The Supreme Court en banc has affirmed the right of the Filipino Society of Composers, Authors and Publishers, Inc. (FILSCAP) to collect royalties over copyrighted works of its member artists.

FILSCAP is a non-profit society of composers, authors, and publishers that owns public performance rights over the copyrighted musical works of its members. It also owns the right to license public performances in the Philippines of copyrighted foreign musical works of its members and affiliate performing rights societies abroad.

The case arose upon the refusal of Anrey Inc., the operator of two restaurants in Baguio, to pay FILSCAP for the unauthorized use of its members’ copyrighted music. Anrey Inc. argued that its establishments were merely playing music being broadcast over the radio, whose royalties have already been paid for by the radio stations.

After FILSCAP sent several demand letters which remained unheeded, FILSCAP filed a complaint for copyright infringement before the Regional Trial Court (RTC). The RTC dismissed FILSCAP’s complaint for lack of merit citing Sec. 184 (i) of RA 8293, or the Intellectual Property Code of the Philippines, which exempts public performances by a club or institution for charitable or educational purposes provided, they are not profit making and they do not charge admission fees. On appeal, the Court of Appeals (CA) affirmed the decision of the RTC.

In deciding the sole issue of whether the unlicensed playing of radio broadcasts using loudspeakers as background music in an establishment amounts to copyright infringement, the Supreme Court ruled that such act is, in itself, a performance separate from the radio broadcast, and is thus entitled to its own protection.

The Supreme Court explained: “A radio reception creates a performance separate from the broadcast. This is otherwise known as the doctrine of multiple performances which provides that a radio (or television) transmission or broadcast can create multiple performances at once.” Accordingly, it is immaterial if the broadcasting station has been licensed by the copyright owner. The reception of the broadcast becomes a new public performance requiring separate protection.

Further, the Supreme Court held that radio reception transmitted through loudspeakers to enhance profit does not constitute, and is not analogous to, fair use. The circumstances under which the copyrighted music was being played weighed against Anrey Inc.’s argument of fair use. In this case, the copyrighted songs in their entirety were being played publicly throughout Anrey Inc.’s establishments. The Supreme Court explained that “while Anrey does not directly charge a fee for playing radio broadcasts over its speakers, such reception is clearly done to enhance profit by providing entertainment to the public, particularly its customers, who pay for the dining experience in Anrey’s restaurants.” This commercial use, according to the Supreme Court, “is beyond the normal exploitation of the copyright holder’s creative work.”