G.R. No. 184661 - Separate Concurring Opinion

G.R. No. 184661, February 25, 2025,
♦ Decision, Lopez, [J]
♦ Separate Concurring Opinion, Leonen, [J]
♦ Concurring Opinion, Caguioa, [J]
♦ Concurring and Dissenting Opinion, Lazaro-Javier, [J]
♦ Separate Concurring and Dissenting Opinion, Zalameda, [J]
♦ Separate Concurring Opinion, Dimaampao, [J]
♦ Concurring and Dissenting Opinion, Singh, [J]

FILIPINO SOCIETY OF COMPOSERS AND PUBLISHERS, PETITIONER, VS. WOLFPAC COMMUNICATIONS, INC., RESPONDENT.

As early as 1918, this Court has recognized that the author has proprietary rights over their literary, scientific, or artistic. work's production, reproduction, annotation, improvement, or other forms of its exploitation:

However, the dominion of a creator over their intellectual creation is not absolute. Intellectual property, as with all property, has been recognized in our laws as having uses that bear a social function. Article XII, Section 6 of the Constitution states:

SECTION 6. The use of property bear a social function, and all economic agents shall contribute to the common good. Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands.

In recognition of this, the Intellectual Property Code declares that for national development and progress and the common good, the State shall promote the diffusion of knowledge and information:

Thus, it is the task of this Court to strike the appropriate balance between the common good and the rights of authors and artists to their intellectual creations.

Before this Court is a Petition for Review on Certiorari that assails the Regional Trial Court's Judgment2 and Order3 dismissing petitioner Filipino Society of Composers, Authors, and Publishers, Inc.'s (FILSCAP) copyright infringement complaint against respondent Wolfpac Communications, Inc. (Wolfpac). In the course of offering "ringback tones" for mobile phones for sale on a website, Wolfpac allegedly infringed on copyrights by allowing prospective purchasers to listen to 20-second portions of each ringback tone as a "pre-listening function" prior to a sale.4

I concur in the differentiation between public performance and communication to the public rights, in accordance with the modifications introduced by Phil. Home Cable Holdings, Inc. v. Filipino Society of Composers, Authors, and Publishers, Inc.5 to Filipino Society of Composers, Authors, and Publishers, Inc. v. Anrey, Inc.6 I further agree that Wolfpac's acts, as described, were exercises of the communication to the public right over the musical works, and not the public performance right:

The agreement between Wolfpac and the composers allows Wolfpac to convert the content or musical works into ringtones, which can be downloaded through the Caller Ring Tune Service. Before potential consumers download the ringback tone, Wolfpac encourages them to listen to the sample first. The first aspect of communication to the public is apparent. Wolfpac's act of placing the pre-listening function makes the musical work available to the public through the use of the internet. The musical works are not yet audible; thus, the first aspect of public performance is still absent. The musical work becomes audible only when the potential consumer clicks the play button to hear the sample song. This is where the second aspect of communication to the public becomes apparent. Considering that the samples are available on Wolfpac's website, any member of the public can access the samples from a place and time individually chosen by them. Thus, there is communication to the public by wireless means because the members of the public can access the samples from Wolfpac's website at a place and time individually chosen by them.

Performance can also be present once the potential consumer plays the sample. In this scenario, the person who makes the sample audible is the potential consumer—not Wolfpac. Put simply, the performance was not made by Wolfpac. The members of the public individually perform the works by clicking the play button and making the samples audible. Such performance is not actionable because the potential consumers performed the musical work in private before deciding whether they would purchase the ringback tone. There is no public perception in such a way that persons outside the potential consumer's normal circle of family and their family's closest social acquaintances are or can be present. It must be stressed that what is prohibited is a public performance, not performance per se.7

Next, the ponencia finds that the pre-listening function was outside the scope of the memoranda of agreement between Wolfpac and FILSCAP members-composers, which only authorized Wolfpac "to convert [the musical works] into a form which can be downloaded" and "to offer and sell the same to the general public."8 According to the ponencia, this provision, in relation to another provision that expressly withholds the exercise of the composers' rights outside the terms of the agreements,9 leads to a conclusion that Wolfpac is only authorized to make ringback tones and offer them for sale, but not to advertise the sale of the ringback tones by letting potential buyers preview a portion of it free of charge.10 In this regard, the ponencia asserts that while advertisements are a way to offer the ringback tones to the public, "the agreement does not expressly allow the use of the songs in marketing the ringtones."11

Musical works are "intangible work[s] of art composed of a combination of sounds perceptible to the senses."12 They are not readily identifiable unless otherwise made tangible in the form of sheet music or something similar, or as sounds that may be heard. The title of a musical work, if any, does not always suffice to differentiate the work from another, because it is the original combination of sounds that makes a musical work a work of art protected by copyright. Inevitably, multiple musical works may share the same title, and composers may even reuse titles for different musical works, resulting in the works only being distinguishable from each other when they are made perceptible to the senses.

