COSAC v. FILSCAP

EN BANC
[G.R. No. 222537. February 28, 2023.]
COSAC, INC., petitioner, vs. FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND

PUBLISHERS, INC., respondent.
DECISION
HERNANDO, J : p
This Petition for Review on Certiorari 1 assails the May 28, 2015 Decision 2 and the January 14,
2016 Resolution 3 of the Court of Appeals (CA) in CA-G.R. CV No. 101415 that affirmed the October
24, 2012 Decision 4 and the July 22, 2013 Order 5 of the Regional Trial Court (RTC) of Quezon City,
ordering COSAC, Inc. (COSAC) to pay Filipino Society of Composers, Authors and Publishers, Inc.
(FILSCAP), damages for unpaid license fees/royalties. HTcADC
The Facts
FILSCAP is a non-stock, non-profit corporation comprised of composers, authors, and music
publishers. It is tasked to enforce and protect the performing rights of copyright owners of musical
works. FILSCAP is also authorized to issue licenses and collect license fees for the public
performance of copyrighted musical works under its repertoire, 6 whether for profit or not. FILSCAP
alleged that Filipino composers executed deeds of assignment, and foreign composers/publishers of
musical works executed reciprocal representation agreements, whereby they assigned to FILSCAP
their rights to the use and protection of their copyrighted works. 7
On February 3, 2005 and January 13, 2006, a representative from FILSCAP who monitored 8
Off the Grill Bar and Restaurant (Off the Grill) in Quezon City (owned and operated by COSAC)
discovered that the restaurant played copyrighted music without obtaining from FILSCAP a license
or paying the corresponding fees. Thus, FILSCAP advised COSAC to secure the required licenses and
sent letters of the same tenor dated September 20, 2004 9 and October 14, 2004. 10 Without getting
a favorable response from COSAC, FILSCAP sent a Final Demand Letter 11 dated November 10, 2005
to the former. However, COSAC still refused to comply.
Thus, on February 13, 2006, FILSCAP filed a Complaint 12 for infringement of copyright and
damages against COSAC. FILSCAP alleged that COSAC's refusal to secure the license and its
continued use of copyrighted music without the requisite performing rights constitute acts of
infringement. Thus, COSAC should be compelled to secure a license and to pay royalty fees,
damages, and attorney's fees. 13
Conversely, COSAC argued that FILSCAP is not a real party-in-interest since it did not prove
that the copyright owners assigned their rights to FILSCAP. COSAC denied committing infringement
as it had no knowledge about what the band members would sing as part of their performance, and
because songs once aired and performed become public property. In its counterclaim, COSAC
prayed for attorney's fees and litigation expenses. 14
To prove its standing to file the case, FILSCAP presented the deeds of assignment 15 executed
by the local copyright owners in its favor, together with their reciprocal representation agreements
16 with foreign societies abroad. Likewise, FILSCAP submitted a Certificate of Authentication 17 as
well as an International Confederation of Societies of Authors and Composers (ICSAC) Certification
18 dated September 13, 2006 as proofs of its membership in the ICSAC, and to show that it is the
only ICSAC-recognized collective management organization in the Philippines authorized to license
the public performance of musical works. 19
FILSCAP also provided a list from Fiche Internationale, 20 a database containing information
pertinent to the interested parties of musical works. It contains "(a) the names of the interested
parties (i.e., the composer, lyricist [author], publisher and sub-publisher of the musical work), (b)
the society to which each interested party belongs to, and (c) the percentage of sharing of
performance royalties between the interested parties." 21 FILSCAP averred that Off the Grill played
some songs that were assigned to it and included in the Fiche Internationale's database. 22
In the Affidavit 23 of Debra Ann Gaite (Gaite), then the General Manager of FILSCAP, she
asserted that the deeds of assignment executed by the composers and publishers over the
performing rights of their works to FILSCAP were duly registered with the National Library of the
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Philippines and are easily available to the public. 24
During her cross-examination, Gaite stated that the copyright owners authorized FILSCAP to
issue "licenses" to the establishments which sought to play copyrighted music in their respective
venues. 25 She explained that the computation of royalty fees are based on the seating capacity of
the establishment. 26 Since Off the Grill is considered as a bar, Gaite stated that the royalty fees
should be computed as follows: 27
For Lounges/Bars/Pubs (Where Dancing is not allowed)
Maximum Accommodation Capacity Live & Mechanical Mechanical Only

Royalty Rate/Day Royalty Rate/Day
100 persons or less [P]100.00 [P]45.00
More than 100 persons, but less than [P]120.00 [P]65.00

300 persons
300 persons or more, but less than [P]145.00 [P]90.00

500 persons
500 persons or more [P]170.00 [P]105.00 28
Similarly, Ferdinand Gorospe (Gorospe), then the Licensing Manager of FILSCAP, explained in
his Judicial Affidavit 29 that the "license" that FILSCAP issues to the users of the music is basically a
written authorization, given that FILSCAP controls the performance rights over the copyrighted
musical works of its members and affiliate performing rights of societies abroad. 30
Gorospe stated that there is public performance when "a musical work is played to the public
through any means or process," 31 such as when the copyrighted musical work is "played or
performed live through a performer or mechanically through any audio or audiovisual player or
device such as a CD player, VCD player, DVD player, cassette player, television set or radio player."
32 Gorospe elucidated FILSCAP's position during his testimony, as follows: CAIHTE
Q: To whom do you issue this practice of issuing licenses?

A: We issue it to the users of music.
Q: You mean to the public?
A: Well, to the users.
Q: To the public?
A: To those who want to use the music, but not to everybody.
Q: Who want to use?
A: Who [wants] to use the music.
Q: When you said "who [wants] to use," you are referring to singers?
A: Well, if they are to use it, yes it could be to singers. If they want to produce a record,
then, a license also is issued to them by the parties, but not FILSCAP.
Q: For example, Mr. Witness, myself, I want to sing a song assigned by the composer to
FILSCAP. If I want to use it, I have to get a license from you?
A: Technically, singing, no. We need not issue license because singing is not really — It
depends on where you'll sing it, like, for example, if you want to sing it privately in your
bathroom, then why would we issue a license because that is —
Q: How about a band? They want to sing it in a restaurant. To whom [shall they] secure a
license?
A: Technically it is the establishment. We'll go after the establishment, the owner of the
establishment.
Q: Why the establishment? Why not the singer, Mr. Witness? Or why not the band?
A: Because if the establishment allows the singing of the songs, then, the corporation or the
establishment allows public performance.
Q: Why? Is there a control on the establishment over the band to sing what they should
sing?
A: No, not on the particular song but on the act of singing. The bar can say, You are not
allowed to sing because you are not licensed by the establishment, something like that.
Q: All kinds of songs, Mr. Witness?
A: No, only — well, yes, for copyrighted songs.
Q: Do you have singers or bands who secure licenses from you?
A: As of —
xxx xxx xxx
Q: Were there other establishments that secure your license?
A: Yes.
xxx xxx xxx
A: Well, we have Shoemart, we have GMA 7, Channel 2, Channel 5. We also have bars like,
well, we have, before it was the Embassy. We also have Jollibee, we have McDonald's,
Starbucks, et cetera, et cetera. 33
Gorospe averred that without an authorization or "license," the public performance of the
copyrighted work is illegal. 34 During his cross-examination, Gorospe asserted that if an
establishment allows the singing or playing of copyrighted songs in its venue, then it also allows the
"public performance" of the songs. 35
Emigio C. Lejano III (Lejano), then a Licensing Assistant of FILSCAP, stated in his Judicial
Affidavit 36 that when he monitored Off the Grill on February 3, 200537 and January 13, 2006, 38 he
found that copyrighted musical works under FILSCAP's repertoire were being performed for the
entertainment of the customers. 39 In particular, the following songs were performed live by a band
in Off the Grill on February 3, 2005, for the entertainment of its customers:
1. Ignition
2. If I Ain't Got You
3. Falling In Love With You
4. Tattooed On My Mind
5. If I Was The One 40
Thereafter, these songs were mechanically played as background music for its customers:
1. Don't Miss You At All
2. All I Wanna Do
3. Strong Enough
4. Don't Know Why
5. Run Baby Run
6. Saturday Night
7. Anything But Down
8. My All
9. Turn The Beat Around
10. Conga
11. Get On Your Feet
12. You're Still The One 41
In like manner, on January 13, 2006, the following musical works were performed by a live
band:
1. Officially Missing You
2. Angel
3. At Your Best (You Are Love)
4. Knocks Me Off My Feet
5. Emotion 42
Afterwards, the following songs were mechanically played as background music: aScITE
1. Everybody's Changing
2. She Will Be Loved
3. Let's Get Retarded 43
Michelle Flor (Flor), a Copyright Examiner from the National Library, mentioned in her Judicial
Affidavit 44 that FILSCAP regularly files and deposits with the National Library's Copyright Office the
deeds of assignment of performing rights over copyrighted musical works as well as reciprocal
representation agreements with other societies abroad. 45 She clarified that their office's
certification applies to the entire document even if they only stamp the first page of a multi-page
document, in order to certify that the said file is a faithful reproduction or photocopy of the original
one deposited with the Copyright Office. 46 On cross-examination, Flor confirmed that her office
records the application for copyright of an individual or company 47 as well as the transfer and
assignment of rights to the copyright to a society like FILSCAP. 48
On the other hand, in the Judicial Affidavit 49 of COSAC's lone witness, Melrose Tanan (Tanan),
she asserted that bands perform at Off the Grill to provide entertainment. She also claimed that
once music is played, it becomes public property. 50 During her cross-examination, Tanan admitted
that music is regularly played in the restaurant either live or through recorded music via a monitor
or music video. 51
The Ruling of the Regional Trial
Court
In a Decision 52 dated October 24, 2012, the RTC found COSAC guilty of infringement. 53 The
RTC found that:
[T]he unrebutted evidence on record shows that the foreign composers of the 25 musical
works performed live or mechanically played in [COSAC's Off the Grill Bar and Restaurant],
through their foreign societies, had authorized [FILSCAP] also as assignee of their musical
works to file this case for infringement of copyright and damages against [COSAC] which
allowed such live performance or mechanical playing of the musical works in its x x x
establishment for the benefit of its customers without the requisite performance license from
FILSCAP or without the payment of the license fees/royalties to FILSCAP. 54
Moreover, the RTC held that under Section 182 of the Intellectual Property Code (IPC), the
filing of the deeds of assignment and the reciprocal representation agreements with the National
Library and its non-publication in the Intellectual Property Office (IPO) Gazette did not render the
said deeds and agreements void. The trial court declared that if this were the intent of Congress,
then it should have expressly provided in the IPC that such assignments and/or agreements which
were not published in the IPO Gazette shall be void. 55
Additionally, it ruled that FILSCAP, as duly authorized by the copyright owners, is a real party-
in-interest and has the standing to file the complaint based on Section 183 56 of the IPC. 57 Thus,
the dispositive portion of the RTC Decision reads:
WHEREFORE, judgment is rendered ordering the defendant [COSAC] to pay to the
plaintiff [FILSCAP] the following sums of money, to wit: a) Php317,050.00 as damages for
unpaid license fees/royalties and Php5,778.17 as damages for monitoring expenses, both with
interest at the rate of six percent (6%) per annum reckoned from the date of the filing of the
complaint, February 13, 2006, until the same is fully paid; and b) Php52,003.47 as reasonable
attorney's fees and litigation expenses plus costs of suit. All other claims, including the
counterclaims, are dismissed for lack of legal and/or factual basis.
SO ORDERED. 58
Aggrieved, COSAC filed a motion for reconsideration. 59 Likewise, it filed a motion for inhibition
60 resulting in the inhibition of the presiding judge 61 and the re-assignment of the case.
Nevertheless, the RTC, in an Order 62 dated July 22, 2013, denied COSAC's motion for
reconsideration of the RTC's October 24, 2012 Decision. COSAC appealed 63 to the CA insisting that
the documents which FILSCAP relied on to assert its authority were not published in the IPO Gazette
as allegedly required by Section 182 of the IPC. 64
The Ruling of the Court of Appeals
In its assailed May 28, 2015 Decision, 65 the CA sustained the ruling of the RTC but deleted
the award for monitoring expenses. 66 It held that:
Under Section 177 of the Intellectual Property Code of the Philippines, a copyright owner
has the exclusive right to carry out, authorize or prevent the public performance of a work and
other communication to the public of the work. To enforce this right, the copyright may be
assigned in whole or in part and the assignee is entitled to all the rights and remedies which
the assignor has with respect to the copyright. Particularly, copyright owners or their heirs
may designate a society of artists, writers or composers to enforce their economic rights and
moral rights on their behalf. 67
The CA found that the copyright owners assigned their rights and remedies to FILSCAP
through deeds of assignment and reciprocal representation agreements. As such, FILSCAP is
authorized to regulate the public performance, mechanical reproduction, and synchronization rights
granted by law to the creators and owners of original musical works. 68 Significantly, the CA held
that registration or publication in the IPO Gazette of the deeds of assignment and reciprocal
representation agreements is not required.
Citing Section 182 of the IPC which states that "an assignment or exclusive license may be
filed in duplicate with the National Library upon payment of the prescribed fee for registration in
books and records," the CA concluded that the filing is discretionary and that non-publication in the
IPO Gazette did not render said deeds and agreements void. 69 Moreover, the CA ruled that FILSCAP
is a real party-in-interest as it is authorized to enforce the intellectual property rights of copyright
owners pursuant to the deeds and agreements. 70
Finally, the CA held that due to the continued infringing activities of COSAC, the RTC correctly
awarded damages in favor of FILSCAP, as well as attorney's fees, as FILSCAP was compelled to
litigate to protect its rights. However, the CA deleted the award for monitoring expenses since
FILSCAP failed to substantiate this claim. COSAC's counterclaim for attorney's fees and litigation
expenses was denied for lack of merit. 71
The fallo of the CA Decision reads:
FOR THESE REASONS , the October 24, 2012 Decision of the Regional Trial Court of
Quezon City, Branch 90 is MODIFIED in that the award for monitoring expenses is deleted.
DETACa
SO ORDERED. 72
COSAC moved for reconsideration 73 which the CA denied in its January 14, 2016 Resolution.
74
Unrelenting, COSAC elevated this case before Us based on the following grounds:
I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT HOLDING THE NECESSITY OF
PUBLICATION IN THE IPO GAZETTE OF THE ALLEGED DEED OF ASSIGNMENT/AUTHORITY OF
THE RESPONDENT.
II
THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONER TO PAY LICENSE
FEES/ROYALTIES TO RESPONDENT IN THE AMOUNT OF [P]317,050.00 AND MONITORING
EXPENSE OF [P]5,778.17.
III
THE COURT OF APPEALS ERRED IN ORDERING THE PETITIONER TO PAY ATTORNEY'S FEES IN
THE AMOUNT OF [P]52,003.47.
IV
THE COURT OF APPEALS ERRED IN NOT GRANTING THE COUNTERCLAIMS OF THE PETITIONER.
75
Thus, the issues in this petition are whether COSAC committed copyright infringement and if
so, whether it should be held liable to pay fees and damages for the said violation.
Arguments of COSAC
COSAC insists that the publication of the deeds of assignment or FILSCAP's authority in the
IPO Gazette is necessary under Section 182 of the IPC as it serves to inform the general public of its
authority to collect royalty fees. 76 COSAC contends that FILSCAP's authority as assignee is vague
and not supported by evidence. 77 Additionally, FILSCAP is not entitled to collect royalty fees
because its authority is defective.
Likewise, the damages and attorney's fees awarded in favor of FILSCAP are baseless and
excessive, especially since COSAC has no control over what the bands will sing in the
establishment. 78 Lastly, COSAC maintains that it is entitled to its counterclaim as it was
unnecessarily dragged into litigation, considering that once the music is played in the airwaves, it
becomes public property. 79
Arguments of FILSCAP
FILSCAP counters that COSAC's arguments are mere rehashes of arguments raised in previous
pleadings and involve questions of fact which are not allowed in a Rule 45 petition. Contrary to
COSAC's contention, FILSCAP offered in evidence the deeds of assignment and the reciprocal
representation agreements. It adds that although COSAC is a corporation, the petition's verification
and certification of non-forum shopping were not verified by the corporation itself or any of its
authorized representatives but by a certain Jeremy Sy (Sy), the General Manager, supposedly in his
personal capacity. Thus, the petition should be dismissed outright. 80
Moreover, FILSCAP avers that the CA correctly held that FILSCAP has the right to enforce the
intellectual property rights over copyrighted musical works pursuant to the deeds of assignment of
the members and the reciprocal representation agreements with foreign affiliate societies. These
were duly filed and recorded in the National Library pursuant to Section 182 of the IPC. Thus, as
copyright owner or at least the copyright holder of copyrighted musical works, FILSCAP is a real
party-in-interest. 81
With regard to the issue of publication in the IPO Gazette based on Section 182 of the IPC,
FILSCAP opines that:
it [is] clear that the word 'may' pertains to the filing of an assignment or exclusive license with
the National Library. From the wording of the law, this portion of the provision is clearly
permissive. On the other hand, the word 'shall' pertains to the publication in the IPO Gazette
of exclusive licenses or deeds of assignment which have optionally been filed with the
National Library. [COSAC's] interpretation would render the IP Code provision absurd as it
would appear that it wants this Honorable Court to disregard the portion of the provision with
the permissive term 'may' in favor of the portion which has the mandatory term 'shall,' when
clearly each word pertains to a separate and distinct object. 82
FILSCAP adds that Section 172.1 of the IPC provides that literary and artistic works are original
intellectual creations which are protected from the moment of their creation. Similarly, Section
172.2 of the IPC states that works are protected by the sole fact of their creation, irrespective of
their form of expression, as well as their content, quality, and purpose. Hence, musical works are
protected by copyright without need of any other act including registration with any government
agency or publication. 83
Moreover, FILSCAP maintains that it should be paid royalties and attorney's fees and that
COSAC is not entitled to its counterclaim. 84 It asserts that it can sue for infringement and recover
damages if "(1) the musical works are publicly performed, (2) the musical works [are] within the
repertoire of FILSCAP, and (3) the musical works were publicly performed without the consent of or
license from FILSCAP." 85 FILSCAP asserts that for there to be a public performance, there must be
performance of the work, either directly or by means of any device or process, or if in case of a
sound recording, the recorded sound or music is audible at a place where persons outside the
normal circle of family and that family's closest social acquaintances are or can be present. 86
Our Ruling
The petition lacks merit.
The Court notes that the petition suffers from infirmities. COSAC did not attach a Secretary's
Certificate or any document showing Sy's authority to sign the Verification and Certification of Non-
Forum Shopping on behalf of COSAC. 87 More importantly, the petition raised issues that were
already passed upon by both the RTC and the CA. Nonetheless, We deem it proper to discuss the
pertinent matters regarding copyrighted music since these tread on fairly new jurisprudential
territory.
At the outset, it must be stressed that the alleged acts of infringement occurred on February
3, 2005 and January 13, 2006, while the Complaint was filed on February 13, 2006. The applicable
law then was Republic Act No. 8293 (RA 8293) or the IPC, which took effect on January 1, 1998, 88
prior to its amendment by Republic Act No. 10372 (RA 10372) 89 on February 28, 2013. Relevant to
this case are the amendments introduced by RA 10372 in Section 216 of the IPC which classifies the
three types of copyright infringers. 90 Although not originally enumerated in RA 8293, the same still
finds support in the earlier law (RA 8293). Similarly, the concept of "just damages" which may be
awarded in lieu of actual damages can be found in RA 8293. We will expound on these matters in
the discussion. HEITAD
Overview of Copyright
"[A] copyright is the right to literary property as recognized and sanctioned by positive law; it
is an intangible, incorporeal right granted by statute to the author or originator of certain literary or
artistic productions, whereby he or she is invested, for a specific period, with the sole and exclusive
privilege of multiplying copies of the same and publishing and selling them." 91 Relevantly, "
[c]opyright, 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 it. 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.
Accordingly, it can cover only the works falling within the statutory enumeration or description." 92
Section 13, Article XIV of the Constitution accords protection to intellectual properties,
including copyright, as follows: "[t]he State shall protect and secure the exclusive rights of
scientists, inventors, artists, and other gifted citizens to their intellectual property and creations,
particularly when beneficial to the people, for such period as may be provided by law."
The declaration of state policies of the IPC acknowledges that "[t]he use of intellectual
property bears a social function. To this end, the State shall promote the diffusion of knowledge and
information for the promotion of national development and progress and the common good." 93 In
line with this, the Court held in ABS-CBN Broadcasting Corp. v. Philippine Multi-Media System, Inc. 94
that intellectual property protection must be consistent with public welfare, viz.:
[I]ntellectual 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. 95
Included in the category of copyright are musical works, which is the main subject of the case
at bench.
Musical Works: Covered by Copyright Protection
Musical works are protected by copyright from the moment of creation in accordance with
Sections 172 and 178 of the IPC, which provide:
SECTION 172. Literary and Artistic Works. — 172.1. Literary and artistic works, hereinafter
referred to as "works," are original intellectual creations in the literary and artistic domain
protected from the moment of their creation and shall include in particular:
xxx xxx xxx
(f) Musical compositions, with or without words;
xxx xxx xxx
SECTION 178. Rules of Copyright Ownership. — Copyright ownership shall be governed by
the following rules:
178.1 Subject to the provisions of this section, in the case of original literary and artistic
works, copyright shall belong to the author of the work;
xxx xxx xxx 96
Derivative works are likewise protected by copyright, to wit:
SECTION 173. Derivative Works. — 173.1. The following derivative works shall also be
protected by copyright:
(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other
alterations of literary or artistic works; and
(b) Collections of literary, scholarly or artistic works, and compilations of data and other
materials which are original by reason of the selection or coordination or arrangement of their
contents.
173.2. The works referred to in paragraphs (a) and (b) of Subsection 173.1 shall be
protected as new works: Provided, however, That such new work shall not affect the force of
any subsisting copyright upon the original works employed or any part thereof, or be
construed to imply any right to such use of the original works, or to secure or extend copyright
in such original works. 97
A musical composition 98 is an intangible work of art composed of a combination of sounds
perceptible to the senses. It is separate and distinct from the tangible object that embodies it, such
as a sheet music, 99 as described by Section 181 of the IPC:
SECTION 181. Copyright and Material Object. — The copyright is distinct from the property
in the material object subject to it. Consequently, the transfer or assignment of the copyright
shall not itself constitute a transfer of the material object. Nor shall a transfer or assignment of
the sole copy or of one or several copies of the work imply transfer or assignment of the
copyright. 100
As pointed out by Senior Associate Justice Marvic Mario Victor F. Leonen during deliberations,
the IPC also introduces the concept of "fixation" of a performance of a musical composition in a
"sound recording," 101 as follows:
SECTION 202. Definitions. — For the purpose of this Act, the following terms shall have the
following meanings:
xxx xxx xxx
202.2. "Sound recording" means the fixation of the sounds of a performance or of other
sounds, or representation of sound, other than in the form of a fixation incorporated in a
cinematographic or other audiovisual work;
xxx xxx xxx
202.4. "Fixation" means the embodiment of sounds, or of the representations thereof, from
which they can be perceived, reproduced or communicated through a device; 102
Chapters XII 103 and XIII 104 of the IPC govern the fixations of sounds in the form of sound
recordings. These chapters provide for the moral rights of the performers, the rights of producers of
sound recordings, and the limitations 105 on the said rights.
A distinction exists between a musical composition which is protected by copyright and the
performance or fixation of a musical composition. Such a distinction is relevant since not only the
composers, authors, and publishers, but also the performers and sound recording producers should
be remunerated when the fixation or performance of their sound recording is being performed in
public (although the focus of this petition is on composers, authors, and publishers as represented
by FILSCAP). aDSIHc
Infringing Activities in the Case at Bench

