9/12/23, 10:51 AM [ G.R. No. 222537.

February 28, 2023 ]

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.:

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.

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 pai1 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.
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[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 pai1y 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 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 Live & Mechanical Mechanical Only Royalty

Capacity Royalty Rate / Day Rate / Day
100 persons or less [P] 100.00 [P] 45.00
More than 100 persons, but
[P] 120.00 [P] 65.00
less than 300 persons
300 persons or more, but
[P] 145.00 [P] 90.00
less than 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:

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.

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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 –

xxxx

Q: Were there other establishments that secure your license?

A: Yes.
xxxx

A: Well, we have Shoernart, 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, 2005[37] and January 13,
2006,[38] he found that copyrighted musical works under FILSCAP's repe1ioire 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

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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:

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
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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 stuns 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:

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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.

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:

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]

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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 "(l) 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.

Overview of Copyright

"[A] copyright is the right to literary property as recognized and sanctioned by positive law; it is
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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:

xxxx

(f) Musical compositions, with or without words;

xxxx

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;

x x x x[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
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(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:

xxxx

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;

xxxx

202.4. "Fixation" means the embodiment of sounds, or of the representations thereat:

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).

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.

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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/or 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
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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:

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]

xxxx

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]

xxxx

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]

xxxx

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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.

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).

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In 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

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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:

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;

xxxx

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
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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
access1bl 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 1th 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;

(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
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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 ofa 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. [n 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
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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 of ABS-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
commercial nature or is for non-profit educational purposes;

b. The nature of the copyrighted work;

c. The amount and substantiality of the portion used in relation to the copyrighted
work as a whole; and

d. The effect of the use upon the potential market for or value of the copyrighted
work.

First, the purpose and character of the use of the copyrighted material must fall
under those listed in Section 185, thus: 'criticism, comment, news reporting, teaching
including multiple copies for classroom use, scholarship, research, and similar
purposes.' 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
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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/or 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 before defendant's
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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.

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
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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
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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]

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
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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 –

xxxx

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.

xxxx

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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.

x x x x[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 xx entitles each of the

contracting Societies, x x x

a) to permit or prohibit xx 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

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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.

xxxx

(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.

x x x x[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
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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 ofrecord. 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.

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
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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 reg1strat1on 1s to protect subsequent purchasers or mortgagees for value and without notice,
since in principle, it is similar to the filing and recording statute pe1iaining 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
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(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 pa11y, 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.

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
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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 and no
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 asse1iion 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]

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
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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. Lopez, Dimaampao, Marquez, Kho, Jr., and Singh, JJ.,
concur.
Leonen, SAJ., Caguioa, and Zalameda, JJ., see separate concurring opinion.
Lazaro-Javier, J., please see concurrence.
Inting* and M. Lopez,** JJ., no part.

*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.

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[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.

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[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.

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[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 OF
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
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follows:

SEC. 216. Infringement. – A person in fringes a right protected under this Act when one:

(a) Directly commit an infringement;

(b) Benefits from the infringing activity of another person who commits an
infringement if the person benefiting has been given notice or 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.
xxxx

[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.

[97] INTELLECTUAL PROPERTY CODE, Sec. 173.

[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).

[100] INTELLECTUAL PROPERTY CODE, Sec. 181.

[101]Separate Concurring Opinion of Senior Associate Justice Marvic Mario Victor F. Leonen,
pp. 3-4.

[102] INTELLECTUAL PROPERTY CODE, Sec. 202.

[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;

xxxx

202.5. "Producer of a sound recording" means the person, or the legal entity, who or which takes

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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.
xxxx
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.
xxxx

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.

[104] INTELLECTUAL PROPERTY CODE, Sec. 208.

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.

[105] INTELLECTUAL PROPERTY CODE, Sec. 212.

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).

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[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.

[110] INTELLECTUAL PROPERTY CODE, Sec. 209.

[111] INTELLECTUAL PROPERTY CODE, Sec. 206.

