Filipino Society of Composers, Authors and Publishers, Inc. vs. Anrey, Inc.

The Court held that the unlicensed playing of radio broadcasts containing copyrighted music via loudspeakers in a commercial establishment constitutes copyright infringement under the Intellectual Property Code. Because the reception creates a separate performance directed at a “new public” beyond the original family circle contemplated by the copyright holder, a distinct license is required. Foreign statutory exemptions for small businesses do not apply in the Philippines, and the commercial, non-transformative use of creative musical works fails the four-factor fair use test.

Petitioner FILSCAP, an accredited collective management organization, administers public performance rights for copyrighted musical works of local and foreign composers. Between July and September 2008, FILSCAP monitored three Sizzling Plate restaurants operated by respondent Anrey, Inc. in Baguio City and documented the unauthorized playing of copyrighted songs via radio. After FILSCAP’s repeated demands for annual license fees went unheeded, it filed a complaint for copyright infringement before the Regional Trial Court of Baguio City, seeking compensatory, nominal, and exemplary damages, as well as attorney’s fees.

• Petitioner FILSCAP is a non-stock, non-profit collective management organization accredited to license public performances and collect royalties for copyrighted musical works.
• Respondent Anrey, Inc. operates a chain of Sizzling Plate restaurants in Baguio City.
• FILSCAP representatives conducted surveillance at respondent’s establishments and recorded the playing of specific copyrighted songs through radio receivers connected to loudspeakers.
• Petitioner sent multiple demand letters requiring respondent to secure public performance licenses and pay corresponding fees. Respondent ignored the demands.
• Petitioner filed a civil action for copyright infringement, alleging unauthorized public performance and seeking damages and attorney’s fees.
• Respondent denied infringement, asserting that it merely tuned into publicly broadcast radio signals, that broadcasting stations had already paid royalties, and that the music was intended for staff rather than the dining public.
• The trial court dismissed the complaint, and the appellate court affirmed, both relying on statutory exemptions and foreign jurisprudence that exclude small commercial establishments from licensing requirements for radio reception.

• Petitioner maintained that it holds exclusive authority, through deeds of assignment and reciprocal international agreements, to license public performances and sue for infringement on behalf of its member composers.
• Petitioner argued that playing radio broadcasts through loudspeakers in a commercial dining area constitutes a public performance and communication to the public under Sections 177.6 and 177.7 of the Intellectual Property Code.
• Petitioner contended that statutory exemptions under Section 184 do not apply because respondent operates for-profit commercial restaurants, and the United States “homestyle” and “business” exemptions cannot be judicially imported into Philippine law.
• Petitioner asserted that the fair use doctrine does not shield respondent, as the use was commercial, non-transformative, involved complete reproduction of creative works, and would substantially harm the potential market for licensed performances.

• Respondent argued that it did not commit copyright infringement because it merely received and amplified freely broadcast radio signals intended for public consumption.
• Respondent contended that the originating radio stations had already secured the necessary licenses, and requiring additional fees would constitute double recovery for petitioner.
• Respondent maintained that the reception was not “public” because the broadcasts were primarily for the benefit of its employees, not its customers.
• Respondent urged the adoption of United States copyright exemptions, which shield small business establishments from licensing requirements when using standard radio receivers with limited speakers and no cover charge.

• Procedural Issues: N/A
• Substantive Issues:
  • Whether the unlicensed reception and amplification of radio broadcasts containing copyrighted music through loudspeakers in a commercial restaurant constitutes copyright infringement under the Intellectual Property Code.
  • Whether respondent’s conduct falls within the statutory limitations on copyright or qualifies as fair use.
  • Whether United States copyright exemptions for small businesses apply in the Philippines.

• Procedural: N/A
• Substantive:
  • The Court held that radio reception amplified through loudspeakers in a commercial establishment constitutes a public performance and communication to the public under Sections 171.6 and 171.3 of the Intellectual Property Code.
  • The Court applied the doctrine of multiple performances, ruling that a single broadcast generates distinct performances when received and amplified by separate entities, each requiring independent authorization.
  • The Court rejected the application of United States copyright exemptions, emphasizing that intellectual property is a private right governed by domestic law, and judicially creating exemptions would usurp legislative authority.
  • The Court found that respondent’s use fails the four-factor fair use test because it is commercial, involves creative works, reproduces songs in full, and would substantially prejudice the market for licensed performances if left unchecked.
  • The Court awarded temperate damages of ₱10,000.00 and attorney’s fees of ₱50,000.00, with legal interest, noting that actual damages based on annual license rates were inequitable given the limited proof of use.

