REPUBLIC OF THE PHILIPPINES NATIONAL CAPITAL JUDICIAL REGION REGIONAL TRIAL COURT Branch 90, QUEZON CITY PHILIPPINE

LONG DISTANCE TELEPHONE CO., INC. Plaintiff, Civil Case No. Q-99-38800 -versusPHILIPPINE LEAGUE FOR DEMOCRATIC TELECOMMUNICATIONS, INC. and GERARDO KAIMO Defendants x----------------------------x ANSWER (With Compulsory Counterclaims) Comes now defendant Philippine League for Democratic Telecommunications, Inc. ("PLDT, Inc." for brevity), through counsel, unto this Honorable Court respectfully represents that: ADMISSIONS 1. That defendant PLDT, Inc. admits the allegations contained in paragraph 2. [a] except its address which is now at LPL Center Unit 15-B, 130 L. P. Leviste Street (formerly Alfaro Street), Salcedo Village, Makati City. 2. The averment in paragraph 3 of the complaint is admitted; DENIALS 3. The allegations stated in paragraphs 1, 2[b], 4, 5, 6, 28, and 31 are specifically DENIED for lack of knowledge or information sufficient to form a belief as to the truth thereof; 4. The averments contained in paragraphs 4, 5, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, and 30 of the complaint are specifically DENIED, the truth being stated in the special and affirmative defenses incorporated hereinbelow; and defendant PLDT, Inc. furthers avers by way of -

I SPECIAL AND AFFIRMATIVE DEFENSES: That FIRST DEFENSE 5. The complaint dismally fails to state a valid cause of action against defendant PLDT, Inc. Defendant PLDT, Inc. has NEITHER participated in, collaborated with nor involved itself in acquiring rights over or in creating a website on the worldwide web or internet using the domain name PLDT.COM. As admitted by the defendant Gerardo Kaimo himself, the domain name and website PLDT.COM belongs to him only as it was acquired, paid for and being maintained solely by him. On the other hand, defendant PLDT, Inc. uses a separate and distinct website from that of PLDT.COM.

SECOND DEFENSE 6. Plaintiff has NO legal capacity to sue. By its own admission (paragraph 4, complaint), plaintiff was incorporated in 1928. There is no showing nor any allegation in the complaint that plaintiff re-incorporated itself after the expiration of its 50-year corporate life. Admittedly, as the life span of corporate entities are consittutionally limited to such period. Without re-incorporating upon expiration of the 50-year period, plaintiff Philippine Long Distance Telephone Co. has no legal corporate existence to begin with, and therefore has no legal capacity to sue. (Section 1, Rule 3, Rules of Court)

THIRD DEFENSE 7. Plaintiff's unfounded assertion of "exclusive and continuous use of the tradename "PLDT" for more than seventy (70) years is a complete prevarication. Its "application for registration of the service mark "PLDT" was received by the Bureau of Patent, Trademarks and Technology Transfer only on November 19, 1997. (See Exh. "I," Affidavit of Horacio Lavides (Annex "E," Complaint)

Plaintiff has NOT and can NOT validly acquire an exclusive trademark over the initials "PLDT," which is merely a generic set of letters put together in a particular order. Similarly, plaintiff can NOT cause the issuance of a temporary restraining order (TRO) or a writ of injunction against the "Palestinian Liberation Demolition Team" or "Pangilingan's Lap Dancing Troupe" which both use the initials "PLDT." Of course, plaintiff can always try. The fact remains, however, that plaintiff's attempt to prevent defendants from using the initials "PLDT" on a website simply because it is known by that name bespeaks of sheer arrogance and gall in attempting to monopolize the use of said generic initials, not just within the territorial jurisdiction of the Honorable Court, but the entire Internet as well. It is a profound insult and affront to all other entities which may happen to also share the initials "PLDT" to be effectively barred from legally using those said initials simply because plaintiff happens to be known by those initials. But even stretching one's imagination and granting that plaintiff holds a trademark on said initials, such trademark can NEVER be held exclusive, as such initials are by their very nature GENERIC.

