Court affirms FILSCAP’S right over copyrighted music works

THE Supreme Court has upheld the right of the Filipino Society of Composers, Authors and Publishers Inc. (FILSCAP) to collect license fees and/or royalties over copyrighted works of its member artists played through the use of loudspeakers.

In a decision penned by Justice Rodil V. Zalameda, the Court En Banc reversed and set aside the ruling issued by the Court of Appeals (CA), which affirmed the decision and order of the Baguio City Regional Trial Court (RTC), Branch 6 dismissing the amended complaint filed by FILSCAP.

FILSCAP is a non-profit society of composers, authors, and publishers that owns public performance rights over copyrighted musical works of its members. It also owns the right to license public performances in the Philippines of copyrighted foreign musical works of its members and affiliate performing rights societies abroad.

It is deputized to enforce and protect the copyrighted works of its members or affiliates by issuing licenses and collecting royalties and/or license fees from anyone who publicly exhibits or performs music belonging to FILSCAP’S worldwide repertoire.

The case was lodged after a FILSCAP representative found out between July and September 2008 that branches of Sizzling Plate Restaurant along Session Road and along Abandon Extension in Baguio City, which were owned by respondent Anrey Inc., played copyrighted music owned by FILSCAP.

FILSCAP wrote the restaurants several letters informing them that the unauthorized public performance of copyrighted music amounts to infringement and urging them to secure licenses from FILSCAP to avoid prosecution.

FILSCAP eventually filed a complaint for copyright infringement against Anrey before the RTC.

For its defense, Anrey denied playing any copyrighted music within its establishments and claimed that its establishments played whatever was being broadcasted on the radio they were tuned in.

The trial ruled in favor of the respondent citing Section 184 (i) of Republic Act 8293, or the Intellectual Property Code of the Philippines, which exempts public performances by a club or institution for charitable or educational purposes as long as they are not for profit and they do not charge admission fees.

The RTC also denied the motion for reconsideration filed by FILSCAP, prompting it to elevate the issue before the Court of Appeals.

However, the CA also affirmed the lower court’s decision and FILSCAP’S subsequent motion for reconsideration.

FILSCAP then elevated the case before the SC through a petition for review.

In ruling in favor of FILSCAP, the SC affirmed the petitioner’s legal standing to sue for copyright infringement as it is accredited by the IPP to perform the role of a Collective Management Organization and a member of the Paris-based International Confederation of Societies of Authors and Composers, the umbrella organization of all composer societies worldwide.

Thus, the Court ruled that FILSCAP has the authority to collect royalties and/or license fees and sue for copyright infringement.

“As an assignee of copyright, it is entitled to all the rights and remedies which the assignor had with respect to the copyright,” the SC said.

The Court also declared that the act of playing radio broadcasts containing copyrighted music through the use of loudspeakers (radio-over-loudspeakers) is, in itself, a performance.

The Court did not give weight to Anrey’s argument that it is exempt from securing a license since the radio station that broadcasted the copyrighted music already secured one from FILSCAP.

The High Tribunal explained that a radio reception creates a performance separate from the broadcast, which is otherwise known as the doctrine of multiple performances which provides that a radio (or television) transmission or broadcast can create multiple performances at once.

“Thus, on whether the reception of a broadcast may be publicly performed, it is immaterial if the broadcasting station has been licensed by the copyright owner because the reception becomes a new public performance requiring separate protection,” the SC explained.

Further, the Court held that radio reception transmitted through loudspeakers to enhance profit couldn’t be considered “fair use.”

Based on the records, the reception was transmitted through loudspeakers within Anrey’s restaurants.

“While Anrey does not directly charge a fee for playing radio broadcasts over its speakers, such reception is clearly done to enhance profit by providing entertainment to the public, particularly its customers, who pay for the dining experience in Anrey’s restaurants,” the SC said.

The Court held that the free use by commercial establishments of radio broadcast “is beyond the normal exploitation of the copyright holder’s creative work.”

The SC also expressed apprehension that denying FILSCAP’S petition would affect the copyright holder’s market where instead of paying royalties, they may opt to use free radio reception.

The Court said allowing such exceptions to restaurants will also affect other uses in similar establishments like malls, department stores, retail stores, lounges and the like, causing a huge economic impact on the music industry in general.

In light of this, the Court ordered Anrey Inc. to pay FILSCAP P10,000 as temperate damages for the unlicensed public performance of the copyrighted songs on FILSCAP’S repertoire and P50,000 as attorney’s fees, plus interest at the rate of 12 percent per annum from September 8, 2009 until June 30, 2013 and 6 percent per annum from July 1, 2013 until finality of the Court’s judgment.