Publishing’s copyright over the subject books was not transferred in whole or in part to M.Y. Intercontinental.
On the petitioners’ defense that the copyright certificates in M.Y. Intercontinental’s name are prima facie evidence of ownership, the Court ruled that copyright registration does not vest ownership. “Failure to register does not remove copyright protection under the law, but this does make the owner liable to pay a fine. Registration of copyright only serves as a notice, but it does not confer rights.”
The Court cited the 2020 Revised Rules of Procedure for Intellectual Property Rights Cases, which states that registration and deposit of a work with the National Library or the Intellectual Property Office (IPO) “shall not carry with it the presumption of ownership of the copyright by the registrant or depositor, nor shall it be considered a condition sine qua non to a claim of copyright infringement.”
Neither did petitioners have a right to sell the books upon default of St. Mary’s Publishing’s obligations, the Court found, as there was nothing in the loan contract which allows petitioners and their principal to sell the printed books due to default.
Thus, without a valid Deed of Assignment, and with the authorities issued by St. Mary’s Publishing limited to printing only, as well as without rights to sell upon default under the contract of loan, petitioners had no right to import the books and sell them to the public.
Reiterating that importing, marketing, and selling of books without the consent of the copyright owner constitutes copyright infringement, the Court thus found that petitioners infringed upon the exclusive economic rights of St. Mary’s Publishing under Section 177 of the Intellectual Property Code when they imported, marketed, and sold the copyrighted textbooks.
The Court hence directed the IPO to cancel the copyright registration in the name of M.Y. Intercontinental.
The Court also upheld the award of damages in favor of St. Mary’s Publishing, but remanded to the RTC the determination of the propriety of petitioners’ compulsory counterclaims. (Courtesy of the Supreme Court Public Information Office)
Full text of G.R. No. 249715 (M.Y. Intercontinental Trading Corporation, et al. v. St. Mary’s Publishing Corporation) at: https://sc.judiciary.gov.ph/249715-m-y-intercontinental-trading-corporation-tedwin-t-uy-and-allianz-marketing-and-publishing-corporation-vs-st-marys-publishing-corporation-and-jerry-vicente-s-catabijan/