Yet, before declaring that copyright infringement was committed, the copyright owner must
establish the musical works that were subject of the infringing activity as well as the existing valid
copyright over the said works. This is because copyright is a statutory right with protections granted
by law insofar as those works qualify for the said protections. 106
In this case, it appears that the infringing activities were committed in two ways: performance
by a live band and playing of sound recordings.
With regard to the performance of music by live band, FILSCAP averred that the members of
the live bands performed musical works without the consent of the copyright holders. However, it is
unclear in FILSCAP's allegations whether the bands altered the musical compositions during their
performances, which may be considered as derivative works. Even so, the use of derivative works
does not downplay the copyright protections accorded to the original work, and should not be
considered as a free ticket to use the said original work without authority. In any case, FILSCAP did
not specify whether the live bands, independently of COSAC, secured authorization or were parties
to any contract which permitted them to publicly perform the musical works. At most, FILSCAP
maintained that COSAC, as the one which ultimately benefitted from the performances, should have
secured the required authority, and not the live bands themselves. As the owner of the
establishment, COSAC consented to the public performance of these live bands using copyrighted
music.
However, Senior Associate Justice Marvic Mario Victor F. Leonen initially observed that We
cannot automatically accept FILSCAP's argument that establishments lacking appropriate licenses
which do not prohibit live bands from performing copyrighted songs are infringers under Section
216 of the IPC prior to its amendment by RA 10372. 107 Here, it was not clarified during trial if the
members of the live bands were COSAC's employees. If the live bands which performed copyrighted
musical works without license would automatically be considered as COSAC's employees and result
in COSAC's solidary liability, it would be tantamount to expanding the purview of copyright
infringement under [RA] 8293, the applicable law in this case, although the expanded liability for
infringement was only introduced in [RA] 10372, which contained amendments not applicable to
this case. 108 This concern would further be addressed during the discussion, especially regarding
COSAC's indirect or vicarious liability, as it cannot be denied that the playing of live band music still
contributed to the overall benefit which COSAC received.
As regards the playing of specific fixations or sound recordings, it appears that aside from
infringing the copyright of the owners of the musical compositions, the rights of the performers and
producers of the sound recordings to remuneration for the public performances were likewise
breached. Sections 202.9, 209, and 206 of the IPC provide:
SECTION 202.9. "Communication to the public of a performance or a sound
recording" means the transmission to the public, by any medium, otherwise than by
broadcasting, of sounds of a performance or the representations of sounds fixed in a sound
recording. For purposes of Section 209, "communication to the public" includes making the
sounds or representations of sounds fixed in a sound recording audible to the public. 109
SECTION 209. Communication to the Public. — If a sound recording published for
commercial purposes, or a reproduction of such sound recording, is used directly for
broadcasting or for other communication to the public, or is publicly performed with the
intention of making and enhancing profit, a single equitable remuneration for the performer or
performers, and the producer of the sound recording shall be paid by the user to both the
performers and the producer, who, in the absence of any agreement shall share equally. 110
SECTION 206. Additional Remuneration for Subsequent Communications or
Broadcasts. — Unless otherwise provided in the contract, in every communication to the
public or broadcast of a performance subsequent to the first communication or broadcast
thereof by the broadcasting organization, the performer shall be entitled to an additional
remuneration equivalent to at least five percent (5%) of the original compensation he or she
received for the first communication or broadcast. 111
Insofar as sound recordings are concerned however, it would be premature to make a
distinction on the type of performance considering that this was never put into issue in the
proceedings before the RTC until it reached this Court. Stated differently, FILSCAP, in its pleadings,
did not differentiate the modes of playing the sound recordings. It merely alleged that COSAC
committed copyright infringement when it played copyrighted songs in its establishment through
live performance and sound recordings. Additionally, both the RTC and the CA focused on the
finding of copyright infringement, and did not delve into the methods of playing the sound
recordings. Given this restriction, it would be more judicious to say, specifically for this case, that
COSAC infringed the performing rights of the copyright owners. 112
In its complaint, FILSCAP stated that "to have a wonderful dining experience, [COSAC], as a
matter of policy and practice, plays copyrighted musical works within the premises of its restaurant.
This is confirmed by the presence of loud speakers installed and used within the confines of the
restaurant." 113 FILSCAP pointed out that Tanan admitted under oath that the establishment plays
music regularly, or every night 114 and that rock bands performed at Off the Grill to provide
entertainment to the public. 115 During Tanan's testimony, she disclosed the following details: ATICcS
Q: You mentioned and I'm curious, because you stated in your Affidavit that you are an
Accountant but you are in-charge of the monitoring operations of the restaurant?
A: The same.
Q: Which aspect of the operations of the restaurant are you monitoring?
A: The entertainment every night and the payment.
Q: And the payment to?
A: To the entertainers.
Q: So you can confirm to me that music is regularly being played?
A: Every night, sir.
Q: At Off the Grill?
A: Yes, sir. 116
xxx xxx xxx
Q: So every night, you play live music for the entertainment?
A: Yes, sir.
Q: But during the day and even during the night, you also play recorded music, cd music as
background before the band plays?
A: We have a monitor, MTV.
Q: You play? Please say that again?
A: MTV.
Q: You do not play cd music?
A: No, projector, sir. 117
xxx xxx xxx
Q: Earlier, you said, you confirmed to me that music is being played at the restaurant?
A: Yes, sir.
Q: Will you give me examples of the songs that were played inside the restaurant?
A: Acoustic songs, sir.
Q: Can you give me the title of the songs that were played that you can remember has been
played inside the restaurant?
A: Somewhere Down the Road, sir.
Q: What else?
A: Through the Fire. 118
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Q: In your Judicial Affidavit, paragraph 4, you mentioned that once music is played at the
airwaves, it already became a public property. What is your basis for saying this?
A: May kumakanta sa radio so hindi na natin hawak yung kinakanta nila so sa entertainment
po, hindi namin alam kung ano iyong mga kinakanta ng mga bawat entertainer.
Q: So, that is just your opinion?
A: Actually hindi po opinion, kasi po iyong sa mga band namin, they have their own songs
na pina-practice so hindi po namin alam kung ano iyong mga kinakanta nila dahil hindi
naman po pinapaalam sa amin for the night. 119
Hence, FILSCAP contended that "by hiring bands and other performers, [COSAC] made music
audible at the Off the Grill Bar and Restaurant, which is a place where persons outside the normal
circle of a family and that family's closest social acquaintances are or can be present. Furthermore,
[COSAC] likewise played, apart from live music[,] background music and music through monitor or
projector. These are clearly acts of infringement upon the public performing rights owned by
FILSCAP committed by [COSAC] as the public performances were done without the consent of or
license from FILSCAP." 120
FILSCAP insisted that COSAC "hired those bands to play music and sing songs in its
establishment to enhance its customers' drinking and dining experience, as well as improve the
general ambience of its establishment. By doing so, [COSAC] hopes to entice more of the general
public to patronize its establishment, more often. This was thus a business decision of [COSAC], in
line with its organizational objective of making more profits. [COSAC] constituted those bands as its
agents when it hired them to perform for it a service which was geared towards its profit-making
purpose. By the principles of the law of agency, [COSAC] is directly liable for the acts of its agents in
publicly performing copyrighted musical works without the requisite license from FILSCAP, ergo,
[COSAC] is liable for copyright infringement." 121
It is interesting to note that FILSCAP places the liability on COSAC as the owner of the
establishment which played the copyrighted music, and not on the live bands that performed
thereat. FILSCAP adds that COSAC "cannot feign ignorance and claim that it had no idea the bands
would play copyrighted musical works as part of the set of songs they would perform for the event.
[COSAC's] control of what music is played in its establishment is beyond question. If it does not like
the music or song being played, it can easily stop the band from continuing with its performance or
order them to change the song, in the same way that if it does not like the song playing on the
radio or mp3 player, it can easily turn said device off or switch it to another station or song." 122
Notably, FILSCAP avers that COSAC provided the venue and the opportunity where the bands
could publicly perform copyrighted musical works under FILSCAP's repertoire without the requisite
license. Thus, COSAC should be considered as a "principal by indispensable cooperation." Without
COSAC and its establishment, the bands could not have publicly performed the musical works on
the specific time and place where the infringements occurred. 123 It should be noted that with this
allegation, FILSCAP alluded to the kinds of infringers which RA 10372 later introduced, and which
will further be discussed. ETHIDa
For its part, though, COSAC simply asserts that at night, rock bands perform at Off the Grill to
provide entertainment to the customers, 124 and maintains that the bands or the singers are the
ones who are performing or singing the copyrighted works of the authors and composers. 125
Intent to Profit: Economic Rights under the IPC
Based on FILSCAP's allegations, COSAC benefitted from the performance in public of
copyrighted songs at Off the Grill. While the primary purpose of the establishment is to generate
profit, the restaurant owner should bear in mind that the use or performance of copyrighted music
should not unduly infringe the rights of the copyright owners or holders. In relation to this, there is a
need to revisit the 1987 case of FILSCAP v. Tan 126 (Tan).
I n Tan , the restaurant hired professional singers who performed musical compositions to
entertain the customers, but without prior authority from FILSCAP which had rights to the songs.
The Court ruled that after release, the songs played in the establishment already became part of
the public domain and thus, no infringement was committed. However, under the prevailing law at
that time, the musical composition needed to be registered first before the economic rights
attached to the copyright can be enforced. Specifically, the Court then pronounced that "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 [and becomes public property]." 127 Later on, the law on
intellectual property was amended (to RA 8293, which was approved on June 6, 1997 but took
effect on January 1, 1998) to state that original works are protected from the moment of creation
and no longer just from the date of registration.
What is relevant in Tan , however, is that the element of profit was considered, in that
ultimately, the establishment derived revenue from the playing of live band music even if the
patrons primarily paid for the food and drinks. Simply put, the public performance of the musical
works was made essentially for the realization of profit. It should be stressed, however, that Act No.
3134, the prevailing law when Tan was resolved, expressly mentioned "profit" 128 in connection with
"performance." Meanwhile, Sections 171.6 and 177.6 of the IPC no longer mentioned "profit" in
relation to "public performance." 129 As such, when considering cases which were filed after Act No.
3134 was amended, "profit" should not be the controlling factor in assessing whether one
committed copyright infringement after the performance in public of the musical works, although
"profit" would be relevant in evaluating if the case falls under the limitations on copyright or the fair
use doctrine (which will briefly be mentioned later). Nevertheless, the Court in Tan held that:
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. It will be noted that for the
playing and singing the musical compositions involved, the combo was paid as independent
contractors by the appellant. 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). 130 (Citations omitted).
The IPC, before its amendment in 2013, did not distinguish if the public performance was
conducted or made possible by the owners of the establishment, the performers, or other
individuals and entities. Undeniably, however, the performance in public of the copyrighted works,
either directly or by means of any device or process, reached persons outside the normal circle of a
family and that family's closest social acquaintances. This is how Off the Grill "performed" 131 the
copyrighted musical works under FILSCAP's repertoire, even with the knowledge that the music is
protected by copyright with the corresponding exclusive economic rights pursuant to Section 177 of
the IPC, viz.:
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;
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. 132 (Emphases and
underscoring supplied).
Sections 174 and 178 of the IPC similarly provide:
SECTION 174. Published Edition of Work. — In addition to the right to publish granted
by the author, his heirs, or assigns, the publisher shall have a copyright consisting merely of
the right of reproduction of the typographical arrangement of the published edition of the
work. 133
SECTION 178. Rules on Copyright Ownership. — Copyright ownership shall be
governed by the following rules: TIADCc
178.1. Subject to the provisions of this section, in the case of original literary and
artistic works, copyright shall belong to the author of the work;
xxx xxx xxx
178.5. In the case of audiovisual work, the copyright shall belong to the producer,
the author of the scenario, the composer of the music, the film director, and the author of the
work so adapted. However, subject to contrary or other stipulations among the creators, the
producer shall exercise the copyright to an extent required for the exhibition of the work in
any manner, except for the right to collect performing license fees for the performance of
musical compositions, with or without words, which are incorporated into the work; 134
Copyright Infringement
Since the economic rights provided by the IPC are exclusive in nature, not just anyone can
exercise such rights. In other words, the use of any copyrighted material without the consent of the
copyright owner (or his/her assignee), and which violates these economic rights, shall amount to
copyright infringement.
Infringement of a copyright is a trespass on a private domain owned and occupied by
the owner [or assignee] 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 [or assignee] of the copyright, of anything the
sole right to do which is conferred by statute on the owner [or assignee] of the copyright. 135
The 'gravamen of copyright infringement,' according to NBI-Microsoft Corporation v. Hwang,
136
[I]s not merely the unauthorized 'manufacturing' of intellectual works but rather the
unauthorized performance of any of the acts covered by Section 5. Hence, any person who
performs any of the acts under Section 5 without obtaining the copyright owner's prior consent
renders himself civilly 137 and criminally 138 liable for copyright infringement. 139
To successfully claim that copyright infringement was committed, the evidence must show the
"(1) ownership of a validly copyrighted material by the complainant; and (2) infringement of the
copyright by the respondent." 140
For the first element, as already mentioned, original and derivative works are protected by
copyright from the moment of creation. The copyright owners can then enforce their rights,
especially economic rights, without the need for prior reporting or recording. In the same way, the
copyright owners can assign their rights to an assignee, and this assignment need not be registered
for it to be valid. Thereafter, the copyright owners or their assignee can properly pursue the
protection and enforcement of these rights.
The second element is comprised of two (2) components: (1) the act of infringement; and (2)
the defendant or respondent who committed the act of infringement.
Act of Infringement
The first component or the infringing act, "is not merely the unauthorized 'manufacturing' of
intellectual works but rather the unauthorized performance" 141 of any of the acts covered by the
exclusive economic rights provided under Section 177 of the IPC of the copyright owners or their
assignee. Nonetheless, there are instances when certain acts shall not constitute as infringement,
such as those covered by Section 184 on "Limitations on Copyright" and Section 185 on "Fair Use of
a Copyrighted Work," of the IPC, as follows:
SECTION 184. Limitations on Copyright. — 184.1. Notwithstanding the provisions of
Chapter V, the following acts shall not constitute infringement of copyright:
(a) The recitation or performance of a work, once it has been lawfully made
accessible to the public, if done privately and free of charge or if made strictly for a charitable
or religious institution or society;
(b) The making of quotations from a published work if they are compatible with fair
use and only to the extent justified for the purpose, including quotations from newspaper
articles and periodicals in the form of press summaries: Provided, That the source and the
name of the author, if appearing on the work, are mentioned;
(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;
(d) The reproduction and communication to the public of literary, scientific or artistic
works as part of reports of current events by means of photography, cinematography or
broadcasting to the extent necessary for the purpose;
(e) The inclusion of a work in a publication, broadcast, or other communication to
the public, sound recording or film, if such inclusion is made by way of illustration for teaching
purposes and is compatible with fair use: Provided, That the source and the name of the
author, if appearing in the work, are mentioned;
(f) The recording made in schools, universities, or educational institutions of a work
included in a broadcast for the use of such schools, universities or educational institutions:
Provided, That such recording must be deleted within a reasonable period after they were first
broadcast: Provided, further, That such recording may not be made from audiovisual works
which are part of the general cinema repertoire of feature films except for brief excerpts of the
work;
(g) The making of ephemeral recordings by a broadcasting organization by means of
its own facilities and for use in its own broadcast;
(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; cSEDTC
(i) The public performance or the communication to the public of a work, in

a place where no admission fee is charged in respect of such public performance or
communication, by a club or institution for charitable or educational purpose only,
whose aim is not profit making, subject to such other limitations as may be
provided in the Regulations; (n)
(j) Public display of the original or a copy of the work not made by means of a film,
slide, television image or otherwise on screen or by means of any other device or process:
Provided, That either the work has been published, or, that the original or the copy displayed
has been sold, given away or otherwise transferred to another person by the author or his
successor in title; and (k) Any use made of a work for the purpose of any judicial proceedings
or for the giving of professional advice by a legal practitioner. (Citations omitted).
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. 142
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.
Decompilation, which is understood here to be the reproduction of the code and translation of
the forms of the computer program to achieve the inter-operability of an independently
created computer program with other programs may also constitute fair use. 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.
185.2. The fact that a work is unpublished shall not by itself bar a finding of fair use
if such finding is made upon consideration of all the above factors. 143 (Emphasis supplied).
It can thus be inferred that the copyright owners do not have the unlimited and absolute right
to limit, restrict, authorize or permit the performances of their works, based on Sections 184 and
185 of the IPC. Nonetheless, the parties in this case did not raise as issues the application of
limitations on copyright and the concept of fair use. Even so, a brief yet necessary discussion on
these two fundamental concepts is useful.
The limitations on copyright specify the situations which, although involving the use of
copyrighted material, do not amount to infringement. In particular, paragraph (i) of Section 184 of
the IPC provides that for a performance to be exempt, these requisites should be satisfied: 144
(i) The place where the performance is made does not charge any admission fee in respect
of such performance or communication;
(ii) The performance is made by a club or institution: (a) for charitable or educational
purpose only; and (b) whose aim is not profit making; and
(iii) Such other requirements that may be prescribed under the implementing rules and
regulations promulgated by the Director General of the [IPO].