[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).

[129] Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 4-6.

[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;"
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and "Falling In Love With You."

[132] INTELLECTUAL PROPERTY CODE, Sec. 177.

[133] INTELLECTUAL PROPERTY CODE, Sec. 174.

[134] INTELLECTUAL PROPERTY CODE, Sec. 178.

[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).

[137] INTELLECTUAL PROPERTY CODE, Sec. 216.

[138] INTELLECTUAL PROPERTY CODE, Sec. 217.

[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.

[142] INTELLECTUAL PROPERTY CODE, Sec. 184.

[143] INTELLECTUAL PROPERTY CODE, Sec. 185.

[144] Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 9-21.

[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

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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., (CA 7 Wis) 181 F2d 664 [1950]; Bradbury v. Columbia Broadcasting System, Inc.,
(CA9 Cal) 287 F2d 478, cert den 368 US 801, 7 Led 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.

[157] Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 14-17,
citing Campbell v. Acuff-Ruse Music, Inc., 510 U.S. 569 (1994).

[158]
Separate Concurring Opinion of Justice Alfredo Benjamin S. Caguioa, p. 17, citing
Campbell v. Acuff­Rose Music, Inc., 510 U.S. 569 (1994).

[159] Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 17-18,
citing 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.
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[165] Separate Concurring Opinion of Associate Justice Alfredo Benjamin S. Caguioa, pp. 19-20,
citing 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/ascap­licensing (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
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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 F. 2d 304 (1963).

[190] Katherine Wardein, "Copyright Infringement: What's Covering the Cover Band?" available
at: http:www.kentlaw.edu/perritt/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.
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[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/ipophl-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."

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[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.

[204] INTELLECTUAL PROPERTY CODE, Sec. 216.1.

[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.

[208] INTELLECTUAL PROPERTY CODE, Sec. 182.

[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 Section 26. After the first public
be secured by the registration of the claim dissemination or performance by
to such copyright in accordance with the authority of the copyright owner of a
provisions of this Act and by publication work falling under subsections (A), (B),
thereof with the required notice of (C) and (D) of Section 2 of this Decree,
copyright upon the front part or title-page there shall, within three weeks, be
of each copy thereof published or offered registered and deposited with the
for sale by authority of the copyright National Library, by personal delivery or
proprietor and by depositing with the by registered mail, two complete copies
Director of the Philippine Library and or reproductions of the work in such form
Museum by personal delivery or by as the Director of said library may
registered mail two complete copies of prescribe. A certificate of registration and
the copyrighted work or one copy of the deposit for which the prescribed fee shall
issue or issues containing the work if it be be collected. If, within three weeks after
a contribution to a periodical. No receipt by the copyright owner of a
copyright in any work is considered as written demand from the director for such
existing until the provisions of this Act deposit, the required copies or
with respect to the deposit of copies and reproductions are not delivered and the
registration of claim to copyright shall fee is not paid, the copyright owner shall
have been complied with. be liable to pay to the 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
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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.

xxxx

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).

[216] INTELLECTUAL PROPERTY CODE, Sec. 172.2.

[217] INTELLECTUAL PROPERTY CODE, Sec. 213.

[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.

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[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] Aspointed 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).
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[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.

SEPARATE CONCURRING OPINION

LEONEN, SAJ.:

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:

...
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(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 non­profit educational purposes;

b. The nature of the copyrighted work;

c. The amount and substantiality of the portion used in relation to the

copyrighted work as a whole; and

d. The effect of the use upon the potential market for or value of the
copyrighted work.

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 I 85 of the
Intellectual Property Code lists four (4) factors to determine if there was fair use of a
copyrighted work:

a. The purpose and character of the use, including whether such use is of
a commercial nature or is for non­profit educational purposes;

b. The nature of the copyrighted work;

c. The amount and substantiality of the portion used in relation to the

copyrighted work as a whole; and

d. The effect of the use upon the potential market for or value of the
copyrighted work.