FOURTH DEFENSE 8. Due to plaintiff's lack of diligence to acquire the domain PLDT.COM (having been validly registered under and through the vigilant efforts of defendant Kaimo), it can only have itself to blame for its gross negligence and extreme incompetence. As is the norm on the registration of Internet domain general policy of "first-come, first-serve" applies. Since was first to acquire and own said domain name while it was available to anyone who paid the US$70 registration fee at rights thereto must be respected. names, the defendant Kaimo still the time, his

Furthermore, the fact that plaintiff exerted no efforts to get in touch with or at least negotiate with defendant Kaimo over the subject domain name shows the clear unmistakably malicious attitude of insatiable greed of a giant telecommunications company (the plaintiff) lording it over the entire country's telephone consumers like a monopolistic dictator reminiscent of the Marcosian era. In fact, a number of other local well-known companies do not hold the corresponding top-level dot-com (.com) domain names for their

respective websites, which simply shows that there is a clear history and precedent of NOT having one's own tradename for its own domain name. Some examples of these are cited hereinbelow: a) The Bank of the Philippine Islands (BPI) does not own BPI.COM. This is owned by Business Products Inc. in Colorado, USA. b) Metrobank does not own METROBANK.COM, which is instead by a bank in Panama c) Purefoods does not own PUREFOODS.COM, which is instead owned by USA Global Link. d) Ayala Corporation does not own AYALA.COM. This belongs to Ayala E-mail Services in Vancouver. e) Universal Records Philippines does not own UNIVERSALRECORDS.COM which is instead owned by MCA-Universal in Los Angeles. f) San Miguel Corporation Philippines does not own SANMIGUEL.COM; it is however owned by a Hong Kong brewery. g) Philippine National Bank does not own PNB.COM. It is owned by Pacific National Bank in Miami, Florida, USA. h) Smart Communications does not own SMART.COM. It is owned by a European Web magazine called "Smart." i) Globe Telecommunications GMCR, Inc. does not own GLOBE.COM, which is a "portal" or general-content site having nothing to do with telecoms or cell phones. j) Infocom does not own INFO.COM nor INFOCOM.COM, the latter being owned by a company in Indiana, USA.

FIFTH DEFENSE 9. With all due respect, the Honorable Court has no jurisdiction over the subject and/or nature of the action or suit. The nature of the case at hand is unprecedented in local

jurisprudence as it involves the Internet, which is the global network of interconnected computer networks throughout the world, crisscrossing the borders of various countries, states, and territorial jurisdictions nationally and internationally. The very nature of the Internet and cyberspace defies simple traditional concepts of territorial jurisdcition. As stated by David G. Post and david Johnson in their article Law and Borders -- The Rise of Law in Cyberspace (Stanford Law Review, May 1999): "Cyberspace radically undermines the relationship between legally significant (online) phenomena and physical location. The rise of the global computer network is destroying the link between geographical location and: (1) the power of local governments to assert control over online behavior; (2) the effects of online behavior on individuals or things; (3) the legitimacy of the efforts of a local sovereign to enforce rules applicable to global phenomena; and (4) the ability of physical location to give notice of which sets of rules apply. "The Net thus radically subverts a system of rulemaking based on borders between physical spaces, at least with respect to the claim that cyberspace should naturally be governed by territorially defined rules." As seen in the instant case, the web server hosting the wbesite in question is located in Boca Raton, Florida in the United States, while the Internet registry of domain names throughout the world (Network Solutions, Inc.) resides in Virginia, also in the United States. But the audience of the website is the entire Internet which spans practically the whole world. While the Honorable Court's authority within the territorial boundaries of the Philippines is without question, it must take notice of the fact that any decision in the instant case will certainly have "far reaching" repercussions beyond the territorial jurisdiction of the Honorable Court, which may adversely affect innocent third parties outside the territorial boundaries of the Philippines.

SIXTH DEFENSE 10. Even assuming arguendo that defendant PLDT, Inc. did initiate the registration of the PLDT.COM domain name or had caused the creation of the PLDT.COM website, and continues to maintain the same, plaintiff's suit is directly violative of defendant's constitutional and intrinsic human right to freedom of speech and expression, as well as indirectly that of all other users of the PLDT.COM website in question.

