[G.R. No. L-36402. March 16, 1987.

FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS,

INC., Plaintiff-Appellant, v. BENJAMIN TAN, Defendant-Appellee.

Lichauco, Picazo & Agcaoili Law Office, for Plaintiff-Appellant.

Ramon A. Nieves, for Defendant-Appellee.

DECISION

PARAS, J.:

An appeal was made to the Court of Appeals docketed as CA-G.R. No. 46373-R **
entitled Filipino Society of Composers, Authors, Publishers, Inc., Plaintiff-Appellant v.
Benjamin Tan, Defendant-Appellee, from the decision of the Court of First Instance of
Manila, Branch VII in Civil Case No. 71222 *** "Filipino Society of Composers, Authors
and Publishers, Inc., Plaintiff v. Benjamin Tan, Defendant," which had dismissed
plaintiffs’ complaint without special pronouncement as to costs. chanrobles virtual lawl ibrary

The Court of Appeals, finding that the case involves pure questions of law, certified the
same to the Supreme Court for final determination (Resolution, CA-G.R. No. 46373-R,
Rollo, p. 36; Resolution of the Supreme Court of February 16, 1973 in L-36402, Rollo,
p. 38).

The undisputed facts of this case are as follows: chanrob1es virtual 1aw library

Plaintiff-appellant is a non-profit association of authors, composers and publishers duly

organized under the Corporation Law of the Philippines and registered with the
Securities and Exchange Commission. Said association is the owner of certain musical
compositions among which are the songs entitled: "Dahil Sa Iyo," "Sapagkat Ikaw Ay
Akin," "Sapagkat Kami Ay Tao Lamang" and "The Nearness Of You." cralaw virtua1aw library

On the other hand, defendant-appellee is the operator of a restaurant known as "Alex

Soda Foundation and Restaurant" where a combo with professional singers, hired to
play and sing musical compositions to entertain and amuse customers therein, were
playing and singing the above-mentioned compositions without any license or
permission from the appellant to play or sing the same.

Accordingly, appellant demanded from the appellee payment of the necessary license
fee for the playing and singing of aforesaid compositions but the demand was ignored.

Hence, on November 7, 1967, appellant filed a complaint with the lower court for
infringement of copyright against defendant-appellee for allowing the playing in
defendant-appellee’s restaurant of said songs copyrighted in the name of the former. cralawnad
Defendant-appellee, in his answer, countered that the complaint states no cause of
action. While not denying the playing of said copyrighted compositions in his
establishment, appellee maintains that the mere singing and playing of songs and
popular tunes even if they are copyrighted do not constitute an infringement (Record on
Appeal, p. 11; Resolution, CA-G.R. NO. 46373-R, Rollo, pp. 32-36) under the provisions
of Section 3 of the Copyright Law (Act 3134 of the Philippine Legislature).

The lower court, finding for the defendant, dismissed the complaint (Record on Appeal,
p. 25).

Plaintiff appealed to the Court of Appeals which as already stated certified the case to
the Supreme Court for adjudication on the legal question involved. (Resolution, Court of
Appeals, Rollo, p. 36; Resolution of the Supreme Court of February 18, 1973, Rollo, p.
38).

In its brief in the Court of Appeals, appellant raised the following Assignment of Errors:
virtual 1aw l ibrary
chanrob1es

THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL COMPOSITIONS OF THE
APPELLANT WERE IN THE NATURE OF PUBLIC PROPERTY WHEN THEY WERE
COPYRIGHTED OR REGISTERED.

II

THE LOWER COURT ERRED IN HOLDING THAT THE MUSICAL COMPOSITIONS OF THE
APPELLANT WERE PLAYED AND SUNG IN THE SODA FOUNTAIN AND RESTAURANT OF
THE APPELLEE BY INDEPENDENT CONTRACTORS AND ONLY UPON THE REQUEST OF
CUSTOMERS.

III

THE LOWER COURT ERRED IN HOLDING THAT THE PLAYING AND SINGING OF
COPYRIGHTED MUSICAL COMPOSITIONS IN THE SODA FOUNTAIN AND RESTAURANT
OF THE APPELLEE ARE NOT PUBLIC PERFORMANCES FOR PROFIT OF THE SAID
COMPOSITIONS WITHIN THE MEANING AND CONTEMPLATION OF THE COPYRIGHT
LAW.

IV

THE LOWER COURT ERRED IN NOT HOLDING THAT THE APPELLEE IS LIABLE TO THE
APPELLANT FOR FOUR (4) SEPARATE INFRINGEMENTS. (Brief for Appellant, pp. A and
B).

The petition is devoid of merit. chanrobles virtual lawlib rary

The principal issues in this case are whether or not the playing and signing of musical
compositions which have been copyrighted under the provisions of the Copyright Law
(Act 3134) inside the establishment of the defendant-appellee constitute a public
performance for profit within the meaning and contemplation of the Copyright Law of
the Philippines; and assuming that there were indeed public performances for profit,
whether or not appellee can be held liable therefor.

Appellant anchors its claim on Section 3(c) of the Copyright Law which provides: jgc:chanrobles.com.ph

"SEC. 3. The proprietor of a copyright or his heirs or assigns shall have the exclusive
right:
chanrob1es virtual 1aw library

x x x

(c) To exhibit, perform, represent, produce, or reproduce the copyrighted work in any
manner or by any method whatever for profit or otherwise; if not reproduced in copies
for sale, to sell any manuscripts or any record whatsoever thereof;

x x x"

It maintains that playing or singing a musical composition is universally accepted as

performing the musical composition and that playing and singing of copyrighted music
in the soda fountain and restaurant of the appellee for the entertainment of the
customers although the latter do not pay for the music but only for the food and drink
constitute performance for profit under the Copyright Law (Brief for the Appellant, pp.
1925).

We concede that indeed there were "public performances for profit." cralaw virtua1aw libra ry

The word ‘perform’ as used in the Act has been applied to "One who plays a musical
composition on a piano, thereby producing in the air sound waves which are heard as
music . . . and if the instrument he plays on is a piano plus a broadcasting apparatus,
so that waves are thrown out, not only upon the air, but upon the other, then also he is
performing the musical composition." (Buck, Et. Al. v. Duncan, Et. Al.; Same v. Jewell-
La Salle Realty Co., 32F. 2d. Series 367).

In relation thereto, it has been held that "The playing of music in dine and dance
establishment which was paid for by the public in purchases of food and drink
constituted ‘performance for profit’ within a Copyright Law," (Buck, Et. Al. v. Russon,
No. 4489 25 F. Supp. 317). Thus, it has been explained that while it is possible in such
establishments for the patrons to purchase their food and drinks and at the same time
dance to the music of the orchestra, the music is furnished and used by the orchestra
for the purpose of inducing the public to patronize the establishment and pay for the
entertainment in the purchase of food and drinks. The defendant conducts his place of
business for profit, and it is public; and the music is performed for profit (Ibid., p. 319).
In a similar case, the Court ruled that "The Performance in a restaurant or hotel dining
room, by persons employed by the proprietor, of a copyrighted musical composition, for
the entertainment of patrons, without charge for admission to hear it, infringes the
exclusive right of the owner of the copyright." (Herbert v. Shanley Co.; John Church Co.
v. Hillard Hotel Co., Et Al., 242 U.S. 590-591). In delivering the opinion of the Court in
said two cases, Justice Holmes elaborated thus: chanrobles.com : virtual law library

"If the rights under the copyright are infringed only by a performance where money is
taken at the door, they are very imperfectly protected. Performances not different in
kind from those of the defendants could be given that might compete with and even
destroy the success of the monopoly that the law intends the plaintiffs to have. It is
enough to say that there is no need to construe the statute so narrowly. The
defendants’ performances are not eleemosynary. They are part of a total for which the
public pays, and the fact that the price of the whole is attributed to a particular item
which those present are expected to order is not important. It is true that the music is
not the sole object, but neither is the food, which probably could be got cheaper
elsewhere. The object is a repast in surroundings that to people having limited power of
conversation or disliking the rival noise, give a luxurious pleasure not to be had from
eating a silent meal. If music did not pay, it would be given up. If it pays, it pays out of
the public’s pocket. Whether it pays or not, the purpose of employing it is profit, and
that is enough." (Ibid., p. 594).

In the case at bar, it is admitted that the patrons of the restaurant in question pay only
for the food and drinks and apparently not for listening to the music. As found by the
trial court, the music provided is for the purpose of entertaining and amusing the
customers in order to make the establishment more attractive and desirable (Record on
Appeal, p. 21). It will be noted that for the playing and singing the musical
compositions involved, the combo was paid as independent contractors by the appellant
(Record on Appeal, p. 24). It is therefore obvious that the expenses entailed thereby
are added to the overhead of the restaurant which are either eventually charged in the
price of the food and drinks or to the overall total of additional income produced by the
bigger volume of business which the entertainment was programmed to attract.
Consequently, it is beyond question that the playing and singing of the combo in
defendant-appellee’s restaurant constituted performance for profit contemplated by the
Copyright Law. (Act 3134 as amended by P.D. No. 49, as amended).

Nevertheless, appellee cannot be said to have infringed upon the Copyright Law.
Appellee’s allegation that the composers of the contested musical compositions waived
their right in favor of the general public when they allowed their intellectual creations to
become property of the public domain before applying for the corresponding copyrights
for the same (Brief for Defendant-Appellee, pp. 14-15) is correct. chanrobles lawlibrary : rednad

The Supreme Court has ruled that "Paragraph 33 of Patent Office Administrative Order
No. 3 (as amended, dated September 18, 1947) entitled ‘Rules of Practice in the
Philippines Patent Office relating to the Registration of Copyright Claims’ promulgated
pursuant to Republic Act 165, provides among other things that an intellectual creation
should be copyrighted thirty (30) days after its publication, if made in Manila, or within
sixty (60) days if made elsewhere, failure of which renders such creation public
property." (Santos v. McCullough Printing Company, 12 SCRA 324-325 [1964]. Indeed,
if the general public has made use of the object sought to be copyrighted for thirty (30)
days prior to the copyright application the law deems the object to have been donated
to the public domain and the same can no longer be copyrighted.

A careful study of the records reveals that the song "Dahil Sa Iyo" which was registered
on April 20, 1956 (Brief for Appellant, p. 10) became popular in radios, juke boxes, etc.
long before registration (TSN, May 28, 1968, pp. 3-5; 25) while the song "The Nearness
Of You" registered on January 14, 1955 (Brief for Appellant, p. 10) had become popular
twenty five (25) years prior to 1968, (the year of the hearing) or from 1943 (TSN, May
28, 1968, p. 27) and the songs "Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay Tao
Lamang" both registered on July 10, 1966, appear to have been known and sang by the
witnesses as early as 1965 or three years before the hearing in 1968. The testimonies
of the witnesses at the hearing of this case on this subject were unrebutted by the
appellant. (Ibid., pp. 28; 29 and 30).

Under the circumstances, it is clear that the musical compositions in question had long
become public property, and are therefore beyond the protection of the Copyright Law.

PREMISES CONSIDERED, the appealed decision of the Court of First Instance of Manila
in Civil Case No. 71222 is hereby AFFIRMED.

SO ORDERED.

G.R. No. L-30774 January 29, 1929

PHILIPPINE EDUCATION COMPANY, INC., plaintiff-appellee,

vs.
VICENTE SOTTO and V. R. ALINDADA defendants.
V. R. ALINDADA, appellant.

Vicente Sotto for appellant.

Gibbs, and McDonough and Roman Ozaeta for appellee.

STATEMENT

Plaintiff alleges that it is a domestic corporation, with its principal office in the City of Manila, of which
the defendants are also residents and of legal age; that it is the proprietor and publisher of the
monthly magazine Philippine Education Magazine, which is published in the City of Manila and of
general circulation in the Philippine Islands; that the defendant, Vicente Sotto, is the proprietor and
publisher, and the defendant, V. R. Alindada, is the editor of a weekly newspaper known as The
Independent, which is also published in the City of Manila and also of such general circulation; that
in December, 1927, plaintiff contracted with Austin Craig for the preparation and publication of an
original article to be written by him concerning Mrs. Jose Rizal, to be published exclusively in
the Philippine Education Magazine, and that by virtue thereof, the said Craig prepared and wrote an
original article entitled "The True Story of Mrs. Rizal," and delivered it to the plaintiff which paid him
for it, and thereby became the exclusive owner of the article; that it printed and published the article
in its issue of December, 1927, and that it was on the market for sale in the early part of that month;
that as such owner the plaintiff has the exclusive right to print and publish the article in its magazine,
and that it gave notice in that issue "that all rights thereto were reserved;" that the defendants
unlawfully and without the knowledge or consent of the plaintiff appropriated, copied and reproduced
and published the article in the weekly issues of The Independent of December 24th and December
31, 1927, without citing the source of its defendants; that upon such discovery, the plaintiff to the fact
that the article in question was published "without permission or even the courtesy of an ordinary
credit line," and requested that in his next issue that "you state in some prominent place that this
article was taken from our magazine, and I request further that you refrain from similar thefts in the
future," Also calling his attention to the fact that we have stated plainly "on the title page of our
magazine that we reserve all rights, and you infringe on them at your peril." In answer to that latter,
the editor protested against the use of the word "thefts," and advised the plaintiff in substance that it
had not registered such right under the Copyright Law, and that "any newspaper can reprint the
article of Professor Craig without permission from anybody. Will you appreciate this free lesson of
law?" And the article as continued was again published in the next issue of The Independent.
Plaintiff alleges that by reason of defendants' acts, it was damaged in the sum of P5,000; that the
defendants threaten to, and will continue appropriating and reproducing the article owned by the
plaintiff, in voilation of its rights, unless restrained by the court, and plaintiff prays for judgment
against the defendants for P5,000, and that they be perpetually enjoined from the publication of any
further articles without the knowledge or consent of the plaintiff, and for such other and further relief
as the court may deem just and equitable.

To this complaint, the defendants filed a general demurrer upon the ground that it did not state facts
sufficient to constitute a cause of action, which was overruled. The defendants then answered in
which they made a general and specific denial of all of the material allegations of the complaint, and
as a special defense allege:

(a) That the defendant Vicente Sotto is not the owner of the magazine The Independent, nor
has he any intervention in the publication of said magazine.

(b) That the plaintiff is not the owner of the article entitled "The True Story of Mrs. Rizal,"
because it is not registered in its name in the proper registry under Act No. 3134 and the
regulation concerning the registration of intellectual property made by the Chief of the
Philippine Library and Museum.

(c) That the defendant V. R. Alindada, as the editor of The Independent, published in said
magazine the article entitled "The True Story of Mrs. Rizal," written by Austin Craig, in good
faith and in the belief that such an interesting historical passage of the Philippines was
published by the magazine Philippine Education Magazine for the information and
propaganda of the ideas and patriotic feelings of the wife of the apostle of our country's
liberties, without any intention to prejudice anybody in his property rights.

Wherefore, the defendants pray the court that the complaint be dismissed and the
defendants absolved therefrom, with costs against the plaintiff.

The case was tried and submitted upon the following admitted facts:

(1) That the Philippine Education Co., Inc., is the corporation that contracted with Austin
Craig for the preparation of the article "The True Story of Mrs. Rizal," for its exclusive
publication in said magazine.

(2) That said article which was prepared by Mr. Austin Craig and published in the "Philippine
Education Magazine" is not found registered in the Copyright Office, although in the same
magazine, under letter A, on the third page containing the index, there may be read a note
"All Rights Reserved."

(3) That the Philippine Education Co., Inc., paid Mr. Austin Craig a certain sum for the
preparation of said article.
 (4) That The Independent, which is edited under the management of Mr. V. R. Alindada,
published the said article written by Austin Craig on December 24, 1927 and December 31st
of the same year, making it appear in the heading of the article the name of the author, the
first publication of which is marked as Exhibit B.

(5) That on December 23d when The Independent published it, the editor of The Philippine
Education Magazine wrote to Mr. V. R. Alindada, editor of The Independent, the letter
marked with letter C.

(6) That notwithstanding the letter Exhibit C, the publication of the said article was continued
in the issue of The Independent of December 31st, marked Exhibit E, without citing the
source of the article but making it appear therein the name of the author.

(7) That the purposes of the judgment that may be rendered in this case, in the event of
adverse judgment, Mr. V. R. Alindada, one of the defendants, admits to be solely responsible
civilly.

(8) That in relation to the admission just mentioned, the document, Exhibit F, is presented.

Mr. SOTTO. Before presenting our evidence, I request that the defendant Vicente
Sotto be excluded from the complaint.

Mr. OZAETA. Without objection.

COURT. According to the petition of the defendant Mr. Vicente Sotto, which is
concurred in by counsel for the plaintiff, the case is dismissed with respect to him,
without costs.

Upon such issues the lower court rendered judgment against the defendant, V. R. Alindada, for
P500, without costs, from which he appeals, contending, first, that the lower court erred in overruling
the demurrer to the complaint, and second, in sentencing him to pay P500 to the plaintiff.

JOHNS, J.:

The question presented involves the legal construction of Act No. 3134 of the Philippine Legislature,
which is entitled "An Act to protect intellectual property," and which is known as the Copyright Law of
the Philippine Islands.

Section 2 of the Act defines and enumerates what may be copyrighted which, among other things,
includes books, composite and cyclopedic works, manuscripts, commentaries and critical studies.

Section 4 provides:

For the purpose of this Act articles and other writings published without the names of the
authors or under pseudonyms are considered as the property of the publishers.

And section 5 says:

 Lines, passages, or paragraphs in a book or other copyrighted works may be qouted or cited
or reproduced for comment, dissertation, or criticism.

News items, editorial paragraphs, and articles in periodicals may also be reproduced unless
they contain a notice that their publication is reserved or a notice of copyright, but the source
of the reproduction or original reproduced shall be cited. In case of musical works part of little
extent may also be reproduced.

Hence, the real question involved is the construction which should be placed upon the second
paragraph of section 5.

It is conceded that neither Professor Craig nor the palintiff applied for or obtained a copyright of the
article in question under the terms and provisions of this Act. The defendants contends taht after the
article was once published without a copyright in plaintiff's magazine, it then became public property,
and that he had a legal right to publish it in his magazine, without giving "the source of the
reproduction."

It must be conceded that after the Copyright Law of the United States, he would have that legal right.
That is the construction which has been place upon that law by numerous decisions both state and
federal of that nation. Be that as it may, we have carefully read and reread the Copyright Law of the
United States, and the provisions contained in the second paragraph of section 5 of the Act No.
3134 are removed to be found in the Copyright Law of the United States. Neither does it contain any
similar provision, and for want thereof, the decisions of those courts are not in point on the question
involved here, and, as appellant says, the legal question presented on this appeal is one of first
impression in this court, and the case is submitted without the citation of the decision of any court
under the same or similar statute.

Section 4 specifically provides:

For the purpose of this Act articles and other writings published without the names of the
authors or under pseudonyms are conidered as the property of the publishers.

The first paragraph of section 5 says:

Lines, passages, or paragraphs in book or other copyrighted works may be qouted or cited
or reproduced for comment, dissertion, or criticism.

It is very apparent that this paragraph is confined and limited to a book or other copyrighted works,
and, hence, that it does not apply to the publication of the article now in question. The second
paragraph of this question is confined to news items, editorial paragraphs and articles in periodicals
which may also be reproduced, "unless they contain a notice that their publication is reserved or a
notice of copyright, but the source of the reproduction or original reproduce shall be cited." It is
admitted that the plaintiff notified the defendant "that we reserve all rights and you infringe on them
at your peril," and that after receipt of the notice, the defendant published the article in question,
without giving "the source of the reproduction."

If it had been the purpose and intent of the Legislature to limit the reproduction of "news items,
editorial paragraphs, and articles in periodicals," to those which have a notice or copyright only, it
never would have said if "they contain a notice that their publication is reserved."
Analyzing the language used, it says, first, that such news items, editorial paragraphs, and articles in
periodicals may be reproduced, unless they contain a notice that their publication is reserved, or,
second, that may also be reproduced, unless they contain a notice of copyright. But in either event,
the law specifically provides that "the source of the reproduction or original reproduced shall be
cited," and is not confined or limited to case in which there is "a notice of copyright," and specifically
says that in either event "the source of the reproduction or original reproduced shall be cited." To
give this section any other construction would be to nullify, eliminate and take from the paragraph
the words "they contain a notice that their publication is reserved," and to say that the Legislature
never intended to say what it did say. This court must construe the language found in the act. The
language is plain, clear, define and certain, and this court has no legal right to say that the
Legislature did not mean what it said when it used those words, which is all the more apparent by
the use of the word "or" after the word "reserved." In the instant case, the plaintiff did not give notice
of its copyright, for the simple reason that it did not have a copyright, but it did notify the defendant
that in the publication of the article "we reserved all rights," which was legally equivalent to a notice
"that their publication is reserved." To give that paragraph any other construction would eliminate,
take from it, and wipe out, the words "that their publication is reserved," and this court has no legal
right to do that. It was contended that this construction would nullify the use and value of the whole
Copyright Law, but it will bbe notted that this exception is specifically confined and limited to "news
items editorial paragraphs, and articles in periodicals," and hence could not be made to apply to any
other provisions of the Copyright Law. It will also be noted that in the instant case, the defendant had
the legal right to publish the article in question by giving "the source of the reproduction." The plaintiff
bought and paid for the article and published it with the notice that "we reserve all rights," and the
defendant published the article in question without citing "the source of the reproduction," and for
aught that appeared in his paper, the article was purchase and paid for by the defendant.