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

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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.[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
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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.

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
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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.

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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 bow 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.

[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].

[9] Ponencia, p. 36.

[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.

[16] Ponencia, p. 47.

SEPARATE CONCURRING OPINION

CAGUIOA, J.:

I concur.

This case involves a similar issue as FILSCAP v. Anrey[1] (Anrey), which likewise stemmed
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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]

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 Complaint[6] 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 185 (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

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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)

In 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 copyrighted Section 177. Copyright or Economic
musical compositions Rights. — Subject to the provisions of
Chapter VIII, copyright or economic
(N.B.: The fact that COSAC had directly rights shall consist of the exclusive right
caused the musical compositions to be to carry out, authorize or prevent the
played — as opposed to being a mere following acts:
passive party that happened to reap
unexpected rewards due to having x x x x
strangers/bands playing music in its
establishment — is evidenced by 177.6. Public performance of the work;
COSAC's witness' own admission under
oath that it regularly hires and pays x x x
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

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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
compositions contained in sound Rights. — Subject to the provisions of
recordings Chapter VIII, copyright or economic
rights shall consist of the exclusive right
(N.B.: As admitted under oath by to carry out, authorize or prevent the
COSAC's witness, COSAC uses a following acts:
projector to display "MTV."[13] There is
no indication whether this is a broadcast x x x x
of the channel or whether COSAC is
merely projecting a recorded footage 177.6. Public performance of the work;
thereof.) and

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 —

xxxx

b) "right of public performance" shall, as provided in Section 171.6 of [the IP

Code) x x x

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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.:

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 xx 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

xxxx

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 conj unction "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.

xxxx

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
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"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

xxxx

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 1s separately covered
— see Article 14(l)(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

xxxx

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 11bis applies. Put
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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."

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."

xxxx

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 music and played
MTV in its establishment (but 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

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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:

xxxx

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 x

xxxx

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

xxxx

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[.] x x x

xxxx

Section 217 of the IP Code, in turn, provides penal sanctions for copyright
infringement:

xxxx
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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)

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)

xxxx

(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;

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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 reqms1te 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)

C.

Fair Use
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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 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.

xxxx

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
xx

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.

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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

In 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

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185 of the IP Code, i.e., for criticism, comment, news reporting, teaching,
scholarship, research, and similar purposes.

In 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."

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.
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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

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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."

In 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.

In 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.

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

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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, it is undisputed that COSAC had used the entirety of at least 25[24] 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.:

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SECTION 216. Remedies for Infringement. — 216.1. Any person

infringing a right protected under this law shall be liable:

xxxx

(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, is 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,

(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 FTLSCAP first
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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 [non­stock 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 socio­cultural 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 tor sharing their creations to the society.
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In view of the foregoing reasons, I vote to DENY the petition.

[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. lnting 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.

[18] Ponencia, p. 34.

[19] J. Caguioa, Separate Concurring Opinion in FILSCAP v. Anrey, supra note 1 at 4-7.

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Citation omitted.

[20] Id. at 9-13. Citations omitted.

[21] Id. at 13-29. Citations omitted.

[22] Ponencia, p. 7.

[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.

[26] Ponencia, p. 51.

[27] Id. at 50. Citations omitted.

[28] Id. at 4.

[29] Rollo, p. 39.

[30] Id. at 75.

[31] Certificate of Accreditation, No. CMO-2-2020, available at

<https://www.ipophil.gov.ph/collective-management-organizations/>.

CONCURRENCE

LAZARO-JAVIER, J.:

Every civil case generally follows two sequential stages – liability and relief These stages are
in reality the elements constituting a cause of action – right, violation of this right, and relief.
At times, trials are bifurcated to first settle the issue of liability before hearing evidence on the
appropriate relief.

Here, I agree with the ponencia that petitioner COSAC, Inc. is liable for infringing the
copyright of respondent's principals – the first two constituent elements of its cause of action,
its right and petitioner's violation of this right. There is no question that without the requisite
license from respondent, COSAC may not play or perform copyrighted music – i.e., through a
live band or recorded music, otherwise, it would be infringing Republic Act No. 8293.