For the first requisite, charging an admission fee does not automatically remove the playing of
copyrighted music from this exemption. But if the admission fee is "charged in respect of such
performance" then it would not be covered by the exemption. Otherwise stated, charging an
admission fee for some other purpose not in connection with the playing of the work could still be
exempt under this provision. 145
Regarding the second requisite, the club or institution should both be for a charitable or
educational purpose and not for profit, 146 in that "no net income or asset accrues to or benefits
any member or specific person, with all [its] net income or asset[s] devoted to the institution's
purposes and all its activities conducted not for profit." 147 A charitable institution should be one
that "provide[s] for free goods and services to the public which would otherwise fall on the
shoulders of the government," 148 while an educational institution should be a school, seminary,
college, or other similar educational establishment under the formal school system. 149
As for the fair use doctrine, the case ofABS-CBN Corporation v. Gozon 150 (Gozon) described it
as "'a privilege 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.' 151 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.'" 152 Gozon continues to state that "in its current
form, the [IPC] 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." 153
Pertaining to the fair use doctrine, Gozon elucidates:
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
b. The nature of the copyrighted work;
c. The amount and substantiality of the portion used in relation to the copyrighted
d. The effect of the use upon the potential market for or value of the copyrighted
work. AIDSTE
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.' 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. This court must look into whether the copy of the work adds
'new expression, meaning or message' to transform it into something else. 'Meta-use' can also
occur without necessarily transforming the copyrighted work used.
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. 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. 154 (Emphases supplied,
citations omitted)
These four factors should be considered together in establishing a case hinged on fair use, as
these are not individually conclusive. 155
First Factor of Fair Use: The Purpose and Character of the Use
The purpose and character of the use of the copyrighted work, whether it is for commercial or
nonprofit educational purposes, should be determined. Thus, "if the new work clearly has
transformative use and value, a finding of fair use is more likely even if the user stands to profit
from his or her new work. Conversely, if the new work merely supplants the object of the original
work, i.e., it has no transformative value, and is commercial in nature, the first factor will most likely
be weighed against a finding of fair use. Needless to state, if the new work has transformative use
and value, and was created for a noncommercial purpose or use, the scale will highly likely be
swayed in favor of fair use." 156 To illustrate, examples of transformative use are those listed in
Section 185 of the IPC, i.e., for criticism, comment, news reporting, teaching, scholarship, research,
and similar purposes. 157
Second Factor of Fair Use: The Nature of the Copyrighted Work
In this factor, such "calls for recognition that some works are closer to the core of intended
copyright protection than others, with the consequence that fair use is more difficult to establish
when the former works are copied." 158 For example, the fair use defense carries more weight in
case of factual works compared to fiction and fantasy, since generally, there is a greater need to
disseminate the former than the latter. 159 Similarly, if the copied work is unpublished, such is a
clear indication of its "nature," as the "scope of fair use is narrower with respect to unpublished
works." 160 Hence, "the closer the work is to the core of copyright protection —i.e., the more
creative, imaginative, or original the copied work is, the more likely will fair use be rejected as a
defense against infringement." 161
Third Factor of Fair Use: The Amount and Substantiality of the Portion Used
This factor relates to the reasonableness of the amount and substantiality of the portion used
concerning the copyrighted material as a whole. Additionally, focus must be directed on whether
the amount of copying leads to a valid and transformative purpose, which is related to the first
factor (the purpose and character of use), even if the entire work is copied but is hinged on a
different function compared to the original. 162
Fourth Factor of Fair Use: The Effect of the Use Upon the Potential Market for or Value of the
Copyrighted Work
Considered as the most important element of fair use,163 the last factor "requires the courts
to consider not only the extent of market harm caused by the particular actions of the alleged
infringer, but also 'whether unrestricted and widespread conduct of the sort engaged in by
the defendant . . . would result in substantially adverse impact on the potential market' for
the original" 164 and derivative works. 165
In [Hustler Magazine v. Moral Majority, Inc. ], the US Court held that in order to
determine the potential harm to a copyrighted work, the courts should focus on whether the
infringing use: (1) 'tends to diminish or prejudice the potential sale of the work; (2) tends to
interfere with its marketability of the work; or (3) fulfill the demand for the original work.' 166
In this case, the US Court considered the following factors in concluding that the impact of
defendant's use of plaintiff's work was nil: (a) the plaintiff's work was first issued or released
long befoe defendant's mailings went out; (b) 'the effect on the marketability of back issues of
the magazine is de minimis because it is only one page of a publication'; and (c) defendant's
uses did not cause plaintiff any competitive injury since defendant was not selling or
distributing copies of the ad parodies to plaintiff's followers. 167
Thus, "[w]here the profit generated by the alleged infringement substitutes for what the owner
or creator could make, this bars the concept of fair use. But where the benefits are complementary
or incidental, then fair use may be properly considered." 168
In any case, the playing of music in Off the Grill was not done privately, and the establishment
is not a charitable or religious institution or society. Additionally, the playing of the creative
copyrighted music in Off the Grill was commercial in nature, and will work against the copyright
owners' interests. Thus, COSAC's acts did not fall under the said limitations and the fair use
doctrine. SDAaTC
In other words, the playing of musical compositions or sound recordings at Off the Grill,
regardless of the medium used, whether via live band or through the use of speakers or monitors,
does not fall under any of the limitations or the concept of fair use. Notably, the IPC did not provide
parameters to determine how an entity or individual would be deemed as exempt in certain
instances. There is no law, rule or previous jurisprudence delineating the treatment for copyright
music infringers, whether it be big businesses ("large-scale users") or small establishments ("small-
scale users"). Additionally, the IPC did not expressly make distinctions as to the possible levels of
liabilities or exemptions if the copyrighted music would be played using different media. It did not
categorize the "treatments" per medium, if the use would be sourced from a television/radio
broadcast, personal recordings through a CD or mp3s, music videos, etc. Hence, where the law
does not distinguish, We must not distinguish. 169
This is noticeably different from other jurisdictions, as the laws in some countries
distinguished the kind of medium used, and specified the quantity as well as the area of coverage
of the establishment before one can be considered as exempt. In Our jurisdiction, the IPC did not
make a distinction on: (a) the area of coverage of the establishment; (b) the number of loud
speakers or television monitors used; (c) the transmission of the reception; and, (d) the entrance or
admission fees to an establishment, for an entity to be considered as exempt from the licensing
fees. 170
These matters could have been properly delineated and clarified if the provisions of the IPC
were supplemented by implementing rules and regulations or actually amended to address the
changing milieu of copyrighted musical works. It would have been informative with respect to
copyrighted musical works which have many facets, classifications, and media. Still, these concerns
would be better addressed by the legislative department, considering the social function or
common good element of intellectual property creations as well as the aim to balance the interests
of the copyright owners and the public. Regardless, the IPC, specifically the prevailing version at the
time COSAC allegedly committed infringing acts, states that public performance can be done
"either directly or by means of any device or process" or "making the recorded sounds
audible at a place or at places where persons outside the normal circle of a family and
that family's closest social acquaintances are or can be present."
Nevertheless, a discussion on these specifications would also be premature since none of the
parties raised this as an issue. More importantly, it was established that regardless of the
medium used, COSAC allowed the playing of copyrighted music in its restaurant.
It should be noted, though, that the copyright owners' economic rights are hinged on profit, in
the sense that the valid use of the copyrighted works serves as reasonable compensation for the
owners' hard work, and to further urge them to create or develop more materials. 171 Even so, the
key objective is "to encourage the production of original literary, artistic, and musical expression for
the public good." 172 Additionally, "[t]he primary purpose of copyright law is not so much to protect
the interests of the authors/creators, but rather to promote the progress of science and the useful
arts — that is — knowledge. To accomplish this purpose, copyright ownership encourages
authors/creators in their efforts by granting them a temporary monopoly, or ownership of exclusive
rights for a specified length of time. However, this monopoly is somewhat limited when it conflicts
with an overriding public interest, such as encouraging new creative and intellectual works, or the
necessity for some members of the public to make a single copy of a work for [non-profit],
educational purposes." 173
In the same vein, the Supreme Court of the United States (US Supreme Court) held in
Twentieth Century Music Corp. v. Aiken 174 that:
The limited scope of the copyright holder's statutory monopoly, like the limited
copyright duration required by the Constitution, reflects a balance of competing claims upon
the public interest: creative work is to be encouraged and rewarded, but private motivation
must ultimately serve the cause of promoting broad public availability of literature, music, and
the other arts. The immediate effect of our copyright law is to secure a fair return for an
'author's' creative labor. But the ultimate aim is, by this incentive, to stimulate artistic
creativity for the general public good. 'The sole interest of the United States and the primary
object in conferring the monopoly.' this Court has said, 'lie in the general benefits derived by
the public from the labors of authors.' 175
With these considerations, it appears that, as noted by then Senior Associate Justice Estela M.
Perlas-Bernabe 176 (SAJ Bernabe, Ret.) during the deliberations prior to her retirement, there is a
balancing of interests between the copyright owners (or their assignees) and the public who benefit
from the use of copyrighted materials. As can be gleaned from Sections 184 and 185 of the IPC, the
"unauthorized use" of copyrighted works may be allowed and not characterized as infringement.
Notably, such permitted "use" of copyrighted works has a non-profit aspect, such as for
educational, charitable, judicial, scientific, or other recognized purposes under the law. 177 The
"use" in the said fields will not significantly or unfavorably impact the copyright holders' exclusive
economic rights, but will be in consonance with the policy that copyright laws should promote
creativity and knowledge for the good of the public.
To emphasize, for an act to be considered as copyright infringement, it must not fall under
Section 177 of the IPC, and at the same time must not be covered by Sections 184 (Limitations on
Copyright) and 185 (Fair Use Doctrine).
Persons Who Commit Acts of Infringement
For the second component of the second element, based on Sections 216 and 216.1 of the
IPC, "any person infringing a right protected under [the IPC] shall be liable x x x." This provision was
subsequently refined by the passage of RA 10372 178 in 2013. Specifically, RA 10372 distinguished
the "roles" of an infringer as follows: (1) directly commits an infringement; (2) benefits from the
infringing activity of another person who commits an infringement if the person benefiting has been
given notice of the infringing activity and has the right and ability to control the activities of the
other person; and (3) with knowledge of the infringing activity, induces, causes or materially
contributes to the infringing conduct of another. 179
SAJ Bernabe, Ret. opines 180 that Sections 216 and 216.1 of the IPC, as amended by RA 10372,
contemplate two (2) different kinds of copyright infringers, specifically: (a) primary infringers or
those who directly commit the infringing acts; and (b) secondary infringers or those who induce,
materially contribute to, or benefit from, an infringing act of another. It should be stressed, though,
that since RA 10372 was enacted in 2013, or after COSAC allegedly committed the infringing acts,
the original provisions of RA 8293 should be controlling in this case. Basically, the enumeration
pertaining to the different types of infringers provided by RA 10372 cannot strictly apply in the
instant case.
Yet, as aptly explained by SAJ Bernabe, Ret.:
Despite the seeming lack of recognition of the dichotomy between primary and
secondary infringers under the original Sections 216 and 216.1 [of RA 8293], it is nevertheless
submitted that the phrase '[a]ny person infringing a right protected under this law shall be
liable x x x' may be interpreted to be broad enough to include all those who had a part
with the infringing activity, whether directly (primary infringers) or indirectly
(secondary infringers) — and that the RA 10372 amendments should be considered as a
mere refinement of the phraseology of the coverage of copyright infringement meant
only to explicitly codify what was already implied in the old law in order to further
strengthen the enforcement of copyright-related rights. 181 AaCTcI
She adds that this view is supported by copyright law and related jurisprudence in the United
States (US), which hold persuasive value in the Philippine jurisdiction given that our country's
copyright laws trace its roots from the US. 182 For instance, the Copyright Act of 1976 of the US is
now reflected as Title 17 of the US Code (17 USC). 17 USC § 501 (a), 183 just like Sections 216 and
216.1 of the IPC, does not enumerate the different types of infringers, as it merely states "anyone
who violates" the rights of the copyright owner or author. Simply put, the said provisions do not
expressly provide for liability characterized as secondary infringement. Even so, US jurisprudence,
184 based on common law principles, recognizes that liability characterized as secondary
infringement should be penalized. Relevantly, in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster,
Ltd. 185 (MGM), the US Supreme Court ruled that "[a]lthough '[t]he Copyright Act does not expressly
render anyone liable for infringement committed by another,' these doctrines of secondary liability
emerged from common law principles and are well established in the law." Thus, as opined by SAJ
Bernabe, Ret., since the legal system of the Philippines is "a blend of customary usage, and Roman
(civil law) and Anglo-American (common law) systems," 186 We can adopt the view regarding
common law principles related to secondary infringement. Thus, secondary infringers may be
recognized and penalized, given the persuasive nature of US law in connection with Philippine law
and in order to complement the old Sections 216 and 216.1 of the IPC.
In relation to this, under US law, copyright infringement is seen in the nature of a tort, and all
those who take part in the infringing act are jointly and severally liable. 187 The US cases of EMI April
Music, Inc. v. White , 188 Shapiro v. H. L. Green Co., 189 and MGM, clarified that a person can be held
liable for copyright infringement based on the acts of another — if one benefits from the infringing
act; if a person contributes to the infringement by inducing direct infringing acts; or infringes
vicariously by profiting from direct infringement while declining to exercise a right to stop/limit it.
US case law also provides for sub-classifications of secondary liability, as follows: (a)
inducement theory; (b) contributory infringement; and (c) vicarious infringement.
Under the inducement theory, when a person induces the commission of an infringing act by
another party, or persuades another to commit infringement, he/she shall be liable. 190 Next,
contributory infringement happens when a person, aware of the infringing activity, induces, causes
or materially contributes to the infringing act of another. 191
Finally, vicarious infringement has two (2) elements: (1) a defendant possesses the right and
ability to supervise the infringing act; and (2) the defendant must have "an obvious and direct
financial interest in the exploitation of copyrighted material." 192 In this mode, knowledge or lack
thereof of the infringement is immaterial in the determination of vicarious liability. 193
The US case of ABKCO Music, Inc. v. Washington 194 ruled that the secondary liability of an
infringer may be founded on both contributory and vicarious infringement, as when the secondary
infringer has a financial interest in the act of infringement and also materially contributed to the
commission of the said act.
Therefore, to hold a defendant or respondent liable, the evidence must show that he or she is
either a direct infringer or a secondary infringer, in relation to the exclusive economic rights of a
copyright owner (or assignee) which are not covered by the fair use doctrine or the limitations on
copyright under the IPC.
Copyright Infringement: COSAC's Liability
All the elements of copyright infringement, (1) ownership of a validly copyrighted material by
the complainant and (2) infringement of the copyright by the respondent, are present in this case.
The songs that were played in Off the Grill are copyrighted works, and the copyright owners have a
right to enforce their exclusive economic rights. COSAC, through the testimony of Tanan, admitted
that it allowed the playing of the copyrighted songs in the restaurant. Such performances were not
covered by the limitations on copyright or the fair use doctrine. More importantly, these were
carried out to realize profits for the establishment. Ergo, COSAC committed copyright
infringement.
To be more precise, COSAC is a primary infringer, and also a secondary infringer under the
concept of vicarious infringement. This is because as owner of Off the Grill, it allowed the
commission of infringing acts when it permitted musical artists or bands to perform copyrighted
music (secondary infringer), and played sound recordings as background music (primary infringer)
without first procuring a license from the copyright owners (or assignees) of the songs and paying
the fee. By doing so, COSAC unduly enriched itself when it allowed the playing in public of
copyrighted songs which in turn paved the way for it to generate more profit without any additional
expense to it. This contravenes the aim of copyright laws to protect and compensate authors and
the artists, as well as encourage them to produce more creations for the eventual benefit of the
public. FILSCAP's allegation that COSAC is a principal by indispensable cooperation, in a way, finds
basis in this rationale.
Designation of FILSCAP
In view of these, the copyright owners of the musical works can rightly assert their economic
rights when their copyrighted songs are being played or performed without their consent or
authorization. FILSCAP even asserted that notice and demand from the copyright owner is not
required for the infringer to be liable for copyright infringement. 195 To effectively enforce their
economic rights, the copyright owners can designate a society of artists, writers or composers on
their behalf, like FILSCAP, as provided by Section 183 196 of the IPC. This designation is achieved
through deeds of assignment, exactly how various copyright owners had assigned to FILSCAP the
protection and enforcement of their rights on their behalf. The deeds of assignment between
FILSCAP and the copyright owners contained the following pertinent provisions:
1. DEFINITIONS
a) "Copyright work" shall mean and include —
xxx xxx xxx
b) "right of public performance" shall, as provided in Section 171.6 of [the IPC] x
xx
c) "right of communication to the public" shall mean the right . . . per Section
171.3 of [the IPC]
d) The expression "public performing rights" shall mean (b) [right of public
performance] and (c) [right of communication to the public] above.
2. ASSIGNMENT OF PUBLIC PERFORMING RIGHTS
a. ASSIGNOR assigns to FILSCAP, the PUBLIC PERFORMING RIGHTS in ALL copyright
works x x x, together with all interests and shares of the ASSIGNOR x x x
b. FILSCAP shall own, hold, control, administer and enforce said public performing
rights on an exclusive basis x x x.
c. ASSIGNOR shall x x x make, constitute and appoint FILSCAP as his/her true and
lawful attorney, with full power and authority to execute all documents and do all acts,
including licensing of the rights herein assigned, that may be necessary, proper or expedient
to effectively administer/enforce the public performing rights of ASSIGNOR in all his/her
copyright works. acEHCD
xxx xxx xxx

5. DISTRIBUTION OF ROYALTIES
a. FILSCAP shall from time to time pay ASSIGNOR such sums of money out of the
royalties FILSCAP has collected from the exercise or licensing of the rights herein assigned in
accordance with the distribution guidelines set by the FILSCAP Board of Trustees.
xxx xxx xxx 197
In like manner, the reciprocal representation agreements executed by the foreign societies in
favor of FILSCAP essentially stipulated the following:
[They] assign to FILSCAP the performing right x x x, in the territories in which this latter
Society operates x x x, and the right to authorize all public performances x x x of musical
works, with or without lyrics, which are protected under the terms of national laws, bilateral
treaties and multilateral international conventions relating to the author's right (copyright,
intellectual property, etc.) x x x.
The assignment of the performing right as referred to x x x entitles each of the
contracting Societies, x x x
a) to permit or prohibit x x x public performance of works in the repertoire of the
other Society and to issue the necessary authorizations for such performances;
b) to collect all royalties required in return for the authorizations issued by it x x x;
c) to receive all sums due as indemnification or damages for unauthorized
performances of the works in question;
d) to commence and pursue x x x any legal action against any person or corporate
body and any administrative or other authority responsible for illegal performance of the
works in question;
e) to transact, compromise, submit to arbitration, refer to any Court of Law, special
or administrative tribunal;
f) to take other action for the purpose of ensuring the protection of the public
performance right in the works covered by the present contract. 198
It should be mentioned that "at most, an assignee can only acquire rights duplicating those
which his assignor is entitled by law to exercise." 199 Necessarily, FILSCAP's scope of authority is
limited by what the deeds or agreements specifically provide. Relevantly, too, FILSCAP alleged that
it represents "composers, lyricists/authors, and music publishers." As additional information, since
FILSCAP is currently recognized and accredited by the IPO 200 as a Collective Management
Organization (CMO), 201 it essentially has the personality to step in to protect the rights of copyright
owners, specifically composers, lyricists, music publishers, and other music copyright owners, 202 as
long as the copyrighted songs are under FILSCAP's catalogue.
Therefore, FILSCAP, as the assignee, "is entitled to all the rights and remedies which the
assignor had with respect to the copyright." 203 If FILSCAP determines that there is an infringement
of the copyrighted musical works, it can pursue appropriate measures to protect its rights and that
of the assignors. The remedies for infringement relevant to the instant case are stated in Section
216 of the IPC, prior to its amendment by RA 10372 in 2013, as follows:
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.
xxx xxx xxx
(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.

xxx xxx xxx 204 (Emphasis Supplied).
COSAC failed to rebut FILSCAP's claim that Off the Grill played copyrighted music either
through a live band or sound recordings without any license from the Society. As the assignee,
FILSCAP rightly sought to protect the copyrighted musical works by requiring COSAC, through
demand letters, to procure the authorization to play the songs and also to pay the corresponding
fees. Since COSAC refused to comply, FILSCAP properly resorted to filing a complaint before the trial
court to compel COSAC to secure a license and pay the fees before conducting or allowing any
further performance of the copyrighted songs at Off the Grill.
Registration Not Required;
For Recording Purposes Only
With the presentation of the certifications 205 from the National Library and the deeds of
assignment 206 of various musical artists in its favor, FILSCAP was able to establish its authority to
enforce the rights of the assignors, especially when an establishment plays the copyrighted music
without a "license." The same applies to the foreign societies' copyrighted music, with the
corresponding certification from the National Library of the reciprocal representation agreements.
207
Even so, COSAC argues that FILSCAP should have caused the publication of the deeds of
assignment and the reciprocal representation agreements in the IPO Gazette to properly inform the
public of its authority. We are not persuaded. Section 182 of the IPC provides:
Section 182. Filing of Assignment or License. — An assignment or exclusive license
may be filed in duplicate with the National Library upon payment of the prescribed fee for
registration in books and records kept for the purpose. Upon recording, a copy of the
instrument shall be returned to the sender with a notation of the fact of record. Notice of the
record shall be published in the IPO Gazette. 208
Thus, if the author or assignee opts to file a duplicate of the deed or agreement, a record of
the said filing will be kept by the National Library. A notation of the fact of record shall be given to
the sender or the filer. Thereafter, a notice of the said record shall be published in the IPO Gazette.
Withal, the provision suggests that filing a duplicate of the document assigning the rights to
copyrighted musical works is permissive and not mandatory upon the author or the assignee.
As uniformly found by both the RTC and the CA, the filing of a duplicate copy of the deed of
assignment or the reciprocal representation agreement with the National Library is not required.
Instead, filing a duplicate copy of the deed or agreement with the National Library is discretionary
on the part of either the author or the assignee. Since the filing is optional, the authors or their
assignees cannot be compelled to file a duplicate copy of the document evidencing the assignment,
and have the deeds or agreements published in the IPO Gazette before their rights can be invoked
or enforced.
FILSCAP aptly stated that "[c]onsidering that the Deeds of Assignment and Reciprocal
Agreements are not required to be registered with the National Library, then much less is their
publication in the IPO Gazette required. The filing of the assignment of copyright is a pre-requisite
for publication, such that if no assignment is filed, then there can be no publication to speak of." 209
In addition, the Court sustains FILSCAP's fitting explanation regarding the intent of the framers
of the IPC, when juxtaposed with Presidential Decree (PD) No. 49, the preceding law, and other
provisions in the IPC, as follows:
85. Furthermore, an analysis of the legislative history of Section 182 of the IP Code,
as well as a comparison of the said provision with the other provisions of the IP Code will
confirm that there is no question that the filing of copyright assignment instruments with the
National Library is not mandatory and that the failure to file the said instruments will not
render the instrument void as to third persons.
86. Prior to Section 182 of the IP Code, Presidential Decree No. 49, promulgated on
14 November 1972, mandated the filing of the assignment of a copyright with the National
Library and provided a penalty for non-compliance, to wit:
'SECTION 19. Every assignment, license or other instrument relating to any right,
title or interest in a copyright and to the work subject to it shall be filed in duplicate with the
National Library upon payment of the prescribed fee for registration in books and records kept
for the purpose. Upon recording, a copy of the instrument shall be returned to the sender with
a notation of the fact of record. Notice of the record shall be published in the Official Gazette.
Such [instrumentalities] 210 shall be void as against any subsequent purchaser
or mortgagee for valuable consideration and without notice unless it is recorded in
the library prior to the subsequent purchase or mortgage.

87. Obviously, if it were the intention of the Philippine Congress to make it
mandatory to file the assignment of copyright with the National Library, the second paragraph
in Section 19 of PD No. 49 as quoted above should have been retained in Section 182 of the IP
Code. It was not. EcTCAD
88. The permissive character of registration of assignment of copyright is likewise

