Published 31 March 2023, The Daily Tribune

We often do not realize the value of intangible properties such as “intellectual property.” We can comprehend paying for the use of a venue, rental cars, and hotel rooms, but not paying for the right to use a particular artistic or creative creation, such as music.

The recent case of FILSCAP v. Anrey Inc., GR No. 233918, 9 August 2022, involves a chain of restaurants owned by Anrey Inc. that play radio music inside their restaurants without paying any license fees. FILSCAP, after monitoring the subject establishments, demanded payment of license fees for playing songs by their musicians.

The Supreme Court reiterated that our copyright law affords protection to original and intellectual creations in the literary and artistic domain from the moment of their creation. This includes “musical compositions, with or without words,” while the rights afforded to copyright owners may be classified into either economic rights or moral rights. Part of the economic rights of an owner is the exclusive right to carry out or authorize the following acts enumerated under the law, one of which is the “public performance” of the work.

The very issue of the case is whether radio reception or simply tuning in to the radio as background music in the restaurants amounts to a violation of the right to public performance by FILSCAP. It then boils down to the proper determination of whether the act of playing radio broadcasts, which include copyrighted music in restaurants, can be considered a public performance and, consequently, copyright infringement, if no payment of license fees has been made.

Anrey, however, argued that radio stations already pay the licenses, why should they pay for another? Also, arguably, is the act of Anrey not covered by fair use as an exception to the rights of the copyright owner?

The SC fully covered this issue by citing relevant American jurisprudence. The SC said radio reception is indeed a public performance since the reception of a radio broadcast and its translation into audible sound is not a mere playing of the original program but is a reproduction since complicated electrical instrumentalities are necessary for its reception and distribution.

Further, the SC introduced the doctrine of multiple performances and the concept of a new public. The SC explained that the playing of a record is a performance under copyright laws and that the reproduction of the radio waves into audible sound waves is also a performance, as in the case at the bar, which constitutes multiple performances.

Meanwhile, the SC explained that the concept of a “new public” contemplates a situation where, typically, radio stations already secured from the copyright owner (or his/her assignee) the license to broadcast the sound recording. And by the nature of broadcasting, it is necessarily implied that its reception by the public has been consented to by the copyright owners.

But the author normally thinks of the license to broadcast as covering only the direct audience receiving the signal within the family circle. Any further communication of the reception creates, by legal fiction, a “new public” which the author never contemplated when they authorized its use in the initial communication to the public.

With the foregoing, the SC concluded that the act of Anrey in playing radio music inside its restaurants is considered a “performance” which ought to have the permission of the copyright owner.

Lastly, regarding the matter of fair use, the SC ruled that radio reception transmitted through loudspeakers to enhance profit does not constitute, and is not analogous to, fair use.

It went on by explaining that “the unauthorized transmission of the radio broadcast, which plays copyrighted music, for commercial purposes cannot be treated as fair use.

In this case, the reception was transmitted through loudspeakers within Anrey’s restaurants which are commercial establishments open to the public. Anrey is in the business of running restaurants, whose end goal is clearly profit-making. xxx Surely, Anrey would not put up such radio reception and loudspeakers if not to enhance the overall ambiance and dining experience in its establishments, all for the purpose of economic gain.”

The SC concluded that this does not fall under the concept of fair use.

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