G.R. No. L-32339. March 29, 1988.
PHOENIX PUBLISHING HOUSE, INC., petitioner, vs. JOSE T. RAMOS AND SOCORRO C. RAMOS, doing business as National Book Store, and COURT OF APPEALS, respondents.

FACTS

Petitioner Phoenix Publishing House, Inc., along with the authors, filed a complaint for damages against respondents Jose T. Ramos and Socorro C. Ramos (doing business as National Book Store) for alleged copyright infringement of two science textbooks. The complaint asserted that the respondents reprinted, published, distributed, and sold pirated copies of the copyrighted books. After trial, the lower court dismissed the complaint. It further ordered the petitioner to pay the respondents attorney’s fees of P5,000.00, dissolved a preliminary injunction, and ordered the return of seized books to the respondents.
The Court of Appeals affirmed the lower court’s decision. The Supreme Court initially gave due course to the petition for review, but limited its scope solely to the propriety of the award of attorney’s fees against the petitioner. The petitioner contended that the award was erroneous, as it essentially penalized the act of filing a lawsuit, contrary to established jurisprudence that attorney’s fees are not awarded merely because a party wins a case.

ISSUE

Whether the lower court and the Court of Appeals erred in awarding attorney’s fees to the respondents.

RULING

No, the award of attorney’s fees was improper and is hereby deleted. The Supreme Court modified the decision of the Court of Appeals. The legal logic is anchored on Article 2208 of the Civil Code, which enumerates the exclusive instances where attorney’s fees may be awarded in the absence of a stipulation. The Court examined whether this case fell under any of these exceptions.
The trial court’s justification for the award—that the respondents needed counsel to vindicate themselves—was found insufficient. The Court ruled this does not constitute a valid basis under Article 2208. The evidence showed the petitioner had secured copyrights from the Copyright Office, which were presumed valid, and it had obtained a search warrant based on its belief that infringing copies were being sold. Therefore, the infringement suit filed by the petitioner could not be characterized as “clearly unfounded” under paragraph 4 of Article 2208. Nor was the award justifiable under paragraph 11 (the general equitable clause), as the mere fact of litigation and the consequent need for legal services, without more, does not warrant such an award.
Consistent with settled jurisprudence, the Supreme Court emphasized that attorney’s fees are not intended to penalize a party for exercising its right to litigate. The award in this case placed an undue penalty on that right. Consequently, the award of P5,000.00 as attorney’s fees against the petitioner was ordered deleted.