highlighted by a comparison of the provisions of the IP Code on registration of an assignment
of copyright as against the IP Code provisions on registration of trademark assignment and
patent assignment.
88.1 Registration with IPO is required for assignments, licenses and other
instruments relating to the transmission of any right, title or interest in and to inventions, and
patents or application for patents or inventions within three (3) months from the date of the
instrument, or prior to a purchase or mortgage. If the instrument is not registered, it is void as
against a subsequent purchaser or mortgagee for valuable consideration and without notice.
88.2 The IP Code likewise requires IPO recording of assignments and transfers of
trademark application or registration for the same to be effective against third parties. The
rule is likewise the same for license contracts involving a trademark application or
registration. 211
Simply put, if the legislative intent was to void the deeds or agreements in case of non-
publication in the IPO Gazette, then a provision requiring said publication should have been
expressly stated in the IPC. Absent such a provision, there is no basis to conclude that non-
publication in the IPO Gazette of copies of the deeds or agreements would automatically render
void these documents.
Notably, under the old copyright laws, 212 registration and deposit of the work were required
before it can be protected. In the aforementioned Tan case, which was decided under these old
copyright laws, the Court ruled that while the acts of the respondent in playing live band music in
the restaurant constituted as copyright infringement, he could not be held liable since the owners of
the musical works did not comply with the formalities required by the old copyright laws. Such
failure constituted as a waiver on the owners' part to enforce their copyright ownership, and thus,
they cannot enjoy copyright protection over their works. As a consequence, their musical works
became property of the public domain.
Yet, pursuant to the Berne Convention, 213 of which the Philippines is a signatory, the
enjoyment of rights protected by copyright "shall not be subject to any formality; such enjoyment
and such exercise shall be independent of the existence of protection in the country of origin of
work." 214 Hence, in the past, while formalities were required before a work may be protected, the
country's copyright laws later on shifted to conferring protection from the moment of creation.
215 Accordingly, under the IPC, original and derivative 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, 216 and shall extend during the life of the author and for fifty (50) more years after his/her
death. 217
Again, as SAJ Bernabe, Ret. stated, while the IPC still provides pointers regarding the
registration and deposit of copyrighted works, the objective for doing so is for recording only.
Such recording will not affect the copyright's validity, including the rights and protections that are
attached to it. Withal, failure to register an assignment or licensing agreement involving
copyrighted works should not impact the validity of such transactions. 218 Rather, the purpose of
registration is to protect subsequent purchasers or mortgagees for value and without notice, since
in principle, it is similar to the filing and recording statute pertaining to chattel mortgages. 219 Thus,
FILSCAP, as the assignee in this case, can register and deposit copyrighted works on behalf of the
authors/owners, but only with the aim to successfully record the same.
In fine, non-registration or deposit of the works with the National Library will not affect the
validity of the copyright, as these works are protected from the moment of creation, and given that
the registration is purely for recording purposes. To stress, copyright holders or their assignees
have the basis to enforce their rights and take action against any person or entity who infringes on
the said rights even absent such recording.
FILSCAP's Remedies
As the assignee, FILSCAP has the right to demand compensation for the playing or
performance in public of copyrighted musical works under its catalogue in
establishments or other venues, when infringement is being committed due to the
absence of a license and payment of fees.
Relevantly, the RTC granted FILSCAP actual damages representing unpaid license
fees/royalties as well as monitoring expenses (both with legal interest), attorney's fees and litigation
expenses, and costs of suit. However, the RTC did not grant FILSCAP's prayer to compel COSAC to
secure a public performance license and to pay for the fees. Since FILSCAP did not appeal these
aspects, these are deemed waived and considered to have become final as against it. 220 It should
be emphasized, however, that failure to procure a license from FILSCAP and pay the necessary fees
before allowing the playing or public performance of copyrighted works will still amount to copyright
infringement. Nonetheless, the CA upheld the RTC's ruling on license fees/royalties but ordered the
deletion of award for monitoring expenses, which FILSCAP did not question as well.
In the case at bench, since COSAC committed infringement, FILSCAP, representing the
copyright owners, is entitled to compensation in the form of damages. In its complaint, FILSCAP
expressly prayed for nominal damages in the amount of P300,000.00. 221 Had FILSCAP asked for
actual damages, further assessment of the evidence would have been required. "Under Article 2199
of the Civil Code, actual or compensatory damages are those awarded in satisfaction of, or in
recompense for, loss or injury sustained. They proceed from a sense of natural justice and are
designed to repair the wrong that has been done, to compensate for the injury inflicted and not to
impose a penalty." 222
To expound, "[t]he Court in San Miguel Foods, Inc. v. Magtuto 223 reiterated that there are two
kinds of actual or compensatory damages: (1) the loss of what a person already possesses, and (2)
the failure to receive as a benefit that which would have pertained to them. In the latter instance,
the familiar rule is that damages consisting of unrealized profits, frequently referred to as ganacias
frustradas or lucrum cessans, are not to be granted on the basis of mere speculation, conjecture, or
surmise, but rather by reference to some reasonably definite standard such as market value,
established experience, or direct inference from known circumstances. 224 Thus, to justify a grant of
actual or compensatory damages, it is necessary to prove with a reasonable degree of certainty,
premised upon competent proof and on the best evidence obtainable by the injured party, the
actual amount of loss." 225
FILSCAP's evidence is lacking in terms of the "actual" damage it sustained. It did not offer
other receipts or documentation, except for what Lejano presented when he visited Off the Grill, as
well as the matrix of fees submitted by FILSCAP's employees. There is no effective way to ascertain
how much pecuniary loss FILSCAP incurred with respect to license fees as well as monitoring
expenses. For this reason, the RTC and CA's award to FILSCAP for license fees/royalties should also
be removed, in addition to the monitoring expenses which the CA already deleted. FILSCAP's
evidence, unfortunately, is insufficient to properly calculate its entitlement to royalties, as well as
other actual damages, assuming it further prayed for the same, apart from the license fees and
monitoring expenses. SDHTEC
Moreover, FILSCAP, through Lejano, only monitored Off the Grill on February 3, 2005 and
January 13, 2006, even when it averred that the establishment has been committing infringing acts
for a while. Two dates can hardly be considered as an accurate representation of all the instances
when COSAC should have paid the license fees. Even if FILSCAP specifically prayed for actual
damages, the Court cannot grant it because FILSCAP did not present "sufficient evidence to prove
the amount claimed and the basis to measure actual damages." 226 In fine, allegations should
always be supported by preponderant evidence 227 to successfully claim for actual damages and
remuneration of lost profits.
This is not to say, however, that FILSCAP cannot be granted any kind of damages. Even if it
failed to substantiate its entitlement to actual damages, according to RA 8293 or the IPC (prior to
its amendment in 2013), FILSCAP can still claim some form of compensation. Specifically, RA 8293
states that: "in lieu of actual damages and profits , such damages which to the court shall
appear to be just" 228 may be awarded to address a claim of pecuniary loss.229 For this Court, "just
damages" is a form of compensation akin to temperate damages, viz.:
Article 2224. Temperate or moderate damages, which are more than nominal but
less than compensatory damages, may be recovered when the court finds that some
pecuniary loss has been suffered but its amount cannot, from the nature of the case, be
provided with certainty. 230
In the same way, jurisprudence teaches that "[w]hen the court finds that some pecuniary loss
has been suffered but the amount cannot, from the nature of the case, be proved with certainty,
temperate damages may be recovered. Temperate damages may be allowed in cases where from
the nature of the case, definite proof of pecuniary loss cannot be adduced, although the court is
convinced that the aggrieved party suffered some pecuniary loss." 231 Nonetheless, "[i]t must be
stressed that the grant of temperate damages, albeit subject to the discretion of the court, 232 must
always be reasonable 233 and based on the facts and circumstances of each case. 234 Indeed,
this Court's discretion is subject to the condition that the award for damages is not excessive under
the attendant facts and circumstance of the case." 235 To stress, even if FILSCAP specifically asked
for actual damages, temperate damages should be awarded instead. This is because due to lack of
evidence, the amount of actual damages cannot be quantified with reasonable certainty even if it is
evident that FILSCAP indeed suffered losses.
To reiterate, FILSCAP, in its Complaint, did not include in its prayer the award of actual
damages. It asked for nominal damages 236 and attorney's fees, on top of its request to compel
COSAC to secure a public performance license and then pay the corresponding license fees for the
performing rights of copyrighted musical works at Off the Grill. 237
It should be noted that nominal damages cannot be awarded in this case since it is clear that
FILSCAP suffered pecuniary loss , although the rates cannot adequately be computed due to lack
of proof. To expound, "[u]nder Article 2221 of the Civil Code, nominal damages may be awarded in
order that the plaintiff's right, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss
suffered. " 238 Otherwise stated, "[n]ominal damages are 'recoverable where a legal right is
technically violated and must be vindicated against an invasion that has produced no actual
present loss of any kind or where there has been a breach of contract andno substantial
injury or actual damages whatsoever have been or can be shown.'" 239 Nominal damages is
not proper in cases involving infringement of intellectual property rights because there is a
presumption that the copyright owner (or assignee) suffered a pecuniary loss. 240 Besides, by
praying for nominal damages, FILSCAP may not have been certain with the actual amount it lost.
Regardless, it cannot be denied that FILSCAP suffered pecuniary loss when COSAC did not pay for
license fees before it allowed playing and performance in public of copyrighted music at Off the
Grill.
Even if its prayer for nominal damages cannot be granted for lack of basis, as earlier
discussed, FILSCAP is still entitled to temperate or just damages in accordance with Section 216.1
(b) of the IPC, notwithstanding its failure to prove its entitlement to actual damages.
Thence, the amount which should be awarded to FILSCAP should be based on the following
considerations: 241 (1) the 500-seating capacity of Off the Grill; 242 (2) based on FILSCAP's matrix,
the royalty fee of P170.00/day for lounges/bars/pubs which play copyrighted songs live and
mechanically; 243 (3) FILSCAP's assertion that it demanded from COSAC to pay license fees since
October 2003, until the filing of the complaint on February 13, 2006 244 (although it is unclear when
FILSCAP first discovered COSAC's acts of infringement); (4) FILSCAP's monitoring agent identified
only 25 copyrighted songs which were played at Off the Grill without the requisite license and
payment of fees; 245 (5) to acknowledge FILSCAP's members who are copyright owners, and
FILSCAP's authority to enforce their rights; 246 and, (6) to balance the interests between copyright
owners and the society, in that the award of just damages is "[a] not too excessive as to scare away
other people from carrying out legitimate acts involving copyrighted music, BUT [b] not too minimal
as to give the wrong impression that the State accords little value to copyrighted musical work and
that creators do not deserve to be compensated with reasonable economic rewards for sharing their
creations to the society." 247 HSAcaE
Considering the foregoing, the Court deems it proper to award FILSCAP the amount of
P300,000.00 as temperate (or just) damages, based on Section 216.1 (b) of the IPC. Such is a fair
and reasonable amount to show that the Court recognizes that, apart from suffering pecuniary loss,
FILSCAP has the right to require the procurement of a license and the payment of license fees
before COSAC can validly play copyrighted musical works in its establishment. 248 One should bear
in mind that FILSCAP, as assignee, is seeking to protect the intellectual property rights of the
owners of copyrighted musical works, and is not just safeguarding its own interest.
However, modifications regarding the applicable legal interest upon the said monetary awards
should be imposed in accordance with Nacar v. Gallery Frames . 249 Therefore, the monetary awards
shall be subject to interest at the rate of 12% per annum from the date of the filing of the complaint
or on February 13, 2006 until June 30, 2013, and thereafter, 6% per annum from July 1, 2013 until
finality of this judgment. Furthermore, once the judgment in this case becomes final and executory,
the said amounts shall be subject to legal interest at the rate of 6% per annum from such finality
until its satisfaction.
As a final note, the Court acknowledges that FILSCAP, by authority of the deeds/agreements,
represents the owners or holders of copyrighted musical works under its catalogue. As the assignee,
FILSCAP is tasked to monitor and issue licenses to persons, businesses, establishments, and the like
which are interested to play or perform these musical compositions. Although it seems trivial or
outrageous to collect fees for this purpose especially when almost everything is readily accessible to
the listening public, the copyright owners are still entitled to be compensated for their creative
work. There is no question that they invested time, creativity, talent, and effort in the creation and
development of their compositions. Thus, assigning FILSCAP to pursue their intellectual property
rights on their behalf should not be taken against FILSCAP, as it is acting not merely for its own
benefit, but for the copyright owners' as well. Still, FILSCAP's monitoring, licensing, and its other
functions should all be exercised within reasonable, proper, and just means.
WHEREFORE, the Petition for Review on Certiorari is hereby DENIED. The assailed May 28,
2015 Decision and January 14, 2016 Resolution of the Court of Appeals in CA-G.R. CV No. 101415
are AFFIRMED with MODIFICATIONS. The monetary award in the amount of P317,050.00 as
damages for unpaid license fees/royalties in favor of the Filipino Society of Composers,
Authors and Publishers, Inc. is DELETED. Instead, petitioner COSAC, Inc., is ORDERED to
indemnify the Filipino Society of Composers, Authors and Publishers, Inc. temperate
damages in the amount of P300,000.00. This amount shall be subject to interest at the rate of 12%
per annum from February 13, 2006 until June 30, 2013, and at the rate of 6% per annum from July 1,
2013 until the date of finality of this judgment. Thereafter, all the monetary amounts shall be
subject to interest at the rate of 6% per annum from the date of finality of this judgment until full
satisfaction of the same.
SO ORDERED.
Gesmundo, C.J., Gaerlan, Rosario, J.Y. Lopez, Dimaampao, Marquez, Kho, Jr. and Singh, JJ.,
concur.
Leonen, Caguioa and Zalameda, JJ., see separate concurring opinion.
Lazaro-Javier, J., pls. see concurrence.
Inting * and M.V. Lopez, ** JJ., took no part.
Separate Opinions
LEONEN, J., concurring:
I concur in the result. Petitioner should be made liable for copyright infringement pursuant to
Republic Act No. 8293, the Intellectual Property Code.
I agree that profit is not the controlling factor in determining the commission of copyright
infringement. 1 Even during the copyright regime subsisting under Presidential Decree No. 49, the
exhibition, performance, representation, production, or reproduction of a copyrighted work is the
exclusive right of the copyright holder, regardless of whether the act was committed for profit or
otherwise:
SEC. 3. The proprietor of a copyright or his heirs or assigns shall have the exclusive
right:
xxx xxx xxx
(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; . . . (Emphasis supplied)
As astutely pointed out in the ponencia, what the factor of profit — or more accurately, the
absence of a profit-making aim — can do is to exclude certain acts from a finding of infringement,
such as when the act was committed in accordance with those enumerated in Section 184 of the
Intellectual Property Code. 2 Particularly, when raising the defense of fair use, several factors — not
just the alleged infringer's profit purpose — must be considered:
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;
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.
This court defined fair use as "a privilege 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." 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."
Determining fair use requires application of the four-factor test. Section 185 of the
Intellectual Properly 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;
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." 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. This court must look into whether the copy of the work
adds "new expression, meaning or message" to transform it into something else. "Meta-use"
can also occur without necessarily transforming the copyrighted work used.
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. AScHCD
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. 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. 3
There is no question that petitioner's employees playing copyrighted music through the radio,
speakers, or music videos constituted an exercise of respondent's public performance rights, and
that to do so without securing a license from respondent constitutes copyright infringement for
which the petitioner can be made liable. That much has been settled in Filscap v. Anrey. 4
It may likewise appear that the case of Filscap v. Tan 5 is controlling on the liability of a
proprietor when a live band, within the establishment of another, publicly performed musical
compositions without the appropriate public performance license. There, the operator of a
restaurant was alleged to have committed copyright infringement when it hired a combo of
professional singers who played and sung musical compositions "to entertain customers therein" 6
without first securing a license or permission from the copyright holders.
However, Filscap v. Tan did not fully reckon with the infringement liability of the owner of an
establishment in relation to the liability of the primary and direct infringers — the combo of
professional singers. Instead, the Court ultimately found that no copyright infringement was
committed because the compositions performed have already passed into the public domain. 7
This Court must be circumspect in its assignation of infringing act and liability pursuant to
copyright law. Copyright is a statutory right, the extent and limitations of which are defined and
governed by existing law:
An important aspect of intellectual property rights is that their protection subsists only
"for such period as may be provided by law." As with other intellectual property rights, the
metes and bounds of protection for works covered by copyright are defined and governed by
existing law. In Joaquin v. Drilon :
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.
8
At the time the infringing acts were committed in this case, Republic Act No. 8293 only
punished the direct infringer: the person who, without authority or consent, exercises a right that
was exclusively granted to the copyright holder, or author of the work in case of moral rights, or the
performer, producer of sound recordings or broadcasting organization for rights defined in Chapter
XII of the Intellectual Property Code, among others. Persons who benefit from the infringing activity
of another, or knowingly and materially contribute to another's infringing activity, were not liable
under Section 216 of Republic Act No. 8293. Thus, in the strictest understanding of liability for
infringement under Republic Act No. 8293, to impute infringement, it must be shown that the
unauthorized exercise of copyright or related right must have been done by the alleged infringer.
The only exception was persons who knowingly possess infringing copies of the work, penalized
under Section 217.3:
SECTION 217. Criminal Penalties. — . . .
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.
It was only in Republic Act No. 10372 that acts constituting copyright infringement were
expanded to contemplate those done by persons other than the direct infringers:
SEC. 216. Infringement. — Any person infringes a right protected under this Act
when one:
(a) Directly commits an infringement;
(b) Benefits from the infringing activity of another person who commits
an infringement if the person benefiting has been given notice of the infringing
activity and has the right and ability to control the activities of the other person;
(c) With knowledge of infringing activity, induces, causes or materially
contributes to the infringing conduct of another.
I respectfully put forward that, if this Court must impute liability to persons other than the
direct infringers absent a specific provision in copyright law, then it is inappropriate to find its basis
on the common law principles of another jurisdiction. 9 "Otherwise, our laws, and by extension, our
courts, will be beholden to interpretations made of foreign laws, by foreign bodies, ignoring the real
and material divergences in the legal, political, social, and cultural developments unique to each
jurisdiction." 10 For those infringing acts allegedly committed and yet responsibility is imputed to
another, prior to the effectivity of Republic Act No. 10372, it is more appropriate that Philippine law
and jurisprudence's existing formulations of the concept of vicarious liability be applied. In Cangco
v. Manila Railroad Co.: 11
On the other hand, the liability of masters and employers for the negligent acts or
omissions of their servants or agents, when such acts or omissions cause damages which
amount to the breach of a contract, is not based upon a mere presumption of the master's
negligence in their selection or control, and proof of exercise of the utmost diligence and care
in this regard does not relieve the master of his liability for the breach of his contract. HESIcT
Every legal obligation must of necessity be extra-contractual or contractual. Extra-

contractual obligation has its source in the breach or omission of those mutual duties which
civilized society imposes upon its members, or which arise from these relations, other than
contractual, of certain members of society to others, generally embraced in the concept of
status. The legal rights of each member of society constitute the measure of the
corresponding legal duties, mainly negative in character, which the existence of those rights
imposes upon all other members of society. The breach of these general duties whether due
to willful intent or to mere inattention, if productive of injury, gives rise to an obligation to
indemnify the injured party. The fundamental distinction between obligations of this character
and those which arise from contract, rests upon the fact that in cases of non-contractual
obligation it is the wrongful or negligent act or omission itself which creates the vinculum juris,
whereas in contractual relations the vinculum exists independently of the breach of the
voluntary duty assumed by the parties when entering into the contractual relation.
With respect to extra-contractual obligation arising from negligence, whether of act or
omission, it is competent for the legislature to elect — and our Legislature has so elected — to
limit such liability to cases in which the person upon whom such an obligation is imposed is
morally culpable or, on the contrary, for reasons of public policy, to extend that liability,
without regard to the lack of moral culpability, so as to include responsibility for the
negligence of those persons whose acts or omissions are imputable, by a legal fiction, to
others who are in a position to exercise an absolute or limited control over them. The
legislature which adopted our Civil Code has elected to limit extra contractual liability — with
certain well-defined exceptions — to cases in which moral culpability can be directly imputed
to the persons to be charged. This moral responsibility may consist in having failed to exercise
due care in one's own acts, or in having failed to exercise due care in the selection and control
of one's agents or servants, or in the control of persons who, by reason of their status, occupy
a position of dependency with respect to the person made liable for their conduct. 12
In particular, when an employer is being made liable for their employees' acts, this Court's
jurisprudence on vicarious liability of employers can be adapted and refined as the foundation for
vicarious liability in copyright infringement cases. For example, in the preliminary determination of
an employer's vicarious liability, there must be proof that an employer-employee relationship exists
between the two parties. 13 It must then be shown that the employer was negligent in some
capacity, failing to exercise the diligence of a good parent of a family in the selection of employees
and supervision of performance of their duties. As stated in Victory Liner, Inc. v. Heirs of Malecdan:
14
Employers may be relieved of responsibility for the negligent acts of their employees
acting within the scope of their assigned task only if they can show that "they observed all the
diligence of a good father of a family to prevent damage." For this purpose, they have the
burden of proving that they have indeed exercised such diligence, both in the selection of the
employee and in the supervision of the performance of his duties.
In the selection of prospective employees, employers are required to examine them as
to their qualifications, experience and service records. With respect to the supervision of
employees, employers must formulate standard operating procedures, monitor their
implementation and impose disciplinary measures for breaches thereof. These facts must be
shown by concrete proof, including documentary evidence. 15
Thus, recovery from the proprietor of the establishment under the theory of vicarious liability
may hinge upon a finding that the proprietor has control or supervision over the acts of the primary
and direct infringer. This likewise presupposes that the proprietor knows or has been informed of
the primary infringer's act, much in the same way that Section 216 of the Intellectual Property
Code, as amended, requires notice or knowledge for liable persons who are not the direct infringers.
Finally, I agree with the ponencia that, considering that respondent only prayed for nominal
damages and failed to prove actual damages, but suffered some degree of pecuniary loss in the
form of petitioner's nonpayment of the appropriate licensing fees for the musical compositions
performed, temperate damages may be awarded.
FILSCAP's evidence is lacking in terms of the "actual" damage it sustained. It did not
offer other receipts or documentation, except for what Lejano presented when he visited Off
the Grill, as well as the matrix of fees submitted by FILSCAP's employees. There is no effective
way to ascertain how much pecuniary loss FILSCAP incurred with respect to license fees as
well as monitoring expenses. For this reason, the RTC and CA's award to FILSCAP for license
fees/royalties should also be removed, in addition to the monitoring expenses which the CA
already deleted. FILSCAP's evidence, unfortunately, is insufficient to properly calculate its
entitlement to royalties, as well as other actual damages, assuming it further prayed for the
same, apart from the license fees and monitoring expenses. 16
Accordingly, I vote to DENY the Petition for Review on Certiorari.
CAGUIOA, J., concurring:
I concur.
This case involves a similar issue as FILSCAP v. Anrey 1 (Anrey), which likewise stemmed from
a third party's unauthorized exercise of the authors' copyright. The role of respondent Filipino
Society of Composers, Authors and Publishers, Inc. (FILSCAP) in relation to its members who own the
music copyright involved in this case is summarized as follows:
x x x [FILSCAP] x x x is a "non-stock, non-profit association of composers, lyricists, and
music publishers" accredited by the [Intellectual Property Office of the Philippines (IPOPHL)] to
perform the role of a [Collective Management Organization (CMO)], and is a member of the
Paris-based International Confederation of Societies of Authors and Composers ( Confédération
Internationale des Sociétés d'Auteurs et Compositeurs or CISAC), the umbrella organization of
all composer societies worldwide. Being the designated CMO of composers, lyricists, and
music publishers, FILSCAP assists in "protecting the intellectual property rights of its members
by licensing performances of their copyright music." For this purpose, FILSCAP gets assigned
the copyright by its members, and, as assignee, then collects royalties which come in the form
of license fees from end-users who intend to "publicly play, broadcast, stream, and to a
certain extent (reproduce) any copyrighted local and international music of its members." 2
The controversy in the instant case started when a representative from FILSCAP monitored Off
the Grill Bar and Restaurant (Off the Grill), a commercial establishment in Quezon City owned and
operated by petitioner COSAC, Inc. (COSAC). These monitoring activities led to the discovery that
COSAC was playing copyrighted music in its establishment without obtaining from FILSCAP the
necessary license or paying the corresponding fees. 3 AcICHD
FILSCAP sent demand letters informing COSAC of its obligations under Republic Act No. (R.A.)
8293 4 otherwise known as the Intellectual Property Code (IP Code) and demanded the payment of
the appropriate amount of license fees and/or that COSAC obtain the necessary license from
FILSCAP. 5
COSAC, however, refused to heed the demand, prompting FILSCAP to file a Complaint6 for
copyright infringement and damages. In its Answer, 7 COSAC questioned FILSCAP's authority to
enforce music copyright and — without explicitly raising as defenses any of the exceptions to
copyright infringement under the law — denied that it had committed copyright infringement. 8
I concur that COSAC should be held liable for copyright infringement. As stated in the
ponencia, "for an act to be considered as copyright infringement, it must not fall under
Section 177 of the [IP Code (Copyright or Economic Rights)], and at the same time must
not be covered by Sections 184 (Limitations on Copyright) and 18 (Fair Use [of a
Copyrighted Work])." 9
These two conditions are clearly present in this case. For ease of reference and to allow for
the sufficient elaboration of the relevant issues, the succeeding discussion will be divided into the
following topics:
I. COSAC exercised without authority the authors' exclusive rights under Section 177
(Copyright or Economic Rights).
a. The law itself distinguishes the right of "public performance" from the right of
"communication to the public," either right being enforceable through FILSCAP.
II. COSAC's acts are not covered by Sections 184 (Limitations on Copyright) and 185 (Fair
Use of a Copyrighted Work).
a. The Court is called upon not to simply discuss the provisions on copyright
protection, but to extensively delve into its existing limitations.
b. Limitations on copyright
c. Fair Use
i. Fair Use Doctrine
ii. Fair Use in the Philippines
iii. The Four Fair Use Factors
1. First Factor: Purpose and Character of Use
2. Second Factor: Nature of Copyrighted Work
3. Third Factor: Amount and Substantiality of the Portion Used
4. Fourth Factor: Effect of the Use Upon the Potential Market
for or Value of the Copyrighted Work
d. Why COSAC is not exempted from liability for copyright infringement
III. There must be reasonable considerations for quantifying the damages awarded in
copyright infringement cases.
DISCUSSION
I. COSAC EXERCISED WITHOUT
AUTHORITY THE AUTHORS'
EXCLUSIVE RIGHTS UNDER SECTION
177 (COPYRIGHT OR ECONOMIC
RIGHTS)
I n Microsoft Corp. v. Manansala, 10 the Court clarified that the "gravamen of copyright
infringement" is not merely the unauthorized manufacturing of intellectual works[,] but rather the
unauthorized performance of any of the exclusive economic rights of the copyright
owner. 11 There is no question that COSAC had exercised the copyright owners' exclusive rights
under Section 177 by carrying out the following acts, as summarized and defined in the table below:
COSAC's Acts Infringed Right of the Authors
Hiring a live band to perform Section 177. Copyright or Economic Rights. — Subject to the
copyrighted musical compositions provisions of Chapter VIII, copyright or economic rights shall
consist of the exclusive right to carry out, authorize or
(N.B.: The fact that COSAC had directly
caused the musical compositions to be
played — as opposed to being a mere xxx xxx xxx
passive party that happened to reap
unexpected rewards due to having
strangers/bands playing music in its 177.6. Public performance of the work;
establishment — is evidenced by
COSAC's witness' own admission under
oath that it regularly hires and pays xxx xxx xxx
entertainers to play live music.) 12
Section 171.6 of the IP Code.
"Public Performance" x x x is x x x otherwise performing

the work x x x by means of any x x x process x x x at a
place or at places where persons outside the normal circle of
a family and that family's closest social acquaintances are
or can be present, irrespective of whether they are or can
be present at the same place and at the same time, or at
different places and/or at different times x x x.
Playing of copyrighted musical Section 177. Copyright or Economic Rights. — Subject to the
compositions contained in sound provisions of Chapter VIII, copyright or economic rights shall
recordings consist of the exclusive right to carry out, authorize or
(N.B.: As admitted under oath by

COSAC's witness, COSAC uses a xxx xxx xxx
projector to display "MTV." 13 There is
no indication whether this is a broadcast
of the channel or whether COSAC is 177.6. Public performance of the work; and
merely projecting a recorded footage
thereof.)
177.7. Other communication to the public of the work.
(Sec. 5, P.D. No. 49a)
Section 171.6 of the IP Code. "Public Performance" x x x

is x x x in the case of a sound recording, making the
recorded sounds audible at a place or at places where
persons outside the normal circle of a family and that
family's closest social acquaintances are or can be present,
irrespective of whether they are or can be present at the
same place and at the same time, or at different places
and/or at different times x x x.

AND/OR
Section 171.3 of the IP Code. "Communication to the

public" or "communicate to the public" means the
making of a work available to the public by wire or wireless
means in such a way that members of the public may
access these works from a place and time individually
chosen by them[.]
A.
The law itself distinguishes the right of "public performance" from the right of "communication
to the public," either right being enforceable through FILSCAP
As will be elaborated below, I agree with the ponencia that "it would be more judicious to say,
specifically for this case, that COSAC infringed the [public] performing rights of the copyright
owners." 14 Notably, this expression encompasses both "right of public performance" and "right of
communication to the public," as can be seen in FILSCAP's deeds of assignment, viz.:
1. DEFINITIONS
a) "Copyright work" shall mean and include —
xxx xxx xxx
b) "right of public performance" shall, as provided in Section 171.6 of [the IP Code
]xxx
c) "right of communication to the public" shall mean the right x x x per Section
171.3 o[f] [the IP Code]
d) The expression "public performing rights" shall mean (b) [right of public
performance] and (c) [right of communication to the public] above. 15
(Emphasis and underscoring in the original)
Despite having a collective term to refer to both these rights, the Court must still take pains to
proactively distinguish them lest these exclusive rights be conflated with one another. While not
raised as an issue, it is important to dispel the misconception that only the right of public
performance is generally involved when "[a] copyrighted musical work is 'played or performed live
through [the] performer or mechanically through any audio or audiovisual player or device such as
a CD player, VCD player, DVD player, cassette player, television set or radio player.'" 16
The distinction between these two rights — the right of public performance and the right of
communication to the public — I had earlier extensively discussed in my Separate Concurring
Opinion in Anrey, viz.: TAIaHE
The foregoing provisions suggest that the public performance right and the right to
communicate to the public are separate and distinct rights which are available to, and
may separately be exploited by the author. This is clear from first, the separate
designation of these rights under the "menu" of economic rights under Section 177
of the IP Code, and second, the "exclusionary" definition of "public performance" in
Section 171.6, which expressly requires that "the performance x x x be perceived
without the need for communication [to the public] within the meaning of
Subsection 171.3 [of the IP Code]."
x x x [This] is likewise supported by the following provisions of the IP Code involving the
rights of performers, producers of sound recordings, and broadcasting organizations. x x x
xxx xxx xxx
Notably, under Section 209 of the IP Code, performers and producers of sound
recordings are entitled to remuneration whenever (i) a sound recording is published for
commercial purposes, or (ii) when reproductions of such sound recordings are (a) "used
directly for broadcasting or for other communication to the public" (i.e., right to communicate
to the public), or (b) "publicly performed with the intention of making and enhancing profit"
(i.e., right of public performance). In other words, performers and producers would be entitled
to remuneration for three distinct activities, which is clear from the use of the conjunction
"or." Otherwise stated, if the intention was to only entitle the performers and producers to one
remuneration for all of these activities combined, then the conjunction "and" should have
been used. This further underscores that Sections 177.6 and 177.7 in relation to Sections
171.3 and 171.6 of the IP Code actually recognize two separate and distinct rights that
may independently be exploited by an author or copyright owner.
xxx xxx xxx
x x x [I]t must further be underscored that the public performance right and right to
communicate to the public are not only separate and distinct — they are also ingeniously
delineated or segregated by the IP Code based on the means of transmission or making
available of the work, i.e., whether the performance or communication is made by "wire or
wireless means." x x x
I expound.
First, it should be stressed at the onset that the definition of public performance under
Section 171.6 is exclusionary in relation to Section 171.3. i.e., in order to constitute "public
performance," the performance must be "perceive[able] without the need for communication
within the meaning of Subsection 171.3." Conversely, if an aspect of a performance can
be perceived by the public by means of "communication" as defined under Section
171.3, i.e., "by wire or wireless means in such a way that members of the public
may access these works from a place and time individually chosen by them," then
this aspect of the performance would only be a "communication to the public" and
would not therefore constitute a "public performance."
Second, the foregoing conclusion is also supported by the text of The Berne Convention
for the Protection of Literary and Artistic Works (Berne Convention), to which the Philippines is
a signatory. x x x
xxx xxx xxx
x x x [U]nder the Berne Convention, public performance and any communication of such
performance is covered by Article 11 thereof. However, similar to how the IP Code is worded,
if the public communication is via a specific mode or means of transmission, i.e., by means of
broadcasting or other "wireless diffusion," by wire or rebroadcasting (if the communication is
made by an organization other than the original one), or by loudspeaker or any other
analogous instrument of the broadcast of the work, then the same will fall under Article 11bis.
In fact, the foregoing stance is made clear by the WIPO in its explanatory guide to the
Berne Convention (WIPO Guide). Anent the difference of Article 11 from Article 11bis of the
Berne Convention, the WIPO remarked as follows:
11.4. However, [Article 11] goes on to speak of "including such public
performance by any means or process," and this covers performance by means of
recordings; there is no difference for this purpose between a dance hall with an
orchestra playing the latest tune and the next-door discotheque where the
customers use coins to choose their own music. In both, public performance takes
place. The inclusion is general and covers all recordings (discs, cassettes, tapes,
videograms, etc.) though public performance by means of cinematographic works
is separately covered — see Article 14(1)(ii).
11.5. The second leg of this right is the communication to the public of
a performance of the work. It covers all public communication except
broadcasting which is dealt with in Article 11bis. For example, a
broadcasting organisation broadcasts a chamber concert. Article 11bis applies. But
if it or some other body diffuses the music by landline to subscribers, this is a
matter for Article 11. x x x
Furthermore, the WIPO Guide also states that Article 11bis, which covers the author's
right to communicate one's work by means of broadcasting, is "the fourth of the author's
exclusive rights x x x, the other three being those of translation, reproduction and public
performance." Anent the "broadcasting right," the WIPO elucidates that this right includes one
primary right to authorize the broadcast of one's work via wireless means, and two
[secondary] rights to authorize (i) the subsequent communication of said broadcast, by wire or
rebroadcast, by an organization other than the one which originally made the broadcast, and
(ii) the communication of the same broadcast via loudspeaker or a television screen to a "new
public." x x x
xxx xxx xxx
Parsed, while the communication of a "performance" may fall under Article 11 of the
Berne Convention (governing public performance), this is only true if the performance can be
perceived without the need for communication within the meaning of Article 11bis — very
much like how Section 171.6 of the IP Code is worded. On the other hand, under the Berne
Convention, if the communication to the public is made either (i) via broadcast or by any other
means of wireless diffusion, (ii) whether by wire or not, by an organization other than the one
who originally made the broadcast, or (iii) through a broadcast of the work through a
loudspeaker, television screen, or other analogous instrument, then Article 11 bis applies. Put
simply, one clear similarity between the structure of the Berne Convention and the
IP Code is that both categorically separate the concept of "public performance"