We are clearly of the opinon that the language in question in the Copyright Law of the Philippine
Islands, which is not found in the Copyright Law of the United States, was inserted for a specific
purpose, and it was intended to prohibit the doing of the very thing which the defendant did in this
case; otherwise, the use of all of those words is a nullity. This construction does not least impair the
Copyright Law, except as to "news items, editorial paragraphs, and articles in periodicals," and it
protects an enterprising newspaper or magazine that invests its money and pays for the right to
publish an original article, and that was the reason why the Legislature saw fit to use the language in
question.

Above and beyond all this, it would seem that upon the undisputed facts in this case, common
courtesy among newspaper men would suggest that the defendant would give "the source of the
reproduction." It would have been a very simple and an easy thing to do.

All things considered, we are clearly of the opinion that the judgment of the lower court should be
affirmed, with costs. So ordered.

Malcolm, Ostrand, Romualdez and Villa-Real, JJ., concur.

Separate Opinions

VILLAMOR, J., concurring and dissenting:

I concur in the majority opinion as regards the matter of law, but believe the idemnity imposed by the
trial court should be reduced, for lack of proof, to P200, in accordance with section 19 of Act No.
3134.
STREET, J., dissenting:

The effect of this decision is to create an anomalous right, not heretofore recognized by statute or
decision, in matter published without copyright protection. The decision rests, as I conceive it, upon
an erroneous interpretation of the second paragraph of section 5 of the Copyright Law (Act No.
3134).

It is rudimentary in copyright law that publictaion without copyright constitutes a dedication to the
public and leaves any and everybody free to utilize the matter, with or without giving credit. In other
words, publication without copyright terminates the literary property which the author had while the
material was unpublished. This rule is universal. I here quote from the monographic article on
copyright and literary property in Corpus Juris:

The owner of literary or intellectual property, like the owner of any other kind of property, may
do what he will with his own; his right is absolute, and exclusive as against the word. Subject
to the rule that a general publication operates as a dedication and terminates all private
property rights, he is master of situation. If he chooses to keep his production unpublished
and private, he may do so, and he has his remedies to prevent or to redress an unauthorized
publication. He has the exclusive right to make first publication. (13 C. J., 949.)

Again, I quote from the title "Copyright" in Ruling Case Law:

. . . In other words, the author of a manuscript, so long as he does not publish it, may keep it
as a private matter which he is not obliged to give to the world; and in it he has a special
interest entitling him to prevent its publication. But this exclusive right is confined to the first
publication. When once published it is dedicated to the public, and the author has not, at
common law, any exclusive right to multiply copies of it or to control the subsequent issues of
copies by others. Therefore a work which has been published by others in any form they may
see fit, so far as the copyright law is concerned. (6 R. C. L., 1103.)

An intention radically to change the foundations of copyright law on the point now under
consideration is not lightly to be attributed to our Legislature, and this consideration is especially
cogent in dealing with an Act of the Philippine Legislature which, in all its more important provisions,
is an embodiment of the American copyright law.

And what is the provision which is relied upon by the court as a justification of the present decision?
Confronting the eye again with the text, we find that the section in question reads as follows:

SEC. 5. Lines, passages, or paragraphs in a book or other copyrighted works may be quoted
or cited or reproduced for comment, dissertation, or criticism.

News items, editorial paragraphs, and articles in periodicals may also be reproduced unless
they contain a notice that their publication is reserved or a notice of copyright, but the source
of the reproduction or original reproduced shall be cited. In case of musical works parts of
little extent may also be reproduced.

Upon this it will be noted that the first paragraph expressly refers to copyrighted matter, the purpose
being to define the extent to which copyrighted matter may be quoted or reproduced for purposes of
comment, dissertation, or criticism. The second paragraph also evidently deals with copyrighted
matter, although the word "copyrighted" is not inserted before the word "periodicals." Nor was it
necessary to repeat the word in this paragraph, because the subject matter of said paragraph and
the form of expression in which the provision is moulded otherwise show clearly that the Legislature
was here dealing with rights in copyrighted matter. Of course this paragraph should be interpreted
in pari materia with the first paragraph for it was evidently intended to nulify in certain respects the
rule stated in the first paragraph.

Again, it will be observed the the word "copyrighted" is not used before musical works, near the end
of the second paragraph. Nevertheless, we imagine that no one would doubt that the Legislature
there means copyrighted musical works. It is obvious that, inasmuch as the subject matter treated in
section 5 was defined in first paragraph of said section as relating to copyrighted works, it was
considered unnecessary to go on repeating the word "copyrighted" before "periodicals" and "musical
works."

Furthermore upon comparing the two paragraphs of which section 5 is composed, it will be seen that
the first paragraphs defines the right of reproduction of books and works like books, while the
second deals with the right of reproduction of certain matter printed in periodicals and musical works.
The two paragraphs together cover substantially the field of copyrightable matter; and the peculiarity
of the second paragraph is merely that the law-making body there states a special rule with respect
to the material with which this paragraph deals. Throughout the reference is clearly to copyrighted
matter.

If we fix the attention still more closely upon the contents of the second paragraph, it will be noted
that by this paragraph news items, editorial paragraphs, and articles in periodicals may be
reproduced "unless they contain a notice that their publication is reserved or a notice of copyright."
This perhaps gives a more extensive right of reproduction with respect to the matter mentioned than
is conferred by the first paragraph, subject always to the proviso contained in the clause introduced
by the word "unless." By this priviso the statute permits the publisher of periodicals, meaning
copyrighted periodicals, absolutely to prohibit the reproduction of news items, editorial paragraphs,
and articles, If he gives the notice therein required. The expression "unless they contain a notice that
their publication is reserved a notice of copyright" contemplates a reservation or notice of copyright
in addition to the doing of the acts required by the statute to be done in order to effect legal
copyright. In other words, where the periodical is copyrighted, it requires a special notice reservation
or special notice of copyright to prevent reproduction to the extent therein permitted. The part of the
paragraph which has caused difficulty in this case is apparently found in the words "or a notice of
copyright" in the clause commencing with "unless." Without those words it could hardly be
contended that the reservation of rights therein referred to would be effective upon uncopyrighted
matter. But the ill-advised insertion of these words in the statute — if such it be — does not render
the statute unintelligible, nor does it justify the decision made by the court; for as we have
demonstrated, the second paragraph of section 5 is concerned only with copyrighted matter.

If we may be permitted to hazard a conjecture as to the reason why these words "or a notice of
copyright" were inserted, an explanation might possibly be found in the reflection that the copyright
of a signed article in the periodical may be vested in the author whose name is signed thereto, while
the publisher of the periodical may have copyright only in the matter published in the periodical
without the names of the authors or under pseudonyms, as indicated in section 4 of the Act. In view
of the possibility of conflict between these two interest, it may have been considered desirable to
express the clause in the form adopted in the statute.

The interpretation which the majority opinion now place upon this paragraph is such that the clause
in question now has about the same meaning that it would have had if written thus: "unless they
contain a notice that their publication is reserved, in case either of copyrighted or uncopyrighted
matter, or a notice of copyright in case of copyrighted matter" (Emphasis ours). In other words a
limiting clause has been so construed as to extend the purview of the general clause which it limits.
This is a violent process.
Again, in no place does Act No. 3134 attempt to define the right of literary property in uncopyrighted
matter. Its subject matter is copyright and means of acquiring copyright. But assuming that the
Legislature designed to create the anomalous right which the court has deduced from the statute, is
it not strange that it did not state the duration of this right? Under section 18 of the Act a copyright
acquired in accordance with the provisions of the Act endures for thirty years. Does the new right
which the court has now discovered have the same duration, or will it continue after copyright has
expired?

Heretofore the only way of acquiring an exclusive right to reproduce published matter was to effect
copyright. But under the interpretation which the court now place upon this law, there now is another
way to acquire the same exclusive right, which is simply not to take copyright but merely to reserv
the right of publication. I maintain that even under our statue exclusive rights can only be acquired
by effecting copyright in the manner provided by law. This is the fundamental point that underlies all
legislature on the subject. The judgment should, in my opinion, be reserved.

G.R. No. 175769-70 January 19, 2009

ABS-CBN BROADCASTING CORPORATION, Petitioners,

vs.
PHILIPPINE MULTI-MEDIA SYSTEM, INC., CESAR G. REYES, FRANCIS CHUA (ANG BIAO),
MANUEL F. ABELLADA, RAUL B. DE MESA, AND ALOYSIUS M. COLAYCO, Respondents.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari1 assails the July 12, 2006 Decision2 of the Court of Appeals in
CA-G.R. SP Nos. 88092 and 90762, which affirmed the December 20, 2004 Decision of the Director-
General of the Intellectual Property Office (IPO) in Appeal No. 10-2004-0002. Also assailed is the
December 11, 2006 Resolution3 denying the motion for reconsideration.

Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is licensed under the laws of the
Republic of the Philippines to engage in television and radio broadcasting.4 It broadcasts television
programs by wireless means to Metro Manila and nearby provinces, and by satellite to provincial
stations through Channel 2 on Very High Frequency (VHF) and Channel 23 on Ultra High Frequency
(UHF). The programs aired over Channels 2 and 23 are either produced by ABS-CBN or purchased
from or licensed by other producers.

ABS-CBN also owns regional television stations which pattern their programming in accordance with
perceived demands of the region. Thus, television programs shown in Metro Manila and nearby
provinces are not necessarily shown in other provinces.

Respondent Philippine Multi-Media System, Inc. (PMSI) is the operator of Dream Broadcasting
System. It delivers digital direct-to-home (DTH) television via satellite to its subscribers all over the
Philippines. Herein individual respondents, Cesar G. Reyes, Francis Chua, Manuel F. Abellada, Raul
B. De Mesa, and Aloysius M. Colayco, are members of PMSI’s Board of Directors.
PMSI was granted a legislative franchise under Republic Act No. 86305 on May 7, 1998 and was
given a Provisional Authority by the National Telecommunications Commission (NTC) on February
1, 2000 to install, operate and maintain a nationwide DTH satellite service. When it commenced
operations, it offered as part of its program line-up ABS-CBN Channels 2 and 23, NBN, Channel 4,
ABC Channel 5, GMA Channel 7, RPN Channel 9, and IBC Channel 13, together with other paid
premium program channels.

However, on April 25, 2001,6 ABS-CBN demanded for PMSI to cease and desist from
rebroadcasting Channels 2 and 23. On April 27, 2001,7 PMSI replied that the rebroadcasting was in
accordance with the authority granted it by NTC and its obligation under NTC Memorandum Circular
No. 4-08-88,8 Section 6.2 of which requires all cable television system operators operating in a
community within Grade “A” or “B” contours to carry the television signals of the authorized television
broadcast stations.9

Thereafter, negotiations ensued between the parties in an effort to reach a settlement; however, the
negotiations were terminated on April 4, 2002 by ABS-CBN allegedly due to PMSI’s inability to
ensure the prevention of illegal retransmission and further rebroadcast of its signals, as well as the
adverse effect of the rebroadcasts on the business operations of its regional television stations. 10

On May 13, 2002, ABS-CBN filed with the IPO a complaint for “Violation of Laws Involving Property
Rights, with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary
Injunction,” which was docketed as IPV No. 10-2002-0004. It alleged that PMSI’s unauthorized
rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and copyright.

On July 2, 2002, the Bureau of Legal Affairs (BLA) of the IPO granted ABS-CBN’s application for a
temporary restraining order. On July 12, 2002, PMSI suspended its retransmission of Channels 2
and 23 and likewise filed a petition for certiorari with the Court of Appeals, which was docketed as
CA-G.R. SP No. 71597.

Subsequently, PMSI filed with the BLA a Manifestation reiterating that it is subject to the must-carry
rule under Memorandum Circular No. 04-08-88. It also submitted a letter dated December 20, 2002
of then NTC Commissioner Armi Jane R. Borje to PMSI stating as follows:

This refers to your letter dated December 16, 2002 requesting for regulatory guidance from this
Commission in connection with the application and coverage of NTC Memorandum Circular No. 4-
08-88, particularly Section 6 thereof, on mandatory carriage of television broadcast signals, to the
direct-to-home (DTH) pay television services of Philippine Multi-Media System, Inc. (PMSI).

Preliminarily, both DTH pay television and cable television services are broadcast services, the only
difference being the medium of delivering such services (i.e. the former by satellite and the latter by
cable). Both can carry broadcast signals to the remote areas, thus enriching the lives of the
residents thereof through the dissemination of social, economic, educational information and cultural
programs.

The DTH pay television services of PMSI is equipped to provide nationwide DTH satellite services.
Concededly, PMSI’s DTH pay television services covers very much wider areas in terms of carriage
of broadcast signals, including areas not reachable by cable television services thereby providing a
better medium of dissemination of information to the public.

In view of the foregoing and the spirit and intent of NTC memorandum Circular No. 4-08-88,
particularly section 6 thereof, on mandatory carriage of television broadcast signals, DTH pay
television services should be deemed covered by such NTC Memorandum Circular.
For your guidance. (Emphasis added)11

On August 26, 2003, PMSI filed another Manifestation with the BLA that it received a letter dated
July 24, 2003 from the NTC enjoining strict and immediate compliance with the must-carry rule
under Memorandum Circular No. 04-08-88, to wit:

Dear Mr. Abellada:

Last July 22, 2003, the National Telecommunications Commission (NTC) received a letter dated July
17, 2003 from President/COO Rene Q. Bello of the International Broadcasting Corporation (IBC-
Channel 13) complaining that your company, Dream Broadcasting System, Inc., has cut-off, without
any notice or explanation whatsoever, to air the programs of IBC-13, a free-to-air television, to the
detriment of the public.

We were told that, until now, this has been going on.

Please be advised that as a direct broadcast satellite operator, operating a direct-to-home

(DTH) broadcasting system, with a provisional authority (PA) from the NTC, your company,
along with cable television operators, are mandated to strictly comply with the existing policy
of NTC on mandatory carriage of television broadcast signals as provided under
Memorandum Circular No. 04-08-88, also known as the Revised Rules and Regulations
Governing Cable Television System in the Philippines.

This mandatory coverage provision under Section 6.2 of said Memorandum Circular, requires
all cable television system operators, operating in a community within the Grade “A” or “B”
contours to “must-carry” the television signals of the authorized television broadcast
stations, one of which is IBC-13. Said directive equally applies to your company as the
circular was issued to give consumers and the public a wider access to more sources of
news, information, entertainment and other programs/contents.

This Commission, as the governing agency vested by laws with the jurisdiction, supervision and
control over all public services, which includes direct broadcast satellite operators, and taking into
consideration the paramount interest of the public in general, hereby directs you to immediately
restore the signal of IBC-13 in your network programs, pursuant to existing circulars and regulations
of the Commission.

For strict compliance. (Emphasis added)12

Meanwhile, on October 10, 2003, the NTC issued Memorandum Circular No. 10-10-2003, entitled
“Implementing Rules and Regulations Governing Community Antenna/Cable Television (CATV) and
Direct Broadcast Satellite (DBS) Services to Promote Competition in the Sector.” Article 6, Section 8
thereof states:

As a general rule, the reception, distribution and/or transmission by any CATV/DBS operator of any
television signals without any agreement with or authorization from program/content providers are
prohibited.

On whether Memorandum Circular No. 10-10-2003 amended Memorandum Circular No. 04-08-88,
the NTC explained to PMSI in a letter dated November 3, 2003 that:
To address your query on whether or not the provisions of MC 10-10-2003 would have the effect of
amending the provisions of MC 4-08-88 on mandatory carriage of television signals, the answer is in
the negative.

xxxx

The Commission maintains that, MC 4-08-88 remains valid, subsisting and enforceable.

Please be advised, therefore, that as duly licensed direct-to-home satellite television service
provider authorized by this Commission, your company continues to be bound by the
guidelines provided for under MC 04-08-88, specifically your obligation under its mandatory
carriage provisions, in addition to your obligations under MC 10-10-2003. (Emphasis added)

Please be guided accordingly.13

On December 22, 2003, the BLA rendered a decision 14 finding that PMSI infringed the broadcasting
rights and copyright of ABS-CBN and ordering it to permanently cease and desist from
rebroadcasting Channels 2 and 23.

On February 6, 2004, PMSI filed an appeal with the Office of the Director-General of the IPO which
was docketed as Appeal No. 10-2004-0002. On December 23, 2004, it also filed with the Court of
Appeals a “Motion to Withdraw Petition; Alternatively, Memorandum of the Petition for Certiorari” in
CA-G.R. SP No. 71597, which was granted in a resolution dated February 17, 2005.

On December 20, 2004, the Director-General of the IPO rendered a decision15 in favor of PMSI, the
dispositive portion of which states:

WHEREFORE, premises considered, the instant appeal is hereby GRANTED. Accordingly, Decision
No. 2003-01 dated 22 December 2003 of the Director of Bureau of Legal Affairs is hereby
REVERSED and SET ASIDE.

Let a copy of this Decision be furnished the Director of the Bureau of Legal Affairs for appropriate
action, and the records be returned to her for proper disposition. The Documentation, Information
and Technology Transfer Bureau is also given a copy for library and reference purposes.

SO ORDERED.16

Thus, ABS-CBN filed a petition for review with prayer for issuance of a temporary restraining order
and writ of preliminary injunction with the Court of Appeals, which was docketed as CA-G.R. SP No.
88092.

On July 18, 2005, the Court of Appeals issued a temporary restraining order. Thereafter, ABS-CBN
filed a petition for contempt against PMSI for continuing to rebroadcast Channels 2 and 23 despite
the restraining order. The case was docketed as CA- G.R. SP No. 90762.

On November 14, 2005, the Court of Appeals ordered the consolidation of CA-G.R. SP Nos. 88092
and 90762.

In the assailed Decision dated July 12, 2006, the Court of Appeals sustained the findings of the
Director-General of the IPO and dismissed both petitions filed by ABS-CBN.17
ABS-CBN’s motion for reconsideration was denied, hence, this petition.

ABS-CBN contends that PMSI’s unauthorized rebroadcasting of Channels 2 and 23 is an

infringement of its broadcasting rights and copyright under the Intellectual Property Code (IP
Code);18that Memorandum Circular No. 04-08-88 excludes DTH satellite television operators; that
the Court of Appeals’ interpretation of the must-carry rule violates Section 9 of Article III19 of the
Constitution because it allows the taking of property for public use without payment of just
compensation; that the Court of Appeals erred in dismissing the petition for contempt docketed as
CA-G.R. SP No. 90762 without requiring respondents to file comment.

Respondents, on the other hand, argue that PMSI’s rebroadcasting of Channels 2 and 23 is
sanctioned by Memorandum Circular No. 04-08-88; that the must-carry rule under the Memorandum
Circular is a valid exercise of police power; and that the Court of Appeals correctly dismissed CA-
G.R. SP No. 90762 since it found no need to exercise its power of contempt.

After a careful review of the facts and records of this case, we affirm the findings of the Director-
General of the IPO and the Court of Appeals.

There is no merit in ABS-CBN’s contention that PMSI violated its broadcaster’s rights under Section
211 of the IP Code which provides in part:

Chapter XIV
BROADCASTING ORGANIZATIONS

Sec. 211. Scope of Right. - Subject to the provisions of Section 212, broadcasting organizations
shall enjoy the exclusive right to carry out, authorize or prevent any of the following acts:

211.1. The rebroadcasting of their broadcasts;

xxxx

Neither is PMSI guilty of infringement of ABS-CBN’s copyright under Section 177 of the IP Code
which states that copyright or economic rights shall consist of the exclusive right to carry out,
authorize or prevent the public performance of the work (Section 177.6), and other communication to
the public of the work (Section 177.7).20

Section 202.7 of the IP Code defines broadcasting as “the transmission by wireless means for the
public reception of sounds or of images or of representations thereof; such transmission by satellite
is also ‘broadcasting’ where the means for decrypting are provided to the public by the broadcasting
organization or with its consent.”

On the other hand, rebroadcasting as defined in Article 3(g) of the International Convention for the
Protection of Performers, Producers of Phonograms and Broadcasting Organizations, otherwise
known as the 1961 Rome Convention, of which the Republic of the Philippines is a signatory, 21 is
“the simultaneous broadcasting by one broadcasting organization of the broadcast of another
broadcasting organization.”

The Director-General of the IPO correctly found that PMSI is not engaged in rebroadcasting and
thus cannot be considered to have infringed ABS-CBN’s broadcasting rights and copyright, thus:
That the Appellant’s [herein respondent PMSI] subscribers are able to view Appellee’s [herein
petitioner ABS-CBN] programs (Channels 2 and 23) at the same time that the latter is broadcasting
the same is undisputed. The question however is, would the Appellant in doing so be considered
engaged in broadcasting. Section 202.7 of the IP Code states that broadcasting means

“the transmission by wireless means for the public reception of sounds or of images or of
representations thereof; such transmission by satellite is also ‘broadcasting’ where the means for
decrypting are provided to the public by the broadcasting organization or with its consent.”

Section 202.7 of the IP Code, thus, provides two instances wherein there is broadcasting, to wit:

1. The transmission by wireless means for the public reception of sounds or of images or of
representations thereof; and

2. The transmission by satellite for the public reception of sounds or of images or of

representations thereof where the means for decrypting are provided to the public by the
broadcasting organization or with its consent.

It is under the second category that Appellant’s DTH satellite television service must be examined
since it is satellite-based. The elements of such category are as follows:

1. There is transmission of sounds or images or of representations thereof;

2. The transmission is through satellite;

3. The transmission is for public reception; and

4. The means for decrypting are provided to the public by the broadcasting organization or
with its consent.

It is only the presence of all the above elements can a determination that the DTH is broadcasting
and consequently, rebroadcasting Appellee’s signals in violation of Sections 211 and 177 of the IP
Code, may be arrived at.

