The Supreme Court (SC) has upheld the authority of the Filipino Society of Composers, Authors and Publishers, Inc. (FILSCAP) to protect the owners and holders of copyrighted musical works.
In a 32-page en banc decision authored by Associate Justice Ramon Paul Hernando, the SC dismissed a petition filed by Cosac Inc., seeking to set aside a May 28, 2015 decision and a January 14, 2016 resolution of the Court of Appeals that upheld the October 2012 and July 22, 2013 orders issued by the Regional Trial Court (RTC) of Quezon City ordering the petitioner to pay FILSCAP damages for unpaid license fees and royalties.
However, the SC modified the appellate court ruling when it lowered the damages awarded to FILSCAP from P317,050 for unpaid license fee and royalties to P300,000.
But it imposed a 12 percent interest per year from February 13, 2006 until June 30, 2013, and at the rate of six percent per year from July 1, 2013 until the date of finality of the judgment.
“As a final note, the Court acknowledges that FILSCAP, by authority of the deeds/agreements, represents the owners or holders of copyrighted musical works under its catalogue. As the assignee, FILSCAP is tasked to monitor and issue licenses to persons, businesses, establishments, and the like which are interested to play or perform these musical compositions,” the SC ruled.
“Although it seems trivial or outrageous to collect fees for this purpose especially when almost everything is readily accessible to the listening public, the copyright owners are still entitled to be compensated for their creative work. There is no question that they invested time, creativity, talent, and effort in the creation and development of their compositions,” it said.
FILSCAP is a non-stock, non-profit corporation comprised of composers, authors, and music publishers which is authorized to issue licenses and collect license fees for the public performance of copyrighted musical works under its repertoire, whether for profit or not.
It is tasked to enforce and protect the performing rights of copyright owners of musical works.
On February 3, 2005 and January 13, 2006, a representative from FILSCAP who monitored Off the Grill Bar and Restaurant in Quezon City, which is (owned and operated by COSAC Inc., discovered that the restaurant played copyrighted music without obtaining from FILSCAP a license or paying the corresponding fees.
Thus, FILSCAP advised COSAC to secure the required licenses and sent letters demanding the same on September 20, 20049 and October 14, 2004.
Due to the failure of COSAC to respond and comply with the demand, FILSCAP filed a complaint for infringement of copyright and damages against COSAC on February 13, 2006.
It claimed that COSAC’s refusal to secure the license and its continued use of copyrighted music without the requisite performingrights constitute acts of infringement.
Because of this FILSCAP said COSAC should be compelled to secure a license and to pay royalty fees, damages, and attorney’s fees.
After not getting a favorable ruling from the trial court and the appellate court, COSAC elevated the issue before the SC, questioning its authority to collect royalty fees.
COSAC insisted that the publication of the deeds of assignment or FILSCAP’s authority in the IPO Gazette is necessary under Section 182 of the Intellectual Property Code (IPC) as it serves to inform the general public of its authority to collect royalty fees.
It further contended that FILSCAP’s authority as assignee is vague and not supported by evidence.
It also questioned the damages and attorney’s fees awarded in favor of FILSCAP for being baseless and excessive, noting that COSAC has no control over what the bands will sing in its establishment.
However, the high court held that the trial court and the CA were correct when it ruled that COSAC committed infringement intwo ways: performance by a live band and playing ofrecordings.
“In any case, the playing of music in Off the Grill was not done privately, and the establishment is not a charitable or religious institution or society. Additionally, the playing of the creative copyrighted music in Off the Grill was commercial in nature, and will work against the copyright owners’ interests,” the SC ruled.
“Thus, COSAC’s acts did not fall under the said limitations and thefair use doctrine,” it added.
It can be recalled that in 2022, the SC declared that the act of playing radio broadcast with copyrighted music through the use of loudspeakers (radio-over-loudspeakers) without a license from thecopyright owner is considered a performance and an infringement of copyright.
The SC also ordered that a copy of the decision be furnished the Intellectual Property Office of the Philippines for their guidance and information, as well as the House of Representatives and the Senate of the Philippines as reference for possible statutory amendments on the Intellectual Property Code without violating the State’s commitments under the Berne Convention and the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
The Berne Convention provides that authors of musical works shall enjoy the exclusive right of authorizing the public performance oftheir works including the“public performance by any means or process”and “any communication to the public of the performance of theworks.”
On the other hand, TRIPS Agreement incorporates by reference theprovisions on copyright from the Berne Convention.
The Court (SC) held that “radio reception transmitted through loudspeakers to enhance profit does not constitute, and is not analogous to, fair use.”