from "broadcasting," such that a work that is conveyed to the public solely via radio
broadcast does not constitute an exercise of the author's right of "public
performance," but rather of the author's right of "[b]roadcasting and other wireless
communications, public communication of broadcast by wire or rebroadcast, public
communication of broadcast by loudspeaker or analogous instruments[,]" or, as
referred to under the IP Code, the author's right to "communicate to the public." ICHDca
Applying the foregoing principles to our jurisdiction, this means that under the IP Code,
as under the Berne Convention, the single act of broadcasting of musical compositions
contained in sound[/audiovisual) recordings, either by the original broadcaster or "by an
organization other than the original one[,]" or by other business establishments solely "by
loudspeaker[, television,] or any other analogous instrument" (as worded in Article 11bis of the
Berne Convention), is actually an exercise of the author's right to "communicate to the public"
his or her work under Section 171.3 of the IP Code. This is clear from the wording of Section
171.3 of the IP Code which specifically defines "communication to the public" as the "making
of a work available to the public by wire or wireless means x x x," and from the wording of
Section 202.7 of the IP Code which defines "broadcasting" as a mode of "transmission by
wireless means for the public reception of sounds[.]" As well, by the wording of Section
171.6 of the IP Code, this may also mean that such act does not constitute an
exercise of an author's public performance right.
In other words, based on the IP Code's definition of these two rights, as further clarified
by the Berne Convention, broadcasting a musical composition over the [television or] radio or
communicating the same in some other "wire or wireless means x x x" would simply
constitute an exercise of the right to "communicate to the public." On the other hand,
playing a sound recording of a musical composition to an audience through other dissimilar or
"non-broadcast" means, i.e., through a jukebox or CD player, even if the same is ultimately
perceived by the audience through a loudspeaker or other analogous instrument, would only
constitute "public performance." After all, the sound recording in this situation can be
perceived by the public without the need of communication by "wire or wireless means in such
a way that members of the public may access these works from a place and time individually
chosen by them."
xxx xxx xxx
To be sure, there are cases where a single performance could constitute both public
performance and communication to the public. For instance, if a band performs a musical
composition live before a studio audience, and the same performance is either simultaneously
or subsequently broadcasted over the radio by a broadcasting station, then the band's
performance results in both a public performance and communication to the public. In this
example, the act of directly performing the musical composition before the audience is itself a
public performance, while the act of broadcasting the performance (not the actual
performance itself) is a communication to the public. Thus, while there is only one
performance, there are actually two acts which respectively result in the exercise of two
separate economic rights.
In other words, unless there is a showing that the music being played via
radio[/television] is not simply a x x x recording [of a musical composition] but rather, being
played live before a studio audience, then the playing of a radio[/television] broadcast as
background music would only constitute a "communication to the public." 17 (Emphasis and
underscoring supplied)
Thus, in the case at bar, considering that COSAC had hired bands to play live musicand
played MTV in its establishment (hut it is not sure whether this was a broadcast or a recorded
footage), the ponencia is therefore correct in saying that COSAC had infringed the public
performing rights of the copyright owners, i.e., their right of public performance and/or their right
of communication to the public.
II. COSAC'S ACTS ARE NOT COVERED
BY SECTIONS 184 (LIMITATIONS ON
COPYRIGHT) AND 185 (FAIR USE OF A
COPYRIGHTED WORK)
A.
The Court is called upon not to simply discuss the provisions on copyright protection, but to
extensively delve into its existing limitations
As mentioned, to determine whether copyright infringement has been committed, the acts in
question "x x x must not be covered by Sections 184 (Limitations on Copyright) and 185 (Fair Use
[of a Copyrighted Work])." 18 Clearly, therefore, in resolving the main issue of copyright
infringement, the Court is called upon to consider and delve into the exceptions to copyright
infringement (i.e., the Limitations on Copyright under Section 184 of the IP Code and Fair Use of a
Copyrighted Work under Section 185 of the IP Code) because they are crucial in determining
whether copyright infringement exists.
Notably, even if COSAC has not explicitly raised as affirmative defenses the exceptions to
copyright infringement, its defense is akin to an exception under the law, as will be discussed in
more detail below. In any event, the fact that COSAC did not expressly raise these exceptions as
issues in the present case is of no moment, as explained in the following disquisition:
In the first place , Spouses Campos v. Republic explains that the Court may consider
issues not raised by the parties if these are necessary at arriving at a just decision, serve the
interest of justice, and necessary to rule on the questions properly assigned as errors:
xxx xxx xxx
Secondly, for the immediate protection of the general public against an overly
expansive interpretation of the coverage of music copyright protection, the Court's verdict
must also x x x expound on and construe more definitively the guardrails already
recognized under the law. This is part and parcel of the Court's function not only to
adjudicate the rights of the parties but also, or more so, to interpret the law for the guidance
of all. x x
xxx xxx xxx
Lastly, the discussion of the exceptions to copyright infringement is necessary —
especially for this landmark case — for the Court to balance the competing interests involved
in copyright protection. x x x Section 2 of the IP Code underscores that the ultimate objective
of having an intellectual property system, which includes the means of protecting copyrights,
is to benefit society [.] x x x
xxx xxx xxx
Section 177 of the IP Code makes it clear that a copyright over protected works is a
bundle of exclusive economic rights in favor of the author. Generally speaking, these
comprehensively encompass the several means by which copyrighted material may be used[.]
xxx
xxx xxx xxx
Section 217 of the IP Code, in turn, provides penal sanctions for copyright infringement:
xxx xxx xxx
Based on the foregoing, it may be readily concluded that these penal sanctions pertain
to wide-ranging conduct, including acts involving copyrighted material which are arguably
commonplace in today's world. This, in effect, further narrows the already thin line dividing
infringement and allowable use or reproduction. 19 x x x (Emphasis supplied) cDHAES
To further make apparent this dividing line between infringement and allowable use or
reproduction, therefore, it is imperative to emphasize why COSAC's acts neither fall under Section
184 (Limitations on Copyright) nor Section 185 (Fair Use of a Copyrighted Work).
B.
Limitations on Copyright
The following discussion aptly highlights and explains the relevant portions of Section 184:
Section 184 of the IP Code reads:
SECTION 184. Limitations on Copyright. — 184.1. Notwithstanding the provisions of
Chapter V, the following acts shall not constitute infringement of copyright:
(a) The recitation or performance of a work, once it has been lawfully made accessible
to the public, if done privately and free of charge or if made strictly for a charitable
or religious institution or society; (Sec. 10(I), P.D. No. 49)
xxx xxx xxx
(i) The public performance or the communication to the public of a work, in a place
where no admission fee is charged in respect of such public performance or
communication, by a club or institution for charitable or educational purpose only,
whose aim is not profit making, subject to such other limitations as may be
provided in the Regulations[.]
This Section expressly provides for specific situations involving the use of copyrighted
material which do not constitute infringement.
In this regard, particularly relevant to x x x the issue in this case — are paragraphs (a)
and (i) of Section 184.1, which respectively involve (i) "the recitation or performance" of a
work in private places, and (ii) the "public performance" and/or "communication to the public"
of copyrighted works in public or publicly accessible places. Under these paragraphs, in order
for a recitation, performance and/or communication of a work to be exempt, the following
requisites should be present:
Under Section 184.1 (a):
(i) The recitation or performance is done (a) privately and free of charge or (b) made
strictly for a charitable or religious institution or society; and
(ii) The work has been lawfully made accessible to the public prior to the recitation or
performance[.]
Under Section 184.1 (i):
(i) The place where the public performance and/or communication to the public is
made does not charge any admission fee in respect of such performance or
communication;
(ii) The public performance and/or communication to the public is made by a club or
institution: (a) for charitable or educational purpose only, and (b) whose aim is not
profit making; and
(iii) Such other requirements that may be prescribed under the implementing rules
and regulations promulgated by the Director General of the IPO[PHL].
Regarding the first requisite of Section 184.1(a), for this exemption to apply, the
recitation or performance should be done privately and completely free of charge — unless
the same is made strictly for a charitable or religious institution or society. Corollarily, a
person could avail of the exemption under Section 184.1 (a) even if the recitation or
performance were to be done publicly and/or for compensation, provided that the same is
made strictly for a charitable or religious institution or society.
Notably, the IP Code does not specifically define the term "privately." Since Congress did
not assign a statutory definition to the term "privately," this term should thus be understood in
its plain and ordinary sense, i.e., "relating or belonging to an individual, as opposed to the
public or the government"[.] Considering, however, that the term "public," the commonly
accepted antonym of "private," is given a technical meaning elsewhere in the IP Code, then
resort could also be made to this definition in order to construe what "privately" as
contemplated under Section 184.1(a) means. In this regard, Section 171.6 of the IP Code
provides that a performance of a sound recording will be deemed as "public" if it would entail
"making the recorded sounds audible at a place or at places where persons outside the normal
circle of a family and that family's closest social acquaintances are or can be present,
irrespective of whether they are or can be present at the same place and at the same time, or
at different places and/or at different times."
In other words, construing "privately" in its ordinary sense (i.e., as the opposite of
"publicly"), and coupled with the definition of "public" under Section 171.6, then this term
should simply be understood to refer to situations where the work is not made "audible at a
place or at places where persons outside the normal circle of a family and that family's closest
social acquaintances are or can be present." After all, it is a settled principle of statutory
construction that "words used in x x x [a] statute must be given their ordinary meaning except
where technical terms are employed." As well, the law must not be read in truncated parts,
and "the whole and every part thereof must be considered in fixing the meaning of any of its
parts in order to produce a harmonious whole."
Meanwhile, regarding the first requisite of Section 184.1(i), in contrast with the first
requisite of Section 184.1(a), it should be clarified that based on the plain text of paragraph (i)
of Section 184, charging an admission fee, per se, does not take out an otherwise allowable
"performance" or "communication" from this exemption. Rather, the admission fee must
specifically be "charged in respect of such performance or communication." Thus, if an
admission fee is charged for some other purpose not otherwise related to the performance or
communication, then the latter could still be exempt under this paragraph.
Anent the second requisite of Section 184.1(i), it must be underscored that not only
must the club or institution be for a "charitable or educational purpose," but it must also be
"non-profit." Thus, to be exempt, the club or institution must not only first qualify as either a
charitable institution, i.e., it "provide[s] for free goods and services to the public which would
otherwise fall on the shoulders of government," or an educational institution, i.e., it must be a
school, seminary, college or similar educational establishment under the formal school
system; but also, said club or institution must likewise be "non-profit," such that "no net
income or asset accrues to or benefits any member or specific person, with all [its] net income
or asset[s] devoted to the institution's purposes and all its activities conducted not for profit."
20 (Emphasis in the original) TCAScE
C.
Fair Use
On the other hand, Section 185 of the IP Code has been explained as follows:
i. Fair Use Doctrine
Aside from the specific exceptions and limitations contemplated under Section 184 of
the IP Code, the law also provides a statutory framework that may be used as a guide in
determining whether an unlicensed use of a copyrighted work falls within fair use and
consequently, outside the scope of copyright infringement. Specifically, Section 185 provides
as follows:
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 x x x. 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
(b) The nature of the copyrighted work;
(c) The amount and substantiality of the portion used in relation to the copyrighted
(d) The effect of the use upon the potential market for or value of the copyrighted
work.
xxx xxx xxx
Before delving into the relevant judicial interpretations made by the US Courts, it should
first be emphasized that the four fair use factors set out in Section 185 of our IP Code are an
exact reproduction of the factors listed in the counterpart provision of the US Copyright Act of
1976, to wit:
Section 107. Limitations on the exclusive rights: Fair use
Notwithstanding the provisions of Sections 106 and 106A, the fair use of a
copyrighted work, including such use by reproduction in copies or phonorecords or
by any other means specified by that section, for purposes such as criticism,
comment, news reporting, teaching (including multiple copies for classroom use),
scholarship, or research, is not an infringement of copyright. In determining
whether the use made of a work in any particular case is a fair use the factors to
be considered shall include —
(1) the purpose and character of the use, including whether such use is of a
commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the
copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such
finding is made upon consideration of all the above factors. x x x
Accordingly, reference to US cases is not only proper, but also imperative.
[Second], it should be pointed out that, as held in the case of Campbell, each of the four
factors is not individually conclusive and should be weighed along with the other factors for
purposes of establishing a case of fair use.
1. First Factor: The Purpose and Character of Use
The first factor to consider in determining whether an unlicensed use or reproduction of
a copyrighted work is in accordance with fair use is the purpose and character of the use,
including whether such use is of a commercial nature or is for nonprofit educational
purposes. In Campbell, the SCOTUS clarified the core value behind an enquiry as to the
purpose and character of the new work:
x x x The central purpose of this investigation is to see, in Justice Story's words,
whether the new work merely "supersede[s] the objects" of the original
creation x x x, or instead adds something new, with a further purpose or
different character, altering the first with new expression, meaning, or
message; it asks, in other words, whether and to what extent the new work is
'transformative.' Although such transformative use is not absolutely necessary for
a finding of fair use, the goal of copyright, to promote science and the arts, is
generally furthered by the creation of transformative works. Such works thus lie at
the heart of the fair use doctrine's guarantee of breathing space within the
confines of copyright, x x x and the more transformative the new work, the
less will be the significance of other factors, like commercialism, that
may weigh against a finding of fair use. x x x
Speaking of commercial purpose, the SCOTUS also clarified [their] ruling in Sony Corp.
of America v. Universal Studios, Inc. , and further elucidated that the commercial character of
a work does not per se make it unfair. At the same time, "the mere fact that a use is
educational and not for profit does not insulate it from a finding of infringement." In shedding
this light, the Court stated, as follows:
The language of the statute makes clear that the commercial or nonprofit
educational purpose of a work is only one element of the first factor
enquiry into its purpose and character. Section 107(1) uses the term
"including" to begin the dependent clause referring to commercial use, and the
main clause speaks of a broader investigation into "purpose and character." As we
explained in Harper & Row, Congress resisted attempts to narrow the ambit of this
traditional enquiry by adopting categories of presumptively fair use, and it urged
courts to preserve the breadth of their traditionally ample view of the universe of
relevant evidence x x x If, indeed, commerciality carried presumptive force
against a finding of fairness, the presumption would swallow nearly all of
the illustrative uses listed in the preamble paragraph of § 107, including
news reporting, comment, criticism, teaching, scholarship, and research,
since these activities "are generally conducted for profit in this country."
Congress could not have intended such a rule, which certainly is not inferable from
the common-law cases, arising as they did from the world of letters in which
Samuel Johnson could pronounce that "no man but a blockhead ever wrote,
except for money." x x x
I n Harper & Row , x x x the SCOTUS explained that "the crux of the profit/nonprofit
distinction is not whether the sole motive of the use is monetary gain, but whether the user
stands to profit from exploitation of the copyrighted material without paying the
customary price."
In other words, if the new work clearly has transformative use and value, a finding of fair
use is more likely even if the user stands to profit from his or her new work. Conversely, if the
new work merely supplants the object of the original work, i.e., it has no transformative value,
and is commercial in nature, the first factor will most likely be weighed against a finding of fair
use. Needless to state, if the new work has transformative use and value, and was created for
a noncommercial purpose or use, the scale will highly likely be swayed in favor of fair use.
Applying the ruling of the SCOTUS in Campbell, we may use as illustrative, not
limitative, examples of transformative use those listed in the preamble of Section 185 of the
IP Code, i.e., for criticism, comment, news reporting, teaching, scholarship, research, and
similar purposes.
I n Campbell, the [US Court] held that parodies which are "less ostensibly humorous
forms of criticism[s]," have transformative value and served an entirely different function. The
x x x Court x x x in Hustler Magazine, Inc. v. Moral Majority, Inc. x x x held that defendants
reproduced and distributed copies of a single page from Hustler Magazine, Inc.'s magazine for
a different purpose — "to defend himself (Jerry Falwell) against such derogatory personal
attacks" Similarly, the x x x Court x x x in The Author's Guild, Inc. v. Hathitrust x x x ruled that
the creation of a full-text searchable database of books is "a quintessentially transformative
use" and the same should not be considered as a substitute for the books searched. In the
same line, the x x x Court x x x in Kelly v. Arriba-Soft x x x ruled that the reproduction of
plaintiff's photos as thumbnail images served an entirely different purpose — "as a tool to
help index and improve access to images on the internet and their related web sites." In the
seminal case of Field v. Google, Inc . x x x, the x x x Court x x x also ruled that Google's use of
"cached" links has transformative use such as: (1) it enables the users to temporarily access
an inaccessible page; (2) it allows users to identify changes made to a particular website; and
(3) it "allows users to understand why a page was responsive to their original query." ASEcHI
On the other hand, in Harper & Row, the [US Court] ruled that the respondent's intended
purpose for the unauthorized use of the unpublished manuscripts was simply to "[supplant]
the copyright holders' commercially valuable right of first publication," and thus, without any
transformative use or value. In Twin Peaks Productions, Inc. v. Publications International Ltd. x
x x, the US Court x x x held that a book which simply summarizes the plots of plaintiff's
teleplay has no transformative value.
Taking into consideration the other fair use factors, [the] US Courts sustained the user's
claim of fair use in Campbell, Hustler Magazine, The Author's Guild, Kelly , and Field, but
denied the same in Harper & Row and Twin Peaks.
2. Second Factor: Nature of Copyrighted Work

