dotPH

REPUBLIC OF THE PHILIPPINES
REGIONAL TRIAL COURT
NATIONAL CAPITAL JUDICIAL REGION
MAKATI CITY, BRANCH 138

BANK OF THE PHILIPPINE ISLANDS,
Plaintiff,

- versus - CIVIL CASE NO. 03-1377

JOSE EMMANUEL DISINI,
Defendant.
x----------------------------------------------------x

MOTION TO DISMISS

DEFENDANT, thru undersigned counsel, respectfully moves for the dismissal of the instant complaint based on the following grounds:

I.The complaint fails to state a cause of action. More particularly,

A.Defendant is not the real party in interest;

B.Assuming arguendo that Defendant is the proper party, Defendant, however, is exempt from any liability under Section 44 of the Implementing Rules and Regulations (the "Rules") of the Electronic Commerce Act (Rep. Act No. 8792);

C.Plaintiff cannot sue for trademark infringement as it is not the registered owner of the trademark "BPI Express On Line"; and,

D.Assuming arguendo that it is the registered owner of the trademark "BPI Express On Line", the complaint does not allege nor impute any act of infringement committed by the Defendant.

II.The court has no jurisdiction over Defendant as summons has not been properly served.

III.The Complaint is improperly certified.

D I S C U S S I O N

I. The Complaint Fails to State a Cause of Action

A.Defendant is not the real party in interest.

By real part interest is meant such party who would be benefited or injured by the judgment or entitled to the avails of the suit. A real party in interest plaintiff is one who has a legal right, while a real party in interest defendant is one who has a correlative legal obligation whose act or omission violates the legal right of the former (Ralla v. Ralla, 199 SCRA 495 [1991]).

The real party in interest is one who prosecutes or defends and is benefited or injured. It applies to the plaintiff as well as the defendant, and a suit may be dismissed if neither of them is a real party in interest on the ground that the complaint states no cause of action, which can be invoked on appeal even if not previously raised in a motion to dismiss or answer (Travel Wide v. CA, 199 SCRA 205 [1991]).

In this case, Plaintiff impleads Defendant, Jose Emmanuel Disini, in his personal capacity. The complaint then alleges that Defendant "is the sole registry of '.ph' domain names". Plaintiff, however, is fully aware that a separate juridical entity, not herein Defendant, is the Philippine domain name registry. In fact, Plaintiff's demand letter, attached as Annex "D" of the complaint, is addressed to the "Philippine Domain (dotPH) Registry/Administrator" and not to Defendant Disini.

Verily, Defendant would not be injured nor benefited from any judgment rendered by this Honorable Court as he is not the Philippine domain name registry. Nor would Defendant be in a position to execute the desired remedy of the Plaintiff, that is, an order from the court "prohibiting (it) from continuing with the false BPI website".

Since the suit is not against the real party in interest defendant, then the Rules require that the instant complaint be dismissed.

B.Defendant is exempt from any liability under Section 44 of the Implementing Rules and Regulations (the "Rules") of the Electronic Commerce Act (Rep. Act No. 8792).

Assuming, for purposes of argument, that Defendant is the real party in interest, Section 44 of the Implementing Rules and Regulations (the "Rules") of the Electronic Commerce Act (Rep. Act No. 8792), exempts service providers, from any civil or criminal liability, including possible infringement of any right, thus:

"Section 44. Extent of Liability of a Service Provider. Except as otherwise provided in this Section, no person or party shall be subject to any civil or criminal liability in respect of the electronic data message or electronic document for which the person or party acting as a service provider as defined in Section 6(n)1 of these Rules merely provide access if such liability is founded on:

a)The obligations and liabilities of the parties under the electronic data message or electronic document;
b)The making, publication, dissemination or distribution of such material, or any statement made in such material, including possible infringement of any right subsisting in or in relation to such material: Provided, That.

i)The service provider: (1) does not have actual knowledge, or (2) is not aware of the facts or circumstances from which it is apparent, that the making, publication, dissemination or distribution of such material is unlawful or infringes any rights subsisting in or in relation to such material, or (3) having become aware, advises the affected parties within reasonable time, to refer the matter to the appropriate authority or, at the option of the parties, to avail of alternative modes of dispute resolution;
ii)The service provider does not knowingly receive a financial benefit directly attributable to the unlawful infringing activity; and
iii)The service provider does not directly commit any infringement or other unlawful act and/or does not benefit financially from the infringing activity or unlawful act of another person or party;