Accordingly, this Office is of the view that the transmission contemplated under Section 202.7 of the
IP Code presupposes that the origin of the signals is the broadcaster. Hence, a program that is
broadcasted is attributed to the broadcaster. In the same manner, the rebroadcasted program is
attributed to the rebroadcaster.

In the case at hand, Appellant is not the origin nor does it claim to be the origin of the programs
broadcasted by the Appellee. Appellant did not make and transmit on its own but merely carried the
existing signals of the Appellee. When Appellant’s subscribers view Appellee’s programs in
Channels 2 and 23, they know that the origin thereof was the Appellee.

Aptly, it is imperative to discern the nature of broadcasting. When a broadcaster transmits, the
signals are scattered or dispersed in the air. Anybody may pick-up these signals. There is no
restriction as to its number, type or class of recipients. To receive the signals, one is not required to
subscribe or to pay any fee. One only has to have a receiver, and in case of television signals, a
television set, and to tune-in to the right channel/frequency. The definition of broadcasting, wherein it
is required that the transmission is wireless, all the more supports this discussion. Apparently, the
undiscriminating dispersal of signals in the air is possible only through wireless means. The use of
wire in transmitting signals, such as cable television, limits the recipients to those who are
connected. Unlike wireless transmissions, in wire-based transmissions, it is not enough that one
wants to be connected and possesses the equipment. The service provider, such as cable television
companies may choose its subscribers.

The only limitation to such dispersal of signals in the air is the technical capacity of the transmitters
and other equipment employed by the broadcaster. While the broadcaster may use a less powerful
transmitter to limit its coverage, this is merely a business strategy or decision and not an inherent
limitation when transmission is through cable.

Accordingly, the nature of broadcasting is to scatter the signals in its widest area of coverage as
possible. On this score, it may be said that making public means that accessibility is undiscriminating
as long as it [is] within the range of the transmitter and equipment of the broadcaster. That the
medium through which the Appellant carries the Appellee’s signal, that is via satellite, does not
diminish the fact that it operates and functions as a cable television. It remains that the Appellant’s
transmission of signals via its DTH satellite television service cannot be considered within the
purview of broadcasting. x x x

xxxx

This Office also finds no evidence on record showing that the Appellant has provided decrypting
means to the public indiscriminately. Considering the nature of this case, which is punitive in fact, the
burden of proving the existence of the elements constituting the acts punishable rests on the
shoulder of the complainant.

Accordingly, this Office finds that there is no rebroadcasting on the part of the Appellant of the
Appellee’s programs on Channels 2 and 23, as defined under the Rome Convention. 22

Under the Rome Convention, rebroadcasting is “the simultaneous broadcasting by one broadcasting
organization of the broadcast of another broadcasting organization.” The Working Paper 23 prepared
by the Secretariat of the Standing Committee on Copyright and Related Rights defines broadcasting
organizations as “entities that take the financial and editorial responsibility for the selection and
arrangement of, and investment in, the transmitted content.” 24 Evidently, PMSI would not qualify as a
broadcasting organization because it does not have the aforementioned responsibilities imposed
upon broadcasting organizations, such as ABS-CBN.

ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the viewers
receive in its unaltered form. PMSI does not produce, select, or determine the programs to be shown
in Channels 2 and 23. Likewise, it does not pass itself off as the origin or author of such programs.
Insofar as Channels 2 and 23 are concerned, PMSI merely retransmits the same in accordance with
Memorandum Circular 04-08-88. With regard to its premium channels, it buys the channels from
content providers and transmits on an as-is basis to its viewers. Clearly, PMSI does not perform the
functions of a broadcasting organization; thus, it cannot be said that it is engaged in rebroadcasting
Channels 2 and 23.

The Director-General of the IPO and the Court of Appeals also correctly found that PMSI’s services
are similar to a cable television system because the services it renders fall under cable
“retransmission,” as described in the Working Paper, to wit:

(G) Cable Retransmission

47. When a radio or television program is being broadcast, it can be retransmitted to new audiences
by means of cable or wire. In the early days of cable television, it was mainly used to improve signal
reception, particularly in so-called “shadow zones,” or to distribute the signals in large buildings or
building complexes. With improvements in technology, cable operators now often receive signals
from satellites before retransmitting them in an unaltered form to their subscribers through cable.

48. In principle, cable retransmission can be either simultaneous with the broadcast over-the-air or
delayed (deferred transmission) on the basis of a fixation or a reproduction of a fixation.
Furthermore, they might be unaltered or altered, for example through replacement of commercials,
etc. In general, however, the term “retransmission” seems to be reserved for such
transmissions which are both simultaneous and unaltered.

49. The Rome Convention does not grant rights against unauthorized cable retransmission. Without
such a right, cable operators can retransmit both domestic and foreign over the air broadcasts
simultaneously to their subscribers without permission from the broadcasting organizations or other
rightholders and without obligation to pay remuneration. 25 (Emphasis added)

Thus, while the Rome Convention gives broadcasting organizations the right to authorize or prohibit
the rebroadcasting of its broadcast, however, this protection does not extend to cable
retransmission. The retransmission of ABS-CBN’s signals by PMSI – which functions essentially as
a cable television – does not therefore constitute rebroadcasting in violation of the former’s
intellectual property rights under the IP Code.

It must be emphasized that the law on copyright is not absolute. The IP Code provides that:

Sec. 184. Limitations on Copyright. -

184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute
infringement of copyright:

xxxx

(h) The use made of a work by or under the direction or control of the Government, by the National
Library or by educational, scientific or professional institutions where such use is in the public
interest and is compatible with fair use;

The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No. 04-
08-88 is under the direction and control of the government though the NTC which is vested with
exclusive jurisdiction to supervise, regulate and control telecommunications and broadcast
services/facilities in the Philippines.26 The imposition of the must-carry rule is within the NTC’s power
to promulgate rules and regulations, as public safety and interest may require, to encourage a larger
and more effective use of communications, radio and television broadcasting facilities, and to
maintain effective competition among private entities in these activities whenever the Commission
finds it reasonably feasible.27 As correctly observed by the Director-General of the IPO:

Accordingly, the “Must-Carry Rule” under NTC Circular No. 4-08-88 falls under the foregoing
category of limitations on copyright. This Office agrees with the Appellant [herein respondent PMSI]
that the “Must-Carry Rule” is in consonance with the principles and objectives underlying Executive
Order No. 436,28 to wit:
The Filipino people must be given wider access to more sources of news, information, education,
sports event and entertainment programs other than those provided for by mass media and afforded
television programs to attain a well informed, well-versed and culturally refined citizenry and
enhance their socio-economic growth:

WHEREAS, cable television (CATV) systems could support or supplement the services provided by
television broadcast facilities, local and overseas, as the national information highway to the
countryside.29

The Court of Appeals likewise correctly observed that:

[T]he very intent and spirit of the NTC Circular will prevent a situation whereby station owners and a
few networks would have unfettered power to make time available only to the highest bidders, to
communicate only their own views on public issues, people, and to permit on the air only those with
whom they agreed – contrary to the state policy that the (franchise) grantee like the petitioner,
private respondent and other TV station owners, shall provide at all times sound and balanced
programming and assist in the functions of public information and education.

This is for the first time that we have a structure that works to accomplish explicit state policy goals. 30

Indeed, intellectual property protection is merely a means towards the end of making society benefit
from the creation of its men and women of talent and genius. This is the essence of intellectual
property laws, and it explains why certain products of ingenuity that are concealed from the public
are outside the pale of protection afforded by the law. It also explains why the author or the creator
enjoys no more rights than are consistent with public welfare.31

Further, as correctly observed by the Court of Appeals, the must-carry rule as well as the legislative
franchises granted to both ABS-CBN and PMSI are in consonance with state policies enshrined in
the Constitution, specifically Sections 9,32 17,33 and 2434 of Article II on the Declaration of Principles
and State Policies.35

ABS-CBN was granted a legislative franchise under Republic Act No. 7966, Section 1 of which
authorizes it “to construct, operate and maintain, for commercial purposes and in the public interest,
television and radio broadcasting in and throughout the Philippines x x x.” Section 4 thereof
mandates that it “shall provide adequate public service time to enable the government, through the
said broadcasting stations, to reach the population on important public issues; provide at all times
sound and balanced programming; promote public participation such as in community programming;
assist in the functions of public information and education x x x.”

PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which
similarly states that it “shall provide adequate public service time to enable the government, through
the said broadcasting stations, to reach the population on important public issues; provide at all
times sound and balanced programming; promote public participation such as in community
programming; assist in the functions of public information and education x x x.” Section 5, paragraph
2 of the same law provides that “the radio spectrum is a finite resource that is a part of the national
patrimony and the use thereof is a privilege conferred upon the grantee by the State and may be
withdrawn anytime, after due process.”

In Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC, 36 the Court held that a franchise is a
mere privilege which may be reasonably burdened with some form of public service. Thus:
All broadcasting, whether by radio or by television stations, is licensed by the government. Airwave
frequencies have to be allocated as there are more individuals who want to broadcast than there are
frequencies to assign. A franchise is thus a privilege subject, among other things, to amendment by
Congress in accordance with the constitutional provision that “any such franchise or right granted . . .
shall be subject to amendment, alteration or repeal by the Congress when the common good so
requires.”

xxxx

Indeed, provisions for COMELEC Time have been made by amendment of the franchises of radio
and television broadcast stations and, until the present case was brought, such provisions had not
been thought of as taking property without just compensation. Art. XII, §11 of the Constitution
authorizes the amendment of franchises for “the common good.” What better measure can be
conceived for the common good than one for free air time for the benefit not only of candidates but
even more of the public, particularly the voters, so that they will be fully informed of the issues in an
election? “[I]t is the right of the viewers and listeners, not the right of the broadcasters, which is
paramount.”

Nor indeed can there be any constitutional objection to the requirement that broadcast stations give
free air time. Even in the United States, there are responsible scholars who believe that government
controls on broadcast media can constitutionally be instituted to ensure diversity of views and
attention to public affairs to further the system of free expression. For this purpose, broadcast
stations may be required to give free air time to candidates in an election. Thus, Professor Cass R.
Sunstein of the University of Chicago Law School, in urging reforms in regulations affecting the
broadcast industry, writes:

xxxx

In truth, radio and television broadcasting companies, which are given franchises, do not own the
airwaves and frequencies through which they transmit broadcast signals and images. They are
merely given the temporary privilege of using them. Since a franchise is a mere privilege, the
exercise of the privilege may reasonably be burdened with the performance by the grantee of some
form of public service. x x x37

There is likewise no merit to ABS-CBN’s claim that PMSI’s carriage of its signals is for a commercial
purpose; that its being the country’s top broadcasting company, the availability of its signals
allegedly enhances PMSI’s attractiveness to potential customers;38 or that the unauthorized carriage
of its signals by PMSI has created competition between its Metro Manila and regional stations.

ABS-CBN presented no substantial evidence to prove that PMSI carried its signals for profit; or that
such carriage adversely affected the business operations of its regional stations. Except for the
testimonies of its witnesses,[39] no studies, statistical data or information have been submitted in
evidence.

Administrative charges cannot be based on mere speculation or conjecture. The complainant has
the burden of proving by substantial evidence the allegations in the complaint. 40 Mere allegation is
not evidence, and is not equivalent to proof.41

Anyone in the country who owns a television set and antenna can receive ABS-CBN’s signals for
free. Other broadcasting organizations with free-to-air signals such as GMA-7, RPN-9, ABC-5, and
IBC-13 can likewise be accessed for free. No payment is required to view the said
channels42 because these broadcasting networks do not generate revenue from subscription from
their viewers but from airtime revenue from contracts with commercial advertisers and producers, as
well as from direct sales.

In contrast, cable and DTH television earn revenues from viewer subscription. In the case of PMSI, it
offers its customers premium paid channels from content providers like Star Movies, Star World,
Jack TV, and AXN, among others, thus allowing its customers to go beyond the limits of “Free TV
and Cable TV.”43 It does not advertise itself as a local channel carrier because these local channels
can be viewed with or without DTH television.

Relevantly, PMSI’s carriage of Channels 2 and 23 is material in arriving at the ratings and audience
share of ABS-CBN and its programs. These ratings help commercial advertisers and producers
decide whether to buy airtime from the network. Thus, the must-carry rule is actually advantageous
to the broadcasting networks because it provides them with increased viewership which attracts
commercial advertisers and producers.

On the other hand, the carriage of free-to-air signals imposes a burden to cable and DTH television
providers such as PMSI. PMSI uses none of ABS-CBN’s resources or equipment and carries the
signals and shoulders the costs without any recourse of charging.44 Moreover, such carriage of
signals takes up channel space which can otherwise be utilized for other premium paid channels.

There is no merit to ABS-CBN’s argument that PMSI’s carriage of Channels 2 and 23 resulted in
competition between its Metro Manila and regional stations. ABS-CBN is free to decide to pattern its
regional programming in accordance with perceived demands of the region; however, it cannot
impose this kind of programming on the regional viewers who are also entitled to the free-to-air
channels. It must be emphasized that, as a national broadcasting organization, one of ABS-CBN’s
responsibilities is to scatter its signals to the widest area of coverage as possible. That it should limit
its signal reach for the sole purpose of gaining profit for its regional stations undermines public
interest and deprives the viewers of their right to access to information.

Indeed, television is a business; however, the welfare of the people must not be sacrificed in the
pursuit of profit. The right of the viewers and listeners to the most diverse choice of programs
available is paramount.45 The Director-General correctly observed, thus:

The “Must-Carry Rule” favors both broadcasting organizations and the public. It prevents cable
television companies from excluding broadcasting organization especially in those places not
reached by signal. Also, the rule prevents cable television companies from depriving viewers in far-
flung areas the enjoyment of programs available to city viewers. In fact, this Office finds the rule
more burdensome on the part of the cable television companies. The latter carries the television
signals and shoulders the costs without any recourse of charging. On the other hand, the signals
that are carried by cable television companies are dispersed and scattered by the television stations
and anybody with a television set is free to pick them up.

With its enormous resources and vaunted technological capabilities, Appellee’s [herein petitioner
ABS-CBN] broadcast signals can reach almost every corner of the archipelago. That in spite of such
capacity, it chooses to maintain regional stations, is a business decision. That the “Must-Carry Rule”
adversely affects the profitability of maintaining such regional stations since there will be competition
between them and its Metro Manila station is speculative and an attempt to extrapolate the effects of
the rule. As discussed above, Appellant’s DTH satellite television services is of limited subscription.
There was not even a showing on part of the Appellee the number of Appellant’s subscribers in one
region as compared to non-subscribing television owners. In any event, if this Office is to engage in
conjecture, such competition between the regional stations and the Metro Manila station will benefit
the public as such competition will most likely result in the production of better television programs.” 46
All told, we find that the Court of Appeals correctly upheld the decision of the IPO Director-General
that PMSI did not infringe on ABS-CBN’s intellectual property rights under the IP Code. The findings
of facts of administrative bodies charged with their specific field of expertise, are afforded great
weight by the courts, and in the absence of substantial showing that such findings are made from an
erroneous estimation of the evidence presented, they are conclusive, and in the interest of stability
of the governmental structure, should not be disturbed. 47

Moreover, the factual findings of the Court of Appeals are conclusive on the parties and are not
reviewable by the Supreme Court. They carry even more weight when the Court of Appeals affirms
the factual findings of a lower fact-finding body,48 as in the instant case.

There is likewise no merit to ABS-CBN’s contention that the Memorandum Circular excludes from its
coverage DTH television services such as those provided by PMSI. Section 6.2 of the Memorandum
Circular requires all cable television system operators operating in a community within Grade “A” or
“B” contours to carry the television signals of the authorized television broadcast stations. 49 The
rationale behind its issuance can be found in the whereas clauses which state:

Whereas, Cable Television Systems or Community Antenna Television (CATV) have shown their
ability to offer additional programming and to carry much improved broadcast signals in the remote
areas, thereby enriching the lives of the rest of the population through the dissemination of social,
economic, educational information and cultural programs;

Whereas, the national government supports the promotes the orderly growth of the Cable Television
industry within the framework of a regulated fee enterprise, which is a hallmark of a democratic
society;

Whereas, public interest so requires that monopolies in commercial mass media shall be regulated
or prohibited, hence, to achieve the same, the cable TV industry is made part of the broadcast
media;

Whereas, pursuant to Act 3846 as amended and Executive Order 205 granting the National
Telecommunications Commission the authority to set down rules and regulations in order to protect
the public and promote the general welfare, the National Telecommunications Commission hereby
promulgates the following rules and regulations on Cable Television Systems;

The policy of the Memorandum Circular is to carry improved signals in remote areas for the good of
the general public and to promote dissemination of information. In line with this policy, it is clear that
DTH television should be deemed covered by the Memorandum Circular. Notwithstanding the
different technologies employed, both DTH and cable television have the ability to carry improved
signals and promote dissemination of information because they operate and function in the same
way.

In its December 20, 2002 letter,50 the NTC explained that both DTH and cable television services are
of a similar nature, the only difference being the medium of delivering such services. They can carry
broadcast signals to the remote areas and possess the capability to enrich the lives of the residents
thereof through the dissemination of social, economic, educational information and cultural
programs. Consequently, while the Memorandum Circular refers to cable television, it should be
understood as to include DTH television which provides essentially the same services.

In Eastern Telecommunications Philippines, Inc. v. International Communication Corporation, 51 we

held:
The NTC, being the government agency entrusted with the regulation of activities coming under its
special and technical forte, and possessing the necessary rule-making power to implement its
objectives, is in the best position to interpret its own rules, regulations and guidelines. The Court has
consistently yielded and accorded great respect to the interpretation by administrative agencies of
their own rules unless there is an error of law, abuse of power, lack of jurisdiction or grave abuse of
discretion clearly conflicting with the letter and spirit of the law.52

With regard to the issue of the constitutionality of the must-carry rule, the Court finds that its
resolution is not necessary in the disposition of the instant case. One of the essential requisites for a
successful judicial inquiry into constitutional questions is that the resolution of the constitutional
question must be necessary in deciding the case.53 In Spouses Mirasol v. Court of Appeals,54 we
held:

As a rule, the courts will not resolve the constitutionality of a law, if the controversy can be settled on
other grounds. The policy of the courts is to avoid ruling on constitutional questions and to presume
that the acts of the political departments are valid, absent a clear and unmistakable showing to the
contrary. To doubt is to sustain. This presumption is based on the doctrine of separation of powers.
This means that the measure had first been carefully studied by the legislative and executive
departments and found to be in accord with the Constitution before it was finally enacted and
approved.55

The instant case was instituted for violation of the IP Code and infringement of ABS-CBN’s
broadcasting rights and copyright, which can be resolved without going into the constitutionality of
Memorandum Circular No. 04-08-88. As held by the Court of Appeals, the only relevance of the
circular in this case is whether or not compliance therewith should be considered manifestation of
lack of intent to commit infringement, and if it is, whether such lack of intent is a valid defense
against the complaint of petitioner.56

The records show that petitioner assailed the constitutionality of Memorandum Circular No. 04-08-88
by way of a collateral attack before the Court of Appeals. In Philippine National Bank v. Palma,57 we
ruled that for reasons of public policy, the constitutionality of a law cannot be collaterally attacked. A
law is deemed valid unless declared null and void by a competent court; more so when the issue has
not been duly pleaded in the trial court.58

As a general rule, the question of constitutionality must be raised at the earliest opportunity so that if
not raised in the pleadings, ordinarily it may not be raised in the trial, and if not raised in the trial
court, it will not be considered on appeal.59 In Philippine Veterans Bank v. Court of Appeals, 60 we
held:

We decline to rule on the issue of constitutionality as all the requisites for the exercise of judicial
review are not present herein. Specifically, the question of constitutionality will not be passed
upon by the Court unless, at the first opportunity, it is properly raised and presented in an
appropriate case, adequately argued, and is necessary to a determination of the case,
particularly where the issue of constitutionality is the very lis mota presented.x x x61

Finally, we find that the dismissal of the petition for contempt filed by ABS-CBN is in order.

Indirect contempt may either be initiated (1) motu proprio by the court by issuing an order or any
other formal charge requiring the respondent to show cause why he should not be punished for
contempt or (2) by the filing of a verified petition, complying with the requirements for filing initiatory
pleadings.62
ABS-CBN filed a verified petition before the Court of Appeals, which was docketed CA G.R. SP No.
90762, for PMSI’s alleged disobedience to the Resolution and Temporary Restraining Order, both
dated July 18, 2005, issued in CA-G.R. SP No. 88092. However, after the cases were consolidated,
the Court of Appeals did not require PMSI to comment on the petition for contempt. It ruled on the
merits of CA-G.R. SP No. 88092 and ordered the dismissal of both petitions.

ABS-CBN argues that the Court of Appeals erred in dismissing the petition for contempt without
having ordered respondents to comment on the same. Consequently, it would have us reinstate CA-
G.R. No. 90762 and order respondents to show cause why they should not be held in contempt.