Here, the ringback tone offered for sale by Wolfpac is not equivalent to a musical work by a FILSCAP member. Ringback tones are a transformation of compositions fixed in a particular format by some technical processes.13 Because of the nature of the format and the processes involved in transforming the musical work, a ringback tone will not necessarily approximate the sound of other fixations—sound recordings—of the musical work.

Hence, it appears that in order to provide comprehensive information on the ringback tones for sale, Wolfpac allowed potential buyers to listen to 20-second portions of the ringback tones. The pre-listening function may confirm to potential buyers that the title of the work, its artist or composer, and other song metadata correspond to a specific musical work. Potential buyers may use the pre-listening function to determine whether the ringback tone is an acceptable transformation, approximation, or version of a musical work they may be familiar with, and if they are willing to pay to obtain it.

It may be reasonably construed that the provision of such information serves as an enticement or encouragement to consumers to purchase the ringback tones. Succinctly put, the pre-listening function is advertising14 for the ringback tones, the intended result of which is to increase the sales of the ringback tones, with a corresponding portion of the profits to be apportioned to the composers according to their agreements with Wolfpac.

The provision of a portion of the musical work offered for sale is all the more necessary when the commerce takes place on a digital marketplace. An analog mode of advertising intangible goods, such as in a print publication, offers an incomplete accounting of the goods' features to consumers, because the actual essence of the intangible good cannot be perceived in that medium. To reiterate, what is being sold is a musical work; it is practical that the musical work itself be presented to the buying public for their consideration. Further, the mechanics of the pre-listening function, including the method of accessing the sample of the ringback tone and the duration available, serves as an assurance that a potential buyer is not satiated by a freely-available portion of the ringback tone. A 20-second portion of a ringback tone on a website is an imperfect substitute for a ringback tone, which must still be purchased and downloaded to a mobile phone to be of actual use.15

Thus, finding that "to offer and sell" does not necessarily include reasonable means of advertising the goods for sale according to the design of the platform through which they are being sold fails to consider the scope of what the offer and sale of goods—especially of intangible goods through a digital marketplace—may entail. A too-narrow definition of what a third-party seller is permitted to do to sell goods based on works under license from another may, in fact, be to the detriment of the licensor's expected share of the profits, and contrary to the reason for why the works were licensed in the first place.

Nonetheless, I agree with the ponencia that the pre-listening function constitutes fair use, and thus, no infringement took place.16

Before resolving whether the pre-listening function is fair use, this Court must first reckon with whether it was proper for Wolfpac to invoke fair use at all. To emphasize, this case involves a licensee granted some but not all rights to certain works, who is claimed by the licensor to have exercised a right that they did not pay the privilege to exercise for. The licensee now invokes as a defense against the infringement claim that their use was, in fact, fair use, notwithstanding the terms of the agreement between the parties.

The exclusive bundle of rights granted to authors and creators in our copyright laws is not absolute. The Intellectual Property Code admits of several exceptions where certain uses of a work do not infringe on the copyright holder's rights, even if the use is unauthorized or unlicensed. These limitations on the exclusive rights of authors and creators are in line with the State policy that the private economic rights embodied in intellectual property laws may give way to the public good.17 As explained by the Intellectual Property Office of the Philippines in its Guidelines on Statutory Fair Use in the Intellectual Property Code:

Copyright is not an absolute right. The exclusive rights afforded by law to authors and creators over their works were never meant to be all-encompassing, for to make such rights unlimited in scope and application would be an affront to the State's policy of "promot[ing] the diffusion of knowledge and information for the promotion of national development and progress and the common good." Thus, the framers of the present Intellectual Property Code of the Philippines (IP Code) deemed it necessary to include in the law certain acts which, when committed by a user of a copyrighted work, would not constitute copyright infringement even if these were done without first securing a license from the copyright owner. Statutorily, these acts are described as limitations on copyright. We know them by the more common term "fair use."18 (Citation omitted)

Section 184 of the Intellectual Property Code enumerates several limitations to copyright which pertain to minimal, private, noncommercial, or publicly beneficial uses of copyrighted work:

Private reproductions of published works,19 reprographic reproduction by libraries,20 and reproduction of computer programs21 under certain conditions may also be done even without the copyright holder's consent.

Another limitation to copyright is the fair use of a copyrighted work, provided in Section 185.1 of the Intellectual Property Code, as amended by Republic Act No. 10372:

Should fair use be invoked as a defense to an allegation of copyright infringement, all four factors must be considered based on the facts of the case.22 Some limitations to copyright in Section 184 refer to fair use, such that they "require the application of the General Fair Use Principle in Section 185 of the [Intellectual Property] Code in addition to the conditions that govern the specific act."23

In this case, the Regional Trial Court in its June 16, 2008 Judgment found that the pre-listening function was fair use, and thus, did not infringe the copyright of FILSCAP's members.24 The ponencia now upholds the trial court's analysis.

