G.R. No. 184661 - Separate Concurring and Disseting 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.

Petitioner Filipino Society of Composers and Publishers' (FILSCAP) presents Us with another interesting intellectual property question, i.e., whether the act of allowing potential consumers to listen to sample ringtones constitutes public performance.

The present case involves the "pre-listening feature" provided in http://ring.smart.com.ph, the website operated by Wolfpac Communications, Inc. (Wolfpac). To promote the downloading of ringback tones for mobile phones operated under the network SMART, the website provides a "pre-listening feature" where a prospective consumer may listen to a 20-second portion of a song before downloading the ringback tone. FILSCAP demanded Wolfpac to secure the necessary performance licenses and pay the appropriate royalties since some of the ringback tones are part of its repertoire. Wolfpac argued that there is no public performance and considered the same as communication to the public as the prospective buyers of the ringback tones may listen to the samples from a place and time individually chosen by them.

The ponencia declared that the pre-listening function on the website operated by Wolfpac amounted to communication to the public, but it is a protected activity under the doctrine of "fair use."

I concur with the disposition of the case, specifically insofar as the ponencia preserves the hairline distinctions between two economic rights of the copyright owner laid down in the landmark case of FILSCAP v. Anrey, Inc. (Anrey)1: 1) the right to public performance defined under Section 171.62 of Republic Act No. 8293, otherwise known as the "Intellectual Property Code of the Philippines" (IPC); and 2) the right to communicate to the public the copyrighted work under Section 171.3.3 However, I have reservations on the implication of the ponencia's discussion relative to the right involved in radio-over-loudspeakers.

Wolfpac's pre-listening feature amounts to communication to the public that is protected under the fair use doctrine

Indeed, the pre-listening function is a form of communication to the public, and not public performance, as differentiated in the landmark case of Anrey.

In Anrey, the Court determined an overlap between the right to public performance and the right to communicate to the public. This observation is based on the Berne Convention and excerpts from the World Intellectual Property Organization (WIPO) Guidelines:

Noticeably, the Berne Convention does not recognize public communication as a right separate and independent from the author's right to public performance or from the right of broadcasting. In 2002, the Philippines became a member of WIPO. As a member, the State had to adhere to the WIPO Copyright Treaty (WCT). The WCT led to changes in our copyright law. In particular, Section 171.3 of Republic Act No. 8293 was lifted directly from Article 8 of the WCT.4 Article 8 reads:

Article 8 of the WCT was introduced to cover situations in the ever-growing and fast-paced digital environment. The explanatory note to the WCT strengthens this point:

As a result of the accumulation of treaties, international conventions, legislative history, and other secondary sources, We made the following distinction: if "public communication" was done using traditional forms such as radio-over-loudspeakers, then the right involved is the public performance right under Section 177.6 of the IPC. On the other hand, if the communication was done in the digital landscape such as the internet, then the right violated is the separate economic right to publicly communicate the work under Section 177.7 of the IPC.

To illustrate, a streaming service in the United Kingdom named TVCatchup offers live streams of free-to-air UK television broadcasts over the internet. The UK High Court referred to the Court of Justice of the European Union (CJEU) whether TVCatchup's streaming activities were a communication to the public. The CJEU held that the retransmission of protected works and broadcasts over the internet was a new communication to the public and therefore must be authorized by the authors concerned.6

Another illustrative case is Nils Svensson v. Retriever Sverige AB.7 The applicants, all journalists, wrote press articles that were published in the Göteborgs-Posten newspaper and freely accessible on the Göteborgs-Posten website. Retriever Sverige operates a website that provides its clients, according to their needs, with lists of clickable internet links (hyperlinks) to articles published by other websites. The CJEU held that the activity of linking to third-party works on the internet is described as an act of public communication, irrespective of the type of link (the judgment makes no distinctions) users may have before them.

Unauthorized links to radio streams are also a violation of the right to communication to the public. In TuneIn Inc. v. Warner Music UK Ltd. & Anor,8 the claimants either represent, own, or hold exclusive licenses to copyrights in sound recordings of music.(awÞhi( On the other hand, defendant TuneIn is a company that operates TuneIn Radio, which enables users in UK to access radio stations from around the world by broadcasting the same on the internet. The appellate court of England and Wales clarified that every transmission or retransmission of the work by a specific technical means must be individually authorized by the copyright holder. Further, for purposes of determining whether there is "communication," the appellate court explained that the work must be made available to the public in such a way that they may access it, whether or not they actually access the work. It confirmed that there is communication to the public in the "transmission of television and radio broadcasts, and sound recordings included therein, to the customers of hotels, public houses, spas, café-restaurants and rehabilitation centers by means of television and radio sets." As TuneIn is a different kind of communication targeted at a different public in a different territory, the court concluded that the rights of the copyright holders were violated.

Here, the alleged infringing act is the "pre-listening feature" on Wolfpac's website providing for a 20-second clip of a song. This is a clear demonstration of the right to communicate to the public (Section 171.3), or for other Member States, they regard this as the "making available to the public" right. The distinguishing feature of the "making available to the public" right is that the transmission of the protected work can be accessed by the public with discretion, not just to the place, but also discretion to the time, which is only possible on Internet-based or On-Demand platforms (such as Netflix, Spotify, or Youtube). The "pre-listening feature" falls under the same category since prospective customers may access the audio clips on the website operated by" Wolfpac any place, anytime, at their own convenience. However, Wolfpac did not acquire such right as the copyright owners limited the assignments they made to the right of public performance.