Provided, Further, That nothing in this Section shall affect -

a)Any obligation founded on contract;
b)The obligation of a service provider as such under a licensing or other regulatory regime established under written law;
c)Any obligation imposed under any written law;
d)The civil liability of any such party to the extent that such liability forms the basis for injunctive relief issued by a court under any law requiring that the service provider take or refrain from actions necessary to remove block or deny access to any material, or to preserve evidence of a violation of law." (Emphasis supplied).

The above provision is a codification of jurisprudence in other countries, notably, the United States. The rationale behind the rule is explained in the case of Scientology v. Dataweb (Cause No. 96/1048), where the District Court of the Hague held that Internet Service Providers could not be held liable for infringement because their activities are limited to providing information from and/or to its users and the storage of this information. In addition, the service providers do not select the information and do not process it either. They only provide the technical means to enable the publication by others. Hence, in these circumstances the service providers do not engage in publishing themselves, but only provide the opportunity for publication. (Disini, Jesus M. Jr., The Electronic Commerce Act and its Implementing Rules and Regulations, p. 44 [2000]).

To be exempt from liability founded on the making, publication, dissemination or distribution of any material which infringes any right, under the aforecited provision, the following elements must concur:

1. The defendant must qualify as a "Service Provider" under Section 6(n) of the Rules;
2. The defendant merely provides access;
3.(i) The defendant does not have actual knowledge or (ii) is not aware of facts that the making publication dissemination or distribution of such material infringes any right, or (iii) having become aware, advises the affected parties to refer the matter to the appropriate authority ;
4.The defendant does not knowingly receive a financial benefit directly attributable to the infringing activity; and
5.The defendant does not directly commit any infringement or does not induce another person to commit any infringement and does not benefit financially from the infringing activity.

In this case, all elements to exempt Defendant from liability, assuming he is the real party in interest, is present.

1. Defendant is a "Service Provider".

As defined in Section 6(n), a "Service Provider" includes one who provides network access or operator of facilities therefore, including entities offering transmission, routing, or providing of connections for online communications, digital or otherwise, between or among points specified by a user, of electronic data message or electronic documents of the user's choosing".

In a passive and indirect sense, a domain name registry provides the means by which electronic data message or documents can be routed. In particular, a domain name registry merely provides relevant information to those entities that actually routes electronic data messages. Therefore, a domain name registry and registry falls within the definition and is considered as a Service Provider.

2. Defendant merely provides access.

A domain name registry only registers a name indicated by a client as his preferred domain name address. Registration is done online without any intervention on the part of the domain name registry. After registration, the domain name registry merely provides access to the domain name registration information to any entity requesting the same. In other words, if an Internet service provider wants to send an email to a particular domain name in the .PH domain, such provider will query a name server containing information supplied by the domain name registry in order to determine the destination of the said email. In the case of a uniform resource locator (URL) using the said domain name, the Internet service provider would query the domain name server to determine which computer on the Internet houses or hosts the requested web site. Note that the contents of the website which the client may put up using the domain name is fully within the control of the client -- the domain name registry not having any editorial control or intervention therein whatsoever.

The domain name registry's exemption from liability for contributory infringement was explained in the leading US case of Lockheed Martin Corp. v. Network Solutions, Inc. (985 F.Supp. 949), involving a suit filed against by Lockheed Martin against the US domain name registry for registering a name similar to Lockheed Martin's trademark. In that case, the Federal Court held that the "registration of internet domain name, without more, does not amount to infringement of a mark similar to the name".