It bears stressing that the proceedings for punishment of indirect contempt are criminal in nature.
The modes of procedure and rules of evidence adopted in contempt proceedings are similar in
nature to those used in criminal prosecutions. 63 While it may be argued that the Court of Appeals
should have ordered respondents to comment, the issue has been rendered moot in light of our
ruling on the merits. To order respondents to comment and have the Court of Appeals conduct a
hearing on the contempt charge when the main case has already been disposed of in favor of PMSI
would be circuitous. Where the issues have become moot, there is no justiciable controversy,
thereby rendering the resolution of the same of no practical use or value.64

WHEREFORE, the petition is DENIED. The July 12, 2006 Decision of the Court of Appeals in CA-
G.R. SP Nos. 88092 and 90762, sustaining the findings of the Director-General of the Intellectual
Property Office and dismissing the petitions filed by ABS-CBN Broadcasting Corporation, and the
December 11, 2006 Resolution denying the motion for reconsideration, are AFFIRMED.

SO ORDERED.

CASE DIGEST

ABS-CBN v. Philippine Multi-Media

System (G.R. No. 175769-70)
Facts:

Petitioner ABS-CBN, a broadcasting corporation, filed a complaint against respondent

PMSI alleging that the latter’s unauthorized rebroadcasting of Channels 2 and 23
infringed on its broadcasting rights and copyright. PMSI posits that it was granted a
franchise to operate a digital direct-to-home satellite service and that the rebroadcasting
was in accordance with the NTC memo to carry television signals of authorized television
broadcast stations, which includes petitioner’s programs. The IPO Bureau of Legal Affairs
found PMSI to have infringed petitioner’s broadcasting rights and ordered it to
permanently desist from rebroadcasting. On appeal, the IPO Director General found for
PMSI. CA affirmed.

Issue:

Whether or not petitioner’s broadcasting rights and copyright are infringed.

Ruling: NO.

The Director-General of the IPO correctly found that PMSI is not engaged in
rebroadcasting and thus cannot be considered to have infringed ABS-CBN’s broadcasting
rights and copyright.

Section 202.7 of the IP Code defines broadcasting as “the transmission by wireless

means for the public reception of sounds or of images or of representations thereof; such
transmission by satellite is also ‘broadcasting’ where the means for decrypting are
provided to the public by the broadcasting organization or with its consent.” On the other
hand, rebroadcasting as defined in Article 3(g) of the International Convention for the
Protection of Performers, Producers of Phonograms and Broadcasting Organizations,
otherwise known as the 1961 Rome Convention, of which the Republic of the Philippines
is a signatory, is “the simultaneous broadcasting by one broadcasting organization of the
broadcast of another broadcasting organization.” The Working Paper prepared by the
Secretariat of the Standing Committee on Copyright and Related Rights defines
broadcasting organizations as “entities that take the financial and editorial responsibility
for the selection and arrangement of, and investment in, the transmitted content.”
Evidently, PMSI would not qualify as a broadcasting organization because it does not
have the aforementioned responsibilities imposed upon broadcasting organizations, such
as ABS-CBN.

ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which
the viewers receive in its unaltered form. PMSI does not produce, select, or determine
the programs to be shown in Channels 2 and 23. Likewise, it does not pass itself off as
the origin or author of such programs. Insofar as Channels 2 and 23 are concerned, PMSI
merely retransmits the same in accordance with Memorandum Circular 04-08-88. With
regard to its premium channels, it buys the channels from content providers and transmits
on an as-is basis to its viewers. Clearly, PMSI does not perform the functions of a
broadcasting organization; thus, it cannot be said that it is engaged in rebroadcasting
Channels 2 and 23.

G.R. No. 195956 March 11, 2015

ABS-CBN CORPORATION, Petitioner,

vs.
FELIPE GOZON, GILBERTO R. DUAVIT, JR., MARISSA L. FLORES, JESSICA A. SORO,
GRACE DELA PENA-REYES, JOHN OLIVER T. MANALASTAS, JOHN DOES AND JANE
DOES, Respondents.

DECISION
LEONEN, J.:

The main issue in this case is whether there is probable cause to charge respondents with
infringement under Republic Act No. 8293, otherwise known as the Intellectual Property Code. The
resolution of this issue requires clarification of the concept of "copyrightable material" in relation to
material that is rebroadcast live as a news story. We are also asked to rule on whether criminal
prosecution for infringement of copyrightable material, such as live rebroadcast, can be negated by
good faith.

ABS-CBN Corporation (ABS-CBN) filed the Petition for Review on Certiorari1 to assail the November
9, 2010 Decision2 and the March 3, 2011 Resolution3 of the Court of Appeals. The Court of Appeals
reinstated the Department of Justice Resolution dated August 1, 2005 that ordered the withdrawal of
the Information finding probable cause for respondents’ violation of Sections 177 4 and 2115 of the
Intellectual Property Code.6 Respondents are officers and employees of GMA Network, Inc. (GMA-
7). They are: Felipe Gozon (Gozon), GMA-7 President; Gilberto R. Duavit, Jr. (Duavit, Jr.), Executive
Vice-President; Marissa L. Flores (Flores), Vice-President for New and Public Affairs; Jessica A.
Soho (Soho), Director for News; Grace Dela Peña-Reyes (Dela Peña-Reyes), Head of News and
Public Affairs; John Oliver Manalastas (Manalastas), Program Manager; and others.

The controversy arose from GMA-7’s news coverage on the homecoming of Filipino overseas
worker and hostage victim Angelo dela Cruz on July 22, 2004. As summarized by the Court of
Appeals:

Overseas Filipino worker Angelo dela Cruz was kidnapped by Iraqi militants and as a condition for
his release, a demand was made for the withdrawal of Filipino troops in Iraq. After negotiations, he
was released by his captors and was scheduled to return to the country in the afternoon of 22 July
2004. Occasioned by said homecoming and the public interest it generated, both . . . GMA Network,
Inc. . . . and [petitioner] made their respective broadcasts and coverage of the live event. 7

ABS-CBN "conducted live audio-video coverage of and broadcasted the arrival of Angelo dela Cruz
at the Ninoy Aquino International Airport (NAIA) and the subsequent press conference."8 ABS-CBN
allowed Reuters Television Service (Reuters) to air the footages it had taken earlier under a special
embargo agreement.9

ABS-CBN alleged that under the special embargo agreement, any of the footages it took would be
for the "use of Reuter’s international subscribers only, and shall be considered and treated by
Reuters under ‘embargo’ against use by other subscribers in the Philippines. . . . [N]o other
Philippine subscriber of Reuters would be allowed to use ABS-CBN footage without the latter’s
consent."10

GMA-7, to which Gozon, Duavit, Jr., Flores, Soho, Dela Peña-Reyes, and Manalastas are
connected, "assigned and stationed news reporters and technical men at the NAIA for its live
broadcast and non-live news coverage of the arrival of dela Cruz."11 GMA-7 subscribes to both
Reuters and Cable News Network (CNN). It received a live video feed of the coverage of Angelo
dela Cruz’s arrival from Reuters.12

GMA-7 immediately carried the live news feed in its program "Flash Report," together with its live
broadcast.13 Allegedly, GMA-7 did not receive any notice or was not aware that Reuters was airing
footages of ABS-CBN.14 GMA-7’s news control room staff saw neither the "No Access Philippines"
notice nor a notice that the video feed was under embargo in favor of ABS-CBN.15
On August 13, 2004, ABS-CBN filed the Complaint for copyright infringement under Sections
17716 and 21117 of the Intellectual Property Code.18

On December 3, 2004, Assistant City Prosecutor Dindo Venturanza issued the Resolution19 finding
probable cause to indict Dela Peña-Reyes and Manalastas.20 Consequently, the Information21 for
violation of the Intellectual Property Code was filed on December 17, 2004. It reads:

That on or about the 22nd of July 2004, in Quezon City, Philippines, the above-named accused,
conspiring together, confederating with and mutually helping each other, being the Head of News
Operations and the Program Manager, respectively, for the News and Public Affairs Department of
GMA Network, Inc., did then and there, willfully, unlawfully and feloniously use and broadcast the
footage of the arrival of Angelo [d]ela Cruz at the Ninoy Aquino International Airport of which ABS-
CBN holds the exclusive ownership and copyright by then and there using, airing, and broadcasting
the said footage in its news program "FLASH REPORT" without first obtaining the consent or
authority of said copyright owner, to their damage and prejudice.

Contrary to law.22

On January 4, 2005, respondents filed the Petition for Review before the Department of Justice. 23 In
the Resolution (Gonzalez Resolution) dated August 1, 2005, Department of Justice Secretary Raul
M. Gonzalez (Secretary Gonzalez) ruled in favor of respondents and held that good faith may be
raised as a defense in the case.24 The dispositive portion of the Resolution reads:

WHEREFORE, THE PETITION FOR REVIEW FILED BY GMA-7 in I.S. No. 04-10458 is considered
meritorious and is hereby GRANTED. This case is hereby Dismissed, the resolution of the City
Prosecutor of Quezon City is hereby reversed and the same is ordered to withdraw the information if
any and report action taken to this office within ten (10) days.25 (Emphasis in the original)

Both parties moved for reconsideration of the Gonzalez Resolution.26

Meanwhile, on January 19, 2005, the trial court granted the Motion to Suspend Proceedings filed
earlier by Dela Peña-Reyes and Manalastas.27 The trial court Order reads:

Perusing the motion, the court finds that a petition for review was filed with the Department of Justice
on January 5, 2005 as confirmed by the public prosecutor. Under Section 11 (c), Rule 116 of the
Rules of Criminal Procedure, once a petition for review is filed with the Department of Justice, a
suspension of the criminal proceedings may be allowed by the court.

Accordingly, to allow the Department of Justice the opportunity to act on said petition for review, let
the proceedings on this case be suspended for a period of sixty (60) days counted from January 5,
2005, the date the petition was filed with the Department of Justice. The arraignment of the accused
on February 1, 2005 is accordingly cancelled. Let the arraignment be rescheduled to March 8, 2005
at 8:30 a.m. The accused through counsel are notified in open court.

SO ORDERED.28

On June 29, 2010, Department of Justice Acting Secretary Alberto C. Agra (Secretary Agra) issued
the Resolution (Agra Resolution) that reversed the Gonzalez Resolution and found probable cause
to charge Dela Peña-Reyes and Manalastas for violation of the Intellectual Property
Code.29 Secretary Agra also found probable cause to indict Gozon, Duavit, Jr., Flores, and Soho for
the same violation.30 He ruled that:
[w]hile good faith may be a defense in copyright infringement, the same is a disputable presumption
that must be proven in a full-blown trial. Disputable presumptions may be contradicted and
overcome by other evidence. Thus, a full-blown trial is the proper venue where facts, issues and
laws are evaluated and considered. The very purpose of trial is to allow a party to present evidence
to overcome the disputable presumptions involved. 31

The dispositive portion of the Agra Resolution provides:

WHEREFORE, premises considered:

(a) The Motion for Reconsideration filed by appellees ABS-CBN Broadcasting Corporation
(ABS-CBN) of our Resolution promulgated on August 1, 2005 (Resolution No. 364, Series of
2005) and the Petition for Review filed by complainant-appellant ABS-CBN in I.S. No. 04-
10458 on April10, 2006, are GRANTED and the City Prosecutor of Quezon City is hereby
ordered to file the necessary Information for violation of Section 177 and 211 of Republic Act
No. 8293 against GMA-7. Felipe L. Gozon, Gilberto R. Duavit, Jr., Marissa L.Flores, Jessica
A. Soho, Grace Dela Pena-Reyes, John Oliver T. Manalastas[.]

....

SO ORDERED.32 (Emphasis in the original)

Respondents assailed the Agra Resolution through the Petition for Certiorari with prayer for issuance
of a temporary restraining order and/or Writ of Preliminary Injunction on September 2, 2010 before
the Court of Appeals. In the Resolution dated September 13, 2010, the Court of Appeals granted the
temporary restraining order preventing the Department of Justice from enforcing the Agra
Resolution.33

On November 9, 2010, the Court of Appeals rendered the Decision granting the Petition and
reversing and setting aside the Agra Resolution. 34 The Court of Appeals held that Secretary Agra
committed errors of jurisdiction in issuing the assailed Resolution. Resolving the issue of copyright
infringement, the Court of Appeals said:

Surely, private respondent has a copyright of its news coverage. Seemingly, for airing said video
feed, petitioner GMA is liable under the provisions of the Intellectual Property Code, which was
enacted purposely to protect copyright owners from infringement. However, it is an admitted fact that
petitioner GMA had only aired a five (5) second footage of the disputed live video feed that it had
received from Reuters and CNN as a subscriber. Indeed, petitioners had no notice of the right of
ownership of private respondent over the same. Without notice of the "No Access Philippines"
restriction of the live video feed, petitioner cannot be faulted for airing a live video feed from Reuters
and CNN.

Verily, as aptly opined by Secretary Gonzalez in his earlier Resolution, the act of petitioners in airing
the five (5) second footage was undeniably attended by good faith and it thus serves to exculpate
them from criminal liability under the Code. While the Intellectual Property Code is a special law, and
thus generally categorized as malum prohibitum, it bears to stress that the provisions of the Code
itself do not ipso facto penalize a person or entity for copyright infringement by the mere fact that
one had used a copyrighted work or material.

Certainly so, in the exercise of one’s moral and economic or copyrights, the very provisions of Part
IV of the Intellectual Property Code provide for the scope and limitations on copyright protection
under Section 184 and in fact permit fair use of copyrighted work under Section 185. With the
aforesaid statutory limitations on one’s economic and copyrights and the allowable instances where
the other persons can legally use a copyrighted work, criminal culpability clearly attaches only when
the infringement had been knowingly and intentionally committed.35 (Emphasis supplied)

The dispositive portion of the Decision reads:

WHEREFORE, the foregoing considered, the instant petition is hereby GRANTED and the assailed
Resolution dated 29 June 2010 REVERSED and SET ASIDE. Accordingly, the earlier Resolution
dated 1 August 2005, which ordered the withdrawal of the Information filed, if any, against the
petitioners for violation of Sections 177 and 211 of the Intellectual Property Code, is hereby
REINSTATED. No costs.

SO ORDERED.36 (Emphasis in the original)

ABS-CBN’s Motion for Reconsideration was denied.37 It then filed its Petition for Review before this
court assailing the Decision and Resolution of the Court of Appeals.38

The issues for this court’s consideration are:

First, whether Secretary Agra committed errors of jurisdiction in the Resolution dated June 29, 2010
and, therefore, whether a petition for certiorari was the proper remedy in assailing that Resolution;

Second, whether news footage is copyrightable under the law;

Third, whether there was fair use of the broadcast material;

Fourth, whether lack of knowledge that a material is copyrighted is a defense against copyright
infringement;

Fifth, whether good faith is a defense in a criminal prosecution for violation of the Intellectual
Property Code; and

Lastly, whether the Court of Appeals was correct in overturning Secretary Agra’s finding of probable
cause.

The trial court granted respondents’ Motion to Suspend Proceedings and deferred respondents Dela
Peña-Reyes and Manalastas’ arraignment for 60 days in view of the Petition for Review filed before
the Department of Justice.

Rule 116, Section 11 (c) of the Rules of Criminal Procedure allows

the suspension of the accused’s arraignment in certain circumstances only:

SEC. 11. Suspension of arraignment.–Upon motion by the proper party, the arraignment shall be
suspended in the following cases:

(a) The accused appears to be suffering from an unsound mental condition which effectively
renders him unable to fully understand the charge against him and to plead intelligently
 thereto. In such case, the court shall order his mental examination and, if necessary, his
confinement for such purpose;

(b) There exists a prejudicial question; and

(c) A petition for review of the resolution of the prosecutor is pending at either the
Department of Justice, or the Office of the President; provided, that the period of suspension
shall not exceed sixty (60) days counted from the filing of the petition with the reviewing
office. (12a) (Emphasis supplied)

In Samson v. Daway,39 this court acknowledged the applicability of Rule 116, Section (c) in a criminal
prosecution for infringement under the Intellectual Property Code. However, this court emphasized
the limits of the order of deferment under the Rule:

While the pendency of a petition for review is a ground for suspension of the arraignment, the . . .
provision limits the deferment of the arraignment to a period of 60 days reckoned from the filing of
the petition with the reviewing office. It follows, therefore, that after the expiration of said period, the
trial court is bound to arraign the accused or to deny the motion to defer arraignment. 40

We clarify that the suspension of the arraignment should always be within the limits allowed by law.
In Crespo v. Judge Mogul,41 this court outlined the effects of filing an information before the trial
court, which includes initiating a criminal action and giving this court "authority to hear and determine
the case":42

The preliminary investigation conducted by the fiscal for the purpose of determining whether a prima
facie case exists warranting the prosecution of the accused is terminated upon the filing of the
information in the proper court. In turn, as above stated, the filing of said information sets in motion
the criminal action against the accused in Court. Should the fiscal find it proper to conduct a
reinvestigation of the case, at such stage, the permission of the Court must be secured. After such
reinvestigation the finding and recommendations of the fiscal should be submitted to the Court for
appropriate action. While it is true that the fiscal has the quasi judicial discretion to determine
whether or not a criminal case should be filed in court or not, once the case had already been
brought to Court whatever disposition the fiscal may feel should be proper in the case thereafter
should be addressed for the consideration of the Court, the only qualification is that the action of the
Court must not impair the substantial rights of the accused or the right of the People to due process
of law.

Whether the accused had been arraigned or not and whether it was due to a reinvestigation by the
fiscal or a review by the Secretary of Justice whereby a motion to dismiss was submitted to the
Court, the Court in the exercise of its discretion may grant the motion or deny it and require that the
trial on the merits proceed for the proper determination of the case.

However, one may ask, if the trial court refuses to grant the motion to dismiss filed by the fiscal upon
the directive of the Secretary of Justice will there not be a vacuum in the prosecution? A state
prosecutor to handle the case cannot possibly be designated by the Secretary of Justice who does
not believe that there is a basis for prosecution nor can the fiscal be expected to handle the
prosecution of the case thereby defying the superior order of the Secretary of Justice. The answer is
simple. The role of the fiscal or prosecutor as We all know is to see that justice is done and not
necessarily to secure the conviction of the person accused before the Courts. Thus, in spite of his
opinion to the contrary, it is the duty of the fiscal to proceed with the presentation of evidence of the
prosecution to the Court to enable the Court to arrive at its own independent judgment as to whether
the accused should be convicted or acquitted. The fiscal should not shirk from the responsibility of
appearing for the People of the Philippines even under such circumstances much less should he
abandon the prosecution of the case leaving it to the hands of a private prosecutor for then the entire
proceedings will be null and void. The least that the fiscal should do is to continue to appear for the
prosecution although he may turn over the presentation of the evidence to the private prosecutor but
still under his direction and control.

The rule therefore in this jurisdiction is that once a complaint or information is filed in Court any
disposition of the case as to its dismissal or the conviction or acquittal of the accused rests in the
sound discretion of the Court. Although the fiscal retains the direction and control of the prosecution
of criminal cases even while the case is already in Court he cannot impose his opinion on the trial
court. The Court is the best and sole judge on what to do with the case before it. The determination
of the case is within its exclusive jurisdiction and competence. A motion to dismiss the case filed by
the fiscal should be addressed to the Court who has the option to grant or deny the same. It does
not matter if this is done before or after the arraignment of the accused or that the motion was filed
after a reinvestigation or upon instructions of the Secretary of Justice who reviewed the records of
the investigation.43 (Emphasis supplied, citations omitted)

The doctrine in Crespo was reiterated in Mayor Balindong v. Court of Appeals,44 where this court
reminded the Department of Justice Secretary to refrain from entertaining petitions for review when
the case is already pending with this court:

[I]n order to avoid a situation where the opinion of the Secretary of Justice who reviewed the action
of the fiscal may be disregarded by the trial court, the Secretary of Justice should, as far as
practicable, refrain from entertaining a petition for review or appeal from the action of the fiscal,
when the complaint or information has already been filed in the Court. The matter should be left
entirely for the determination of the Court.45

The trial court should have proceeded with respondents Dela Peña-Reyes and Manalastas’
arraignment after the 60-day period from the filing of the Petition for Review before the Department
of Justice on March 8, 2005. It was only on September 13, 2010 that the temporary restraining order
was issued by the Court of Appeals. The trial court erred when it did not act on the criminal case
during the interim period. It had full control and direction of the case. As Judge Mogul reasoned in
denying the motion to dismiss in Crespo, failure to proceed with the arraignment "disregards the
requirements of due process [and] erodes the Court’s independence and integrity."46

II

According to ABS-CBN, the Court of Appeals erred in finding that: a motion for reconsideration was
not necessary before a petition for certiorari could be filed; the Department of Justice Secretary
committed errors of jurisdiction since the Agra Resolution was issued within its authority and in
accordance with settled laws and jurisprudence; and respondents were not liable for copyright
infringement.