I also laud the ponente for his comprehensive discussion on the grant of temperate damages, in
lieu of the actual damages prayed for by FILSCAP. As aptly noted, FILSCAP "did not present
sufficient evidence to prove the amount claimed and the basis to measure actual damage."

To recall, the courts below appear to have based the amount of damages awarded on the
following matrix presented by one of respondent's witnesses, thus:

Since Off the Grill is considered as a bar, Gaite stated that the royalty fees should be
computed as follows:

For lounges/ Bars/ Pubs

Live & Mechanical Mechanical Only Royalty
(Where Dancing is not
Royalty Rate / Day Rate / Day
allowed)

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Maximum Accommodation
Capacity
100 persons or less P 100.00 P 45.00
More than 100 persons, but
P 120.00 P 65.00
less than 300 persons
300 persons or more, but
P 145.00 P 90.00
less than 500 persons
500 persons or more P 170.00 P 105.00

The specific amounts of damages are not so categorized, to wit:

a) Php317,050.00 as damages for unpaid license fees/royalties... 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....

I assume, however, that these damages are actual damages under the Civil Code based on
respondent's matrix.

A secondary source in the United States,[1] which I find helpful to spur discussion on the issue
of damages, summarizes the purpose of an award of a copyright owner's actual damages – "to
compensate the owner for losses attributable to the infringement" – and the purposes of an
award of the profits the infringer received from the infringement, "to prevent unjust
enrichment of the infringer and to deter wrongful activity." It also mentions a limit to the items
that may be included as actual damages –

Similarly, a copyright owner cannot recover both his own lost profits on sales the
owner would have made to the infringer and also the value to the infringer of
the use of the copyright by the infringer, even though they are both measures of
actual damages, since this recovery would double-count the same economic
transaction. Normally the owner recovers the larger of the two amounts, or all of one
and so much of the other as is not included in the one.[2]

This secondary source clarifies that a "copyright owner's actual damages are usually calculated
by assessing lost profits." The same secondary source intuitively cautions that "[t]he court
recognized that in cases of this kind, lost sales and their resultant lost profit may be based upon
opinion and probable estimate, but it added that a finding that the infringer has unlawfully
taken sales from the copyright owner has to be based upon something other than
conjecture." This source also states that "[e]vidence offered to prove the value of a copyrighted
item must be both material and relevant." I think this statement echoes an analogous ring to
our own statement of the law on actual damages.

I refer to these guiding principles because I find it conjectural to peg the value of actual
damages on these categories: "lounges/bars/pubs;" whether dancing is not allowed; "live and
mechanical" or "mechanical" only; and the venue's "maximum accommodation capacity."

I do not think that everyone in the audience would love to hear the songs in respondent's
repertoire of songs. Or that everyone went to petitioner's bar for the songs in respondent's list
of copyrighted music. Not everyone seeks a seat in the bar for the songs being performed by the
bands or the videos being played when the bands are segueing to their next sets. Some would go
to a bar not for anything else but only for the opportunity to be together, especially before the
pandemic.

Unless clearly established and articulated, the categories in respondent's matrix have nothing
to do with the losses of the copyright owner and the profits and expenses constituting the
profits received by the infringer.