The court there held that refusal of the domain name registry to cancel the domain registrations does not amount to contributory trademark infringement. The ruling is grounded upon the following considerations:

After a domain name is registered, [the domain name registry]'s involvement is over. [The domain name registry] is not part of the process of linking domain names with potentially infringing resources such as Web sites. [The domain name registry] does not require holders to use domain names for Web sites or any other form of Internet communications. Nor do domain name holders need [the domain name registry]'s permission to do so. x x x. [The domain name registry] neither controls nor monitors the Internet. A domain name once registered can be used in connection with thousands of pages of constantly changing information. X x x. (There is no centralized storage location, control point, or communications chained for the internet, and it would not be technically feasible for a single entity to control all of the information conveyed on the internet. [The domain name registry]'s role in the internet is distinguishable from that of an internet service provider whose computers provide the actual storage and communications for infringing material x x x Because [the domain name registry]'s involvement with potentially infringing uses of domain names is remote, the Court finds that it is inappropriate to extend contributory liability to [the domain name registry] x x x (at 961, 962).

The Court further added that a "registry of Internet domain name had no affirmative duty to police the Internet in search of potentially infringing uses of domain names". The same considerations hold true in the the case at bar.

3. No allegation in the Complaint negating the existence of other elements

The other elements required to be exempt from liability are negatively stated. Thus, the Rules require that: (a) there was no actual knowledge by the Service Provider; (b) that it did not knowingly receive any financial benefit directly attributable to the infringing activity; and (c) that it did not directly commit any infringement or induce any other person to do so.

Thus, to successfully claim from a service provider, the Complaint should at least allege one of these elements as being absent.

The Complaint, however, does not allege any fact which would show that Defendant had actual knowledge that the material infringes on Complainant's alleged property rights, that Defendant knowingly received a financial benefit directly attributable to the infringing activity, or that it directly committed any infringement or that it induced another person to commit any such infringement. Therefore, for failure to allege these essential facts, the Complaint states no cause of action and should necessarily be dismissed.

C.Plaintiff is NOT the Registered Owner of the Trademark.

To have a cause of action, the claimant must allege in his pleading that he has a clear legal right, that the defendant has a correlative duty in respect thereto, which the latter violated by some wrongful act or omission, and that such wrongful act or omission cause injury, loss or damage to claimant, for which relief is sought, Metrobank v. Tan, 142 SCRA 352 [1986]. The general rule that to determine the sufficiency of the cause of action, only the facts alleged in the complaint and no other should be considered admits exceptions, such as those which the court may take judicial notice, undisputed facts, official records, documents, pleadings or annexes attached to the complaint, or admissions by the defendant, which the court may take into consideration, in addition to those alleged in the complaint, and relevant laws and jurisprudence, and facts which appear by record or document included in the pleading to be unfounded, Tan v. CA, 295 SCRA 247 [1998]. Conclusions or interpretations of law, and allegations of fact the falsity of which is subject to judicial notice are not also hypothetically admitted, Banez Electric Light Co. v. Abra Electric Cooperative, Inc., 119 SCRA 90 [1982].

Plaintiff claims that it is the "registered owner of a trademark entitled 'BPI Express On Line' as evidenced by the Trademark Application duly received by the Intellectual Property Office". Plaintiff's cause of action, therefore, is predicated on the alleged infringement on its registered trademark. This, however, flows from an erroneous conclusion of law that it is already the registered owner of the trademark "BPI Express On Line".

The law clearly provides that the rights in a mark are acquired through registration made validly in accordance with the provisions of Republic Act No. 8293 [1996], otherwise known as the Intellectual Property Code of the Philippines ("IPC"; Sec. 122, IPC). The certificate of registration of a mark is the prima facie evidence of the validity of registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the same. (Sec. 138, IPC).

The fact of filing of a trademark application, therefore, does not confer upon the applicant the ownership of the trademark since the applicant still has to go through the application process - examination, publication, notice, hearing, opposition, actual use, among others - before it is given the certificate of registration. As explicitly stated in the IPC, trademark rights arise from registration. Thus, the IPC further provides that the owner of a registered mark may recover damages from any person who infringes on his rights, (Sec. 156.1, IPC). It is clear that a person can only avail of the remedies for infringement only upon registration of his trademark.

As the Complaint and Annex "A" would show, Plaintiff has not acquired any trademark rights over the mark "BPI Express On Line" because it has not been issued a certificate of registration over the same. Plaintiff has only filed an application to have the same registered in its name. Plaintiff, therefore, only has an inchoate, uncertain and contingent trademark right over the same. Whether the certificate of registration will be granted or not still remains to be seen.