While a contract is the law between the parties,25 this Court has nevertheless ruled that pursuant to Article 1306 of the Civil Code,26 provisions of law which may regulate certain contracts are deemed written therein and shall govern the contracting parties' relations.27 Regarding the transfer, assignment, or licensing of works under copyright, Section 180 of the Intellectual Property Code provides:

Section 180 does not explicitly place any restrictions on what may be agreed upon by the parties in a copyright transfer, assignment, or licensing agreement. In contrast, Section 195 renders invalid by operation of law any waiver of moral rights that has certain injurious effects to the author:

It is undisputed that the memoranda of agreement between Wolfpac and FILSCAP contains an exclusivity clause. This clause expressly reserves all other rights of FILSCAP's members, and states that those rights and authorities not expressly authorized in the memoranda are excluded.28 The rights licensed to Wolfpac are thus delimited by the terms of its contract with FILSCAP. The controversy in this case arose when FILSCAP contested Wolfpac's pre-listening function as an act within the scope of the right it granted to Wolfpac to "offer and sell the [ringback tones] to the general public."29

Fair use is a matter of defense in copyright infringement.30 Here, the root of the alleged infringement is conflicting interpretations of the reasonable extent of a right already licensed by the copyright holder. I agree that Section 185 of the Intellectual Property Code, as amended, may at times supersede the grants and reservations of copyright mutually agreed upon by the contracting parties in a copyright licensing contract. Under circumstances such as the one prevailing in this case, which concerns a breach of contract where the breach is tantamount to copyright infringement, the alleged infringer may invoke fair use regardless of their previous consent to be bound to exercise only those rights included in the contract.

Considering the factors enumerated in Section 185.1, Wolfpac's use of the copyrighted works by means of the pre-listening function is fair use. The pre-listening function is a truncated distribution of an authorized transformation of musical compositions which ultimately redound to the benefit of the copyright holders.(awÞhi( While the use is of a commercial nature—a way by which Wolfpac's products may be selected for purchase—it does not appear that Wolfpac generates additional profit other than that of a successful sale by providing this pre-listening function to potential buyers. As discussed, the very nature of musical works as being uniquely identifiable to the average consumer only when in a form audible to them makes audible versions of said works a logical mode of presenting them. Moreover, as pointed out by in the ponencia, the pre-listening excerpt is of a "reasonable and necessary" portion of the work, enough to fulfill its advertising purpose but not be a substitute for the ringback tone due to the technical requirements to utilize ringback tones as intended.31 In sum, even without a finding that Wolfpac's pre-listening function is a reasonable interpretation of the right granted to it to offer and sell ringback tones, the pre-listening function still constitutes fair use by an entity already authorized to use the copyrighted works.

As a result of the evolution of intellectual property laws into their modern-day conception, copyright is practically indispensable to our present culture and discourse:

Copyright is profoundly intertwined with culture. Many, if not all, copyrighted works can and do shape identities of persons, groups, communities, and nations, Copyright is not merely economic; it also embodies "discursive power—the right to create, and control, cultural meanings." The State recognizes this not just with copyright law, but also with laws that promote and protect art, literature, culture workers, and the preservation and development of national cultural heritage.32 (Citations omitted)

A robust and effective copyright system is vital. Yet, by virtue of copyright as "legal superstructure,"33 those who benefit from the unchecked accumulation of wealth through their monopoly over intellectual creations may not be the individual human authors of intellectual creations, but monolithic corporations:

The globalized regime of intellectual property laws also carries with it the danger of disproportionately favoring the interests and desired outcomes of so-called highly-industrialized nations, to the detriment of the Global South:

An essential instrument in the process of neo-colonialization by economic means is the establishment of a legal framework of international trade, which confers legally enforceable rights that support and safeguard economic penetration and control. This includes, as a prerequisite for the making of an "informal empire" like in colonial times, the creation of property rights and the guarantee of protection of foreign properly rights in dependent regions. However, unlike in the colonial era, the most important property rights, which fulfill this role in the twenty-first century, are intellectual property rights. This is because intellectual property rights do not attach to objects of physical substance, like kind, raw material or plant and machinery, but are abstract legal concepts of unlimited flexibility as regards extent and time.35

This Court must be mindful that "[c]opyright regulation should not be reduced to economic exercises by individuals."36 In a zealous defense of copyright, courts must take care to curtail the rent-seeking37 behavior of copyright holders that benefits neither the mind that created the work nor the audiences that benefit from access to it. Laudable efforts to protect proprietary entitlements due to this nation's creative citizens must not undermine, but instead strengthen and reinforce, fundamental policies in favor of the common good.

ACCORDINGLY, I vote to DENY the Petition for Review on Certiorari and AFFIRM the June 16, 2008 Judgment and September 16, 2008 Order of Branch 93, Regional Trial Court, Quezon City in Civil Case No. Q-05-54475.