Instead of the matrix referred to by the courts below, we could heed this advice –

To establish the amount of lost profits, the copyright owner may present evidence
of what the estimated sales of the copyrighted item would have been in the
absence of the infringement. Attempting to estimate what sales the copyright

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owner would have made in the absence of an infringement, however, is

inherently speculative. In addition, if a copyright owner is claiming actual damages
based on lost profits, the owner will have to provide more than proof of the
estimated lost sales revenue, since a loss of revenue is not the same thing as a
loss of profits. If the copyright owner contends that lost sales revenue would have
been all profit, the contention is sufficiently improbable to require substantiating
evidence, for it implies that the owner could have made all the lost sales at zero cost.
Also, if the copyright owner's actual sales were reduced because of the infringement,
then the copyright owner's costs may have been reduced as well; in the computation
of the copyright owner's lost profits, this cost savings is a gain that has to be offset
against the loss of revenues.[3]

The process of arriving at the amount of damages suffered gets even more complicated. For
instance:

The amount of the infringer's actual sales of the infringing item may be
indicative of the amount of sales the copyright owner would have made in the
absence of the infringement. When a copyright owner seeks to prove the amount of
his lost profits by presenting evidence of the infringer's actual sales of the
infringing item, the owner's claim is often challenged as too speculative on the
ground that the copyright owner might not have sold copyrighted items to every
customer who purchased an infringing item, perhaps because the copyright
owner's price for the item was higher than the infringer's price. To show that if
there had been no infringement the copyright owner would have made the same
volume of sales as the infringer actually made, so as to constitute a permissible basis
for an award of damages, the copyright owner must show that the items were of
substantially similar quality, sold at substantially similar prices, and sold in a
substantially similar market.[4]

The secondary source I have copiously referenced is 88-page long in letter size, in Times New
Roman, font size 10, and with .75-inch margins. My point is that the legal concept of actual
damages and profits is so complicated to be left undiscussed at all. Indeed, if the award of
damages is based on respondent's matrix, we could be doing injustice to the scheme in
Republic Act No. 8293 which lays down what can and cannot be awarded. In fine, there is a
need to operationalize and explain in actual cases the provisions on damages that may be
awarded to copyright owners. In short, we cannot take for granted the basis for setting in
exact pesos and centavos what petitioner owes to respondent, without first articulating the
clear basis for this award.

ACI Philippines, Inc. v. Coquia[5] forewarned that claims for actual damages in cases of
infringement should be examined with extreme caution. In determining actual damages, the
Court cannot rely on mere assertions, speculations, conjectures or guesswork but must depend
on competent proof and on the best evidence obtainable regarding the actual amount of loss.

To reiterate, respondent's matrix is certainly insufficient to justify the award of actual damages
in this case. For the exact amount of loss or damages cannot be based on the number of persons
going in and out of Off the Grill Bar and Restaurant every night, especially in the absence of
evidence that the customers go to Off the Grill specifically to listen to the subject copyrighted
songs. It should also be remembered that FILSCAP presented proof of COSAC's acts of
infringement on two dates only: February 3, 2005 and January 13, 2006. Surely, we cannot
extrapolate the amount of damages based on this very small sample size. In other words,
FILSCAP utterly failed to prove the actual amount of damages it had suffered.[6]

In Sambar v. Levi Strauss & Co., et al.,[7] the Court clarified that the fact that there was
infringement meant that there were losses. But when the exact amount of damage or loss
could not be determined, the award of temperate damages[8] should be imposed instead.
There, the Court awarded PHP 50,000.00 in favor of private respondents Levi Strauss &
Company and Levi Strauss (Phil.), Inc. considering the attendant circumstances of the case as
well as the global coverage and reputation of private respondents.

The US case of Morley Music Co. v. Cafe Continental, Inc.[9] which shares a similar factual
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milieu with the present case is also illuminating. There, plaintiff's were owners of copyrights of
certain musical compositions and were members of American Society of Composers, Authors
and Publishers (ASCAP) to which they granted non-exclusive right to license non-dramatic
public performances of their works. ASCAP discovered though that therein plaintiff's musical
compositions were being publicly performed at defendant Cafe Continental, sans the requisite
license. The court found Café Continental liable for copyright infringement. In lieu of actual
damages, the Court awarded statutory damages, which bears semblance to temperate
damages in our jurisdiction, taking into account the following factors:

(1) the expenses saved and profits reaped by the defendant in connection with the
infringements;
(2) the revenues lost by plaintiff's as a result of the defendant's conduct; and
(3) the infringers' state of mind, that is, whether willful, knowing, or merely
innocent.