Since Plaintiff still has not registered the mark, it may not legally avail of the remedies provided for in the IPC and as such, the complaint should be dismissed outright.

D.The Complaint does not allege any act of infringement committed by Defendant.

As stated earlier, to have a cause of action, there must be an allegation of an act or omission of defendant in violation of plaintiff's legal right. Absent any such allegation, the complaint cannot prosper and would suffer the fate of dismissal for failure to state a cause of action.

In this case, assuming arguendo that Plaintiff has a legal right to the trade mark "BPI Express On Line", the Complaint should still be dismissed because it fails to allege or impute any act of infringement committed by herein Defendant.

Acts of infringement of a trademark under Section 155 of the IPC include reproduction, counterfeiting, copying or colorably imitating a registered mark. A reading of the complaint would show that it does not impute any of these acts of infringement against Defendant. There is no allegation attributing any act of reproduction, counterfeiting, copying or colorably imitating what Plaintiff claims to be its registered trademark.

The most that Plaintiff alleges and imputes against herein Defendant is that the alleged "false BPI website (www.bpiexpressonline.com.ph) was allowed to be registered by defendant" (Par. 8, Complaint), and that defendant "refused to block or deactivate the false BPI website" (Par. 9, Complaint). These acts imputed against Defendant certainly would not qualify as acts of infringement under the IPC.

Additionally, Section 155 requires that the defendant must have used the registered mark in commerce. However, Plaintiff failed to allege such commercial use of the mark by the Defendant. In fact, as noted by the court in the Lockheed case, supra, the domain name registry does not participate at all in the use of the domain name after its registration. In other words, there can be no liability that attaches to the Defendant simply because it has not even used the domain name in any way, much less in a commercial manner.

Moreover, Section 158 0f the IPC provides that in every suit for infringement, the owner of the registered mark shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such imitation is likely to cause confusion, or to cause mistake or to deceive. Such knowledge is presumed if the registrant gives notice that his mark is registered by displaying with the mark the words "Registered Mark" or the letter R within a circle or if the defendant had actual notice of the registration.

In this case, the Complaint is defective since it does not allege any fact which would show that Defendant committed the acts of infringement with knowledge that it would cause confusion or would cause mistake or would deceive. Plaintiff cannot rely on the presumption that Defendant knew that it would cause confusion since Plaintiff's mark does not have the requisite marks. Hence, pursuant to the express provisions of Section 158 of the IPC, Plaintiff will not be able to recover damages from Defendant and would thus have no cause of action against the latter.

It appears from the averments in the complaint that Plaintiff's cause of action is for "contributory infringement". There is, however, no legal basis for such cause of action since there is no provision in the IPC nor in any other statute which imposes liability against a third party who does not directly participate in any act of infringement. "Contributory infringement", therefore, cannot be used as basis for Plaintiff's cause of action. There being no cause of action the Honorable Court would have no recourse but to dismiss the complaint.

Even if Plaintiff is suing on the basis of unfair competition under Section 168 of the IPC, the Complaint still fails to state a cause of action because it does not allege that Defendant employed deception or any other means contrary to good faith. There is also no statement in the Complaint that Defendant passed off his services or business for those of the one having established such goodwill, which is another essential element of unfair competition.

Therefore, the Complaint should likewise be dismissed for failure of Plaintiff to allege and impute any act or omission by Defendant in violation of plaintiff's legal right.

II. The Court has No Jurisdiction Over Defendant Since Summons Has Not Been Properly Served.

For in personam actions, like the case at bar, personal or substituted service of summons is essential for the acquisition by the court of jurisdiction over the person of a defendant who does not voluntarily submit himself to the court.

Service of summons on a resident defendant who is a natural person is made by handing a copy thereof to him in person, or, if he refuses to receive it, by tendering it to him. If, for justifiable causes, the resident defendant cannot be served within a reasonable time by personal service, substituted service may be resorted to.

Substituted service may be effected by (a) by leaving copies of the summons at the defendant's dwelling house or residence with some person of suitable age and discretion then residing therein, or (b) by leaving copies to the defendant's office or regular place of business with some competent person in charge thereof. Sec. 7, Rule 14, Rules of Court.

