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Copyright infringement and royalties for radio play in commercial sites

Column box-Dennis Gorecho-Kuwentong Kulê

Radio reception transmitted through loudspeakers to enhance profit does not constitute, and is not analogous to, fair use, that will be a valid defense in copyright infringement.

The country report presented by the Intellectual Property Association of the Philippines (IPAP) during the recent Asian Patent Attorneys Association (APAA) conference in Busan, South Korea cited the recent decision by the Philippine Supreme Court in August 2022 involving the case filed by Filipino Society of Composers, Authors and Publishers (FILSCAP) against Anrey, Inc.

The Court stressed that FILSCAP was deprived license fees due to Anrey’s acts of infringement as it failed to receive the benefit of license fees from Anrey, which publicly performed without license or authority the copyrighted works in its restaurants for the benefit of its customers and to enhance its profit.

The SC decision reversed and set aside the Court of Appeals rulings that affirmed the Baguio City Regional Trial Court’s dismissal of a copyright infringement complaint filed by FILSCAP.

The infringement complaint stems from the alleged public performance of copyrighted songs included in FILSCAP’s repertoire sometime in 2008 at branches of Sizzling Plate Restaurant in Baguio City, which are both owned by Anrey.

The Baguio RTC had dismissed FILSCAP’s complaint for lack of merit, citing Sec. 184 (i) of the IP Code. The provision exempts from copyright infringement, public performances made by a club or institution for charitable or educational purposes and at a place where no admission fee is charged. The dismissal was then affirmed by the Court of Appeals.

However, the Supreme Court found merit in FILSCAP’s petition for review on certiorari.

First, the Court ruled that FILSCAP, as the copyright assignee, is entitled to all the rights and remedies the assignor-author/composer had with respect to the copyright. It has the authority to collect royalties and/or license fees and sue for copyright infringement.

Second, the act of playing radio broadcasts of copyrighted music through the use of loudspeakers is, in itself, a performance.

Third, a radio reception creates a performance separate from the broadcast—known as the doctrine of multiple performances—which necessitates a separate license from that held by the broadcasting station. 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.

Fourth, radio reception transmitted through loudspeakers to enhance profit by way of providing entertainment to customers does not constitute and is not analogous to fair use.

The Court noted that 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.

Accordingly, the Supreme Court ordered Anrey to pay FILSCAP P10,000 as temperate damages, P50,000 for 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.

The term “intellectual property rights” consists of (a) copyright and related rights; (b) trademarks and service marks; (c) geographic indications; (d) industrial designs; (e) patents; (f) layout-designs (topographies) of integrated circuits; and (g) protection of undisclosed information.

The IP laws aim to protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in the law. Nobody else can copy or reuse that creation without the owner’s permission.

The IP Code grants authors, artists, and other creators, automatic protection for their literary and artistic creations, from the moment they create it.

IP laws lay down the remedies available to the IP owner in case of a violation of his rights through administrative, civil and criminal sanctions against violators.

Fair use as defense against copyright infringement considers four factors: (a) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (b) the nature of the copyrighted work; (c) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (d) the effect of the use upon the potential market for or value of the copyrighted work.

Atty. Dennis R. Gorecho heads the seafarers’ division of the Sapalo Velez Bundang Bulilan law offices. For comments, e-mail info@sapalovelez.com, or call 0917-5025808 or 0908-8665786.

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