SC upholds rights of artists

Restaurant, lounge and bar owners, and even malls and other business establishments, whether big or small, beware.

Whether it be live band performances or broadcasting music being played over the radio or via MP3 or the computer, playing copyrighted music to entertain the customers and improving the ambiance of the place without first securing the necessary license from the copyright owner and paying the required fees constitutes copyright infringement.

Just recently, the Supreme Court once again championed the exclusive rights of musical artists to their works.

In an en banc decision, the SC ordered COSAC Inc., which owns and operates Off the Grill Bar and Restaurant in Quezon City to pay damages to the Filipino Society of Composers, Authors and Publishers (Filscap) for the unlicensed and unauthorized public performance of copyrighted musical work.

Filscap is a non-stock, non-profit corporation tasked to enforce and protect the performing rights of copyright owners of musical works.

Back in 2005 and 2006, a representative from Filscap discovered that Off the Grill played copyrighted music without obtaining from Filscap a license or paying the corresponding fees. When COSAC refused to secure the required license, Filscap sued COSAC for infringement of copyright and damages, alleging that COSAC’s refusal to secure the license and its continued use of copyrighted music without the requisite performing rights constitutes acts of infringement.

Under the Intellectual Code of the Philippines, one of the economic rights of a copyright owner is the exclusive right to carry out, authorize or prevent the public performance of the work.

The same law also allows owners of copyright and related rights or their heirs to designate a society of artists, writers, composers and other right holders to collectively manage their economic or moral rights on their behalf.  Such societies must be accredited by the Intellectual Property Office.

But COSAC denied committing infringement, saying it had no knowledge about what the band members would sing as part of their performance, and because songs once aired and performed become public property.

Filscap claims that the members of the live bands performed musical works without the consent of the copyright holders. It added that COSAC, as the one which ultimately benefitted from the performances, should have secured the required authority, and not the live bands themselves.

Filscap also pointed out that as the owner of the establishment, COSAC consented to the public performance of these live bands using copyrighted music.

Aside from live music, it noted that COSAC also played background music and music through monitors or projectors which are also acts of infringement upon the public performing rights owned by Filscap.

It said the playing of the music is clearly for profit since COSAC hired those bands to play music and sing songs in its establishment to enhance its customers’ drinking and dining experience and to improve the general ambiance.

Filscap however played the liability on COSAC and not on the live bands, explaining that COSAC cannot feign ignorance and claim that it had no idea that the bands would play copyrighted music.

It stressed that COSAC clearly had control over what music is played, adding that COSAC 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 to another station or song.

Here, the SC said that the infringing activities were committed in two ways: performance by a live band and playing of sound recordings.

The Court ordered COSAC to pay Filscap P300,000 in temperate damages. The amount was computed based on the 500-seating capacity of the restaurant, royalty fee of P170 per day for lounges or bars and pubs which play copyrighted songs live and mechanically, that only 25 copyrighted songs were identified to have been played without the requisite license and payment of fees, among others.

It said that the unauthorized playing of copyrighted music by COSAC was not done privately, nor is the establishment a charitable or religious institution, and that the playing was commercial in nature and will work against the copyright owner’s interests, nor does the playing constitute fair use.

The SC pointed out that COSAC is a primary and secondary infringer. 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.

In its decision penned by Justice Ramon Hernando, the Court said that 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, it stressed, 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.

In 2022, the SC also deciding en banc ordered Anrey Inc. to to pay temperate damages to Filscap for the unlicensed public performance of copyrighted songs on Filscap’s repertoire.

The case arose after a Filscap representative monitored that two branches of Sizzling Plate Restaurant in Baguio, both owned by Anrey, were playing copyrighted music owned by Filscap. It then filed a copyright infringement case with damages against Anrey.

But according to Anrey, it merely played whatever was being broadcasted on the radio they were tuned in.

But the High Tribunal, citing US jurisprudence, held that the act of playing radio broadcasts containing copyrighted music through the use of loudspeakers (radio-over-loudspeakers), is, in itself, a performance.

The Court explained that a radio reception creates a performance separate from the broadcast. Thus, it is immaterial if the broadcasting station has been licensed by the copyright owner since the reception becomes a new public performance requiring separate protection.

It added that free use by commercial establishments of radio broadcasts is beyond the normal exploitation of the copyright holder’s creative work.

The SC also warned that given the current definition of what a public performance is, listeners of a radio station risks, to some extent, copyright infringement.

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