In its assailed Decision, the Court of Appeals found that respondents committed a procedural error
when they failed to file a motion for reconsideration before filing the Petition for Certiorari. However,
the Court of Appeals held that a motion for reconsideration was unnecessary since the Agra
Resolution was a patent nullity and it would have been useless under the circumstances: Given that
a reading of the assailed Resolution and the instant records readily reveals errors of jurisdiction on
the part of respondent Secretary, direct judicial recourse is warranted under the circumstances.
Aside from the fact that said Resolution is a patent nullity having been issued in grave abuse of
discretion amounting to lack or excess of jurisdiction, the filing of a motion for reconsideration is
evidently useless on account of the fact that the issues and arguments before this Court have
already been duly raised and accordingly delved into by respondent Secretary in his disposition of
the petition a quo.47 (Emphasis in the original)

In Elma v. Jacobi,48 this court ruled that a petition for certiorari under Rule 65 of the Rules of Court is
proper when assailing adverse resolutions of the Department of Justice stemming from the
determination of probable cause.49 However, grave abuse of discretion must be alleged.50

In Sanrio Company Limited v. Lim,51 this court stressed the prosecutor’s role in determining probable
cause. Judicial review will only lie when it is shown that the prosecutor acted with grave abuse of
discretion amounting to lack or excess of jurisdiction:

A prosecutor alone determines the sufficiency of evidence that will establish probable cause
justifying the filing of a criminal information against the respondent. By way of exception, however,
judicial review is allowed where respondent has clearly established that the prosecutor committed
grave abuse of discretion. Otherwise stated, such review is appropriate only when the prosecutor
has exercised his discretion in an arbitrary, capricious, whimsical or despotic manner by reason of
passion or personal hostility, patent and gross enough to amount to an evasion of a positive duty or
virtual refusal to perform a duty enjoined by law. 52 (Citations omitted)

Grave abuse of discretion refers to:

such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. The
abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility and must be so patent and gross as to amount to
an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in
contemplation of law.53

Resorting to certiorari requires that there be there be "no appeal, or any plain, speedy, and adequate
remedy in the ordinary course of law[,]"54 such as a motion for reconsideration. Generally, "a motion
for reconsideration is a condition sine qua non before a petition for certiorari may lie, its purpose
being to grant an opportunity for the [tribunal or officer] to correct any error attributed to it by a re-
examination of the legal and factual circumstances of the case." 55 However, exceptions to the rule
exist:

(a) where the order is a patent nullity, as where the Court a quo had no jurisdiction; (b) where the
questions raised in the certiorari proceeding have been duly raised and passed upon by the lower
court, or are the same as those raised and passed upon in the lower court; (c) where there is an
urgent necessity for the resolution of the question and any further delay would prejudice the interests
of the Government or of the petitioner or the subject matter of the action is perishable; (d) where,
under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was
deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case, relief
from an order of arrest is urgent and the granting of such relief by the trial Court is improbable; (g)
where the proceedings in the lower court are a nullity for lack of due process; (h) where the
proceedings was ex parte or in which the petitioner had no opportunity to object; and (i) where the
issue raised is one purely of law or where public interest is involved. 56 (Emphasis in the original,
citations omitted)

As argued by respondents, "[a] second motion for reconsideration would have been useless and
futile since the D[epartment] [of] J[ustice] had already passed upon the same issues twice."57 Equally
pressing under the circumstances was the need to resolve the matter, as the Information’s filing
would lead to respondents’ imminent arrest.58
Moreover, Department of Justice Department Circular No. 70 dated July 3, 2000, or the 2000 NPS
Rules on Appeal, provides that no second motion for reconsideration of the Department of Justice
Secretary’s resolution shall be entertained:

SECTION 13. Motion for reconsideration. The aggrieved party may file a motion for reconsideration
within a non-extendible period of ten (10) days from receipt of the resolution on appeal, furnishing
the adverse party and the Prosecution Office concerned with copies thereof and submitting proof of
such service. No second or further motion for reconsideration shall be entertained.

The Agra Resolution was the result of respondents’ Motion for Reconsideration assailing the
Gonzalez Resolution. To file a motion for reconsideration of the Agra Resolution would be
superfluous. Respondents were, therefore, correct in filing the Petition for Certiorari of the Agra
Resolution before the Court of Appeals.

III

The Court of Appeals ruled that Secretary Agra committed errors of jurisdiction, which then required
the grant of the writ of certiorari:

So viewed, by ordering the filing of information without proof that probable cause exists to charge
petitioners with a crime, respondent Secretary clearly committed an error of jurisdiction thus
warranting the issuance of the writ of certiorari. Surely, probable cause cannot be had when the very
provisions of the statute exculpates criminal liability in cases classified as fair use of copyrighted
materials. The fact that they admittedly used the Reuters live video feed is not, as a matter of
course, tantamount to copyright infringement that would justify the filing of an information against the
petitioners.59

Error of jurisdiction must be distinguished from error of judgment:

A line must be drawn between errors of judgment and errors of jurisdiction. An error of judgment is
one which the court may commit in the exercise of its jurisdiction. An error of jurisdiction renders an
order or judgment void or voidable. Errors of jurisdiction are reviewable on certiorari; errors of
judgment, only by appeal.60

In People v. Hon. Sandiganbayan61:

An error of judgment is one which the court may commit in the exercise of its jurisdiction. An error of
jurisdictionis one where the act complained of was issued by the court without or in excess of
jurisdiction, or with grave abuse of discretion, which is tantamount to lack or in excess of jurisdiction
and which error is correctible only by the extraordinary writ of certiorari. Certiorari will not be issued
to cure errors of the trial court in its appreciation of the evidence of the parties, or its conclusions
anchored on the said findings and its conclusions of law.62 (Emphasis supplied)

This court has adopted a deferential attitude towards review of the executive’s finding of probable
cause.63 This is based "not only upon the respect for the investigatory and [prosecutorial] powers
granted by the Constitution to the executive department but upon practicality as well."64 Review of the
Department of Justice Secretary’s decision or resolution will be allowed only when grave abuse of
discretion is alleged:

The full discretionary authority to determine probable cause in a preliminary investigation to

ascertain sufficient ground for the filing of information rests with the executive branch. Hence, judicial
review of the resolution of the Secretary of Justice is limited to a determination whether there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction. Courts cannot
substitute the executive branch’s judgment.

....

It is only where the decision of the Justice Secretary is tainted with grave abuse of discretion
amounting to lack or excess of jurisdiction that the Court of Appeals may take cognizance of the
case in a petition for certiorari under Rule 65 of the Revised Rules of Civil Procedure. The Court of
Appeals decision may then be appealed to this Court by way of a petition for review on
certiorari.65 (Emphasis supplied, citations omitted)

In this case, it must be shown that Secretary Agra exceeded his authority when he reversed the
findings of Secretary Gonzalez. This court must determine whether there is probable cause to file an
information for copyright infringement under the Intellectual Property Code.

IV

Probable cause pertains to "such facts as are sufficient to engender a well-founded belief that a
crime has been committed and that respondent is probably guilty thereof." 66 Preliminary investigation
is the inquiry or proceeding to determine whether there is probable cause.67

In Webb v. De Leon,68 this court ruled that determination of probable cause during preliminary
investigation does not require trial-like evaluation of evidence since existence of probable cause
does not equate to guilt:

It ought to be emphasized that in determining probable cause, the average man weighs facts and
circumstances without resorting to the calibrations of our technical rules of evidence of which his
knowledge is nil. Rather, he relies on the calculus of common sense of which all reasonable men
have an abundance.

....

. . . A finding of probable cause merely binds over the suspect to stand trial. It is not a
pronouncement of guilt.69

In Reyes v. Pearlbank Securities, Inc.,70 finding probable cause is not equivalent to finding with moral
certainty that the accused committed the crime:

A finding of probable cause needs only to rest on evidence showing that more likely than not a crime
has been committed by the suspects. It need not be based on clear and convincing evidence of guilt,
not on evidence establishing guilt beyond reasonable doubt, and definitely not on evidence
establishing absolute certainty of guilt. In determining probable cause, the average man weighs facts
and circumstances without resorting to the calibrations of the rules of evidence of which he has no
technical knowledge. He relies on common sense.71

During preliminary investigation, a public prosecutor does not adjudicate on the parties’ rights,
obligations, or liabilities.72
In the recent case of Estrada v. Office of the Ombudsman, et al.,73 we reiterated Webb on the
determination of probable cause during preliminary investigation and traced the history of probable
cause as borrowed from American jurisprudence:

The purpose in determining probable cause is to make sure that the courts are not clogged with
weak cases that will only be dismissed, as well as to spare a person from the travails of a needless
prosecution.

....

. . . In the United States, from where we borrowed the concept of probable cause, the prevailing
definition of probable cause is this:

In dealing with probable cause, however, as the very name implies, we deal with probabilities. These
are not technical; they are the factual and practical considerations of everyday life on which
reasonable and prudent men, not legal technicians, act. The standard of proof is accordingly
correlative to what must be proved.

"The substance of all the definitions" of probable cause "is a reasonable ground for belief of guilt."
McCarthy v. De Armit, 99 Pa. St. 63, 69, quoted with approval in the Carroll opinion. 267 U. S. at
161. And this "means less than evidence which would justify condemnation" or conviction, as
Marshall, C. J., said for the Court more than a century ago in Locke v. United States, 7 Cranch 339,
348. Since Marshall’s time, at any rate, it has come to mean more than bare suspicion: Probable
cause exists where "the facts and circumstances within their [the officers’] knowledge and of which
they had reasonably trustworthy information [are] sufficient in themselves to warrant a man of
reasonable caution in the belief that" an offense has been or is being committed. Carroll v. United
States, 267 U. S. 132, 162.

These long-prevailing standards seek to safeguard citizens from rash and unreasonable
interferences with privacy and from unfounded charges of crime. They also seek to give fair leeway
for enforcing the law in the community’s protection. Because many situations which confront officers
in the course of executing their duties are more or less ambiguous, room must be allowed for some
mistakes on their part. But the mistakes must be those of reasonable men, acting on facts leading
sensibly to their conclusions of probability. The rule of probable cause is a practical, non technical
conception affording the best compromise that has been found for accommodating these often
opposing interests. Requiring more would unduly hamper law enforcement. To allow less would be
to leave law-abiding citizens at the mercy of the officers’ whim or caprice.

In the Philippines, there are four instances in the Revised Rules of Criminal Procedure where
probable cause is needed to be established:

(1) In Sections 1 and 3 of Rule 112: By the investigating officer, to determine whether there
is sufficient ground to engender a well-founded belief that a crime has been committed and
the respondent is probably guilty thereof, and should be held for trial. A preliminary
investigation is required before the filing of a complaint or information for an offense where
the penalty prescribed by law is at least four years, two months and one day without regard
to the fine;

(2) In Sections 6 and 9 of Rule 112: By the judge, to determine whether a warrant of arrest or
a commitment order, if the accused has already been arrested, shall be issued and that there
is a necessity of placing the respondent under immediate custody in order not to frustrate the
ends of justice;
 (3) In Section 5(b) of Rule 113:By a peace officer or a private person making a warrantless
arrest when an offense has just been committed, and he has probable cause to believe
based on personal knowledge of facts or circumstances that the person to be arrested has
committed it; and

(4) In Section 4 of Rule 126: By the judge, to determine whether a search warrant shall be
issued, and only upon probable cause in connection with one specific offense to be
determined personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the place to be
searched and the things to be seized which may be anywhere in the Philippines.

In all these instances, the evidence necessary to establish probable cause is based only on the
likelihood, or probability, of guilt.74

Estrada also highlighted that a "[p]reliminary investigation is not part of the criminal action. It is
merely preparatory and may even be disposed of in certain situations." 75

To determine whether there is probable cause that respondents committed copyright infringement, a
review of the elements of the crime, including the existing facts, is required.

ABS-CBN claims that news footage is subject to copyright and prohibited use of copyrighted material
is punishable under the Intellectual Property Code. It argues that the new footage is not a
"newsworthy event" but "merely an account of the arrival of Angelo dela Cruz in the Philippines —
the latter being the newsworthy event":76

To be clear, it is the event itself or the arrival of Angelo dela Cruz which is not copyrightable because
that is the newsworthy event. However, any footage created from the event itself, in this case the
arrival of Angelo dela Cruz, are intellectual creations which are copyrightable. Thus, the footage
created by ABS-CBN during the arrival of Angelo dela Cruz, which includes the statements of Dindo
Amparo, are copyrightable and protected by the laws on copyright. 77

On the other hand, respondents argue that ABS-CBN’s news footage of Angelo dela Cruz’s arrival is
not copyrightable or subject to protection:

Certainly, the arrival of Angelo [d]ela Cruz, which aroused public attention and the consciousness of
the Filipino people with regard to their countrymen, OFWs working in foreign countries and how the
Philippine government responds to the issues concerning them, is "news". There is no ingenuity or
inventiveness added in the said news footage. The video footage of this "news" is not copyrightable
by any legal standard as facts of everyday life depicted in the news and items of press information is
part of the public domain.78 (Emphasis in the original)

The news footage is copyrightable.

The Intellectual Property Code is clear about the rights afforded to authors of various kinds of work.
Under the Code, "works are protected by the sole fact of their creation, irrespective of their mode or
form of expression, as well as of their content, quality and purpose." 79 These include "[a]udiovisual
works and cinematographic works and works produced by a process analogous to cinematography
or any process for making audiovisual recordings."80
Contrary to the old copyright law,81 the Intellectual Property Code does not require registration of the
work to fully recover in an infringement suit. Nevertheless, both copyright laws provide that copyright
for a work is acquired by an intellectual creator from the moment of creation. 82

It is true that under Section 175 of the Intellectual Property Code, "news of the day and other
miscellaneous facts having the character of mere items of press information" are considered
unprotected subject matter.83 However, the Code does not state that expression of the news of the
day, particularly when it underwent a creative process, is not entitled to protection.

An idea or event must be distinguished from the expression of that idea or event. An idea has been
likened to a ghost in that it "must be spoken to a little before it will explain itself." 84 It is a concept that
has eluded exact legal definition.85 To get a better grasp of the idea/expression dichotomy, the
etymology of the term "idea" is traced:

The word "idea" is derived from a Greek term, meaning "a form, the look or appearance of a thing as
opposed to its reality, from idein, to see." In the Timaeus, Plato saw ideas as eternal paradigms,
independent objects to which the divine demiurge looks as patterns in forming the world. This was
later modified to the religious conception of ideas as the thoughts of God. "It is not a very long step
to extend the term ‘idea’ to cover patterns, blueprints, or plans in anyone's mind, not only in God’s."
The word entered the French and English vernacular in the 1600s and possessed two meanings.
The first was the Platonic meaning of a perfect exemplar or paradigm. The second, which probably
has its origin with Descartes, is of a mental concept or image or, more broadly, any object of the
mind when it is active. Objects of thought may exist independently. The sun exists (probably) before
and after you think of it. But it is also possible to think of things that have never existed, such as a
unicorn or Pegasus. John Locke defined ideas very comprehensively, to include: all objects of the
mind. Language was a way of translating the invisible, hidden ideas that make up a person’s
thoughts into the external, perceptible world of articulate sounds and visible written symbols that
others can understand.86 (Citations omitted) There is no one legal definition of "idea" in this
jurisdiction. The term "idea" is mentioned only once in the Intellectual Property Code.87 In Joaquin, Jr.
v. Drilon,88 a television format (i.e., a dating show format) is not copyrightable under Section 2 of
Presidential Decree No. 49;89 it is a mere concept:

P.D. No. 49, §2, in enumerating what are subject to copyright, refers to finished works and not to
concepts. The copyright does not extend to an idea, procedure, process, system, method of
operation, concept, principle, or discovery, regardless of the form in which it is described, explained,
illustrated, or embodied in such work. Thus, the new INTELLECTUAL PROPERTY CODE OF THE
PHILIPPINES provides:

SEC. 175. Unprotected Subject Matter.—Notwithstanding the provisions of Sections 172 and 173,
no protection shall extend, under this law, to any idea, procedure, system, method or operation,
concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated
or embodied in a work; news of the day and other miscellaneous facts having the character of mere
items of press information; or any official text of a legislative, administrative or legal nature, as well
as any official translation thereof.

What then is the subject matter of petitioners’ copyright? This Court is of the opinion that petitioner
BJPI’s copyright covers audio-visual recordings of each episode of Rhoda and Me, as falling within
the class of works mentioned in P.D. 49, §2(M),to wit:

Cinematographic works and works produced by a process analogous to cinematography or any

process for making audio-visual recordings;
The copyright does not extend to the general concept or format of its dating game show.
Accordingly, by the very nature of the subject of petitioner BJPI’s copyright, the investigating
prosecutor should have the opportunity to compare the videotapes of the two shows.

Mere description by words of the general format of the two dating game shows is insufficient; the
presentation of the master videotape in evidence was indispensable to the determination of the
existence of probable cause. As aptly observed by respondent Secretary of Justice:

A television show includes more than mere words can describe because it involves a whole
spectrum of visuals and effects, video and audio, such that no similarity or dissimilarity may be found
by merely describing the general copyright/format of both dating game shows. 90 (Emphasis supplied,
citations omitted)

Ideas can be either abstract or concrete.91 It is the concrete ideas that are generally referred to as
expression:

The words "abstract" and "concrete" arise in many cases dealing with the idea/expression
distinction. The Nichols court, for example, found that the defendant’s film did not infringe the
plaintiff’s play because it was "too generalized an abstraction from what plaintiff wrote . . . only a part
of her ideas." In Eichel v. Marcin, the court said that authors may exploit facts, experiences, field of
thought, and general ideas found in another’s work, "provided they do not substantially copy a
concrete form, in which the circumstances and ideas have been developed, arranged, and put into
shape." Judge Hand, in National Comics Publications, Inc. v. Fawcett Publications, Inc. said that "no
one infringes, unless he descends so far into what is concrete as to invade. . . ‘expression.’"

These cases seem to be distinguishing "abstract" ideas from "concrete" tangible embodiments of
these abstractions that may be termed expression. However, if the concrete form of a work means
more than the literal expression contained within it, it is difficult to determine what is meant by
"concrete." Webster's New Twentieth Century Dictionary of the English Language provides several
meanings for the word concrete. These include: "having a material, perceptible existence; of,
belonging to, or characterized by things or events that can be perceived by the senses; real; actual;"
and "referring to a particular; specific, not general or abstract."92

In Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated,93 this court, citing the American case
of Baker v. Selden, distinguished copyright from patents and illustrated how an idea or concept is
different from the expression of that idea:

In the oft-cited case of Baker vs. Selden, the United States Supreme Court held that only the
expression of an idea is protected by copyright, not the idea itself. In that case, the plaintiff held the
copyright of a book which expounded on a new accounting system he had developed. The
publication illustrated blank forms of ledgers utilized in such a system. The defendant reproduced
forms similar to those illustrated in the plaintiff’s copyrighted book. The US Supreme Court ruled
that:

"There is no doubt that a work on the subject of book-keeping, though only explanatory of well
known systems, may be the subject of a copyright; but, then, it is claimed only as a book. x x x But
there is a clear distinction between the books, as such, and the art, which it is, intended to illustrate.
The mere statement of the proposition is so evident that it requires hardly any argument to support it.
The same distinction may be predicated of every other art as well as that of bookkeeping.

A treatise on the composition and use of medicines, be they old or new; on the construction and use
of ploughs or watches or churns; or on the mixture and application of colors for painting or dyeing; or
on the mode of drawing lines to produce the effect of perspective, would be the subject of copyright;
but no one would contend that the copyright of the treatise would give the exclusive right to the art or
manufacture described therein. The copyright of the book, if not pirated from other works, would be
valid without regard to the novelty or want of novelty of its subject matter. The novelty of the art or
thing described or explained has nothing to do with the validity of the copyright. To give to the author
of the book an exclusive property in the art described therein, when no examination of its novelty has
ever been officially made, would be a surprise and a fraud upon the public. That is the province of
letters patent, not of copyright. The claim to an invention of discovery of an art or manufacture must
be subjected to the examination of the Patent Office before an exclusive right therein can be
obtained; and a patent from the government can only secure it.

The difference between the two things, letters patent and copyright, may be illustrated by reference
to the subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of
great value in the healing art. If the discoverer writes and publishes a book on the subject (as regular
physicians generally do), he gains no exclusive right to the manufacture and sale of the medicine; he
gives that to the public. If he desires to acquire such exclusive right, he must obtain a patent for the
mixture as a new art, manufacture or composition of matter. He may copyright his book, if he
pleases; but that only secures to him the exclusive right of printing and publishing his book. So of all
other inventions or discoveries.

The copyright of a book on perspective, no matter how many drawings and illustrations it may
contain, gives no exclusive right to the modes of drawing described, though they may never have
been known or used before. By publishing the book without getting a patent for the art, the latter is
given to the public.

....

Now, whilst no one has a right to print or publish his book, or any material part thereof, as a book
intended to convey instruction in the art, any person may practice and use the art itself which he has
described and illustrated therein. The use of the art is a totally different thing from a publication of
the book explaining it. The copyright of a book on bookkeeping cannot secure the exclusive right to
make, sell and use account books prepared upon the plan set forth in such book. Whether the art
might or might not have been patented, is a question, which is not before us. It was not patented,
and is open and free to the use of the public. And, of course, in using the art, the ruled lines and
headings of accounts must necessarily be used as incident to it.