The second fair use factor involves the assessment of the nature of the copyrighted
work. "This factor calls for recognition that some works are closer to the core of intended
copyright protection than others, with the consequence that fair use is more difficult to
establish when the former works are copied."
In the case of Stewart v. Abend x x x, the SCOTUS ruled that there is a higher
probability for the fair use defense to fly in case of factual works than works of fiction and
fantasy, since the law generally recognizes a greater need to disseminate the former than the
latter. Considering that a motion picture based on a fictional short story is more creative than
factual, the fair use defense was given less weight. This ruling is affirmed in Twin Peaks, which
involved a televised work of fiction.
In addition, in Harper & Row , the [US Court] stated that the fact that the copied work is
unpublished is a significant element of its "nature," since "the scope of fair use is narrower
with respect to unpublished works."
While even substantial quotations might qualify as fair use in a review of a
published work or a news account of a speech that had been delivered to the
public or disseminated to the press, x x x the author's right to control the first
public appearance of his expression weighs against such use of the work
before its release. The right of first publication encompasses not only the choice
whether to publish at all, but also the choices of when, where, and in what form
first to publish a work. (Emphasis in the original)
This ruling was affirmed by the US Courts in Salinger v. Random House, Inc. and Love v.
Kwitny, where defendants' unauthorized reproduction of unpublished letters and manuscripts
were weighed against fair use.
In the recent case of Google LLC v. Oracle America, Inc. x x x, the SCOTUS placed the
copied "declaring code" farther from the core of copyright compared to other computer
programs. Given this, the application of fair use was held to "[unlikely undermine] the general
copyright protection that Congress provided for computer programs."
The foregoing judicial interpretations may be applied by analogy in similar cases or
used as guide when this Court or the public is confronted with copyright infringement and fair
use cases. As a rule, the closer the work is to the core of copyright protection — i.e., the more
creative, imaginative, or original the copied work is, the more likely will fair use be rejected as
a defense against infringement.
3. Third Factor: Amount and Substantiality of the Portion Used
The third fair use factor asks whether the amount and substantiality of the portion
used in relation to the copyrighted work as a whole is reasonable. The SCOTUS, in
Google LLC, ruled that the "substantiality" factor "will generally weigh in favor of fair
use where x x x the amount of copying was tethered to a valid, and [transformative
purpose]." Thus,
this factor calls for thought not only about the quantity of the materials
used, but about their quality and importance, too. In Harper & Row , for
example, the Nation had taken only some 300 words out of President Ford's
memoirs, but we signaled the significance of the quotations in finding them to
amount to "the heart of the book," the part most likely to be newsworthy and
important in licensing serialization. We also agree with the Court of Appeals that
whether "a substantial portion of the infringing work was copied
verbatim" from the copyrighted work is a relevant question, for it may reveal a
dearth of transformative character or purpose under the first factor, or a
greater likelihood of market harm under the fourth; a work composed
primarily of an original, particularly its heart, with little added or changed, is more
likely to be a merely superseding use, fulfilling demand for the original. x x x
In Campbell, the SCOTUS also clarified that the third fair use factor must be examined in
relation to the first factor, which is the purpose and character of use. Thus, in this case, the
Court held that a parody, which should necessarily "conjure up" at least enough of that
original "to make the object of its critical wit recognizable," is fair use. This is consistent with
the US Court's statement in Field that "even copying of entire works should not weigh against
a fair use finding where the new use serves a different function from the original." Thus, the x
x x Court x x x further stated:
x x x Google's use of entire Web pages in its Cached links serves
multiple transformative and socially valuable purposes. These purposes
could not be effectively accomplished by using only portions of the Web
pages. Without allowing access to the whole of a Web page, the Google
Cached link cannot assist Web users (and content owners) by offering
access to pages that are otherwise unavailable. Nor could use of less than
the whole page assist in the archival or comparative purposes of Google's
"Cached" links. Finally, Google's offering of highlighted search terms in cached
copies of Web pages would not allow users to understand why a Web page was
deemed germane if less than the whole Web page were provided x x x. Because
Google uses no more of the works than is necessary in allowing access to
them through "Cached" links, the third fair use factor is neutral, despite
the fact that Google allowed access to the entirety of Field's works.
(Emphasis and underscoring in the original)
4. Fourth Factor: The Effect of the Use upon the Potential Market for or Value of
the Copyrighted Work
The last factor, according to the case of Harper & Row , is "undoubtedly the single most
important element of fair use." "It requires courts to consider not only the extent of market
harm caused by the particular actions of the alleged infringer, but also 'whether
unrestricted and widespread conduct of the sort engaged in by the defendant x x x
would result in a substantially adverse impact on the potential market' for the original"
and derivative works.
The [Court], in Campbell stated that "when a commercial use amounts to mere
duplication of the entirety of the original, it clearly supersedes the object of the original and
serves as a market replacement for it, making it likely that cognizable market harm
to the original will occur."
I n Hustler Magazine, the US Court x x x held that in order to determine the potential
harm to a copyrighted work, the courts should focus on whether the infringing use: (1) "tends
to diminish or prejudice the potential sale of the work; (2) tends to interfere with its
marketability of the work; or (3) fulfill the demand for the original work." In this case, the US
Court considered the following factors in concluding that the impact of defendant's use of
plaintiff's work was nil: (a) the plaintiff's work was first issued or released long before
defendant's mailings went out; (b) "the effect on the marketability of back issues of the
magazine is de minimis because it is only one page of a publication"; and (c) defendant's uses
did not cause plaintiff any competitive injury since defendant was not selling or distributing
copies of the ad parodies to plaintiff's followers.
I n Google LLC, the SCOTUS found that Google's new smartphone platform is not a
market substitute for Java SE, and accordingly, weighed the fourth factor in favor of fair use.
cTDaEH
On the other hand, in the case of Harper & Row, the [Court] held that "if the defendant's
work adversely affects the value of any of the rights in the copyrighted work (in this case the
adaptation and serialization right) the use is not fair." Similarly, in Stewart, the [Court] ruled
that the rerelease of a film based on a story impinged on respondent's ability to market new
versions of the story, and consequently, caused market harm to respondent.
In Twin Peaks , the x x x Court x x x weighed the fourth factor against fair use and held
that:
x x x It is a safe generalization that copyright holders, as a class, wish to
continue to sell the copyrighted work and may also wish to prepare or license such
derivative works as book versions or films. In this case, the Book may interfere
with the primary market for the copyrighted works and almost certainly interferes
with legitimate markets for derivative works. It is possible that a person who
had missed an episode of "Twin Peaks" would find reading the Book an
adequate substitute, and would not need to rent the videotape of that
episode in order to enjoy the next one x x x. A copyright holder's
protection of its market for derivative works of course cannot enable it
to bar publication of works of comment, criticism, or news reporting
whose commercial success is enhanced by the wide appeal of the
copyrighted work. The author of "Twin Peaks" cannot preserve for itself the
entire field of publishable works that wish to cash in on the "Twin Peaks"
phenomenon. But it may rightfully claim a favorable weighting of the fourth fair
use factor with respect to a book that reports the plot in such extraordinary detail
as to risk impairment of the market for the copyrighted works themselves or
derivative works that the author is entitled to license. 21 (Emphasis in the original)
D.
Why COSAC is not exempted from liability for copyright infringement
In its defense, COSAC claims that it did not commit infringement because "once the music is
played in the airwaves, it becomes public property." 22 Clearly, this exception is not included in
Section 184 of the IP Code. Even assuming that COSAC's defense may be generously construed as
akin to Section 184 (a) 23 because the copyrighted work being performed has been "lawfully made
accessible to the public," it is readily apparent that COSAC cannot fall under this specific limitation
on copyright because it is not done privately and COSAC is not a charitable or religious institution or
society.
Neither can COSAC's acts be classified as falling under the fair use doctrine.
First, COSAC's use of said musical works was primarily commercial in nature, considering that
it was made to improve the ambiance of the establishment and the experience of its customers.
More importantly, COSAC's use of the copyrighted music has no transformative value since it
merely supplants the object of the original work. As discussed in the previous section, a commercial
and non-transformative use of a copyrighted work will more likely be weighed against a finding of
fair use.
Second, COSAC's infringement involved musical compositions, which are creative and not
factual works. Since creative works like these are what copyright primarily intends to protect, the
second factor on the nature of copyrighted work clearly does not weigh in favor of COSAC.
Third, its undisputed that COSAC had used the entirety of at least 2524 copyrighted musical
compositions when it was monitored in two separate days.
Fourth, if allowed by the Court unchecked, COSAC's unauthorized acts of using musical
compositions — whether by hiring live bands or by playing sound recordings (broadcasted or
otherwise) — to enhance its establishment will indubitably have an adverse effect on the potential
market for said musical compositions. If all bars and restaurants like COSAC may freely exploit
copyrighted music in this manner, no other commercial establishment, big or small, will understand
the need to secure licenses for using copyrighted music. Moreover, if unrestricted, COSAC's manner
of use will significantly reduce the value of the copyrighted work. Unrestricted free use of
copyrighted music means that there is zero value attached to the authors' works. This will
ultimately work to the prejudice of the authors who — despite having exerted substantial effort,
time, and resources — will not receive any economic benefits from sharing their works with the rest
of the society. While exposure and fame in favor of the creators are arguably reasonable incentives,
they do not pay the authors' bills.
Clearly, COSAC's acts cannot be classified as fair use because all four factors (i.e., The
Purpose and Character of Use, Nature of Copyrighted Work, Amount and Substantiality of the
Portion Used, and The Effect of the Use upon the Potential Market for or Value of the Copyrighted
Work) weigh against this finding.
III. THERE MUST BE REASONABLE
CONSIDERATIONS FOR QUANTIFYING
THE DAMAGES AWARDED IN
COPYRIGHT INFRINGEMENT CASES
Proceeding from the discussions above, COSAC is clearly liable for copyright infringement
because (1) COSAC exercised without authority the authors' exclusive "public performing rights,"
i.e., their rights of "public performance" and/or "communication to the public" and (2) its acts are
neither covered by the limitations on copyright nor the fair use doctrine.
The nature of damages awarded by the Court in a similar copyright infringement case has
been discussed as follows:
Section 216 of the IP Code enumerates the remedies for infringement. Specifically,
paragraph (b) provides how the award to be paid should be computed, viz.:
SECTION 216. Remedies for Infringement. — 216.1. Any person
infringing a right protected under this law shall be liable:
xxx xxx xxx
(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.
As seen in the provision, there are two alternative awards that courts may order the
infringer to pay to the copyright proprietor or his assigns, namely:
(i) 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, ITAaHc
(ii) damages which to the court shall appear to be just and shall not be regarded as
penalty. x x x
Notably, Section 216 of the IP Code mirrors the rules on awarding actual damages
prescribed under the Civil Code. Thus, if the Court were to award a copyright owner actual
damages, such damages "must not only be capable of proof, but must actually be proved with
reasonable degree of certainty." Further, to be recoverable, the Court "cannot simply rely on
speculation, conjecture or guesswork in determining the amount of damages[,]" such that
there must be "competent proof" of the actual amount of loss incurred. Otherwise, in the
absence of such "competent proof," or if the amount of such loss "cannot be proved with
certainty[,]" temperate damages which must be "reasonable under the circumstances" should
instead be awarded. 25 (Emphasis in the original)
Here, the decretal portion of the ponencia orders the award of the following amounts to
FILSCAP, viz.:
WHEREFORE, the Petition for Review on Certiorari is hereby DENIED. The assailed May
28, 2015 Decision and January 14, 2016 Resolution of the Court of Appeals in CA-G.R. CV No.
101415 are AFFIRMED with MODIFICATIONS. The monetary award in the amount of
P317,050.00 as damages for unpaid license fees/royalties in favor of the Filipino Society of
Composers, Authors and Publishers, Inc. is DELETED. Instead, petitioner COSAC, Inc., is
ORDERED to indemnify the Filipino Society of Composers, Authors and Publishers, Inc.
temperate damages in the amount of P300,000.00. This amount shall be subject to interest at
the rate of 12% per annum from February 13, 2006 until June 30, 2013, and at the rate of 6%
per annum from July 1, 2013 until the date of finality of this judgment. Thereafter, all the
monetary amounts shall be subject to interest at the rate of 6% per annum from the date of
finality of this judgment until full satisfaction of the same. 26
The ponencia justifies the amount of the award as follows:
Thence, the amount which should be awarded to FILSCAP should be based on the
following considerations: (1) the 500-seating capacity of Off the Grill; (2) based on FILSCAP's
matrix, the royalty fee of P170.00/day for lounges/bars/pubs which play copyrighted songs live
and mechanically; (3) FILSCAP's assertion that it demanded from COSAC to pay license fees
since October 2003, until the filing of the complaint on February 13, 2006 (although it is
unclear when FILSCAP first discovered COSAC's acts of infringement); (4) FILSCAP's monitoring
agent identified only 25 copyrighted songs which were played at Off the Grill without the
requisite license and payment of fees; (5) to acknowledge FILSCAP's members who are
copyright owners, and FILSCAP's authority to enforce their rights; and, (6) to balance the
interests between copyright owners and the society, in that the award of just damages is "[a]
not too excessive as to scare away other people from carrying out legitimate acts involving
copyrighted music, BUT [b] not too minimal as to give the wrong impression that the State
accords little value to copyrighted musical work and that creators do not deserve to be
compensated with reasonable economic rewards for sharing their creations to the society." 27
I fully concur with the amount awarded and the considerations enumerated by the ponencia
for the following reasons:
1) It is proper to delete the award of P317,050.00 as actual damages for unpaid license
fees/royalties. Apart from a lack of competent evidence, a closer look at the royalty fees
being charged by FILSCAP hardly justifies awarding this amount. If FILSCAP's royalty fees
for lounges/bars/pubs that play copyrighted songs live and mechanically for 500 persons
or more is pegged at the daily rate of P170.00, 28 the award of P317,050.00 as "unpaid
damages/royalties" amounts to awarding 1,865 days' worth of royalty fees or more than
five years' worth of royalties.
There is no indication in the complaint as to when FILSCAP first discovered COSAC's acts
of infringement. There is only an allegation that as early as 2003, 29 FILSCAP had
formally advised COSAC of its obligations under the IP Code. The complaint for copyright
infringement was then filed on February 13, 2006. In effect, the filing of the complaint
was made around three years (more or less 1,095 days) after COSAC was informed of its
obligation to pay license fees. Assuming that there is clear proof that COSAC
continuously played music in its establishment every day for three years, despite being
informed of its obligation to pay license fees, it should have paid roughly around
P186,150.00 maximum in royalties to FILSCAP.
As discussed, however, awarding unpaid license fees/royalties would be inappropriate
due to the lack of competent proof to substantiate actual/compensatory damages. Thus,
I agree with the ponencia's deletion of the award of P317,050.00 and its award of
temperate damages instead.
2) As found by the Regional Trial Court, "FILSCAP is a [non-stock and] non-profit
corporation because everything it collect[s] is distributed back to its members and
affiliate performing rights societies abroad less only the administrative expenses which
cannot exceed 30% of total collection, withholding tax and 5% deduction for the socio-
cultural fund of its members.'' 30
As it stands, FILSCAP is the only CMO accredited by the IPO to "collectively administer,
license, and enforce the reproduction right (Sec. 177.1, IP Code), the transformation
right (Sec. 177.2, IP Code), the first public distribution right (Sec. 177.3, IP Code), the
public performance right (Sec. 177.6, IP Code), and the communication to the public
right (Sec. 177.7, IP Code) of composers, lyricists, music publishers and other music
copyright owners." 31 Put simply, its members who are music copyright owners —
including those who cannot afford to enforce their own copyrights and collect
royalties — rely on FILSCAP to secure royalties and enforce their rights.
3) In keeping with the goal of balancing competing interests between the copyright owners
and the society at large, the Court should endeavor to ensure that the award of
temperate damages is not too excessive as to scare away other people from carrying out
legitimate acts involving copyrighted music BUT not too minimal as to give the wrong
impression that the State accords little value to copyrighted musical work and that
creators do not deserve to be compensated with reasonable economic rewards for
sharing their creations to the society.
In view of the foregoing reasons, I vote to DENY the petition. cSaATC
ZALAMEDA, J., concurring:

PREFATORY STATEMENT
A basic principle of international law requires a State party to an international treaty must
ensure that its own domestic law and practice are consistent with what is required by the treaty. 1
The Berne Convention for the Protection of Literary and Artistic Works (the Berne Convention)
provides a milestone in acknowledging the rights of authors and providing a framework that would
ensure their protection. But times have changed and today's technological advancement have
paved the way for new types of works, new markets and new methods of use and dissemination. 2
In response to these changes, new treaties were adopted to update and supplement to the
Berne Convention. References to these treaties are essential in determining the extent of copyright
and related rights to today's environment, especially in the context of digital technologies. 3 Doing
so would effectuate and achieve the fundamental rule of pacta sunt servanda or performance of
international agreements in good faith.
DISCUSSION
I would like to express my concurrence with the ponencia, except for a few matters which I
have a different perspective on, particularly, the difference between public performance and
communication to the public. It is very rare for the Court to encounter cases involving intellectual
property, especially copyright infringement. It was only recently that the case of FILSCAP v. Anrey,
Inc. 4 (Anrey) was promulgated by the Court en banc. The Anrey case gave way for an opportunity
for the Court to elaborate on the public performance rights of a copyright owner and balance it
against the interest of the common good.
To recall, in Anrey, the Court was faced with the issue of whether the unlicensed playing of
radio broadcasts as background music in dining areas of a restaurant amounts to copyright
infringement. 5 The Court answered this in the affirmative. It explained that there was a violation of
the owner's public performance right, which includes the broadcasting of music and specifically
covers the use of loudspeakers. 6 Nonetheless, the Court concluded that there is no violation of the
owner's right to communicate to the public, as the latter more particularly covers advanced
methods of communication such as interactive on-demand systems like the internet. 7
Meanwhile, the present case involves allegedly infringing activities committed through
performance by a live band and playing of sound recordings. 8 In contrast, while the ponencia
acknowledged that the methods of playing the sound recordings were not differentiated by FILSCAP
nor delved into by the lower courts, it held that COSAC infringed on FILSCAP's copyright without
distinction as to specific economic right infringed. 9
I agree with the ponente in his determination that COSAC certainly is liable for copyright
infringement. And while the ponencia did not specify the specific economic right infringed, I would
like to take this opportunity to discuss and attempt to create fine distinctions between the public
performance right versus the right to communicate the copyrighted material to the public.
Distinction between public
performance and other
communication to the public
Section 177 of Republic Act No. (RA) 8293, 10 otherwise known as the "Intellectual Property
Code (IPC)," provides for the following economic rights on copyright:
177.6. Public performance of the work; and
177.7. Other communication to the public of the work (Emphasis supplied.)
A "public performance" means:
171.6. "Public performance," in the case of a work other than an audiovisual work, is the
recitation, playing, dancing, acting or otherwise performing the work, either directly or by
means of any device or process; in the case of an audiovisual work, the showing of its images
in sequence and the making of the sounds accompanying it audible, and, in the case of a
sound recording, making the recorded sounds audible at a place or at places where
persons outside the normal circle of a family and that family's closest social
acquaintance are or can be present, (e.g., radio broadcast as background music in dining
areas) irrespective of whether they are or can be present at the same place and at the same
time, or at different places and/or at different times, and where the performance can be
perceived without the need for communication within the meaning of Subsection 171.3.
(Emphasis supplied)
On the other hand, the term "communication to the public" or "communicate to the public
bear the following meaning:
171.3. "Communication to the public" or "communicate to the public" means the making
of a work available to the public by wire or wireless means in such a way that
members of the public may access these works from a place and time individually
chosen by them. (Emphasis supplied.)
I n Anrey, We made an exhaustive discussion on the subject but to summarize, there is an
overlap between the right to public performance and the right to communicate to the public, with
the right to public performance being the broader of these rights. This conclusion was made
on a collective and harmonized approach: by reviewing treaties, jurisprudence of foreign countries,
legislative history, and other secondary sources.
The Berne Convention and the
Paris Act
In 1886, an international assembly was held by European countries on a uniform approach to
protect the literary and artistic works of authors against infringement. Initially, there were only ten
European countries that acceded to the Berne Convention but the list grew enormously throughout
the years. This caucus became known as the Berne Convention. The provisions under the Berne
Convention underwent several revision, the most notable one was in 1971 in Paris. It became
known as the Guide to the Substantive Provisions of the Berne Convention for the Protection of
Literary and Artistic Works (Paris Act of 1971). The Paris Act of 1971 entitled authors certain
economic rights including the right to public performance and broadcasting, thus: CHTAIc
ARTICLE 11
Right of Public Performance
Article 11, paragraph (1)
Scope of the Right
(I) Authors of dramatic, dramatico-musical and musical works shall enjoy the exclusive
right of authorizing:
(i) the public performance of their works, including such public performance by
any means or process;
(ii) any communication to the public of the performance of their works.
ARTICLE 11bis
Right of Broadcasting
Article 11bis, paragraph (1)
Scope of the Right
(1) Authors of literary and artistic works shall enjoy the exclusive right of
authorizing:
(i) the broadcasting of their works or the communication thereof to the public
by any other means of wireless diffusion of signs, sounds or images;
(ii) any communication to the public by wire or by rebroadcasting of the
broadcast of the work, when this communication is made by an organization other
than the original one;
(iii) the public communication by loudspeaker or any other analogous
instrument transmitting, by signs, sounds or images, the broadcast of the work.
The Berne Convention did not mention public communication as an independent
economic right. Instead, it is enumerated as part of the right to public performance. This
logic was confirmed when in 1978, the World Intellectual Property Organization (WIPO)
commissioned a subject matter expert to draft a written guide to the provisions of the Berne
Convention. The result was the 1978 WIPO Guide to the Berne Convention (WIPO Guide) which
states that the author's right to public performance is split into two: 1) the right to
authorize the public performance of his work; and 2) the right to communication to the
public of a performance of the work, thus:
11.3. The paragraph splits the right into two. The author has the exclusive right to
authorise public performance of his work. x x x
11.4. However, it goes on to speak of "including such public performance by any means or
process," and this covers performance by means of recordings; there is no difference for this
purpose between a dance hall with an orchestra playing the latest tune and the next-door
discotheque where the customers use coins to choose their own music. In both, public
performance takes place. The inclusion is general and covers all recordings (discs, cassettes,
tapes, videograms, etc.) though public performance by means of cinematographic works is
separately covered — see Article 14(1) (ii)." (Underscoring supplied.)
11.5. The second leg of this right is the communication to the public of a performance of
the work. It covers all public communication except broadcasting which is dealt with in Article
116/5. For example, a broadcasting organisation broadcasts a chamber concert. Article 116/5
applies. But if it or some other body diffuses the music by landline to subscribers this is a
matter for Article 11. 11
The WIPO Guide also contained a discussion about radio-over-loudspeakers and
considered it as a new and separate public performance from the original transmission
of the copyrighted work, thus:
11bis.11. Finally, the third case dealt with in this paragraph is that in which the work
which has been broadcast is publicly communicated e.g., by loudspeaker or otherwise, to the
public. This case is becoming more common. In places where people gather (cafés,
restaurants, tea-rooms, hotels, large shops, trains, aircraft, etc.) the practice is growing of
providing broadcast programmes. There is also an increasing use of copyright works for
advertising purposes in public places. The question is whether the licence given by the author
to the broadcasting station covers, in addition, all the use made of the broadcast, which may
or may not be for commercial ends.
11bis.12. The Convention's answer is "no." Just as, in the case of a relay of a
broadcast by wire, an additional audience is created (paragraph (1) (ii)), so, in this case too,
the work is made perceptible to listeners (and perhaps viewers) other than those
contemplated by the author when his permission was given. Although, by definition, the
number of people receiving a broadcast cannot be ascertained with any certainty, the author
thinks of his licence to broadcast as covering only the direct audience receiving the signal
within the family circle. Once this reception is done in order to entertain a wider circle, often
for profit, an additional section of the public is enabled to enjoy the work and it ceases to be
merely a matter of broadcasting. The author is given control over this new public
performance of his work. 12 (Emphasis supplied.)
This is the basis why the Court in Anrey held that the license given to the radio station to
broadcast the copyrighted works does not extend to establishments that tune in and play the radio
broadcasts using loudspeakers in their establishments. The radio reception creates a new public
performance that is separate and distinct from the broadcast. The act of playing radio
broadcasts containing copyrighted music through the use of loudspeakers is in itself
another performance.
Indeed, public performance includes performance by means of a recording. A musical work is
considered publicly performed when a sound recording of that work or phonogram, is played over
amplification equipment, for example in a discotheque, airplane, or shopping mall. 13
Despite the explanation provided under the WIPO Guide, a confusion arose on the true
meaning of "communication to the public." This is because Section 171.3 of the IPC which contained
the definition of the term "communication to the public" underwent changes in a relatively short
amount of time. So to understand the term better, it is necessary to look into the
historical details of the provision's origin.
The distinct "Making-
Available to the Public Right"
and the so-called Internet
Treaties
The original text under the IPC (RA 8293) defines communication to the public as:
Sec. 171. Definitions. — For the purpose of this Act, the following terms have the
following meaning:
xxx xxx xxx
171.3. "Communication to the public" or "communicate to the public" means the
making of a work available to the public by wire or wireless means in such a way that
members of the public may access these works from a place and time individually chosen by
them;
This definition, however, was lifted directly from the [WIPO] Copyright Treaty (Copyright
Treaty) of 1996. Article 8 of the Copyright Treaty 14 reads:
Article 8Right of Communication to the Public
Without prejudice to the provisions of Articles 11(1)(ii), 11bis(1)(i) and (ii), 11ter(1)(ii), 14(1)(ii)
and 14 bis(1) of the Berne Convention, authors of literary and artistic works shall enjoy the
exclusive right of authorizing any communication to the public of their works, by wire or
wireless means, including the making available to the public of their works in such a way that
members of the public may access these works from a place and at a time individually chosen
by them. (Underscoring supplied.)
The Internet was a game-changer and authorities may not have anticipated Internet as a
medium to broadcast copyrighted works. Thus the WCT introduced the right to "communication to
the public." But as explained in the quoted text, this right finds particular application to advanced
forms or medium of communication such as the Internet. cHDAIS
This provision has been regarded by Member States as the restricted right of "making the
work available to the public" (for brevity, the "making available right") and the WIPO explained
that the "making available right" refers to interactive on-demand systems like the
Internet. It does not refer to other traditional forms like broadcasting and transmitting
of signals where a transmitter and a receiver are required as discussed in the WIPO
Guide to the Berne Convention. Here is an excerpt of WIPO's explanatory note to the Copyright
Treaty:
The WIPO Copyright Treaty (WCT) is a special agreement under the Be rne Convention that
deals with the protection of works and the rights of their authors in the digital environment."
"As to the rights granted to authors, apart from the rights recognized by the Berne
Convention, the Treaty also grants: (i) the right of distribution; (ii) the right of rental; and (iii) a
broader right of communication to the public.
"The right of communication to the public is the right to authorize any communication to the
public, by wire or wireless means, including "the making available to the public of works in a
way that the members of the public may access the work from a place and at a time
individually chosen by them." The quoted expression covers, in particular, on-demand,
interactive communication through the Internet." 15 (Underscoring supplied.)
In 2013, Sec. 171.3 of the IPC (RA 8293) was amended by RA 10372 16 (An Act Amending
Certain Provisions of the IPC) to expand its scope and coverage, thus:
171.3. 'Communication to the public' or 'communicate to the public' means any
communication to the public, including broadcasting, rebroadcasting, retransmitting by cable,
broadcasting and retransmitting by satellite, and includes the making of a work available to
the public by wire or wireless means in such a way that members of the public may access
these works from a place and time individually chosen by them.
The amendment led to two formulations of the "communication to the public" right. The first is
the formulation under the IPC (RA 8293) which exclusively contains the "making available right." On
the other hand, the modern formulation created by the amendment in RA 10372 has a broader
scope and now consists of five variations in which the expanded "communication to the public" may
be infringed: 1) broadcasting; 2) rebroadcasting; 3) retransmitting by cable; 4) broadcasting and
retransmitting by satellite; and 5) the making available right.
In this case, considering that the infringing acts took place on scattered dates in 2005 and
2006, then We are supposed to be bound by the original definition under Sec. 171.3 of the RA 8293.
And the original definition exclusively refers to one particular right, which is the "making available
right." It has been explained by the WIPO that the said right only covers on-demand and interactive
communication through the Internet.
U.S. authorities also reserve its applicability to copyright owners on the right to control
interactive, on-demand dissemination of copyrighted works over the Internet, including provision of
access to streams or downloads. 17 Also, the European Union, under Recitals 24-27 of Article 3,
Directive 2001/29/EC provide a background on this right:
(24) The right to make available to the public subject-matter referred to in Article 3(2)
should be understood as covering all acts of making available such subject-matter to members
of the public not present at the place where the act of making available originates, and as not
covering any other acts.
(25) The legal uncertainty regarding the nature and the level of protection of acts of on-
demand transmission of copyright works and subject-matter protected by related rights over
networks should be overcome by providing for harmonised protection at Community level. It
should be made clear that all rightholders recognised by this Directive should have an
exclusive right to make available to the public copyright works or any other subject-matter by
way of interactive on-demand transmissions. Such interactive on-demand transmissions are
characterised by the fact that members of the public may access them from a place and at a
time individually chosen by them.
(26) With regard to the making available in on-demand services by broadcasters of their
radio or television productions incorporating music from commercial phonograms as an
integral part thereof, collective licensing arrangements are to be encouraged in order to
facilitate the clearance of the rights concerned.
(27) The mere provision of physical facilities for enabling or making a
communication does not in itself amount to communication within the meaning of
this Directive. (Emphasis supplied.)
Even if We disregard the explanations provided by secondary sources, it is still my firm point
of view that the making available right is an umbrella clause, not for any type of public
communication, but only to those situations which may not have been contemplated with the
advent of Internet.
If We look at Sec. 177.7 (regardless if under the Original or Amended IPC), the specific
economic right enumerated is the right to "other communication to the public." The word "other"
qualifies the phrase "communication to the public" which indicates that there are
certain acts of communication to the public that are subsumed by the definition of
public performance. We cannot simply disregard the word "other" and treat it as a worthless
qualifier of the clause "communication to the public."
Also, my interpretation of the communication to the public right has a lot to do with the
phraseology of its definition. Although the definition says that making of a work available to the
public by wire or wireless means amounts to communication to the public, this definition
is qualified by the phrase "in such a way that members of the public may access these
works from a place AND time individually chosen by them." The phrase used the conjunctive
word "AND" which means that in order for it to qualify as a "communication to the public" within the
definition, the transmission must not only be made available to the public, but the public must also
have discretion to access the copyrighted material at the place AND at a time individually chosen by
them.
So the essence of the making available right is to give the public liberty to access a particular
protected work, not just to the place of their own choosing, but also the time. This is exactly the
reason why the making available right is limited to On-Demand platforms (such as Netflix, Disney
Plus, Amazon Prime, HBO Go, Spotify, iTunes, or YouTube) since these platforms offer discretion to
access particular protected work at a place AND time of their own choosing. The Internet has
provided accessibility to copyrighted materials in ways traditional media can never achieve.
To illustrate (and for purely illustrative purposes only), the series the Walking Dead used to
run on the local channel TV5 every Saturday at 7:00 P.M. But the entire series is also available on
Disney Plus. Here the act of making the Walking Dead series available in the Disney Plus streaming
platform amounts to "making it available to the public" since a subscriber can access the series
without any regard as to the place and to the time so long as he has his phone or laptop. He can
even watch it at work on his computer or at home by chromecasting on his Internet-capable Sony
Bravia TV. So if it turns out that Disney Plus does not have the rights to stream the Walking Dead
series, then Disney Plus is liable for infringement under the making-available formulation. The
particular economic right violated is the public communication right. EATCcI

