Championing the rights of music owners

The local music industry has just scored a major victory in its fight against unabated music piracy and copyright infringement, which is costing the sound recording industry and the government billions of pesos in lost profits and revenues.

This was after the Supreme Court issued a landmark en banc decision which basically ruled that playing music being broadcasted over the radio in establishments for profit such as restaurants, malls and the like, without first getting a license from the owner of the copyrighted music constitutes piracy or copyright infringement.

Even listeners of these unauthorized public performance of copyrighted music may be subject to liability under our Intellectual Property Code.

The same goes for similar establishments allowing their customers to watch copyrighted programs being aired on television without first getting a license and paying royalties to the copyright owner.

In a just issued decision penned by Justice Rodil Zalameda, the SC ordered the owner of two restaurants in Baguio City to pay damages for the unlicensed public performance of copyrighted songs when it allowed restaurant customers to listen to these songs which were being broadcasted over the radio through the use of loudspeakers without first securing a license from the music owner.

The petition was filed by the Filipino Society of Composers, Authors and Publishers Inc. or FILSCAP, a non-profit society that owns public performance rights over the copyrighted musical works of its members as well as the right to license public performances in the Philippines of copyrighted foreign musical works of its members and other affiliate performing rights societies abroad.

FILSCAP as a licensed collective management organization is also 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, according to the SC.

According to the High Tribunal, the case arose when a FILSCAP representative monitored that two branches of Sizzling Plate Restaurant along Session Road and along Abanao Extension in Baguio City, both of which were owned by Anrey Inc., played copyrighted music owned by FILSCAP between July and September 2008 without first getting a license from FILSCAP.

In its answer to the complaint for copyright infringement filed by FILSCAP before the Regional Trial Court, Anrey denied that any copyrighted music was being played within its establishments and that instead, its establishments were just playing what was being broadcasted on the radio they were tuned in. The RTC dismissed the complaint, citing Sec. 184i of the Intellectual Property Code which exempts public performances provided they are not profit making and they do not charge admission fees. On appeal, the Court of Appeals affirmed the RTC ruling.

However, the Supreme Court believed otherwise.

Citing US jurisprudence, the High Court held that the act of playing radio broadcasts containing copyrighted music through the use of loudspeakers, in this case, radio-over-loudspeakers, is in itself a performance.

It also did not agree with Anrey when the latter claimed that it is exempt from securing a license since the radio station that broadcasted the copyrighted music already secured one from FILSCAP because according to the SC, “a radio reception creates a performance separate from the broadcast.”

The SC explained that under the doctrine of multiple performances, a radio or TV transmission or broadcast can create multiple performances at one. Thus, it is immaterial if the broadcasting station has been licensed by the copyright owner since the reception becomes a new public performance requiring separate protection, it said.

It added that radio reception transmitted through loudspeakers to enhance profit does not constitute and is not analogous to fair use.

Fair use is considered a limitation to a copyright owner’s exclusive rights. It is the unauthorized use of a copyrighted work which is allowed under certain circumstances, provided there is no substantial injurious effect on the potential market of the copyrighted work and the economic rights of the copyright owner.

The Court noted that the reception was transmitted through loudspeakers within Anrey’s restaurants and although Anrey did 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.

Free use by commercial establishments of radio broadcasts, it held, is beyond the normal exploitation of the copyright holder’s creative work and that denying FILSCAP’s petition would gravely affect the copyright holder’s market since instead of paying royalties, they use free radio reception.

The SC stressed that applying the free use exception 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.

The High Tribunal also hinted on the need to amend the IPC because the very broad definition of what a public performance subjects even listeners of a radio station to copyright infringement

The IP Code defines public performance in the case of sound recording as making the recorded sounds audible at a place where persons outside the normal circle of a family and that family’s closest social acquaintances are or can be present, whether they are or can be present at the same place and time, or at different places and/or different times, and where the performance can be perceived without the need for communication to the public which is making of a work available to the public by wire or wireless means in such a way that members of the public may access these works from a place and time individually chosen by them.

Under the same law, a copyright owner has the exclusive right to carry out, authorize or prevent the public performance of his copyrighted work as well as other communication of the work to the public.

According to the Intellectual Property Office of the Philippines (IPOPHL) and FILSCAP, even what appears to be harmless singing by waiters of the Happy Birthday song to one celebrating his or her birthday at a restaurant may equate to infringement if no prior permission from the copyright owner of the songs have been obtained.

Even the seemingly harmless everyday activity of covering a song and uploading it on YouTube is illegal since copyrighted music cannot be played or performed to the public without permission, FILSCAP said. In this case, there are two illegal acts: recording the video which is a violation of the author’s reproduction rights, and streaming it online which violates the author’s right of communication to the public, it added.

One has also check whether the song is part of the public domain either because it is ineligible for copyright protection in the first place or the term of copyright protection has already lapsed, IPOPHL Bureau of Copyrights and Related Rights director Emerson Cuyo explained. If this is the case, then anyone can do whatever he wants to do with the work, even for profit  and without a license, he emphasized.

But with thousands of songs being created every day, IPOPHL said there is no easy way for businesses to publicly play a song at their establishments without ending up in prison or paying hefty fines. To be sure, IPOPHL advised that they should get a license from FILSCAP, which safeguards more than 20 million copyrighted local and foreign works or about 90 percent of the copyrighted musical works currently being played or performed in the country.

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