The plausibility of the claim put forward by the complainant in this case arises from a confusion of
ideas produced by the peculiar nature of the art described in the books, which have been made the
subject of copyright. In describing the art, the illustrations and diagrams employed happened to
correspond more closely than usual with the actual work performed by the operator who uses the
art. x x x The description of the art in a book, though entitled to the benefit of copyright, lays no
foundation for an exclusive claim to the art itself. The object of the one is explanation; the object of
the other is use. The former may be secured by copyright. The latter can only be secured, if it can be
secured at all, by letters patent."94 (Emphasis supplied)

News or the event itself is not copyrightable. However, an event can be captured and presented in a
specific medium. As recognized by this court in Joaquin, television "involves a whole spectrum of
visuals and effects, video and audio."95 News coverage in television involves framing shots, using
images, graphics, and sound effects.96 It involves creative process and originality. Television news
footage is an expression of the news.
In the United States, a line of cases dwelt on the possibility of television newscasts to be
copyrighted.97 Most of these cases focused on private individuals’ sale or resale of tapes of news
broadcasts. Conflicting decisions were rendered by its courts. Noteworthy, however, is the District
Court’s pronouncement in Pacific & Southern Co. v. Duncan,98 which involves a News Monitoring
Service’s videotaping and sale of WXIA-TV’s news broadcasts:

It is axiomatic that copyright protection does not extend to news "events" or the facts or ideas which
are the subject of news reports. Miller v. Universal City Studios, Inc., 650 F.2d 1365, 1368 (5th Cir.
1981); Wainwright Securities, Inc. v. Wall Street Transcript Corp., 558 F.2d 91, 95 (2d Cir. 1977),
cert. denied, 434 U.S. 1014, 98 S.Ct. 730, 54 L.Ed.2d 759 (1978). But it is equally well-settled that
copyright protection does extend to the reports themselves, as distinguished from the substance of
the information contained in the reports. Wainwright, 558 F.2d at 95; International News Service v.
Associated Press, 248 U.S. 215, 39 S.Ct. 68, 63 L.Ed. 211 (1918); see Chicago Record-Herald Co.
v. Tribune Assn., 275 F. 797 (7th Cir.1921); 1 Nimmer on Copyright § 2.11[B] (1983). Copyright
protects the manner of expression of news reports, "the particular form or collocation of words in
which the writer has communicated it." International News Service, 248 U.S. at 234, 39 S.Ct. at 70.
Such protection extends to electronic news reports as well as written reports. See17 U.S.C. § 102(a)
(5), (6), and (7); see also Iowa State University Research Foundations, Inc. v. American
Broadcasting Cos., 621 F.2d 57, 61 (2d Cir. 1980). 99 (Emphasis supplied)

The idea/expression dichotomy has long been subject to debate in the field of copyright law.
Abolishing the dichotomy has been proposed, in that non-protectibility of ideas should be re-
examined, if not stricken, from decisions and the law:

If the underlying purpose of the copyright law is the dual one expressed by Lord Mansfield, the only
excuse for the continuance of the idea-expression test as a judicial standard for determining
protectibility would be that it was or could be a truly useful method of determining the proper balance
between the creator’s right to profit from his work and the public's right that the "progress of the arts
not be retarded."

. . . [A]s used in the present-day context[,] the dichotomy has little or no relationship to the policy
which it should effectuate. Indeed, all too often the sweeping language of the courts regarding the
non-protectibility of ideas gives the impression that this is of itself a policy of the law, instead of
merely a clumsy and outdated tool to achieve a much more basic end. 100

The idea/expression dichotomy is a complex matter if one is trying to determine whether a certain
material is a copy of another.101 This dichotomy would be more relevant in determining, for instance,
whether a stage play was an infringement of an author’s book involving the same characters and
setting. In this case, however, respondents admitted that the material under review — which is the
subject of the controversy — is an exact copy of the original. Respondents did not subject ABS-
CBN’s footage to any editing of their own. The news footage did not undergo any transformation
where there is a need to track elements of the original.

Having established the protectible nature of news footage, we now discuss the concomitant rights
accorded to authors. The authors of a work are granted several rights in relation to it, including
copyright or economic rights:

SECTION 177. Copyright or Economic Rights. — Subject to the provisions of Chapter VIII, copyright
or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following
acts:

177.1. Reproduction of the work or substantial portion of the work;

 177.2. Dramatization, translation, adaptation, abridgment, arrangement or other
transformation of the work;

177.3. The first public distribution of the original and each copy of the work by sale or other
forms of transfer of ownership;

177.4. Rental of the original or a copy of an audiovisual or cinematographic work, a work

embodied in a sound recording, a computer program, a compilation of data and other
materials or a musical work in graphic form, irrespective of the ownership of the original or
the copy which is the subject of the rental; (n)

177.5. Public display of the original or a copy of the work;

177.6. Public performance of the work; and

177.7. Other communication to the public of the work.(Sec. 5, P. D. No. 49a) (Emphasis
supplied)

Under Section 211 of the Intellectual Property Code, broadcasting organizations are granted a more
specific set of rights called related or neighboring rights:

SECTION 211. Scope of Right. — Subject to the provisions of Section 212, broadcasting
organizations shall enjoy the exclusive right to carry out, authorize or prevent any of the following
acts:

211.1. The rebroadcasting of their broadcasts;

211.2. The recording in any manner, including the making of films or the use of video tape, of
their broadcasts for the purpose of communication to the public of television broadcasts of
the same; and

211.3. The use of such records for fresh transmissions or for fresh recording. (Sec. 52, P.D.
No. 49) (Emphasis supplied)

Section 212 of the Code provides:

CHAPTER XV
LIMITATIONS ON PROTECTION

Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply where the acts
referred to in those Sections are related to:

212.1. The use by a natural person exclusively for his own personal purposes;

212.2. Using short excerpts for reporting current events;

212.3. Use solely for the purpose of teaching or for scientific research; and

212.4. Fair use of the broadcast subject to the conditions under Section 185. (Sec. 44, P.D.
No. 49a)
The Code defines what broadcasting is and who broadcasting organizations include:

202.7. "Broadcasting" means the transmission by wireless means for the public reception of
sounds or of images or of representations thereof; such transmission by satellite is also
"broadcasting" where the means for decrypting are provided to the public by the
broadcasting organization or with its consent;

202.8. "Broadcasting organization" shall include a natural person or a juridical entity duly
authorized to engage in broadcasting[.]

Developments in technology, including the process of preserving once ephemeral works and
disseminating them, resulted in the need to provide a new kind of protection as distinguished from
copyright.102 The designation "neighboring rights" was abbreviated from the phrase "rights
neighboring to copyright."103 Neighboring or related rights are of equal importance with copyright as
established in the different conventions covering both kinds of rights.104

Several treaties deal with neighboring or related rights of copyright.105 The most prominent of these is
the "International Convention for the Protection of Performers, Producers of Phonograms and
Broadcasting Organizations" (Rome Convention).106

The Rome Convention protects the rights of broadcasting organizations in relation to their
broadcasts. Article XIII of the Rome Convention enumerates the minimum rights accorded to
broadcasting organizations:

Article 13

Minimum Rights for Broadcasting Organizations

Broadcasting organisations shall enjoy the right to authorize or prohibit:

(a) the rebroadcasting of their broadcasts;

(b) the fixation of their broadcasts;

(c) the reproduction:

(i) of fixations, made without their consent, of their broadcasts;

(ii) of fixations, made in accordance with the provisions of Article 15, of their
broadcasts, if the reproduction is made for purposes different from those referred to
in those provisions;

(d) the communication to the public of their television broadcasts if such communication is
made in places accessible to the public against payment of an entrance fee; it shall be a
matter for the domestic law of the State where protection of this right is claimed to determine
the conditions under which it may be exercised.

With regard to the neighboring rights of a broadcasting organization in this jurisdiction, this court has
discussed the difference between broadcasting and rebroadcasting:
Section 202.7 of the IP Code defines broadcasting as "the transmission by wireless means for the
public reception of sounds or of images or of representations thereof; such transmission by satellite
is also ‘broadcasting’ where the means for decrypting are provided to the public by the broadcasting
organization or with its consent."

On the other hand, rebroadcasting as defined in Article 3(g) of the International Convention for the
Protection of Performers, Producers of Phonograms and Broadcasting Organizations, otherwise
known as the 1961 Rome Convention, of which the Republic of the Philippines is a signatory, is "the
simultaneous broadcasting by one broadcasting organization of the broadcast of another
broadcasting organization."

....

Under the Rome Convention, rebroadcasting is "the simultaneous broadcasting by one broadcasting
organization of the broadcast of another broadcasting organization." The Working Paper prepared by
the Secretariat of the Standing Committee on Copyright and Related Rights defines broadcasting
organizations as "entities that take the financial and editorial responsibility for the selection and
arrangement of, and investment in, the transmitted content." 107 (Emphasis in the original, citations
omitted)

Broadcasting organizations are entitled to several rights and to the protection of these rights under
the Intellectual Property Code. Respondents’ argument that the subject news footage is not
copyrightable is erroneous. The Court of Appeals, in its assailed Decision, correctly recognized the
existence of ABS-CBN’s copyright over the news footage:

Surely, private respondent has a copyright of its news coverage. Seemingly, for airing said video
feed, petitioner GMA is liable under the provisions of the Intellectual Property Code, which was
enacted purposely to protect copyright owners from infringement.108

News as expressed in a video footage is entitled to copyright protection. Broadcasting organizations

have not only copyright on but also neighboring rights over their broadcasts. Copyrightability of a
work is different from fair use of a work for purposes of news reporting.

VI

ABS-CBN assails the Court of Appeals’ ruling that the footage shown by GMA-7 falls under the
scope of Section 212.2 and 212.4 of the Intellectual Property Code:

The evidence on record, as well as the discussions above, show that the footage used
by[respondents] could hardlybe characterized as a short excerpt, as it was aired over one and a half
minutes.

Furthermore, the footage used does not fall under the contemplation of Section 212.2 of the
Intellectual Property Code. A plain reading of the provision would reveal that copyrighted material
referred to in Section 212 are short portions of an artist’s performance under Section 203, or a
producer’s sound recordings under Sections 208 and 209. Section 212 does not refer to actual use
of video footage of another as its own.

The Angelo dela Cruz footage does not fall under the rule on Section 212.4 of the Intellectual
Property Code on fair use of the broadcast.
 ....

In determining fair use, several factors are considered, including the nature of the copyrighted work,
and the amount and substantiality of the person used in relation to the copyrighted work as a whole.

In the business of television news reporting, the nature of the copyrighted work or the video
footages, are such that, footage created, must be a novelty to be a good report. Thus, when the . . .
Angelo dela Cruz footage was used by [respondents], the novelty of the footage was clearly
affected.

Moreover, given that a substantial portion of the Angelo dela Cruz footage was utilized by GMA-7 for
its own, its use can hardly be classified as fair use.

Hence, [respondents] could not be considered as having used the Angelo dela Cruz [footage]
following the provisions on fair use.

It is also worthy to note that the Honorable Court of Appeals seem to contradict itself when it relied
on the provisions of fair use in its assailed rulings considering that it found that the Angelo dela Cruz
footage is not copyrightable, given that the fair use presupposes an existing copyright. Thus, it is
apparent that the findings of the Honorable Court of Appeals are erroneous and based on wrong
assumptions.109 (Underscoring in the original)

On the other hand, respondents counter that GMA-7’s use of ABS-CBN’s news footage falls under
fair use as defined in the Intellectual Property Code. Respondents, citing the Court of Appeals
Decision, argue that a strong statutory defense negates any finding of probable cause under the
same statute.110 The Intellectual Property Code provides that fair use negates infringement.

Respondents point out that upon seeing ABS-CBN’s reporter Dindo Amparo on the footage, GMA-7
immediately shut off the broadcast. Only five (5) seconds passed before the footage was cut. They
argue that this shows that GMA-7 had no prior knowledge of ABS-CBN’s ownership of the footage or
was notified of it. They claim that the Angelo dela Cruz footage is considered a short excerpt of an
event’s "news" footage and is covered by fair use.111

Copyright protection is not absolute.112 The Intellectual Property Code provides the limitations on
copyright:

CHAPTER VIII
LIMITATIONS ON COPYRIGHT

Section 184. Limitations on Copyright. - 184.1. Notwithstanding the provisions of Chapter V, the
following acts shall not constitute infringement of copyright:

....

184.2. The provisions of this section shall be interpreted in such a way as to allow the work to be
used in a manner which does not conflict with the normal exploitation of the work and does not
unreasonably prejudice the right holder's legitimate interests.

....
 CHAPTER XV
LIMITATIONS ON PROTECTION

Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply where the acts
referred to in those Sections are related to:

....

212.2. Using short excerpts for reporting current events;

....

212.4. Fair use of the broadcast subject to the conditions under Section 185.(Sec. 44, P.D. No. 49a)
(Emphasis supplied)

The determination of what constitutes fair use depends on several factors. Section 185 of the
Intellectual Property Code states:

SECTION 185. Fair Use of a Copyrighted Work. —

185.1. The fair use of a copyrighted work for criticism, comment, news reporting, teaching including
multiple copies for classroom use, scholarship, research, and similar purposes is not an infringement
of copyright. . . . In determining whether the use made of a work in any particular case is fair use, the
factors to be considered shall include:

a. The purpose and character of the use, including whether such use is of a commercial
nature or is for non-profit 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.
Respondents allege that the news footage was only five (5) seconds long, thus falling under
fair use. ABS-CBN belies this contention and argues that the footage aired for two (2)
minutes and 40 seconds.113 According to the Court of Appeals, the parties admitted that only
five (5) seconds of the news footage was broadcasted by GMA-7.114

This court defined fair use as "aprivilege to use the copyrighted material in a reasonable manner
without the consent of the copyright owner or as copying the theme or ideas rather than their
expression."115 Fair use is an exception to the copyright owner’s monopoly of the use of the work to
avoid stifling "the very creativity which that law is designed to foster."116

Determining fair use requires application of the four-factor test. Section 185 of the Intellectual
Property Code lists four (4) factors to determine if there was fair use of a copyrighted work:

a. The purpose and character of the use, including whether such use is of a commercial
nature or is for non-profit 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.

First, the purpose and character of the use of the copyrighted material must fall under those listed in
Section 185, thus: "criticism, comment, news reporting, teaching including multiple copies for
classroom use, scholarship, research, and similar purposes." 117 The purpose and character
requirement is important in view of copyright’s goal to promote creativity and encourage creation of
works. Hence, commercial use of the copyrighted work can be weighed against fair use.

The "transformative test" is generally used in reviewing the purpose and character of the usage of
the copyrighted work.118 This court must look into whether the copy of the work adds "new
expression, meaning or message" to transform it into something else.119 "Meta-use" can also occur
without necessarily transforming the copyrighted work used.120

Second, the nature of the copyrighted work is significant in deciding whether its use was fair. If the
nature of the work is more factual than creative, then fair use will be weighed in favor of the user.

Third, the amount and substantiality of the portion used is important to determine whether usage
falls under fair use. An exact reproduction of a copyrighted work, compared to a small portion of it,
can result in the conclusion that its use is not fair. There may also be cases where, though the
entirety of the copyrighted work is used without consent, its purpose determines that the usage is
still fair.121 For example, a parody using a substantial amount of copyrighted work may be permissible
as fair use as opposed to a copy of a work produced purely for economic gain. Lastly, the effect of
the use on the copyrighted work’s market is also weighed for or against the user. If this court finds
that the use had or will have a negative impact on the copyrighted work’s market, then the use is
deemed unfair.

The structure and nature of broadcasting as a business requires assigned values for each second of
broadcast or airtime. In most cases, broadcasting organizations generate revenue through sale of
time or timeslots to advertisers, which, in turn, is based on market share: 122 Once a news broadcast
has been transmitted, the broadcast becomes relatively worthless to the station. In the case of the
aerial broadcasters, advertising sales generate most of the profits derived from news reports.
Advertising rates are, in turn, governed by market share. Market share is determined by the number
of people watching a show at any particular time, relative to total viewers at that time. News is by
nature time-limited, and so re-broadcasts are generally of little worth because they draw few
viewers. Newscasts compete for market share by presenting their news in an appealing format that
will capture a loyal audience. Hence, the primary reason for copyrighting newscasts by broadcasters
would seem to be to prevent competing stations from rebroadcasting current news from the station
with the best coverage of a particular news item, thus misappropriating a portion of the market
share.

Of course, in the real world there are exceptions to this perfect economic view. However, there are
also many caveats with these exceptions. A common exception is that some stations rebroadcast
the news of others. The caveat is that generally, the two stations are not competing for market
share. CNN, for example, often makes news stories available to local broadcasters. First, the local
broadcaster is often not affiliated with a network (hence its need for more comprehensive
programming), confining any possible competition to a small geographical area. Second, the local
broadcaster is not in competition with CNN. Individuals who do not have cable TV (or a satellite dish
with decoder) cannot receive CNN; therefore there is no competition. . . . Third, CNN sells the right
of rebroadcast to the local stations. Ted Turner, owner of CNN, does not have First Amendment
freedom of access argument foremost on his mind. (Else he would give everyone free cable TV so
everyone could get CNN.) He is in the business for a profit. Giving away resources does not a profit
make.123 (Emphasis supplied)

The high value afforded to limited time periods is also seen in other media. In social media site
Instagram, users are allowed to post up to only 15 seconds of video. 124 In short-video sharing website
Vine,125 users are allowed a shorter period of six (6) seconds per post. The mobile application 1
Second Everyday takes it further by capturing and stitching one (1) second of video footage taken
daily over a span of a certain period.126

Whether the alleged five-second footage may be considered fair use is a matter of defense. We
emphasize that the case involves determination of probable cause at the preliminary investigation
stage. Raising the defense of fair use does not automatically mean that no infringement was
committed. The investigating prosecutor has full discretion to evaluate the facts, allegations, and
evidence during preliminary investigation. Defenses raised during preliminary investigation are
subject to further proof and evaluation before the trial court. Given the insufficiency of available
evidence, determination of whether the Angelo dela Cruz footage is subject to fair use is better left to
the trial court where the proceedings are currently pending. GMA-7’s rebroadcast of ABS-CBN’s
news footage without the latter’s consent is not an issue. The mere act of rebroadcasting without
authority from the owner of the broadcast gives rise to the probability that a crime was committed
under the Intellectual Property Code.

VII

Respondents cannot invoke the defense of good faith to argue that no probable cause exists.

Respondents argue that copyright infringement is malum in se, in that "[c]opying alone is not what is
being prohibited, but its injurious effect which consists in the lifting from the copyright owners’ film or
materials, that were the result of the latter’s creativity, work and productions and without authority,
reproduced, sold and circulated for commercial use to the detriment of the latter."127

Infringement under the Intellectual Property Code is malum prohibitum. The Intellectual Property
Code is a special law. Copyright is a statutory creation:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right
granted by the statute, and not simply a pre-existing right regulated by the statute. Being a statutory
grant, the rights are only such as the statute confers, and may be obtained and enjoyed only with
respect to the subjects and by the persons, and on terms and conditions specified in the statute.128

The general rule is that acts punished under a special law are malum prohibitum.129 "An act which is
declared malum prohibitum, malice or criminal intent is completely immaterial." 130

In contrast, crimes mala in seconcern inherently immoral acts:

Not every criminal act, however, involves moral turpitude. It is for this reason that "as to what crime
involves moral turpitude, is for the Supreme Court to determine". In resolving the foregoing question,
the Court is guided by one of the general rules that crimes mala in se involve moral turpitude, while
crimes mala prohibita do not, the rationale of which was set forth in "Zari v. Flores," to wit:

It (moral turpitude) implies something immoral in itself, regardless of the fact that it is punishable by
law or not. It must not be merely mala prohibita, but the act itself must be inherently immoral. The
doing of the act itself, and not its prohibition by statute fixes the moral turpitude. Moral turpitude does
not, however, include such acts as are not of themselves immoral but whose illegality lies in their
being positively prohibited. (Emphasis supplied)

[These] guidelines nonetheless proved short of providing a clear cut solution, for in International Rice
Research Institute v. NLRC, the Court admitted that it cannot always be ascertained whether moral
turpitude does or does not exist by merely classifying a crime as malum in se or as malum
prohibitum. There are crimes which are mala in se and yet but rarely involve moral turpitude and
there are crimes which involve moral turpitude and are mala prohibita only. In the final analysis,
whether or not a crime involves moral turpitude is ultimately a question of fact and frequently
depends on all the circumstances surrounding the violation of the statue. 131 (Emphasis in the original)

"Implicit in the concept of mala in se is that of mens rea." 132 Mens reais defined as "the nonphysical
element which, combined with the act of the accused, makes up the crime charged. Most frequently
it is the criminal intent, or the guilty mind[.]" 133

Crimes mala in sepre suppose that the person who did the felonious act had criminal intent to do so,
while crimes mala prohibita do not require knowledge or criminal intent:

In the case of mala in se it is necessary, to constitute a punishable offense, for the person doing the
act to have knowledge of the nature of his act and to have a criminal intent; in the case of mala
prohibita, unless such words as "knowingly" and "willfully" are contained in the statute, neither
knowledge nor criminal intent is necessary. In other words, a person morally quite innocent and with
every intention of being a law abiding citizen becomes a criminal, and liable to criminal penaltes, if
he does an act prohibited by these statutes.134 (Emphasis supplied) Hence, "[i]ntent to commit the
crime and intent to perpetrate the act must be distinguished. A person may not have consciously
intended to commit a crime; but he did intend to commit an act, and that act is, by the very nature of
things, the crime itself[.]"135 When an act is prohibited by a special law, it is considered injurious to
public welfare, and the performance of the prohibited act is the crime itself. 136

Volition, or intent to commit the act, is different from criminal intent. Volition or voluntariness refers to
knowledge of the act being done. On the other hand, criminal intent — which is different from motive,
or the moving power for the commission of the crime137 — refers to the state of mind beyond
voluntariness. It is this intent that is being punished by crimes mala in se.