On the contrary, if TV5 does not have the license to broadcast the series the Walking Dead,
then the right infringed cannot be the "making available right" because the audience is prevented
access the series at a time of his own preference, since TV5 only broadcasts the work every
Saturday at 7:00 p.m. The audience is only deprived preference to access the series at his preferred
place since he can only view the series where there is television, which is normally at home.
Clearly, not every communication of the protected work should be categorized as
"communication to the public." Especially since a public performance of a work would always, to a
certain extent, involve an element of public communication. Sometimes, the demarcation between
these two rights become obscure and fragmented. But most of the time the particular acts that fall
under each right becomes defined by referring to treaties, foreign jurisdiction and knowing the
history behind the introduction of the law. This is the very same approach the Court adopted in
Anrey, when We ruled that Sec. 171.3 of the IPC (RA 8293) on communication to the public is the
exact embodiment of the restricted "making available right."
Justice Caguioa, in his separate Concurring Opinion remarked that in order to constitute public
performance, the performance must be "perceive[able] without the need for communication within
the meaning of Subsection 171.3. 18 I also agree to this exclusionary approach; that if the
performance was publicly communicated through the process mentioned under Sec. 171.3, then the
copyright infringed is the communication to the public copyright, and not public performance. 19
I agree for this may very well be the reason why in Anrey, the Court treated radio-over-
loudspeakers to involve the public performance copyright, and not "communication to the public"
simply because radio-over-loudspeakers does not provide the listener access to the protected work
at a place AND time of his own choosing.
Even if We assume that the modern formulation of the communication to the public right
introduced by the amendments in RA 10372 retroactively applies, still the acts involved in this case
can neither qualify.
To reiterate, under the present and modern definition, there are only five variations in which
the expanded "communication to the public" right covers: 1) broadcasting; 2) rebroadcasting; 3)
retransmitting by cable; 4) broadcasting and retransmitting by satellite; and the 5) making available
right which has been thoroughly discussed above. If there is anything that defines copyright laws,
almost every word bears a technical meaning.
Broadcasting has been defined by RA 10372 (which was lifted from the WPPT) 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. 20 The
last phrase should be interpreted as retransmitting by satellite under the fourth enumeration.
Our law does not define rebroadcasting but Article 3 (g) of the Rome Convention defines
"rebroadcasting" as the "simultaneous broadcasting by one broadcasting organization of the
broadcast of another broadcasting organization." We acceded to the Rome Convention on 25 June
1984. 21 Likewise, the Rome Convention is integrated in the WPPT. Rebroadcasting under the Rome
Convention is limited to over-the-air transmissions.
The European Parliament and the Council of the European Union defines retransmitting by
cable or cable retransmission as the unaltered and unabridged retransmission by a cable or
microwave system for reception by the public of an initial transmission from another Member State,
by wire or over the air including that by satellite, of television or radio programmes intended for
reception by the public, regardless of how the operator of a cable retransmission service obtains the
programme-carrying signals from the broadcasting organization for the purpose of retransmission.
22
The infringing acts involved in the present case do not fit in any of the foregoing definitions.
Here COSAC was allegedly involved in hosting live-band performances and in the unauthorized
playing of radio broadcasts. Had FILSCAP laid down the necessary distinctions; and had the lower
courts delved on to these distinctions, then the acts should have been classified as public
performances of the protected work, not communication to the public.
I urge prudence by referring to the history that led to the introduction of the new definition of
"communication to the public" under the amendments of RA 10372. We introduced the amendment
as an affirmative action in acceding to the terms of the WIPO Performances and Phonograms Treaty
(WPPT) of 1996. It incorporated the obligations created by the Rome Convention for the Protection
of Performers, Producers of Phonograms, and Broadcasting Organizations (1961 Rome Convention).
The Rome Convention expanded and dealt with broadcasting rights. On the other hand, the WPPT is

regarded as an "Internet Treaty." 23 I mentioned this because We may be ascribing acts beyond the
contemplation of the Treaties that introduced them.
Finally, I would like to inject that if there is any gap or void in the IPC, the Court should
recommend to Congress proposed changes in the IPC rather than making pronouncements that
would in effect judicially legislate on matters which are not properly at issue. ISHCcT
Based on the above disquisitions, I vote to DENY the Petition and hold COSAC liable for
copyright infringement.
Footnotes
* No part; his sister J. Socorro B. Inting, had participation in the proceedings before the Court of Appeals.
** No part; penned the assailed CA Decision.

1. Rollo , pp. 10-19.
2. Id. at 26-34. Penned by Associate Justice Mario V. Lopez (now a Member of this Court) and concurred in
by Associate Justices Noel G. Tijam (a retired Member of this Court) and Myra V. Garcia-Fernandez.
3. Id. at 36.
4. Id. at 75-80. Penned by Presiding Judge Reynaldo B. Daway of Branch 90, RTC of Quezon City.
5. Id. at 81-82. Penned by Presiding Judge Arthur O. Malabaguio of Branch 93, RTC of Quezon City.
6. Id. at 98.
7. Id. at 26-27.
8. On February 3, 2005 and January 13, 2006.
9. Rollo , pp. 60-61.
10. Id. at 62-63.

11. Id. at 71.
12. Id. at 37-43.

13. Id. at 27.
14. Id. at 27.

15. Rollo , pp. 178-179; 182-183; 186-187; records, Volume I, pp. 236-237; Though the order and wording
may be different, the older duly executed versions of the other Deeds of Assignment essentially have
the same provisions pertaining to the assignment of rights in favor of FILSCAP; rollo, pp. 190-193;
199-200.
16. Records, Volume II, pp. 534-632.

17. FILSCAP's Exhibit "H," p. 528.
18. FILSCAP's Exhibit "H-1," p. 529.

19. Id.
20. Rollo , pp. 230-255.

21. Id. at 165.
22. Id. at 166.
23. Id. at 159-162.

24. Id. at 160.
25. TSN, March 15, 2010, p. 15.

26. Id. at 19.
27. Rollo , pp. 161-162.

28. Id. at 162.
29. Id. at 163-167.
30. Id. at 163-164.

31. Id. at 148, 165.
32. Id.
33. TSN, June 28, 2010, pp. 7-10.
34. Rollo , pp. 163-164.

35. TSN, June 28, 2010, p. 8.
36. Rollo , pp. 168-170.

37. Id. at 67-70.
38. Id. at 64-66.

39. Id. at 168.
40. Id. at 103, 169.
41. Id. at 103-104, 169.

42. Id. at 104, 169.
43. Id.
44. Rollo , pp. 174-176.
45. Id. at 174.

46. Id. at 175.
47. TSN, December 12, 2011, p. 11.
48. Id. at 13.

49. Rollo , pp. 217-218.
50. Id. at 217.

51. TSN, April 3, 2012, pp. 12-13.
52. Rollo , pp. 75-80.

53. Id. at 78.
54. Id.
55. Id. at 79.

56. Sec. 183. Designation of Society. — The copyright owners or their heirs may designate a society of
artists, writers or composers to enforce their economic rights and moral rights on their behalf (Sec.
32, P.D. No. 49a).
57. Rollo , pp. 79-80.
58. Id. at 80.

59. Records, Volume III, pp. 199-206.
60. Id. at 230-232.

61. Id. at 248.
62. Rollo , pp. 81-82.
63. Records, Volume III, pp. 327-329.

64. Rollo , p. 28.
65. Id. at 26-34

66. Id. at 33.
67. Id. at 29.

68. Id. at 29-30.
69. Id. at 31-32.
70. Id. at 32.

71. Id. at 32-33.
72. Id. at 33.
73. Id. at 406-411.

74. Id. at 36.
75. Id. at 13.

76. Id. at 13-15.
77. Id. at 15-16.
78. Id. at 16-17.

79. Id. at 17-18.
80. Id. at 97, 116-131.

81. Id. at 132-138.
82. Id. at 139.
83. Id. at 140-141.

84. Id. at 144-155.
85. Id. at 149.

86. Id. at 152.
87. Good Earth Enterprises, Inc. v. Garcia , G.R. No. 238761, January 22, 2020.
88. The IPC was approved on June 6, 1997, but Section 241 of the said law indicates that it took effect on
January 1, 1998.
89. Republic Act No. 10372, entitled "AN ACT AMENDING CERTAIN PROVISIONS REPUBLIC ACT NO. 8293,
OTHERWISE KNOWN AS THE INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES, AND FOR OTHER
PURPOSES." Approved on February 28, 2013.
90. Id. at Sec. 22.
SECTION 22. Section 216 of Republic Act No. 8293 [IPC] is hereby amended to read as follows:
SEC. 216. Infringement. — A person infringes a right protected under this Act when one:
(a) Directly commits an infringement;

(b) Benefits from the infringing activity of another person who commits an infringement if the person
benefiting has been given notice of the infringing activity and has the right and ability to control the
activities of the other person;
(c) With knowledge of infringing activity, induces, causes or materially contributes to the infringing
conduct of another.
xxx xxx xxx
91. Kensonic, Inc. v. Uni-Line Multi-Resources, Inc. (Phil.), 832 Phil. 495, 505 (2018), citing Black's Law
Dictionary, Centennial Edition, 6th ed. West Group, St. Paul Minnesota, USA, 1990, p. 336.
92. Ching v. Salinas Sr., 500 Phil. 628, 649 (2005), citing Pearl & Dean (Phil.) v. Shoemart, 456 Phil. 474
(2003); and Joaquin, Jr. v. Drilon, 361 Phil. 900 (1999); see also Stuff v. La Budde Feed & Grain Co.,
42F. Supp. 493 (E.D. Wis. 1941); and Miller v. Goody , 125 F. Supp. 348 (S.D.N.Y. 1954).
93. INTELLECTUAL PROPERTY CODE, Sec. 2.
94. 596 Phil. 283-304 (2009).
95. Id. at 304, citing Fr. Ranhillo Callangan Aquino, Intellectual Property Law: Comments and Annotations,
2003, p. 5.
96. INTELLECTUAL PROPERTY CODE, Secs. 172 and 178.

98. See also: "Musical Composition means a musical composition or medley consisting of words and/or
music, or any dramatic material and bridging passages, whether in form of instrumental and/or vocal
music, prose or otherwise, irrespective of length," available at:
https://www.lawinsider.com/dictionary/musical-composition (last accessed Nov. 26, 2021).
99. See also: "Sheet music, or score, is a hand-written or printed form of musical notation. Sheet music
typically is printed on paper (or, in earlier times, parchment), although in recent years sheet music
has been published in digital formats. Use of the term 'sheet' is intended to differentiate music on
paper from an audio presentation from a sound recording, broadcast, or live performance, or video,"
available at: https://www.newworldencyclopedia.org/entry/Sheet_music (last accessed Nov. 26,
2021).
101. Separate Concurring Opinion of Senior Associate Justice Marvic Mario Victor F. Leonen, pp. 3-4.

103. INTELLECTUAL PROPERTY CODE, Secs. 202-205.
202.1. "Performers" are actors, singers, musicians, dancers, and other persons who act, sing, declaim,
play in, interpret, or otherwise perform literary and artistic work;
xxx xxx xxx

202.5. "Producer of a sound recording" means the person, or the legal entity, who or which takes the
initiative and has the responsibility for the first fixation of the sounds of a performance or other
sounds, or the representation of sounds;
202.9. "Communication to the public of a performance or a sound recording" means the transmission
to the public, by any medium, otherwise than by broadcasting, of sounds of a performance or the
representations of sounds fixed in a sound recording. For purposes of Section 209, "communication to
the public" includes making the sounds or representations of sounds fixed in a sound recording
audible to the public.
SECTION 203. Scope of Performers' Rights. — Subject to the provisions of Section 212, performers
shall enjoy the following exclusive rights:
203.1. As regards their performances, the right of authorizing:
(a) The broadcasting and other communication to the public of their performance; and
(b)The fixation of their unfixed performance.
203.2. The right of authorizing the direct or indirect reproduction of their performances fixed in sound
recordings, in any manner or form;
203.3. Subject to the provisions of Section 206, the right of authorizing the first public distribution of
the original and copies of their performance fixed in the sound recording through sale or rental or
other forms of transfer of ownership;
203.4. The right of authorizing the commercial rental to the public of the original and copies of their
performances fixed in sound recordings, even after distribution of them by, or pursuant to the
authorization by the performer; and
203.5. The right of authorizing the making available to the public of their performances fixed in sound
recordings, by wire or wireless means, in such a way that members of the public may access them
from a place and time individually chosen by them.
xxx xxx xxx
204.2. The rights granted to a performer in accordance with Subsection 203.1 shall be maintained
and exercised fifty (50) years after his death, by his heirs, and in default of heirs, the government,
where protection is claimed.
xxx xxx xxx
SECTION 205. Limitation on Right. — 205.1. Subject to the provisions of Section 206, once the
performer has authorized the broadcasting or fixation of his performance, the provisions of Sections
203 shall have no further application.
SECTION 208. Scope of Right. — Subject to the provisions of Section 212, producers of sound
recordings shall enjoy the following exclusive rights:
208.1. The right to authorize the direct or indirect reproduction of their sound recordings, in any
manner or form; the placing of these reproductions in the market and the right of rental or lending;

208.2. The right to authorize the first public distribution of the original and copies of their sound
recordings through sale or rental or other forms of transferring ownership; and
208.3. The right to authorize the commercial rental to the public of the original and copies of their
sound recordings, even after distribution by them by or pursuant to authorization by the producer.

SECTION 212. Limitations on Rights. — Sections 203 [Performers], 208 [Producers] 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.
106. Joaquin v. Drilon , 361 Phil. 900, 914 (1999).
107. Separate Concurring Opinion of Senior Associate Justice Marvic Mario Victor F. Leonen, pp. 3-4.
108. Separate Concurring Opinion of Associate Justice Marvic Mario Victor F. Leonen, pp. 4-7.
109. INTELLECTUAL PROPERTY CODE, Sec. 202.9.

112. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 5-9.
113. Records, Volume I, p. 3.
114. Rollo , p. 291.
115. Id. at 217.

116. TSN, April 3, 2012, pp. 11-12.
117. Id. at 12-13.

118. Id. at 13-14.
119. Id. at 18-19.

120. Rollo , p. 152.
121. Id. at 387.
122. Id. at 387-388.

123. Id. at 388.
124. Id. at 321.

125. Id. at 257.
126. 232 Phil. 426 (1987).

127. FILSCAP v. Tan , id. at 433.
128. "To exhibit, perform, represent, produce, or reproduce the copyrighted work in any manner or by any
method whatever for profit or otherwise x x x"; see Act No. 3134, Sec. 3 (c).
130. FILSCAP v. Tan , supra note 125 at 432-433.
131. Rollo , pp. 106-107, 166; These songs under Fiche Internationale are involved: "Tattooed On My Mind";
"If I Was The One"; "Officially Missing You"; "Angel"; "At Your Best"; "Knocks Me Off My Feet";
"Emotion"; "Everybody's Changing"; "She Will Be Loved"; "Let's Get Retarded"; "Don't Miss You At
All"; "All I Wanna Do"; "Strong Enough"; "Don't Know Why"; "Run Baby Run"; "Saturday Night";
"Anything But Down"; "My All"; "Turn The Beat Around"; "Conga"; "Get On Your Feet"; "You're Still The
One"; "Ignition"; "If I Ain't Got You"; and "Falling In Love With You."

135. Microsoft Corp. v. Manansala, 772 Phil. 14, 20-21 (2015), citing Columbia Pictures, Inc. v. Court of
Appeals, 329 Phil. 875, 926 (1996).
136. Microsoft Corp. v. Manansala, 772 Phil. 14, 20-21 (2015), citing NBI-Microsoft Corporation v. Hwang,
499 Phil. 423-438 (2005).

139. NBI-Microsoft Corporation v. Hwang, supra note 135.
140. Olaño v. Lim Eng Co, 783 Phil. 234, 250 (2016), citing Ching v. Salinas, Sr., 500 Phil. 628, 639 (2005).
141. Supra note 135.

145. Id.
146. Id. 805 Phil. 607, 617-618 (2017).
147. Commissioner of Internal Revenue v. St. Luke's Medical Center, citing Commissioner of Internal
Revenue v. St. Luke's Medical Center , 695 Phil. 867, 895 (2012); Lung Center of the Philippines v.
Quezon City, 477 Phil. 141 (2004).
148. Id.
149. Commissioner of Internal Revenue v. Court of Appeals, 358 Phil. 562 (1998), citing 84 CJS 566.
150. 755 Phil. 709 (2015), citing Matthew D. Bunker, TRANSFORMING THE NEWS: COPYRIGHT AND FAIR USE
IN NEWS-RELATED CONTEXTS, 52 J. COPYRIGHT SOC'Y U.S.A. 309, 311 (2004-2005), citing Iowa St.
Univ. Research Found, Inc. v. Am. Broad Cos., 621 F.2d 57, 60 (2d Cir. 1980). The four factors are
similarly codified under the United States Copyright Act of 1976, Sec. 107:
§ 107. Limitations on exclusive rights: Fair use
Notwithstanding the provisions of Sections 106 and 106A, the fair use of a copyrighted work,
including such use by reproduction in copies or phonorecords or by any other means specified by that
section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies
for classroom use), scholarship, or research, is not an infringement of copyright. In determining
whether the use made of a work in any particular case is a fair use the factors to be considered shall
include —
(1) the purpose and character of the use, including whether such use is of a commercial nature or is
for nonprofit educational purposes;
(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole;
and
(4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made
upon consideration of all the above factors.
151. ABS-CBN Corporation v. Gozon, 755 Phil. 709, 757 (2015), citing Habana v. Robles , 369 Phil. 764
(1999), which cited 18 AM JUR 2D § 109, in turn citing Toksvig v. Bruce Pub. Co., (CA7 Wis) 181 F2d
664 [1950]; Bradbury v. Columbia Broadcasting System, Inc. , (CA9 Cal) 287 F2d 478, cert den 368 US
801, 7 L ed 2d 15, 82 S Ct 19 [1961]; Shipman v. R.K.O. Radio Pictures, Inc., (CA2 NY) 100 F2d 533
[1938].
152. Id.
153. Id. at 782.
154. Id. at 759-760.
155. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 15-17, citing
Campbell v. Acuff-Rose Music, Inc. , 510 U.S. 569 (1994).
156. Separate Concurring Opinion of Justice Alfredo Benjamin S. Caguioa, p. 16.
Campbell v. Acuff-Rose Music, Inc. , 510 U.S. 569 (1994).
158. Separate Concurring Opinion of Justice Alfredo Benjamin S. Caguioa, p. 17, citing Campbell v. Acuff-
Rose Music, Inc. , 510 U.S. 569 (1994).
Stewart v. Abend, 495 U.S. 207 (1990).
160. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, p. 17, citing Harper v.
Row, 471 U.S. 539 (1985).
161. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, p. 18.
162. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 18-19, citing Google
LLC v. Oracle America, Inc., 593 U.S. (2021).
163. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 14-20, citing Harper
v. Row . 471 U.S. 539; Stewart v. Abend, 495 U.S. 207, citing 3 Nimmer § 13.05[A], pp. 13-81.
164. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, p. 19, citing Campbell
v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), citing Nimmer § 13.05 [A] [4], p. 13102.61 (footnote
omitted); accord Harper v. Row, 471 U.S., at 569; Senate Report, p. 65; Folsom v. Marsh , 9 F. Cas., at
349.
Campbell v. Acuff-Rose Music, Inc. , 510 U.S. 569 (1994), citing Harper v. Row, 471 U.S. 539.
166. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, p. 19, citing Hustler
Magazine v. Moral Majority, Inc., 796 F. 2d 1148.
167. Id.
168. As stated by Associate Justice Maria Filomena D. Singh in her Reflection, p. 5, citing Ty, Inc. v.
Publications International, 292 F. 3d 512 (7th Cir. 2002).
169. See Commissioner of Customs v. Gold Mark Sea Carriers, Inc., G.R. No. 208318, June 30, 2021, citing
Saint Louis University, Inc. v. Olairez , G.R. No. 197126, January 19, 2021.
170. See "ASCAP Licensing, Frequently Asked Questions," available at https://www.ascap.com/help/ascap-
licensing (last accessed May 24, 2021).
171. See Section 2 in relation to INTELLECTUAL PROPERTY CODE, Sec. 177.
172. Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994).

173. "Purpose of Copyright Law," available at https://lib.siu.edu/copyright/module-01/purpose-of-copyright-
law.php (last accessed Nov. 22, 2021).
174. 422 U.S. 151 (1975).