The same is true with FILSCAP. It did not sufficiently establish a cause of action considering that it failed not only in alleging the compositions that were infringed, but also in proving that it acquired the right to communicate to the public the said compositions.

It must be pointed out that although FILSCAP is deputized through agreements it entered into with various composers, authors and publishers, record labels, and other foreign societies, it does not mean that FILSCAP is the sole assignee of each and every copyright owner. Thus, it would be prudent to at least enumerate some of the compositions allegedly infringed. It's no easy task but nonetheless necessary to prevent FILSCAP from making a shotgun approach where the court would simply rely on FILSCAP's claims without verifying or cross-referencing if indeed it was the assignee. Otherwise, FILSCAP's authority may be far too overreaching and anti-competitive.

Further, FILSCAP has consistently based its cause of action for infringement on its alleged right to public performance. This makes it suspect that FILSCAP does not possess the right to "communicate to the public" or "make available to the public" the copyrighted work.

Assuming FILSCAP acquired the right to "communicate to the public" or the "make available to the public" the disputed musical compositions, the use of the pre-listening function is a protected activity under the fair use doctrine. Sections 184 and 185 of the IPC provide for instances that amount to fair use (statutory fair use) and, hence, do not constitute copyright infringement, thus:

Obviously, the pre-listening feature does not fall under any of the specific instances of statutory fair use. Nonetheless, the said activity may still be categorized as fair use under general fair use principles, particularly, by applying the four fair use factors enumerated in the second portion of Section 185.1, thus: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.9

As to the first factor, I agree with the ponente that the pre-listening function is not necessarily commercial. To second this notion, the pre-listening function is a necessary feature of a sanctioned commercial activity that Wolfpac is licensed to undertake. As correctly ruled by observed by the trial court, [h]uman nature is such that one has to "sample" a product first before setting one's eyes on it with finality.10 Consumers would generally want to hear first the song before purchasing the same as their ringtone. Thus, the first factor should be weighed in favor of fair use.

On the second fair use factor, the Anrey case, citing Google v. Oracle,11 made a distinction between copyrights that have a functional purpose against the creative and artistic types. The Supreme Court of the United States (SCOTUS) ruled that computer programs differ to some extent from many other copyrightable works because computer programs always serve a functional purpose. Because of this difference, the SCOTUS accorded lesser protection to computer programs "by providing a context-based check that keeps the copyright monopoly afforded to computer programs within its lawful bounds." The fact that computer programs are primarily functional makes it difficult to apply traditional copyright concepts in that technological world. Copyright's protection may be stronger where the copyrighted material is fiction, not fact, where it consists of a motion picture, rather than a news broadcast, or where it serves an artistic rather than a utilitarian function.12 Music falls under the more artistic and creative aspect that deserve more protection than other copyright works. Clearly, the copyrighted materials are artistic in nature, hence the second factor should be taken against fair use.

Third, the pre-listening feature on the website operated by Wolfpac only utilizes a short portion of the copyrighted material. It holds no other purpose other than to identify the musical work and entice the consumers to purchase the ringback tone. Thus, I agree that the length of the clip is not only short but is also inconsequential, which should be taken in favor of fair use.

As to the fourth fair use factor, Wolfpac's use of the sample songs in the pre-listening function would not cause substantial economic harm to the composers, but would actually do them good as the pre-listening function serves as an effective marketing tool for them to sell the ringback tones they commissioned Wolfpac for.

I agree with the ponente's discussion that musical compositions are among the literary and artistic works that are subject of copyright under Section 172 of the IPC. However, I respectfully submit that musical compositions are protected from the moment of their creation and does not require that it must be embodied in a sound recording or other forms of fixation.13 This is in accordance with Sections 172 and 178 of the IPC, which provide:

The Court in Cosac, Inc. v. Filipino Society of Composers, Authors and Publishers, Inc.15 explained that:

Clearly, musical compositions are protected from the moment of their creation. Sound recording or other forms of fixation is necessary in neighboring rights as provided for by the IPC.

I observed, however, that the ponencia in a way abandoned the Court's ruling in Anrey in that the act of radio-over-loudspeakers can no longer be considered "public performance" in view of the clarification made in Philippine Home Cable Holdings, Inc. v. FILSCAP.16 The ponencia states that "if the possibility of perceiving the performance requires the means of communicating the works to the public, such as broadcasting, rebroadcasting, retransmitting by cable, broadcasting and retransmitting by satellite, and making of a work available to the public by wire or wireless means in such a way that members of the public may access these works from a place and time individually chosen by them, then it is considered as an exercise of the right of "communication to the public."17

I maintain that radio-over-loudspeakers does not amount to broadcasting, rebroadcasting, retransmission by satellite. Neither does it amount to retransmission by cable. Thus, it cannot be considered as "communication to the public."

For ease of reference, I will reproduce the relevant points previously stated in my Concurring Opinion for Philippine Home Cable Inc. v. Filscap, viz:

From the foregoing disquisitions, I concur with the ponencia, save for the reservations expressed above, and vote to DENY the Petition.