• Doctrine of Multiple Performances — This doctrine establishes that a single radio or television broadcast can generate multiple, distinct performances when received and amplified by different establishments. The Court applied this principle to hold that respondent’s amplification of a broadcast created a separate copyrightable performance directed at restaurant patrons, independent of the original broadcast, thereby requiring a separate license.
• Fair Use Doctrine (Four-Factor Test) — The equitable doctrine permits limited use of copyrighted material without consent for purposes such as criticism, comment, or scholarship. The Court applied the statutory four-factor test (purpose/character, nature of work, amount used, market effect) to conclude that commercial background music in restaurants is non-transformative, involves highly creative works, reproduces them entirely, and threatens the licensing market, thus failing the fair use defense.
• “New Public” Concept — Derived from the Berne Convention and WIPO guidelines, this concept holds that communicating a broadcast to an audience beyond the private or family circle originally contemplated by the copyright holder creates a “new public.” The Court relied on this to affirm that commercial establishments transmitting broadcasts to dining customers exercise a separate economic right requiring independent authorization.

• "Music is intangible, and at times it is difficult to appreciate something you cannot see or hold. But music has its rewards, it can deliver a wide-range of benefits. From reeling in customers or to as little as letting someone enjoy the meal with the radio on, rather than having that meal in silence, and most of the time, that is all it takes to have one happy repeat customer. Music is intangible, but its benefits are real. Businesses should pay for such benefit." — The Court emphasized the economic value derived from background music in commercial settings, reinforcing the rationale for requiring license fees.
• "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." — This passage anchors the Court’s legal reasoning that receiving and amplifying a broadcast constitutes an independent act of public performance requiring separate authorization.

• Buck v. Jewell-LaSalle Realty Co. — Cited as foundational precedent establishing that amplifying a radio broadcast through a public speaker system constitutes a “performance” under copyright law, giving rise to the doctrine of multiple performances.
• Broadcast Music, Inc. v. Claire's Boutiques, Inc. — Relied upon to reaffirm that playing radio broadcasts in commercial establishments via loudspeakers qualifies as a public performance, rejecting the contrary rationale of earlier United States jurisprudence.
• Ochranný svaz autorský pro práva k dílům hudebním o.s. v. Léčebné lázně Mariánské Lázně a.s. (OSA) — Cited for the “new public” doctrine, establishing that transmitting broadcast works to patrons in commercial establishments constitutes a separate communication to the public not covered by the original broadcast license.
• ABS-CBN Corp. v. Gozon — Referenced to elucidate the four-factor fair use test under Philippine jurisprudence, particularly regarding commercial use and market impact.

• Section 177.6 and 177.7, Intellectual Property Code (RA 8293) — Enumerate the exclusive economic rights of public performance and other communication to the public, which respondent allegedly violated.
• Section 171.6 and 171.3, Intellectual Property Code — Define “public performance” and “communication to the public,” providing the statutory basis for classifying radio-over-loudspeaker use as an infringing act.
• Section 184, Intellectual Property Code — Lists limitations on copyright; the Court held that none of the exemptions, including the charitable/educational provision, apply to for-profit commercial establishments.
• Section 185, Intellectual Property Code — Codifies the fair use doctrine; the Court applied its four-factor test to reject respondent’s defense.
• Article 11 and Article 11bis, Berne Convention — Recognize the exclusive rights of public performance and broadcasting, supporting the Court’s interpretation of domestic law in harmony with international treaty obligations.
• Article XIV, Section 13 and Article XII, Section 6, 1987 Constitution — Cited to balance the State’s duty to protect intellectual property with the social function of property, affirming that creators’ economic rights are not absolute but remain enforceable against unauthorized commercial exploitation.

• Justice Caguioa — Concurred in the finding of infringement but cautioned against an overly expansive interpretation of copyright that could chill ordinary public use. He emphasized that respondent’s act constitutes communication to a “new public” under Section 177.7 rather than public performance under Section 177.6, and advocated awarding actual damages (₱12,600) instead of temperate damages to fully compensate petitioner for the unpaid annual license fee.
• Justice Singh — Concurred in the infringement ruling but stressed the need to distinguish between large commercial chains and small “mom-and-pop” businesses. He noted that while Philippine law lacks a statutory homestyle exemption, future legislative action or nuanced fair use application may be necessary to protect marginalized enterprises from disproportionate copyright liability.

• Justice Leonen — Dissented on statutory construction grounds, arguing that radio reception does not constitute public performance or communication to the public under the Intellectual Property Code. He emphasized privity of contract, noting that the broadcaster holds the license, and warned that extending liability to mere listeners undermines the cultural and social function of radio in the Philippines. He rejected reliance on United States jurisprudence and WIPO guidelines as binding interpretive tools.
• Justice Lazaro-Javier — Dissented, contending that respondent’s use of a standard radio receiver falls within the “homestyle exemption” by analogy and qualifies as a “private” use under Section 184.1(a) of the Intellectual Property Code. She highlighted the inequity and practical unenforceability of imposing licensing requirements on small businesses that merely tune into publicly available broadcasts for ambient listening.