The PLDT.COM website is clearly a non-commercial site for the purpose of expressing and ventilating its creator's and users' gripes and dissatisfactions with the plaintiff's services which affect the general consuming public, as well as other political and social issues of the day in the form of satirical parody. This clearly seen, even in the humorous disclaimer on the subject website itself: "100% PURE Pinoy -- UNADULTERATED ANGST, PAIN, HORROR, TEARS, RUMORS, LAUGHTER, and LIES FOR THE WHOLE FAMILY OR YOUR MONEY BACK." This disclaimer makes perfectly clear that the contents of the entire website are not in bad faith. They do not misrepresent the statements therein as fact, but rather as a means of expressing the personal opinions of the website owner and users.

II OPPOSITION TO PLAINTIFF'S APPLICATION FOR WRIT OF PRELIMINARY AND PERMANENT INJUNCTION

11. Plaintiff is not entitled to the issuance of writ of preliminary and permanent injunction. A preliminary injunction is n order granted at any stage of an action prior to final judgment, requiring a person to refrain from a particular act (Section 1, Rule 58, Rules of Court). "The party applying for it must show a clear legal right the violation of which is so recent as to make its vindication an urgent one" (Police Commission vs. Bello, 37 SCRA 230). "It is granted only on a showing that (a) the invasion of the right is material and substantial; (b) the right of the complainant is clear and unmistakable; and (c) there is an urgent and permanent necessity for the writ to prevent serious damages" (Pelajo vs. Court of Appeals, 117, SCRA 665). From the foregoing discussions, it is has not established a clear legal right to preliminary injunction. The grounds relied utterly bereft of factual and legal bases, right contemplated by the rules warranting prayed for. certain that plaintiff herein justify the issuance of upon in its application, being can hardly be the "clear legal the issuance of the writs

Failing therein, preliminary, moreso permanent injunction

CANNOT lie. Defendant PLDT, Inc. further alleges by way of -

III COMPULSORY COUNTERCLAIMS: That -

12. Defendant PLDT, Inc. repleads and incorporates the foregoing by way of reference insofar as they are relevant and material hereto: 13. Due to and consequent upon the filing of the instant action which is baseless, unfounded and unwarranted, defendant PLDT, Inc. sustained moral damages for which the plaintiff should be held liable to pay P 50.0 MILLION. The slackness of plaintiff in dragging the defendant PLDT, Inc. in the present action, justifies the grant of moral damages. This rather lackadaisical attitude consittuted gross negligence, if not wanton bad faith, enough to warrant the claim for moral injury suffered by said corporation. "A corporation is not, as rule entitled to moral damages because, not being a natural person, it cannot experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish and moral shock. The exception to this rule is where the corporation has a good reputation that is debased, resulting in its social humiliation" (Simex International, Inc. vs. Court of Appeals, G.R. No. 88013. March 19, 1990). The reputation of defendant PLDT, Inc., a non-stock, non-profit corporation duly organized and existing under Philippine laws, has never been besmirched nor tainted until the malicious filing of the instant case by the plaintiff. Herein defendant is now reputed to be the leading group of professionals who continually monitors and checks plaintiff's abuses and retrogressing services committed against the consuming public; 14. In order to set an example for the public good that the institution of precipitate actions, as this, is not being countenanced in a civilized society and to serve as a warning and deterrent against the repetition of the ineptness and indifference that has been unabashedly displayed here by plaintiff, it should be held to pay to defendant PLDT, Inc. P 50.0 MILLION as exemplary damages; 15. By the malicious filing of the instant action which is clearly and utterly unwarranted, defendant PLDT, Inc. was compelled to engage

the services of counsel for which plaintiff should be held liable to pay the sum of P 1.0 MILLION, plus P 5,000.00 for every court appearance, for and as attorney's fees.

IV PRAYER

WHEREFORE, it is repectfully prayed of this Honourable Court that the case be DISMISSED for being frivolous and unfounded and that the plaintiff be held liable to pay the following sums by way of compulsory counterclaims: a) P 50.0 MILLION as moral damages; b) P 50.0 MILLION as exemplary damages; c) P1.0 MILLION and P 5,000.00 for every court appearance, for and as attorney's fees. Other relief and remedies just and equitable under the circumstances are likewise prayed for. Makati City for Quezon City, October 24, 1999.

Domingo & Dizon Counsel for Philippine League for Democratic Telecommunications, Inc. Unit 15-B, LPL Center 130 Alfaro Street, Salcedo Village Makati City