Unlike other jurisdictions that require intent for a criminal prosecution of copyright infringement, the
Philippines does not statutorily support good faith as a defense. Other jurisdictions provide in their
intellectual property codes or relevant laws that mens rea, whether express or implied, is an element
of criminal copyright infringement.138

In Canada, criminal offenses are categorized under three (3) kinds: "the full mens rea offence,
meaning the accused’s actual or subjective state of mind has to be proved; strict liability offences
where no mens rea has to be proved but the accused can avoid liability if he can prove he took all
reasonable steps to avoid the particular event; [and] absolute liability offences where Parliament has
made it clear that guilt follows proof of the prescribed act only."139 Because of the use of the word
"knowingly" in Canada’s Copyright Act, it has been held that copyright infringement is a full mens rea
offense.140

In the United States, willful intent is required for criminal copyright infringement. 141 Before the
passage of the No Electronic Theft Act, "civil copyright infringements were violations of criminal
copyright laws only if a defendant willfully infringed a copyright ‘for purposes of commercial
advantage or private financial gain.’"142 However, the No Electronic Theft Act now allows criminal
copyright infringement without the requirement of commercial gain. The infringing act may or may
not be for profit.143

There is a difference, however, between the required liability in civil copyright infringement and that
in criminal copyright infringement in the United States. Civil copyright infringement does not require
culpability and employs a strict liability regime144 where "lack of intention to infringe is not a defense
to an action for infringement."145

In the Philippines, the Intellectual Property Code, as amended, provides for the prosecution of
criminal actions for the following violations of intellectual property rights: Repetition of Infringement of
Patent (Section 84); Utility Model (Section 108); Industrial Design (Section 119); Trademark
Infringement (Section 155 in relation to Section 170); Unfair Competition (Section 168 in relation to
Section 170); False Designations of Origin, False Description or Representation (Section 169.1 in
relation to Section 170); infringement of copyright, moral rights, performers’ rights, producers’ rights,
and broadcasting rights (Section 177, 193, 203, 208 and 211 in relation to Section 217); and other
violations of intellectual property rights as may be defined by law.

The Intellectual Property Code requires strict liability for copyright infringement whether for a civil
action or a criminal prosecution; it does not require mens rea or culpa:146

SECTION 216. Remedies for Infringement. —

216.1. Any person infringing a right protected under this law shall be liable:

a. To an injunction restraining such infringement. The court may also order the
defendant to desist from an infringement, among others, to prevent the entry into the
channels of commerce of imported goods that involve an infringement, immediately
after customs clearance of such goods.

b. Pay to the copyright proprietor or his assigns or heirs such actual damages,
including legal costs and other expenses, as he may have incurred due to the
infringement as well as the profits the infringer may have made due to such
infringement, and in proving profits the plaintiff shall be required to prove sales only
and the defendant shall be required to prove every element of cost which he claims,
or, in lieu of actual damages and profits, such damages which to the court shall
appear to be just and shall not be regarded as penalty.

c. Deliver under oath, for impounding during the pendency of the action, upon such
terms and conditions as the court may prescribe, sales invoices and other
documents evidencing sales, all articles and their packaging alleged to infringe a
copyright and implements for making them.

d. Deliver under oath for destruction without any compensation all infringing copies or
devices, as well as all plates, molds, or other means for making such infringing
copies as the court may order.

e. Such other terms and conditions, including the payment of moral and exemplary
damages, which the court may deem proper, wise and equitable and the destruction
of infringing copies of the work even in the event of acquittal in a criminal case.
 216.2. In an infringement action, the court shall also have the power to order the seizure and
impounding of any article which may serve as evidence in the court proceedings. (Sec. 28,
P.D. No. 49a)

SECTION 217. Criminal Penalties. — 217.1. Any person infringing any right secured by provisions of
Part IV of this Actor aiding or abetting such infringement shall be guilty of a crime punishable by:

a. Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty
thousand pesos (₱50,000) to One hundred fifty thousand pesos (₱150,000) for the
first offense.

b. Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging
from One hundred fifty thousand pesos (₱150,000) to Five hundred thousand pesos
(₱500,000) for the second offense.

c. Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging
from Five hundred thousand pesos (₱500,000) to One million five hundred thousand
pesos (₱1,500,000) for the third and subsequent offenses.

d. In all cases, subsidiary imprisonment in cases of insolvency.

217.2. In determining the number of years of imprisonment and the amount of fine, the court
shall consider the value of the infringing materials that the defendant has produced or
manufactured and the damage that the copyright owner has suffered by reason of the
infringement.

217.3. Any person who at the time when copyright subsists in a work has in his possession
an article which he knows, or ought to know, to be an infringing copy of the work for the
purpose of: a. Selling, letting for hire, or by way of trade offering or exposing for sale, or hire,
the article;

b. Distributing the article for purpose of trade, or for any other purpose to an extent
that will prejudice the rights of the copyright owner in the work; or

c. Trade exhibit of the article in public, shall be guilty of an offense and shall be liable
on conviction to imprisonment and fine as above mentioned. (Sec. 29, P.D. No. 49a)
(Emphasis supplied)

The law is clear. Inasmuch as there is wisdom in prioritizing the flow and exchange of ideas as
opposed to rewarding the creator, it is the plain reading of the law in conjunction with the actions of
the legislature to which we defer. We have continuously "recognized the power of the legislature . . .
to forbid certain acts in a limited class of cases and to make their commission criminal without regard
to the intent of the doer. Such legislative enactments are based on the experience that repressive
measures which depend for their efficiency upon proof of the dealer’s knowledge or of his intent are
of little use and rarely accomplish their purposes." 147

Respondents argue that live broadcast of news requires a different treatment in terms of good faith,
intent, and knowledge to commit infringement. To argue this point, they rely on the differences of the
media used in Habana et al. v. Robles, Columbia Pictures v. Court of Appeals, and this case:
Petitioner ABS-CBN argues that lack of notice that the Angelo dela Cruz was under embargo is not a
defense in copyright infringement and cites the case of Columbia Pictures vs. Court of Appeals and
Habana et al. vs. Robles(310 SCRA 511). However, these cases refer to film and literary work where
obviously there is "copying" from an existing material so that the copier knew that he is copying from
an existing material not owned by him. But, how could respondents know that what they are "copying
was not [theirs]" when they were not copying but merely receiving live video feed from Reuters and
CNN which they aired? What they knew and what they aired was the Reuters live video feed and the
CNN feed which GMA-7 is authorized to carry in its news broadcast, it being a subscriber of these
companies[.]

It is apt to stress that the subject of the alleged copyright infringement is not a film or literary work
but live broadcast of news footage. In a film or literary work, the infringer is confronted face to face
with the material he is allegedly copying and therefore knows, or is presumed to know, that what he
is copying is owned by another. Upon the other hand, in live broadcast, the alleged infringer is not
confronted with the fact that the material he airs or re-broadcasts is owned by another, and
therefore, he cannot be charged of knowledge of ownership of the material by another. This specially
obtains in the Angelo dela Cruz news footage which GMA-7 received from Reuters and CNN.
Reuters and CNN were beaming live videos from the coverage which GMA-7 received as a
subscriber and, in the exercise of its rights as a subscriber, GMA-7 picked up the live video and
simultaneously re-broadcast it. In simultaneously broadcasting the live video footage of Reuters,
GMA-7 did not copy the video footage of petitioner ABS-CBN[.]148 (Emphasis in the original)

Respondents’ arguments must fail.

Respondents are involved and experienced in the broadcasting business. They knew that there
would be consequences in carrying ABS-CBN’s footage in their broadcast. That is why GMA-7
allegedly cut the feed from Reuters upon seeing ABS-CBN’s ogo and reporter. To admit a different
treatment for broadcasts would mean abandonment of a broadcasting organization’s minimum
rights, including copyright on the broadcast material and the right against unauthorized rebroadcast
of copyrighted material. The nature of broadcast technology is precisely why related or neighboring
rights were created and developed. Carving out an exception for live broadcasts would go against
our commitments under relevant international treaties and agreements, which provide for the same
minimum rights.149

Contrary to respondents’ assertion, this court in Habana,150 reiterating the ruling in Columbia
Pictures,151 ruled that lack of knowledge of infringement is not a valid defense. Habana and Columbia
Pictures may have different factual scenarios from this case, but their rulings on copyright
infringement are analogous. In Habana, petitioners were the authors and copyright owners of
English textbooks and workbooks. The case was anchored on the protection of literary and artistic
creations such as books. In Columbia Pictures, video tapes of copyrighted films were the subject of
the copyright infringement suit.

In Habana, knowledge of the infringement is presumed when the infringer commits the prohibited
act:

The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its
gravity by an appropriate understanding thereof. Infringement of a copyright is a trespass on a
private domain owned and occupied by the owner of the copyright, and, therefore, protected by law,
and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in
the doing by any person, without the consent of the owner of the copyright, of anything the sole right
to do which is conferred by statute on the owner of the copyright.
 ....

A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such
cases, did not know whether or not he was infringing any copyright; he at least knew that what he
was copying was not his, and he copied at his peril.

....

In cases of infringement, copying alone is not what is prohibited. The copying must produce an
"injurious effect". Here, the injury consists in that respondent Robles lifted from petitioners’ book
materials that were the result of the latter’s research work and compilation and misrepresented them
as her own. She circulated the book DEP for commercial use and did not acknowledge petitioners as
her source.152 (Emphasis supplied)

Habana and Columbia Pictures did not require knowledge of the infringement to constitute a
violation of the copyright. One does not need to know that he or she is copying a work without
consent to violate copyright law. Notice of fact of the embargo from Reuters or CNN is not material
to find probable cause that respondents committed infringement. Knowledge of infringement is only
material when the person is charged of aiding and abetting a copyright infringement under Section
217 of the Intellectual Property Code.153

We look at the purpose of copyright in relation to criminal prosecutions requiring willfulness: Most
importantly, in defining the contours of what it means to willfully infringe copyright for purposes of
criminal liability, the courts should remember the ultimate aim of copyright. Copyright is not primarily
about providing the strongest possible protection for copyright owners so that they have the highest
possible incentive to create more works. The control given to copyright owners is only a means to an
end: the promotion of knowledge and learning. Achieving that underlying goal of copyright law also
requires access to copyrighted works and it requires permitting certain kinds of uses of copyrighted
works without the permission of the copyright owner. While a particular defendant may appear to be
deserving of criminal sanctions, the standard for determining willfulness should be set with reference
to the larger goals of copyright embodied in the Constitution and the history of copyright in this
country.154

In addition, "[t]he essence of intellectual piracy should be essayed in conceptual terms in order to
underscore its gravity by an appropriate understanding thereof. Infringement of a copyright is a
trespass on a private domain owned and occupied by the owner of the copyright, and, therefore,
protected by law, and infringement of copyright, or piracy, which is a synonymous term in this
connection, consists in the doing by any person, without the consent of the owner of the copyright, of
anything the sole right to do which is conferred by statute on the owner of the copyright." 155

Intellectual property rights, such as copyright and the neighboring right against rebroadcasting,
establish an artificial and limited monopoly to reward creativity. Without these legally enforceable
rights, creators will have extreme difficulty recovering their costs and capturing the surplus or profit
of their works as reflected in their markets. This, in turn, is based on the theory that the possibility of
gain due to creative work creates an incentive which may improve efficiency or simply enhance
consumer welfare or utility. More creativity redounds to the public good.

These, however, depend on the certainty of enforcement. Creativity, by its very nature, is vulnerable
to the free rider problem. It is easily replicated despite the costs to and efforts of the original creator.
The more useful the creation is in the market, the greater the propensity that it will be copied. The
most creative and inventive individuals are usually those who are unable to recover on their
creations.
Arguments against strict liability presuppose that the Philippines has a social, historical, and
economic climate similar to those of Western jurisdictions. As it stands, there is a current need to
strengthen intellectual property protection.

Thus, unless clearly provided in the law, offenses involving infringement of copyright protections
should be considered malum prohibitum. It is the act of infringement, not the intent, which causes
the damage. To require or assume the need to prove intent defeats the purpose of intellectual
property protection.

Nevertheless, proof beyond reasonable doubt is still the standard for criminal prosecutions under the
Intellectual Property Code.

VIII

Respondents argue that GMA-7’s officers and employees cannot be held liable for infringement
under the Intellectual Property Code since it does not expressly provide direct liability of the
corporate officers. They explain that "(i) a corporation may be charged and prosecuted for a crime
where the penalty is fine or both imprisonment and fine, and if found guilty, may be fined; or (ii) a
corporation may commit a crime but if the statute prescribes the penalty therefore to be suffered by
the corporate officers, directors or employees or other persons, the latter shall be responsible for the
offense."156

Section 217 of the Intellectual Property Code states that "any person" may be found guilty of
infringement. It also imposes the penalty of both imprisonment and fine:

Section 217. Criminal Penalties. - 217.1. Any person infringing any right secured by provisions of
Part IV of this Act or aiding or abetting such infringement shall be guilty of a crime punishable by:

(a) Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand
pesos (₱50,000) to One hundred fifty thousand pesos (₱150,000) for the first offense.

(b) Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from
One hundred fifty thousand pesos (₱150,000) to Five hundred thousand pesos (₱500,000)
for the second offense.

(c) Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from
five hundred thousand pesos (₱500,000) to One million five hundred thousand pesos
(₱1,500,000) for the third and subsequent offenses.

(d) In all cases, subsidiary imprisonment in cases of insolvency. (Emphasis supplied)

Corporations have separate and distinct personalities from their officers or directors.157 This
court has ruled that corporate officers and/or agents may be held individually liable for a
crime committed under the Intellectual Property Code: 158

Petitioners, being corporate officers and/or directors, through whose act, default or omission the
corporation commits a crime, may themselves be individually held answerable for the crime. . . . The
existence of the corporate entity does not shield from prosecution the corporate agent who
knowingly and intentionally caused the corporation to commit a crime. Thus, petitioners cannot hide
behind the cloak of the separate corporate personality of the corporation to escape criminal liability.
A corporate officer cannot protect himself behind a corporation where he is the actual, present and
efficient actor.159
However, the criminal liability of a corporation’s officers or employees stems from their active
participation in the commission of the wrongful act:

The principle applies whether or not the crime requires the consciousness of wrongdoing. It applies
to those corporate agents who themselves commit the crime and to those, who, by virtue of their
managerial positions or other similar relation to the corporation, could be deemed responsible for its
commission, if by virtue of their relationship to the corporation, they had the power to prevent the act.
Moreover, all parties active in promoting a crime, whether agents or not, are principals. Whether
such officers or employees are benefited by their delictual acts is not a touchstone of their criminal
liability. Benefit is not an operative fact.160 (Emphasis supplied) An accused’s participation in criminal
acts involving violations of intellectual property rights is the subject of allegation and proof. The
showing that the accused did the acts or contributed in a meaningful way in the commission of the
infringements is certainly different from the argument of lack of intent or good faith. Active
participation requires a showing of overt physical acts or intention to commit such acts. Intent or
good faith, on the other hand, are inferences from acts proven to have been or not been committed.

We find that the Department of Justice committed grave abuse of discretion when it resolved to file
the Information against respondents despite lack of proof of their actual participation in the alleged
crime.

Ordering the inclusion of respondents Gozon, GMA-7 President; Duavit, Jr., Executive Vice-
President; Flores, Vice-President for News and Public Affairs; and Soho, Director for News, as
respondents, Secretary Agra overturned the City Prosecutor’s finding that only respondents Dela
Peña-Reyes and Manalastas are responsible for the crime charged due to their duties. 161 The Agra
Resolution reads:

Thus, from the very nature of the offense and the penalty involved, it is necessary that GMA-7’s
directors, officers, employees or other officers thereof responsible for the offense shall be charged
and penalized for violation of the Sections 177 and 211 of Republic Act No. 8293. In their complaint
for libel, respondents Felipe L Gozon, Gilberto R. Duavit, Jr., Marissa L. Flores, Jessica A.Soho,
Grace Dela Pena-Reyes, John Oliver T. Manalastas felt they were aggrieved because they were "in
charge of the management, operations and production of news and public affairs programs of the
network" (GMA-7). This is clearly an admission on respondents’ part. Of course, respondents may
argue they have no intention to infringe the copyright of ABS-CBN; that they acted in good faith; and
that they did not directly cause the airing of the subject footage, but again this is preliminary
investigation and what is required is simply probable cause. Besides, these contentions can best be
addressed in the course of trial.162 (Citation omitted)

In contrast, the Office of the City Prosecutor, in the Resolution dated December 3, 2004, found that
respondents Gozon, Duavit, Jr., Flores, and Soho did not have active participation in the commission
of the crime charged:

This Office, however, does not subscribe to the view that respondents Atty. Felipe Gozon, Gilberto
Duavit, Marissa Flores and Jessica Soho should be held liable for the said offense. Complainant
failed to present clear and convincing evidence that the said respondents conspired with Reyes and
Manalastas. No evidence was adduced to prove that these respondents had an active participation
in the actual commission of the copyright infringement or they exercised their moral ascendancy
over Reyes and Manalastas in airing the said footage. It must be stressed that, conspiracy must be
established by positive and conclusive evidence. It must be shown to exist as clearly and
convincingly as the commission of the offense itself.163 (Emphasis supplied, citations omitted)
The City Prosecutor found respondents Dela Peña-Reyes and Manalastas liable due to the nature of
their work and responsibilities. He found that:

[t]his Office however finds respondents Grace Dela Peña-Reyes and John Oliver T. Manalastas
liable for copyright infringement penalized under Republic Act No. 8293. It is undisputed that
complainant ABSCBN holds the exclusive ownership and copyright over the "Angelo [d]ela Cruz
news footage". Hence, any airing and re-broadcast of the said footage without any consent and
authority from ABS-CBN will be held as an infringement and violation of the intellectual property
rights of the latter. Respondents Grace Dela Peña-Reyes as the Head of the News Operation and
John Oliver T. Manalastas as the Program Manager cannot escape liability since the news control
room was under their direct control and supervision. Clearly, they must have been aware that the
said footage coming from Reuters or CNN has a "No Access Philippines" advisory or embargo thus
cannot be re-broadcast. We find no merit to the defense of ignorance interposed by the respondents.
It is simply contrary to human experience and logic that experienced employees of an established
broadcasting network would be remiss in their duty in ascertaining if the said footage has an
embargo.164 (Emphasis supplied)

We agree with the findings as to respondents Dela Peña-Reyes and Manalastas. Both respondents
committed acts that promoted infringement of ABS-CBN’s footage. We note that embargoes are
common occurrences in and between news agencies and/or broadcast organizations.165 Under its
Operations Guide, Reuters has two (2) types of embargoes: transmission embargo and publication
embargo.166 Under ABS-CBN’s service contract with Reuters, Reuters will embargo any content
contributed by ABS-CBN from other broadcast subscribers within the same geographical location:

4a. Contributed Content

You agree to supply us at our request with news and sports news stories broadcast on the Client
Service of up to three (3) minutes each for use in our Services on a non-exclusive basis and at a
cost of US$300.00 (Three Hundred United States Dollars) per story. In respect of such items we
agree to embargo them against use by other broadcast subscribers in the Territory and confirm we
will observe all other conditions of usage regarding Contributed Content, as specified in Section 2.5
of the Reuters Business Principles for Television Services. For the purposes of clarification, any
geographical restriction imposed by you on your use of Contributed Content will not prevent us or
our clients from including such Contributed Content in online transmission services including the
internet. We acknowledge Contributed Content is your copyright and we will not acquire any
intellectual property rights in the Contributed Content. 167 (Emphasis supplied)

Respondents Dela Peña-Reyes and Manalastas merely denied receiving the advisory sent by
Reuters to its clients, including GMA-7. As in the records, the advisory reads:

ADVISORY - - +++LIVE COVER PLANS+++

PHILIPPINES: HOSTAGE RETURN

**ATTENTION ALL CLIENTS**

PLEASE BE ADVISED OF THE FOLLOWING LIVE COVER

PLANNED FOR THURSDAY, JULY 22:

....

SOURCE: ABS-CBN
TV AND WEB RESTRICTIONS: NO ACCESS PHILIPPINES.168
There is probable cause that respondents Dela Peña-Reyes and Manalastas directly committed
copyright infringement of ABS-CBN’s news footage to warrant piercing of the corporate veil. They
are responsible in airing the embargoed Angelo dela Cruz footage. They could have prevented the
act of infringement had they been diligent in their functions as Head of News Operations and
Program Manager.

Secretary Agra, however, committed grave abuse of discretion when he ordered the filing of the
Information against all respondents despite the erroneous piercing of the corporate veil.
Respondents Gozon, Duavit, Jr., Flores, and Soho cannot be held liable for the criminal liability of
the corporation.

Mere membership in the Board or being President per se does not mean knowledge, approval, and
participation in the act alleged as criminal. There must be a showing of active participation, not
simply a constructive one.

Under principles of criminal law, the principals of a crime are those "who take a direct part in the
execution of the act; [t]hose who directly force or induce others to commit it; [or] [t]hose who
cooperate in the commission of the offense by another act without which it would not have been
accomplished."169 There is conspiracy "when two or more persons come to an agreement concerning
the commission of a felony and decide to commit it":170

Conspiracy is not presumed. Like the physical acts constituting the crime itself, the elements of
conspiracy must be proven beyond reasonable doubt. While conspiracy need not be established by
1âwphi1

direct evidence, for it may be inferred from the conduct of the accused before, during and after the
commission of the crime, all taken together, however, the evidence must be strong enough to show
the community of criminal design. For conspiracy to exist, it is essential that there must be a
conscious design to commit an offense. Conspiracy is the product of intentionality on the part of the
cohorts.

It is necessary that a conspirator should have performed some overt act as a direct or indirect
contribution to the execution of the crime committed. The overt act may consist of active participation
in the actual commission of the crime itself, or it may consist of moral assistance to his co-
conspirators by being present at the commission of the crime or by exerting moral ascendancy over
the other co-conspirators[.]171 (Emphasis supplied, citations omitted)

In sum, the trial court erred in failing to resume the proceedings after the designated period. The
Court of Appeals erred when it held that Secretary Agra committed errors of jurisdiction despite its
own pronouncement that ABS-CBN is the owner of the copyright on the news footage. News should
be differentiated from expression of the news, particularly when the issue involves rebroadcast of
news footage. The Court of Appeals also erroneously held that good faith, as. well as lack of
knowledge of infringement, is a defense against criminal prosecution for copyright and neighboring
rights infringement. In its current form, the Intellectual Property Code is malum prohibitum and
prescribes a strict liability for copyright infringement. Good faith, lack of knowledge of the copyright,
or lack of intent to infringe is not a defense against copyright infringement. Copyright, however, is
subject to the rules of fair. use and will be judged on a case-to-case basis. Finding probable cause
includes a determination of the defendant's active participation, particularly when the corporate veil
is pierced in cases involving a corporation's criminal liability.