175. Id.
176. Reflections of then Senior Associate Justice Estela M. Perlas-Bernabe, Ret., p. 10.
177. See Righthaven LLC v. Hoehn , 792 F. Supp. 2d 1138 (D. Nev. 2011) and RA 8293, Secs. 184 and 185.
178. Republic Act No. 10372, AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT NO. 8293,
OTHERWISE KNOWN AS THE "INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES," AND FOR OTHER
PURPOSES, February 28, 2013.
179. Id.
180. Reflections of then Senior Associate Justice Estela M. Perlas-Bernabe, Ret., p. 11.
181. Id.
182. Reflections of Senior Associate Justice Estela M. Perlas-Bernabe, Ret., p. 12, citing
https://www.ipophil.gov.ph/news/the-intellectual-property-system-a-brief-history/ (last accessed Nov.
22, 2021).
183. 17 U.S. Code § 501 — Infringement of Copyright

(a) Anyone who violates any of the exclusive rights of the copyright owner as provided by
Sections 106 through 122 or of the author as provided in Section 106A (a), or who imports copies or
phonorecords into the United States in violation of Section 602, is an infringer or the copyright of
right of the author, as the case may be. For purposes of this chapter (other than Section 506),
any reference to copyright shall be deemed to include the rights conferred by Section 106A (a). As
used in this subsection, the term 'anyone' includes any State, any instrumentality of a State, and any
officer or employee of a State or instrumentality of a State acting in his or her official capacity. Any
State, and any such instrumentality, officer, or employee, shall be subject to the provisions of this title
in the same manner and to the same extent as any nongovernmental entity. (Emphases and
underscoring supplied).
184. See Sony Corp. v. Universal City Studios, 464 U.S. 417 (1984).
The Copyright Act does not expressly render anyone liable for infringement committed by another. In
contrast, the Patent Act expressly brands anyone who 'actively induces infringement of a patent' as
an infringer, and further imposes liability on certain individuals as 'contributory infringers.' The
absence of such express language in the copyright statute does not preclude the
imposition of liability for copyright infringements on certain parties who have not
themselves engaged in the infringing activity. For vicarious liability is imposed in virtually all
areas of the law, and the concept of contributory infringement is merely a species of the broader
problem of identifying the circumstances in which it is just to hold one individual accountable for the
actions of another. (Emphases and underscoring supplied).
185. 545 U.S. 913 (2005).
186. Reflections of Senior Associate Justice Estela M. Perlas-Bernabe, Ret., p. 13; Historical Overview of the
Legal System in the Philippines, ASEAN Law Association, available at:
https://www.aseanlawassociation.org/wp-content/uploads/2019/11/ALA-PHILS-legal-system-Part-1.pdf
(last accessed Nov. 22, 2021).
187. Granite Music Corp. v. Ctr. St. Smoke House, Inc. , 786 F. Supp. 2d 716 (2011), citing Sygma Photo
News, Inc. v. High Society Magazine, Inc., 596 F. Supp. 28, 33 (S.D.N.Y. 1984).
188. 618 F. Supp. 2d 497 (2009).
189. 316 E. 2d 304 (1963).
190. Katherine Wardein, "Copyright Infringement: What's Covering the Cover Band?" available at:
http:www.kentlaw.edu/perrit/courses/seminar/Katherine%20wardein%20Final%20Paper.pdf (last
accessed Nov. 22, 2021).
191. ABKCO Music, Inc. v. Washington , 2011 U.S. Dist. LEXIS 120081 (2011).
192. EMI April Music, Inc. v. White , 618 F. Supp. 2d 497 (2009), citing Shapiro, Bernstein & Co. v. H. L.
Green Co., 316 F.2d 304, 307 (2d Cir. 1963); see also: ABKCO Music, Inc. v. Washington , 2011 U.S.
Dist. LEXIS 120081 (2011).
193. ABKCO Music, Inc. v. Washington , 2011 U.S. Dist. LEXIS 120081 (2011), citing Gordon v. Nextel
Comm'n, 345 F.3d. 922, 925 (6th Cir. 2003).
194. 2011 U.S. Dist. LEXIS 120081 (2011).
195. Rollo , p. 389.
196. Sec. 183. Designation of Society. — The copyright owners or their heirs may designate a society of
artists, writers or composers to enforce their economic rights and moral rights on their behalf (Sec.
32, P.D. No. 49a).
197. Rollo , pp. 178-179; 182-183; 186-187; 198; records, Volume I, pp. 236-237; Though the order and
wording may be different, the older duly executed versions of the other Deeds of Assignment
essentially have the same provisions pertaining to the assignment of rights in favor of FILSCAP; rollo,
pp. 190-193; 199-200.
198. Rollo , pp. 30-31; see records, Volume II, pp. 534-632; Although differently worded, the agreements
essentially pertain to the assignment of rights to FILSCAP: see: records, Volume II, pp. 537-538, 593-
594; 582 (for similarities): '"Performing Right" includes any right that now exists or may exist in the
future of performance of any musical work in public by any means whether now known or later
invented and in any manner, or of communication of any musical work to the public by
telecommunication or authorizing or prohibiting any public performance or any communication of any
work to the public by telecommunication within the territories in which each of the contracting
Societies operates. 'Public performance' shall have a corresponding meaning and without limiting the
generality of the foregoing, includes performances whether instrumental or vocal or both and whether
provided by live means, by mechanical means (including but not limited to analog or digital sound
recordings whether phonographic recordings, discs, wires, tapes, sound tracks and similar devices
capable of reproducing sound); by processes of projection (including but not limited to
videogrammes, whether sound film, tape, and similar devices capable of reproducing sound); by
means of telecommunication (including but not limited to radio, television, telephonic apparatus,
cable, fibre optic, satellite and similar means and devices); and whether made directly, relayed,
rebroadcast or retransmitted."; see also records, Volume II, pp. 554, 573, 607-608 (for similarities):
other agreements describe public performance as follows: "includes all performances audible to the
public in any place within the territories administered by either contracting Society, by whatever
means, whether the said means be already known and used or whether hereafter discovered and put
into use during the period when the present contract is in force. The expression 'public performance'
includes, in particular, performances given by live means, instrumental or vocal; by mechanical
means, such as gramophone records, wires, tapes and sound tracks, magnetic or otherwise; by any
process of sound-film projection, of diffusion and transmission; such as radio and television
broadcasts, whether direct, relayed or retransmitted, and so forth, as well as by any process of
wireless reception, radio, television and telephone receiving apparatus and similar means and
devices, and so forth."
199. Lim v. Moldex Land, Inc., 804 Phil. 341, 353 (2017) citing Casabuena v. Court of Appeals, 350 Phil.
237, 244 (1998).
200. See: RA 10372, Sec. 10:

Section 10. Section 183 of Republic Act No. 8293 is hereby amended to read as follows:
"SEC. 183. Designation of Society. — The owners of copyright and related rights or their heirs may
designate a society of artists, writers, composers and other right-holders to collectively manage their
economic or moral rights on their behalf. For the said societies to enforce the rights of their members,
they shall first secure the necessary accreditation from the Intellectual Property Office. (Sec. 32, P.D.
No. 49a)"
201. Concept introduced by RA 10372; see: Collective Management Organizations "['manages] the bundle
of copyrights that their members own, by providing the legal platform to efficiently enforce their
intellectual property (IP) rights," available at https://www.ipophil.gov.ph/news/ipoplil-highlights-
relevance-of-collective-management-organizations/ (last accessed Nov. 26, 2021).; See also "List of
Accredited Collective Management Organizations (CMO)" available at:
https://www.ipophil.gov.ph/collective-management-organizations/ (last accessed Nov. 24, 2021); and
"Why do you need a License?" available at: https://filscap.org/licensing (last accessed Nov. 24, 2021).
202. Certificate of Accreditation, Registration No. CMO-2-2020, available at

https://www.ipophil.gov.ph/collective-management-organizations/ (last accessed June 2, 2022); See
"We Value Music," available at: https://filscap.org/ (last accessed June 6, 2022): "FILSCAP has been
duly accredited by the Intellectual Property Office of the Philippines to operate as a Collective
Management Organization (CMO) for music creators and copyright owners, and to primarily license
the public playing, broadcast and streaming of the songs of its members, and the members of its
affiliate foreign societies. Currently. FILSCAP's repertoire covers over 20 million copyrighted local and
foreign songs."
203. SECTION 180. Rights of Assignee. — 180.1. The copyright may be assigned in whole or in part. Within
the scope of the assignment, the assignee is entitled to all the rights and remedies which the assignor
had with respect to the copyright.

205. Rollo , pp. 177, 181, 185, 189, 197; records, Volume I, p. 235.
206. Id. at 178-180, 182-184, 186-188, 190-196, 198, 201; id. at 236-238.
207. Records, Volume II, pp. 534-632.

209. Rollo , p. 143.

210. Decree on the Protection of Intellectual Property, Presidential Decree No. 49, November 14, 1972.
211. Rollo , pp. 141-142.

212. See Act No. 3134, "An Act to Protect Intellectual Property." § 11 and Presidential Decree No. 49,
"Decree on the Protection of Intellectual Property," § 26.
Act No. 3134, Section 11 Presidential Decree No. 49, Section 26
SECTION 11. Copyright for a work may be Section 26. After the First public dissemination or
secured by the registration of the claim to such performance by authority of the copyright owner
copyright in accordance with the provisions of this of a work falling under subsections (A), (B), (C)
Act and by publication thereof with the required and (D) of Section 2 of this Decree, there shall,
notice of copyright upon the front part or title- within three weeks, be registered and deposited
page of each copy thereof published or offered for with the National Library, by personal delivery or
sale by authority of the copyright proprietor and by registered mail, two complete copies or
by depositing with the Director of the Philippine reproductions of the work in such form as the
Library and Museum by personal delivery or by Director of said library may prescribe. A certificate
registered mail two complete copies of the of registration and deposit for which the
copyrighted work or one copy of the issue or prescribed fee shall be collected. If, within three
issues containing the work if it be a contribution to weeks after receipt by the copyright owner of a
a periodical. No copyright in any work is written demand from the director for such
considered as existing until the provisions of this deposit, the required copies or reproductions are
Act with respect to the deposit of copies and not delivered and the fee is not paid, the
registration of claim to copyright shall have been copyright owner shall be liable to pay to the
complied with. National Library the amount of the retail price of
the best edition of the work.
With or without a demand from the director, a

copyright owner who has not made such deposit
shall not be entitled to recover damages in an
infringement suit and shall be limited to the other
remedies specified in Section 23 of this Decree.
213. See "Berne Convention for the Protection of Literary and Artistic Works," available at:
https://wipolex.wipo.int/en/text/283698 (last accessed Nov. 25, 2021).
214. In its Guide to the Berne Convention, the World Intellectual Property Organization explains Article 5,
paragraph 2, as follows:
Here appear the other fundamental principles of the Convention. First and foremost, protection may
not be made conditional on the observance of any formality whatsoever. The word "formality" must
be understood in the sense of a condition which is necessary for the right to exist administrative
obligations laid down by national laws, which, if not fulfilled, lead to loss of copyright. Examples are:
the deposit of a copy of a work; its registration with some public or official body; the payment of
registration fees, or one or more of these. If protection depends on observing any such formality, it is
breach of the Convention. However, what is at issue here is the recognition and scope of protection
and not the various possible ways of exploiting the rights given by the law. Member countries may,
for example, prescribe model contracts governing the conditions of the utilisation of works without
this being considered a formality. What one must look at is whether or not the rules laid down by the
law concern the enjoyment and exercise of the rights. (Underscoring supplied).
215. See Senate Deliberations, October 8, 1996, pp. 18-19, the pertinent portions of which read:
Part IV, Mr. President, in this proposed Code is the proposed new law on copyrights. To comply with
the Berne Convention, Senate Bill No. 1719 repeals the provision in Presidential Decree No. 49 which
provides that unless the author deposits two copies of books, publications, lectures, and letter with
the National Library, then he cannot recover damages against the infringer.
xxx xxx xxx

The Code also seeks to clarify that basic concept in the first paragraph of Section 161 that works "are
protected by the sole fact and from the moment of their creation, irrespective of their mode or form of
expression, as well as their content, quality and purpose." Similarly, it reaffirms the basic principle in
Section 164 that "no protection shall extend to any idea, procedure, system, method or operation,
discovery or mere date as such." (Underscoring supplied).
218. INTELLECTUAL PROPERTY CODE, Sec. 191; see also Rule 7, Sec. 2 of the Copyright Safeguards and
Regulations; and Ernesto C. Salao, "Essentials of Intellectual Property Law: A Guidebook on Republic
Act No. 8293 and Related Laws," Second Edition, p. 299.
219. See Isle Originals, Inc., et al. v. Sosan Industries, Inc., et al., 95 O.G. 3479, 3487 (1995); see also
Jacinto D. Jimenez, "Intellectual Property Law in the Philippines," 2012 Edition, p. 41.
220. "[I]t is settled in jurisprudence that a party that did not appeal a judgment is bound by the same and
he cannot obtain from the appellate court any affirmative relief other than those granted, if any, in
the decision of the lower court or administrative body." (Luna v. Allado Construction Co., Inc. , 664
Phil. 509, 524 (2011), citing Pison-Arceo Agricultural and Development Corporation v. NLRC, 344 Phil.
723, 736 (1997)).
221. Rollo , p. 41.
222. Premiere Development Bank v. Court of Appeals, 471 Phil. 704, 719 (2004); see CIVIL CODE, Arts.
2199-2200.
Article 2199. Except as provided by law or by stipulation, one is entitled to an adequate

compensation only for such pecuniary loss suffered by him as he has duly proved. Such compensation
is referred to as actual or compensatory damages.
Article 2200. Indemnification for damages shall comprehend not only the value of the loss suffered,
but also that of the profits which the obligee failed to obtain.
223. Boncayao Confederation of Sugar Producers Cooperatives, G.R. No. 225438, January 20, 2021, citing
San Miguel Foods, Inc., and Vinoya v. Magtuto, G.R. No. 225007, July 24, 2019.
224. Id.
225. Boncayao Confederation of Sugar Producers Cooperatives, G.R. No. 225438, January 20, 2021; ACI
Philippines, Inc. v. Coquia, 580 Phil. 275, 287 (2008), citing Premiere Development Bank v. Court of
Appeals, 471 Phil. 704, 719 (2004); Premiere Development Bank v. Court of Appeals, 471 Phil. 704,
719 (2004); Smith Kline Beckman Corp. v. Court of Appeals, 456 Phil. 213, 225 (2003), citing
Integrated Packaging Corporation v. Court of Appeals, 388 Phil. 835, 846 (2000); Sambar v. Levi
Strauss & Co., 428 Phil. 425, 436 (2002).
226. Asia Pacific Resources International Holdings, Ltd. v. Paperone, Inc. , 845 Phil. 85, 101 (2018).
227. RULES OF COURT, Rule 133, Sec. 1.

228. INTELLECTUAL PROPERTY CODE, Sec. 216.1 (b).
229. As pointed out by Associate Justice Amy C. Lazaro-Javier in her Reflections dated August 31, 2021, pp.
4-6.
230. CIVIL CODE, Art. 2224.

231. Premiere Development Bank v. Court of Appeals, 471 Phil. 704, 719 (2004); Sambar v. Levi Strauss &
Co., 428 Phil. 425, 437 (2002), citing CIVIL CODE, Art. 2224.
232. Mencorp Transport Systems, Inc. v. Heirs of Libatique, G.R. No. 203309 (Notice), February 3, 2021,
citing Pleno v. Court of Appeals, 244 Phil. 213, 229 (1988).
233. Mencorp Transport Systems, Inc. v. Heirs of Libatique, G.R. No. 203309 (Notice), February 3, 2021,
citing CIVIL CODE, Art. 2225.
234. Supra note 231.

235. Id.
236. CIVIL CODE, Arts. 2221-2223.

Article 2221. Nominal damages are adjudicated in order that a right of the plaintiff, which has been
violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.
Article 2222. The court may award nominal damages in every obligation arising from any source
enumerated in article 1157, or in every case where any property right has been invaded.
Article 2223. The adjudication of nominal damages shall preclude further contest upon the right
involved and all accessory questions, as between the parties to the suit, or their respective heirs and
assigns.
237. Rollo , p. 41.
238. Seven Brothers Shipping v. DMC-Construction Resources, Inc., 748 Phil. 692, 700 (2014).
239. Id., citing Francisco v. Ferrer , 405 Phil. 741, 751 (2001), which cited Areola v. Court of Appeals, 306
Phil. 657, 667 (1994).
240. See Sambar v. Levi Strauss & Co., 428 Phil. 425, 436-437 (2002) and Co v. Spouses Yeung
(Resolution), 742 Phil. 803, 809 (2014).
241. Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 21-23, Section
216.1 of the IPC, as amended by RA 10372, can be used as a guide in ascertaining the amount of just
damages even if:

The copyright owner may elect, at any time before final judgment is rendered, to recover instead of
actual damages and profits, an award of statutory damages for all infringements involved in an action
in a sum equivalent to the filing fee of the infringement action but not less than Fifty thousand pesos
(Php50,000.00). In awarding statutory damages, the court may consider the following factors:
(1) The nature and purpose of the infringing act;

(2) The flagrancy of the infringement;
(3) Whether the defendant acted in bad faith;
(4) The need for deterrence;

(5) Any loss that the plaintiff has suffered or is likely to suffer by reason of the infringement; and
(6) Any benefit shown to have accrued to the defendant by reason of the infringement. x x x
242. TSN, April 3, 2012, p. 17.
243. Rollo , pp. 161-162.

244. Id. at 37-41.
245. Id. at 103-104, 169.
246. See Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, p. 24.
247. Id.
248. Co v. Spouses Yeung (Resolution), 742 Phil. 803, 809 (2014), citing CIVIL CODE, Art. 2224.
249. 716 Phil. 267, 280-283 (2013). See Bangko Sentral ng Pilipinas Monetary Board Circular No. 799,
Series of 2013.
LEONEN, J., concurring:
1. Ponencia , p. 22.
2. Id. at 25.
3. ABS-CBN v. Gozon, 755 Phil. 709, 756-760 (2015) [Per J. Leonen, Second Division].
4. G.R. No. 233918, August 9, 2022 [Per J. Zalameda, En Banc].
5. 232 Phil. 426 (1987) [Per J. Paras, Second Division].

6. Id. at 429.
7. Id. at 433-434.
8. Philippine Home Cable Holdings, Inc. v. Filscap, G.R. No. 188933, February 21, 2023 [Per J. Leonen, En
Banc].
10. Justice Leonen's Dissenting Opinion in Filscap v. Anrey, Inc., G.R. No. 233918, August 9, 2022 [Per J.
Zalameda, En Banc].
11. 38 Phil. 768 (1918) [Per J. Fisher, En Banc].

12. Id. at 775-776.
13. Catsilex Industrial Corporation v. Vasquez, Jr., 378 Phil. 1009, 1017 (1999) [Per C.J. Davide, Jr., First
Division].
14. 442 Phil. 784 (2002) [Per J. Mendoza, Second Division].

15. Id. at 793.

CAGUIOA, J., concurring:
1. G.R. No. 233918, August 9, 2022. Penned by Associate Justice Rodil V. Zalameda, with Chief Justice
Alexander G. Gesmundo and Associate Justices Ramon Paul L. Hernando, Samuel H. Gaerlan, Ricardo
R. Rosario, Jhosep Y. Lopez, Japar B. Dimaampao, and Jose Midas P. Marquez concurring.
Associate Justice Caguioa submitted his Separate Concurring Opinion, joined in by Associate Justice
Antonio T. Kho, Jr.
Senior Associate Justice Marvic M.V.F. Leonen and Associate Justice Amy C. Lazaro-Javier dissented,
submitting their respective Dissenting Opinions.
Associate Justice Maria Filomena D. Singh expressed both concurrence and dissent.
Associate Justice Mario V. Lopez on official leave but left his vote to concur. Associate Justice Henri
Jean Paul B. Inting took no part.
2. J. Caguioa, Separate Concurring Opinion in FILSCAP v. Anrey , id . at 1.

3. Ponencia , p. 2.
4. AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE INTELLECTUAL
PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES,
approved on June 6, 1997.
5. Rollo , pp. 60-63 and 71.

6. Id. at 37-43.
7. Id. at 72-74.
8. Ponencia , p. 3.
9. Id. at 34. (Emphasis supplied)
10. G.R. No. 166391, October 21, 2015, 773 SCRA 345.
11. See id. at 352. Citations omitted.
12. Ponencia , pp. 19-20.

13. Id. at 20.
14. Id. at 19.

15. Id. at 38-39.
16. Id. at 4; Testimony of FILSCAP's witness, Ferdinand Gorospe. Emphasis supplied.
17. J. Caguioa, Separate Concurring Opinion in FILSCAP v. Anrey , supra note 1 at 44-51. Citations omitted.
19. J. Caguioa, Separate Concurring Opinion in FILSCAP v. Anrey , supra note 1 at 4-7. Citation omitted.
20. Id. at 9-13. Citations omitted.
21. Id. at 13-29. Citations omitted.

23. IP Code, Section 184 (a) provides: "The recitation or performance of a work, once it has been lawfully
made accessible to the public, if done privately and free of charge or if made strictly for a charitable
or religious institution or society; (Sec. 10 (1), P.D. No. 49)."
24. Ponencia , pp. 6-7.
25. J. Caguioa, Separate Concurring Opinion in FILSCAP v. Anrey , supra note 1 at 66-67.
27. Id. at 50. Citations omitted.

28. Id. at 4.
29. Rollo , p. 39.

30. Id. at 75.
31. Certificate of Accreditation, Registration No. CMO-2-2020, available at

<https://www.ipophil.gov.ph/collective-management-organizations/>.
ZALAMEDA, J., concurring:

1. United Nations Handbook for Parliamentarians on the Convention on the Rights of Persons with
Disabilities.
2. See The Advantages of Adherence to the WIPO Copyright Treaty (WCT) and the WIPO Performances and
Phonograms Treaty (WPPT); the International Bureau of WIPO, p. 2.
3. Id.
4. G.R. No. 233918, 09 August 2022.

5. Id.
6. Id.
7. Id.
9. Id. at 17-18.
10. Entitled: "AN ACT PRESCRIBING THE INTELLECTUAL PROPERTY CODE AND ESTABLISHING THE
INTELLECTUAL PROPERTY OFFICE, PROVIDING FOR ITS POWERS AND FUNCTIONS, AND FOR OTHER
PURPOSES." Approved: 06 June 1997.
11. WIPO-1978 Guide to the Berne Convention, pp. 64-65.
12. Id. at 68-69.

13. Understanding Copyright and Related Rights; World Intellectual Property Organization (WIPO) 2016, p.
12.
14. https://wipolex.wipo.int/en/text/295166; last accessed on 20 July 2022.
15. Available at https://www.wipo.int/treaties/en/ip/wct/summary_wct.html, last accessed 20 July 2022.

16. Entitled: "AN ACT AMENDING CERTAIN PROVISIONS OF REPUBLIC ACT No. 8293, OTHERWISE KNOWN AS
THE INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES, AND FOR OTHER PURPOSES." Approved: 28
February 2013.
17. The Making Available Right in the United States, U.S. Copyright Office (2016), p. 15.
18. J. Caguioa Separate Concurring Opinion dated 03 October 2022, p. 10.

19. Id., p. 12.
20. Sec. 202.7 of the IPC (as amended).
21. WIPO-Administered Treaties, "Contracting Parties > Rome Convention," available at

https://www.wipo.int/wipolex/en/treaties/ShowResults?search_what=C&treaty_id=17 (last accessed
24 February 2023).
22. Art. 1 of Directive 93/83/EEC, par. 3.
23. WIPO Internet Treaties, available at https://www.wipo.int/copyright/en/activities/internet_treaties.html,

last accessed 24 February 2023.

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EN BANC

[G.R. No. 222537. February 28, 2023.]

COSAC, INC., petitioner, vs. FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND

Maximum Accommodation Capacity Live & Mechanical Mechanical Only

100 persons or less [P]100.00 [P]45.00

More than 100 persons, but less than [P]120.00 [P]65.00

300 persons or more, but less than [P]145.00 [P]90.00

500 persons or more [P]170.00 [P]105.00 28

Q: To whom do you issue this practice of issuing licenses?

Infringing Activities in the Case at Bench

(i) The public performance or the communication to the public of a work, in

CD Technologies Asia, Inc. © 2023 cdasiaonline.com

xxx xxx xxx

CD Technologies Asia, Inc. © 2023 cdasiaonline.com

CD Technologies Asia, Inc. © 2023 cdasiaonline.com

88. The permissive character of registration of assignment of copyright is likewise

Every legal obligation must of necessity be extra-contractual or contractual. Extra-

COSAC's Acts Infringed Right of the Authors

"Public Performance" x x x is x x x otherwise performing

(N.B.: As admitted under oath by

Section 171.6 of the IP Code. "Public Performance" x x x

CD Technologies Asia, Inc. © 2023 cdasiaonline.com

Section 171.3 of the IP Code. "Communication to the

CD Technologies Asia, Inc. © 2023 cdasiaonline.com

CD Technologies Asia, Inc. © 2023 cdasiaonline.com

ZALAMEDA, J., concurring:

CD Technologies Asia, Inc. © 2023 cdasiaonline.com

CD Technologies Asia, Inc. © 2023 cdasiaonline.com

** No part; penned the assailed CA Decision.

9. Rollo , pp. 60-61.

10. Id. at 62-63.

12. Id. at 37-43.

14. Id. at 27.

16. Records, Volume II, pp. 534-632.

18. FILSCAP's Exhibit "H-1," p. 529.

20. Rollo , pp. 230-255.

22. Id. at 166.

23. Id. at 159-162.

25. TSN, March 15, 2010, p. 15.

27. Rollo , pp. 161-162.

29. Id. at 163-167.

30. Id. at 163-164.

33. TSN, June 28, 2010, pp. 7-10.

34. Rollo , pp. 163-164.

36. Rollo , pp. 168-170.

38. Id. at 64-66.

40. Id. at 103, 169.

41. Id. at 103-104, 169.

45. Id. at 174.

47. TSN, December 12, 2011, p. 11.

48. Id. at 13.

50. Id. at 217.

52. Rollo , pp. 75-80.

55. Id. at 79.

58. Id. at 80.

60. Id. at 230-232.

62. Rollo , pp. 81-82.

63. Records, Volume III, pp. 327-329.

65. Id. at 26-34