Indeed, the award of actual damages is not the only relief which the courts may grant in cases of
copyright infringement. The relevant provisions of Republic Act No. 8293, as amended read:

SECTION 216. Infringement. — A person infringes a right protected under this Act
when one:

....

(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.

SECTION 216.1 Remedies for Infringement. — Any person infringing a right

protected under this law shall be liable:

....

(b) To 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: Provided, That the
amount of damages to be awarded shall be doubled against any person who:

(i) Circumvents effective technological measures; or

(ii) Having reasonable grounds to know that it will induce, enable,

facilitate or conceal the infringement, remove or alter any electronic
rights management information from a copy of a work, sound recording,
or fixation of a performance, or distribute, import for distribution,
broadcast, or communicate to the public works or copies of works
without authority, knowing that electronic rights management
information has been removed or altered without authority.

....

(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.

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

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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.

In case the infringer was not aware and had no reason to believe that his acts
constitute an infringement of copyright, the court in its discretion may reduce the
award of statutory damages to a sum of not more than Ten thousand pesos
(Php10,000.00): Provided, That the amount of damages to be awarded shall be
doubled against any person who:

(i) Circumvents effective technological measures; or

(ii) Having reasonable grounds to know that it will induce, enable,

facilitate or conceal the infringement, remove or alter any electronic
rights management information from a copy of a work, sound recording,
or fixation of a performance, or distribute, import for distribution,
broadcast, or communicate to the public works or copies of works
without authority, knowing that electronic rights management
information has been removed or altered without authority.

....

Verily, the complications of proving actual damages and profits are avoided altogether by
seeking just damages (thus, RA 8293 states "in lieu of actual damages and profits") or statutory
damages (only if, as RA 8293 clearly imposes, the copyright owner "elect[s], at any time before
final judgment is rendered, to recover instead of actual damages and profits, an award of
statutory damages"). The learned ponente has painstakingly explored the grant of "just
damages" akin to temperate damages. Indeed, even if FILSCAP failed to substantiate its
entitlement to actual damages, damages which appear to be just may be awarded to address a
claim of pecuniary loss. As it was, FILSCAP suffered pecuniary loss when COSAC did not pay
the license fees before it allowed the public performance of copyrighted music at Off the Grill.
I, therefore, agree with the award of temperate damages in the amount of PHP 300,000.00
pursuant to Section 216.1 (b) of Republic Act No. 8293.

ACCORDINGLY, I vote for the denial of the petition, and the grant of PHP 300,000 as
temperate damages in favor of FILSCAP.

Respectfully submitted.

[1] 50 Am. Jur. Proof of Facts 2d 263 (Originally published in 1988).

[2] Id.

[3] Id.

[4] Id.

[5] 580 Phil. 275, 287 (2008) [Per J. Tinga, Second Division].
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[6]See Smith Kline Beckman Corp. v. Court of Appeals, 456 Phil. 213-226 (2003) [Per J.
Carpio Morales, Third Division].

[7] 428 Phil. 425-437 (2002) [Per J. Quisumbing, Second Division].

[8]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.

[9] Case No. 91-6019-CIV, November 4, 1991.

SEPARATE CONCURRING OPINION

ZALAMEDA, J.:

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]

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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.)

In 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:

ARTICLE 11
Right of Public Performance

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Article 11, paragraph (1)

Scope of the Right

(1) 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-over­loudspeakers 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
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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:

xxxx

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 8
Right 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 14bis(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.)
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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.

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 Berne
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 modem 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
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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 on­demand 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 pa1iicular economic right violated is the public communication right.

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.

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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 Caguiao, 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-over­loudspeakers 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 live­band 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

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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.

Based on the above disquisitions, I vote to DENY the Petition and hold COSAC liable for
copyright infringement.

[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.

[8] Ponencia, p. 17

[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.

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[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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