WHEREFORE, the Petition is partially GRANTED. The Department of Justice Resolution dated June
29, 2010 ordering the filing of the Information is hereby REINSTATED as to respondents Grace Dela
Pena-Reyes and John Oliver T. Manalastas. Branch 93 of the Regional Trial Court of Quezon City is
directed to continue with the proceedings in Criminal Case No. Q-04-131533.
 G.R. No. 222702, April 05, 2016

RAPPLER, INC., Petitioner, v. ANDRES D. BAUTISTA, Respondent.

RESOLUTION

CARPIO, J.:

Petitioner Rappler, Inc. (petitioner) filed a petition for certiorari and prohibition against
Andres D. Bautista (respondent), in his capacity as Chairman of the Commission on
Elections (COMELEC). The petition seeks to nullify Part VI (C), paragraph 19 and Part VI
(D), paragraph 20 of the Memorandum of Agreement (MOA) on the 2016 presidential
and vice-presidential debates, for being executed without or in excess of jurisdiction or
with grave abuse of discretion amounting to lack or excess of jurisdiction and for
violating the fundamental rights of petitioner protected under the Constitution. The
MOA, signed on 13 January 2016, was executed by the COMELEC through its Chairman,
respondent Bautista, and the Kapisanan ng mga Brodkaster ng Pilipinas (KBP), and the
various media networks, namely: ABS-CBN Corporation, GMA Network, Inc., Nine Media
Corporation, TV5 Network, Inc., Philstar Daily, Inc., Philippine Daily Inquirer, Inc.,
Manila Bulletin Publishing Corporation, Philippine Business Daily Mirror Publishing, Inc.,
and petitioner. Under the MOA, the KBP was designated as Debate Coordinator while
ABS-CBN, GMA, Nine Media, and TV5, together with their respective print media
partners were designated as Lead Networks.

Petitioner alleged that on 21 September 2015, respondent called for a meeting with
various media outlets to discuss the "PiliPinas 2016 Debates," for presidential and vice-
presidential candidates, which the COMELEC was organizing.1 Respondent showed a
presentation explaining the framework of the debates, in which there will be three
presidential debates and one vice presidential debate. Respondent proposed that
petitioner and Google, Inc. be in charge of online and social media engagement.
Respondent announced during the meeting that KBP will coordinate with all media
entities regarding the organization and conduct of the debates.

On 22 September 2015, petitioner sent a proposed draft for broadcast pool guidelines
to COMELEC and the KBP. A broadcast pool has a common audio and video feed of the
debates, and the cost will be apportioned among those needing access to the same.
KBP informed petitioner that the proposal will be discussed in the next meeting.

On 19 October 2015, another meeting was held at the COMELEC office to discuss a
draft MOA on the debates. In the draft, petitioner and Google's participation were
dropped in favor of the online outlets owned by the Lead Networks. After the meeting,
the representatives of the Lead Networks drew lots to determine who will host each leg
of the debates. GMA and its partner Philippine Daily Inquirer sponsored the first
presidential debate in Mindanao on 21 February 2016; TV5, Philippine Star, and
Businessworld sponsored the second phase of presidential debate in the Visayas on 20
March 2016; ABS-CBN and Manila Bulletin will sponsor the presidential debate to be
held in Luzon on 24 April 2016; and the lone vice-presidential debate will be sponsored
by CNN, Business Mirror, and petitioner on 10 April 2016. Petitioner alleged that the
draft MOA permitted online streaming, provided proper attribution is given the Lead
Network.
On 12 January 2016, petitioner was informed that the MOA signing was scheduled the
following day. Upon petitioner's request, the draft MOA was emailed to petitioner on the
evening of 12 January 2016. Petitioner communicated with respondent its concerns
regarding certain provisions of the MOA particularly regarding online streaming and the
imposition of a maximum limit of two minutes of debate excerpts for news reporting.
Respondent assured petitioner that its concerns will be addressed afterwards, but it has
to sign the MOA because time was of the essence. On 13 January 2016, petitioner,
along with other media networks and entities, executed the MOA with the KBP and the
COMELEC for the conduct of the three presidential debates and one vice-presidential
debate. Petitioner alleged that it made several communications with respondent and the
COMELEC Commissioners regarding its concerns on some of the MOA provisions, but
petitioner received no response. Hence, this petition.

In this petition for certiorari and prohibition, petitioner prays for the Court to render
judgment:

a. Declaring null and void, for being unconstitutional, pertinent parts of the
Memorandum of Agreement that violate the rights of the Petitioner, specifically Part VI
(C), paragraph 19 and Part VI (D), paragraph 20 [of the MOA];

b. Prohibiting the Respondent from implementing specifically Part VI (C), paragraph 19

and Part VI (D), paragraph 20 of the MOA;

c. Pending resolution of this case, issuing a Preliminary Injunction enjoining the

Respondent from implementing Part VI (C), paragraph 19 and Part VI (D), paragraph
20 of the MOA; and

d. Pending resolution of this case, issuing a Preliminary Mandatory Injunction requiring

the Respondent to ensure an unimpaired and equal access to all mass media, online or
traditional, to all the Debates.2

Part VI (C), paragraph 19 and Part VI (D), paragraph 20 of the MOA read:

VI
ROLES AND RESPONSIBILITIES OF THE LEAD NETWORKS

xxxx

C. ONLINE STREAMING

xxxx

19. Subject to copyright conditions or separate negotiations with the Lead Networks,
allow the debates they have produced to be shown or streamed on other websites;

D. NEWS REPORTING AND FAIR USE

20. Allow a maximum of two minutes of excerpt from the debates they have produced
to be used for news reporting or fair use by other media or entities as allowed by the
copyright law: Provided, that the use of excerpts longer than two minutes shall be
subject to the consent of the Lead Network concerned;3

Respondent argues that the petition should be dismissed for its procedural defects. In
several cases, this Court has acted liberally and set aside procedural lapses in cases
involving transcendental issues of public interest,4 especially when time constraint is a
factor to be considered, as in this case. As held in GMA Network, Inc. v. Commission on
Elections:5

Respondent claims that certiorari and prohibition are not the proper remedies that
petitioners have taken to question the assailed Resolution of the COMELEC. Technically,
respondent may have a point. However, considering the very important and pivotal
issues raised, and the limited time, such technicality should not deter the Court from
having to make the final and definitive pronouncement that everyone else depends for
enlightenment and guidance. "[T]his Court has in the past seen fit to step in and
resolve petitions despite their being the subject of an improper remedy, in view of the
public importance of the issues raised therein.6

The urgency to resolve this case is apparent considering that the televised debates
have already started and only two of the scheduled four national debates remain to be
staged.7 And considering the importance of the debates in informing the electorate of
the positions of the presidential and vice-presidential candidates on vital issues
affecting the nation, this case falls under the exception laid down in GMA Network, Inc.
v. Commission on Elections.

Petitioner is a signatory to the MOA. In fact, the sole vice-presidential debate, to be

held in Manila on 10 April 2016, will be sponsored by CNN Philippines (owned and
operated by Nine Media Corporation) and its partners Business Mirror and petitioner.
Petitioner, however, is alleging that it is being discriminated particularly as regards the
MOA provisions on live audio broadcast via online streaming. Petitioner argues that the
MOA grants radio stations the right to simultaneously broadcast live the audio of the
debates, even if the radio stations are not obliged to perform any obligation under the
MOA. Yet, this right to broadcast by live streaming online the audio of the debates is
denied petitioner and other online media entities, which also have the capacity to live
stream the audio of the debates. Petitioner insists that it signed the MOA believing in
good faith the issues it has raised will be resolved by the COMELEC.

The provisions on Live Broadcast and Online Streaming under the MOA read:

VI
ROLES AND RESPONSIBILITIES OF THE LEAD NETWORKS

xxxx

B1. LIVE BROADCAST

10. Broadcast the debates produced by the Lead Networks in their respective television
stations and other news media platforms;

11. Provide a live feed of the debate to other radio stations, other than those of the
Lead Network's, for simultaneous broadcast;

12. Provide a live feed of the debates produced by them to radio stations not belonging
to any of the Lead Networks for simultaneous broadcast;

xxxx

C. ONLINE STREAMING

17. Live broadcast the debates produced by the Lead Networks on their respective web
sites and social media sites for free viewing by the public;

18. Maintain a copy of the debate produced by the Lead Network on its on-line site(s)
for free viewing by the public during the period of elections or longer;

19. Subject to copyright conditions or separate negotiations with the Lead

Networks, allow the debates they have produced to be shown or streamed on
other websites;8 (Boldfacing and underscoring supplied)

Petitioner's demand to exercise the right to live stream the debates is a contractual
right of petitioner under the MOA. Under Part VI (C), paragraph 19 of the MOA, the
Lead Networks are expressly mandated to "allow the debates they have produced
to be shown or streamed on other websites," but "subject to copyright
conditions or separate negotiations with the Lead Networks." The use of the
word "or" means that compliance with the "copyright conditions" is sufficient for
petitioner to exercise its right to live stream the debates in its website.

The "copyright conditions" refer to the limitations on copyright as provided under

Section 184.1(c) of the Intellectual Property Code (IPC), thus:

SEC. 184. Limitations on Copyright. - 184.1 Notwithstanding the provisions of Chapter

V, the following acts shall not constitute infringement of copyright:

xxxx

(c) The reproduction or communication to the public by mass media of articles

on current political, social, economic, scientific or religious topic, lectures, addresses
and other works of the same nature, which are delivered in public if such use
is for information purposes and has not been expressly
reserved; Provided, That the source is clearly indicated; (Sec. 11, P.D. No. 49)
(Boldfacing and underscoring supplied)

Under this provision, the debates fall under "addresses and other works of the
same nature." Thus, the copyright conditions for the debates are: (1) the
reproduction or communication to the public by mass media of the debates is
for information purposes; (2) the debates have not been expressly reserved by
the Lead Networks (copyright holders); and (3) the source is clearly indicated.

Condition 1 is complied because the live streaming by petitioner is obviously for

information purposes. Condition 2 is also complied because Part VI (C), paragraph 19 of
the MOA expressly "allow[s] the debates x x x to be shown or streamed on other
websites," including petitioner's website. This means that the "reproduction or
communication (of the debates) to the public by mass media x x x has not been
expressly reserved" or withheld. Condition 3 is complied by clearly indicating and
acknowledging that the source of the debates is one or more of the Lead Networks.

Part VI (C), paragraph 19 of the MOA, which expressly allows the debates produced by
the Lead Networks to be shown or streamed on other websites, clearly means that
the Lead Networks have not "expressly reserved" or withheld the use of the
debate audio for online streaming. In short, the MOA expressly allows the live
streaming of the debates subject only to compliance with the "copyright conditions."
Once petitioner complies with the copyright conditions, petitioner can exercise the right
to live stream the audio of the debates as expressly allowed by the MOA.

Under the MOA, the Lead Networks are mandated to promote the debates for maximum
audience.9 The MOA recognizes the public function of the debates and the need
for the widest possible dissemination of the debates. The MOA has not
reserved or withheld the reproduction of the debates to the public but has in
fact expressly allowed the reproduction of the debates "subject to copyright
conditions." Thus, petitioner may live stream the debate in its entirety by complying
with the "copyright conditions," including the condition that "the source is clearly
indicated" and that there will be no alteration, which means that the streaming will
include the proprietary graphics used by the Lead Networks. If petitioner opts for a
clean feed without the proprietary graphics used by the Lead Networks, in order for
petitioner to layer its own proprietary graphics and text on the same, then petitioner
will have to negotiate separately with the Lead Networks. Similarly, if petitioner wants
to alter the debate audio by deleting the advertisements, petitioner will also have to
negotiate with the Lead Networks.

Once the conditions imposed under Section 184.1(c) of the IPC are complied with, the
information - in this case the live audio of the debates -now forms part of the public
domain. There is now freedom of the press to report or publicly disseminate the live
audio of the debates. In fact, the MOA recognizes the right of other mass media
entities, not parties to the MOA, to reproduce the debates subject only to the same
copyright conditions. The freedom of the press to report and disseminate the live audio
of the debates, subject to compliance with Section 184.1(c) of the IPC, can no longer
be infringed or subject to prior restraint. Such freedom of the press to report and
disseminate the live audio of the debates is now protected and guaranteed under
Section 4, Article III of the Constitution, which provides that "[N]o law shall be passed
abridging the freedom x x x of the press."

The presidential and vice-presidential debates are held primarily for the benefit of the
electorate to assist the electorate in making informed choices on election day. Through
the conduct of the national debates among presidential and vice-presidential
candidates, the electorate will have the "opportunity to be informed of the candidates'
qualifications and track record, platforms and programs, and their answers to
significant issues of national concern."10 The political nature of the national debates and
the public's interest in the wide availability of the information for the voters' education
certainly justify allowing the debates to be shown or streamed in other websites for
wider dissemination, in accordance with the MOA.
Therefore, the debates should be allowed to be live streamed on other websites,
including petitioner's, as expressly mandated in Part VI (C), paragraph 19 of the MOA.
The respondent, as representative of the COMELEC which provides over-all supervision
under the MOA, including the power to "resolve issues that may arise among the parties
involved in the organization of the debates,"11 should be directed by this Court to
implement Part VI (C), paragraph 19 of the MOA, which allows the debates to be shown
or live streamed unaltered on petitioner's and other websites subject to the copyright
condition that the source is clearly indicated. chanrobleslaw

WHEREFORE, we PARTIALLY GRANT the petition. Respondent Andres D. Bautista, as

Chairman of the COMELEC, is directed to implement Part VI (C), paragraph 19 of the
MOA, which allows the debates to be shown or live streamed unaltered on petitioner's
and other websites subject to the copyright condition that the source is clearly
indicated. Due to the time constraint, this Resolution is immediately executory.

SO ORDERED. cralawlawlibrary

FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, INC vs.

BENJAMIN TAN

G.R. No. L-36402

March 16, 1987

Filipino Society of Composers, Authors and Publishers Inc., a non-profit association which owned the
songs "Dahil Sa Iyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao Lamang" and "The Nearness Of
You”, demanded payment for license fee from Benjamin Tan, operator of the “Alex Soda Foundation and
Restaurant” where a combo with professional singers performed the above-mentioned compositions
without license or permission from the said association. This demand was ignored thus the association
filed a complaint with the lower court for infringement of copyright against Tan for allowing the playing
in his restaurant of said songs copyrighted in the name of the former.

Tan maintains that the mere singing and playing of songs and popular tunes even if they are copyrighted
do not constitute an infringement under the provisions of Section 3 of the Copyright Law.

The lower court, favored Tan and dismissed the complaint.

The association appealed to the CA which as already stated certified the case to the SC for adjudication
on the legal question involved.

ISSUE:

WON the playing and singing of musical compositions (copyrighted), inside the establishment of Tan
constitute a public performance for profit.

WON Tan can be held liable for copyright infringement.

HELD:

SC held that "The playing of music in dine and dance establishment which was paid for by the public in
purchases of food and drink constituted "performance for profit" within a Copyright Law." Thus, it has
been explained that while it is possible in such establishments for the patrons to purchase their food and
drinks and at the same time dance to the music of the orchestra , the music is furnished and used by the
orchestra for the purpose of inducing the public to patronize the establishment and pay for the
entertainment in the purchase of food and drinks. Benjamin Tan conducts his place of business for profit,
and it is public; and the music is performed for profit.

It is obvious that the expenses entailed thereby are added to the overhead of the restaurant which are
either eventually charged in the price of the food and drinks or to the overall total of additional income
produced by the bigger volume of business which the entertainment was programmed to attract.
Consequently, it is beyond question that the playing and singing of the combo in defendant-appellee's
restaurant constituted performance for profit contemplated by the Copyright Law.

Nevertheless, Tan cannot be said to have infringed upon the Copyright Law. Tan's allegation that the
composers of the contested musical compositions waived their right in favor of the general public when
they allowed their intellectual creations to become property of the public domain before applying for
the corresponding copyrights for the same is correct.

The SC has ruled that "Paragraph 33 of Patent Office Administrative Order No. 3 (as amended, dated
September 18, 1947) entitled 'Rules of Practice in the Philippines Patent Office relating to the
Registration of Copyright Claims' promulgated pursuant to Republic Act 165, provides among other
things that an intellectual creation should be copyrighted thirty (30) days after its publication, if made in
Manila, or within the (60) days if made elsewhere, failure of which renders such creation public
property." Indeed, if the general public has made use of the object sought to be copyrighted for thirty
(30) days prior to the copyright application the law deems the object to have been donated to the public
domain and the same can no longer be copyrighted.

A careful study of the records reveals that the enumerated songs had long become public property, and
are therefore beyond the protection of the Copyright Law.

PHILIPPINE EDUCATION COMPANY, INC. vs. VICENTE SOTTO and V.R. ALINDADA
(52 Phil. 580)
G.R. No. 30774, January 29, 1929

FACTS:
Philippine Education Company, Inc. (PECI) is a domestic corporation. It is the
proprietor and publisher of the monthly magazine Philippine Education
Magazine published in the City of Manila.

In December 1927, PECI contracted with Austin Craig for the preparation and
publication of an original article (“The True Story of Mrs. Rizal”) to be written by him
concerning Mrs. Jose Rizal to be published in the Philippine Education Magazine. The
said article was delivered to PECI which paid him for it. The same was printed and
published in the December 1927 issue then put in market for sale. In every issue, it gave
a notice that all rights thereto were reserved.

Soon after, Sotto, the proprietor and publisher of a weekly newspaper known
as The Independent and Alindada, the editor, allegedly appropriated, copied and
published the article unlawfully and without the knowledge and consent of PECI in The
Independent of December 24th and 31st, 1927, without citing the PECI as source. Upon
discovery, PECI requested thru a letter that on the former’s next issue, they cite it as the
source of the article in some prominent place. However, despite the letter, the publication
of the article was continued. Alindada advised PECI that it had not registered such right
under the Copyright Law. As a result, PECI sued Sotto and Alindada for damages. Sotto
and Alindada demurred to the evidence and alleged as a special defense that PECI is not
the owner of the article because it had not registered it in its name in the proper registry
under Act 3134 and the regulation concerning the registration of intellectual property
made by the Chief of the Philippine Library and Museum, also, they had published the
same without any intention to prejudice anybody in his property right but in good faith.
The RTC ruled in favor of PECI, hence, the appeal.

ISSUE:
WON the article may be reproduced taking into consideration that PECI has not
registered the same in its name and just served a notice that it reserved the rights to
publication.

RULING:
THE DEFENDANT SHOULD CITE THE SOURCE OF THE REPRODUCTION.
The case warrants for the interpretation of Section 5 of Act 3134 (An Act to Protect
Intellectual Property which is known as the Copyright Law of the Philippine
Islands). Considering the language used, such news items, editorial paragraphs and
articles in periodicals may be reproduced unless they contain a notice that their
publication is reserved or unless they contain a notice of copyright. In either event, the
law specifically provides that the source of the reproduction or original reproduced shall
be cited. To give the Section another construction would be to nullify, eliminate and take
from the paragraph the works “they contain a notice that their publication is reserved. The
words are plain and clear, it should be applied.

In the case at bar, PECI did not give notice of its copyright for the simple reason
that it did not have one but it did notify Sotto and Alindada that in the publication of the
article “we reserved all right,” which was legally equivalent to a notice of copyright. In
addition, the latter would have had the legal right to publish the article by giving the source
of the reproduction to which it failed to. If it had been the purpose of and intent of the
Legislature to limit the reproduction of news items, editorial paragraphs and articles in
periodicals to those which have a notice of copyright only, it never would have said if “they
contain a notice that their publication is reserved.”
Rappler, Inc. vs. Andres D. Bautista

G.R. No. 222702 | April 5, 2016

FACTS:

On January 13, 2016, the COMELEC through Chairman Andres D. Bautista executed a

Memorandum of Agreement (MOA) with the Kapisanan ng mga Brodkaster ng Pilipinas (KBP),

and various media networks, in time for the “PiliPinas 2016 Debates”.

Rappler communicated with respondent its concerns regarding certain provisions of the

MOA particularly regarding online streaming and imposition of a maximum limit of two minutes

of debate excerpts for news reporting, but they did not receive any response.

ISSUES:

Whether or not Rappler will violated certain copyright laws when allowed to live stream

the debate subject to the conditions set forth in the MOA.

RULING:

No, Rappler will not violate certain copyright laws.

Section 184.1(c) of the Intellectual Property Code states that:

“(c) The reproduction or communication to the public by mass

media of articles on current political, social, economic, scientific or

religious topic, lectures, addresses and other works of the same

nature, which are delivered in public if such use is for information

purposes and has not been expressly reserved; Provided, That the

source is clearly indicated; (Sec. 11, P.D. No. 49)”

Condition 1 is complied because the live streaming by petitioner is obviously for

information purposes. Condition 2 is likewise complied because Part VI (C), paragraph 19 of the

MOA expressly “allows the debates…to be shown or streamed on other websites”, including

Rappler’s website. Lastly, condition 3 is also complied by clearly indicating and acknowledging

that the source of the debates is one or more of the Lead Networks.