Outcome:

The Supreme Court granted the petition of Filipino Society of Composers, Authors and Publishers, Inc. (FILSCAP) to reverse and set aside the rulings denying its right to collect license fees and/or royalties over its member artists’ copyrighted works.

The Supreme Court ordered respondent Anrey, Inc. (Anrey) to pay the FILSCAP ₱10,000.00 as temperate damages for the unlicensed public performance of the copyrighted songs on FILSCAP’s repertoire and ₱50,000.00 as attorney’s fees, plus interest at the rate of 12% per annum from September 8, 2009 until June 30, 2013, and thereafter, 6% per annum from July 1, 2013 until finality of the Court’s judgment. Such amount shall be subject to interest at the rate of 6% per annum reckoned from the date of finality of this judgment until fully satisfied.

Facts:

FILSCAP is a non-profit society of composer, authors, and publishers that owns public performance rights over the 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 stemmed from when a FILSCAP representative monitored between July and September 2008 that the branches of Sizzling Plate Restaurant along Session Road and along Abandon Extension in Baguio City, both of which were owned by Anrey, 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 then filed a complaint for copyright infringement against Anrey before the Regional Trial Court (RTC).

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 RTC dismissed FILSCAP’s complaint. It cited Sec. 184 (i) of the Intellectual Property Code of the Philippines, which exempts public performances by a club or institution for charitable or educational purposes provided, they are not profit making and they do not charge admission fees.

FILSCAP filed a Motion for Reconsideration but the same was denied by the RTC. The Court of Appeals affirmed the RTC rulings.

The Supreme Court ruled in favor of FILSCAP.

Decision:

The Supreme Court said it was evident that the first element of copyright infringement has been satisfied: 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 Court held 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 was also not persuaded by Anrey’s contention that it is exempt from securing a license since the radio station that broadcasted the copyrighted music already secured one from FILSCAP.

It held 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.

Further, the Court held that radio reception transmitted through loudspeakers to enhance profit does not constitute, and is not analogous to, fair use.

Here, 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 Court held that the free use by commercial establishments of radio broadcasts is beyond the normal exploitation of the copyright holder’s creative work. Denying the petition would gravely affect the copyright holder’s market where instead of paying royalties, they use free radio reception. The Court said applying this 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 Court stressed that FILSCAP was deprived license fees due to acts of infringement by Anrey, which publicly performed without license or authority the subject copyrighted works in its restaurants for the benefit of its customers and to enhance its profit.