If the sheriff effected the service of summons upon defendant by substituted service without first attempting to personally serve the same upon him, he violates the rule an no valid service of summons is effected, depriving the court of jurisdiction over the person of the defendant and rendering the judgment against him null and void. (Talsan Enterprise v. Baliwag Transit, Inc. 310 SCRA 156 [1999]). The statutory requirements of substituted service must be followed strictly, faithfully and fully, and any substituted service other than that authorized by the statute is ineffective, (Laus v. CA, 216 SCRA 588 [1993]).

The Sheriff's Return, attached hereto as Annex "A", would show that summons was served upon defendant by substituted service. The Sheriff's Return merely state that "it was received by Maribeth Francisco, upon instructions of Defendant who is the president of the corporation". There is no showing, however, in the Sheriff's Return that it first attempted to personally serve the summons upon Defendant and that he refused to receive it. The said return did not even state that he inquired as to the whereabouts of the Defendant. There was, therefore, no valid service of summons upon Defendant and consequently, the court has no jurisdiction over the Defendant and the complaint must necessarily be dismissed.

P R A Y E R

WHEREFORE, premises considered, Defendant respectfully move that that Complaint be DISMISSED.

Respondent pray for other just and equitable reliefs.

San Juan City for Makati City, January 8, 2004.

DISINI & DISINI LAW OFFICE
Counsel for Defendant
35 Buchanan St., North Greenhills
San Juan, Metro Manila 1502

By:

BAYANI H. AGABIN
Roll No. 40053
PTR No. 7014039/1-6-04/Makati City
IBP No. 603448/1-6-04/Makati Chapter

NORBERTO M. NAVARRO
Roll No. 46962
PTR No. 2275823/1-6-03/Makati City
IBP Lifetime No. 03042 / Makati Chapter

NOTICE OF HEARING

CLERK OF COURT
Regional Trial Court
Makati City, Branch 138

BENEDICTO VERSOZA GEALOGO & BURKLEY
Counsel for Plaintiff
11/F BPI Bldg., Ayala Avenue
cor. Paseo de Roxas
Makati City

GREETINGS:

Please submit the foregoing motion for the consideration of the Honorable Court on January 16, 2004, at 8:30 a.m. or such other date as the Court may find convenient.

BAYANI H. AGABIN

NORBERTO M. NAVARRO

EXPLANATION OF SERVICE BY REGISTERED MAIL

The foregoing Motion was served by registered mail upon the above-mentioned as evidenced by the attached Affidavit of Service. The undersigned counsel was constrained to serve copies thereof by registered mail due to time constraints, and considering further, the lack of available manpower to effect service by personal delivery.

BAYANI H. AGABIN

NORBERTO M. NAVARRO

AFFIDAVIT OF SERVICE

I, ANGUSTIA L. CURIOSO, of DISINI & DISINI LAW OFFICE, with office address at the 35 Buchanan Street, San Juan, Metro Manila, after being duly sworn, depose and say:

On January ____, 2004, I served copies of the following pleading/paper:

MOTION TO DISMISS

in Civil Case No. 03-1377 entitled "Bank of the Philippine Islands, Plaintiff vs. Jose Emmanuel Disini, Defendant." pursuant to Rule 13 of the 1997 Rules of Civil Procedure, as follows:

By Registered Mail To:

CLERK OF COURT
Regional Trial Court
Makati City, Branch 138

BENEDICTO VERSOZA GEALOGO & BURKLEY
Counsel for Plaintiff
11/F BPI Bldg., Ayala Avenue
cor. Paseo de Roxas
Makati City

[x] By depositing a copy in the post office at _______________________ as evidenced by Registry Receipt Nos. ___________, and ___________ hereto attached and indicated after the name of the addressees, and with instructions to the post-master to return the mail to the sender after ten (10) days if undelivered.

San Juan, Metro Manila, January 8, 2004.

ANGUSTIA L. CURIOSO
Affiant

SUBSCRIBED AND SWORN to before me on January 8, 2004, affiant exhibiting to me his Community Tax Certificate No. 11836157 issued at Makati City on Jan. 3, 2003.

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