PHILIPPINES: SUPREME COURT OFFERS COPYRIGHT CLARIFICATION
01 October 2009
Augusto R Bundang and Anne Mariae Celeste V Jumadla of Sapalo Velez Bundang &Bulilan assess the implications of a recent Supreme Court copyright ruling
The Philippine Supreme Court, through a decision of its third division promulgated on January 19 2009 in the case of ABS-CBN Broadcasting Corporation vs Philippine Multi-Media System Inc, has produced two copyright rulings. First, the Supreme Court declared as a limitation on a copyright directive of the National Telecommunications Commission (NTC), under memorandum circular no 04-08-88. This memorandum requires cable television system operators under the so-called mustcarry rule to carry free-to-air television signals of authorised television broadcast stations. Second, the Supreme Court illustrated what constitutes broadcasting and rebroadcasting under Philippine law.
ABS-CBN broadcasts television programmes produced or purchased by it, or licensed to it by other producers, by wireless means to Metro Manila and via satellite to provincial stations, through Channels 2 and 23.
Philippine Multi-Media System Inc (PMSI), on the other hand, delivers digital direct-to-home television via satellite to its subscribers all over the Philippines and offered as part of its programme line-up ABS-CBN Channels 2 and 23.
ABS-CBN demanded that PMSI cease and desist from rebroadcasting these channels and filed with the Intellectual Property Office (IPO) a complaint for violation of IP rights, alleging that PMSI’s unauthorised rebroadcasting of Channels 2 and 23 infringed on its broadcasting rights and PMSI, in defence, manifested that it is subject to the so called must-carry rule of the NTC.
THE MUST-CARRY RULE AS A LIMITATION ON COPYRIGHT
In resolving the issue in favour of PMSI and ruling out copyright infringement, the Supreme Court considered the nature of the legislative franchises granted to both ABS-CBN and PMSI.
ABS-CBN and PMSI were granted separate legislative franchises under different laws. Both franchises, however, mandate that the franchisee “shall provide adequate public service time to enable the government, through the said broadcasting stations, to reach the population on important public issues; provide at all times sound and balanced programming; promote public participation such as in community programming; assist in the functions of public information and education”.
Being mere privileges, these franchises may be reasonably burdened with the performance by the grantees of some form of public service, such as the must-carry rule imposed by the NTC.
The Supreme Court emphasised that the law on copyright is not absolute, citing Section 184 of the Intellectual Property Code, Republic Act no 8293, which provides copyright limitation on the use made of a work under government direction or control where use is in the public interest and compatible with fair use.
The Supreme Court ruled that the carriage by PMSI of ABS-CBN’s signals by virtue of the mustcarry rule is under the direction and control of the government through the NTC, the imposition of which is within the NTC’s power. This is because public safety and interest may require the government to encourage a larger and more effective use of communications, radio and television broadcasting facilities and to maintain effective competition among private entities.
The High Court elaborated further that the must-carry rule as well as the legislative franchises granted to ABS-CBN and PMSI are in agreement with Sections 9, 17, and 24 of Article II on the Declaration of Principles and State Policies enshrined in the Constitution, which declare that the State: “shall promote a just and dynamic social order…through policies that provide adequate social services”, “shall give priority to education…to…accelerate social progress, and promote total human liberation and development”, “recognis(ing) the vital role of communication and information in nation-building”.
Accordingly, the Supreme Court found the must-carry rule to fall under the limitations on copyright of Section 184 hence, PMSI’s carriage of ABS-CBN’s free-to-air channels is not copyright infringement.
BROADCASTING AND REBROADCASTING
In holding that PMSI did not violate ABS-CBN’s broadcasting rights, the Supreme Court affirmed the finding of the IPO director general and the Court of Appeals that PMSI is not engaged in rebroadcasting and therefore cannot be considered to have infringed ABS-CBN’s broadcasting rights under Section 211 of the IP Code, which gives broadcasting organisations the exclusive right to carry out, authorise or prevent, among others, the rebroadcasting of their broadcasts.
In the absence of a definition in the IP Code, the Court adopted the definition of rebroadcasting in Article 3 (g) of the International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations, otherwise known as the 1961 Rome Convention, of which the Philippines is a signatory, which refers to “the simultaneous broadcasting by one broadcasting organisation of the broadcast of another broadcasting organisation”.
Broadcasting, on the other hand, is defined in Section 202.7 of the IP Code as “the transmission by wireless means for the public reception of sounds or of images or of representations thereof; such transmission by satellite is also ‘broadcasting’ where the means for decrypting are provided to the public by the broadcasting organisation or with its consent”.
Considering that the transmission contemplated under Section 202.7 of the IP Code presupposes that the origin of the signals is the broadcaster and that the programme broadcasted is attributed to the broadcaster, PMSI cannot be deemed to be engaged in broadcasting since it is not the origin nor does it claim to be the origin of the programmes broadcasted by ABS-CBN. Moreover, PMSI did not make and transmit on its own, but merely carried the existing signals of ABS-CBN.
The Supreme Court made reference to the working paper (eighth session, Geneva, November 4-8, 2002) prepared by the secretariat of the Standing Committee on Copyright and Related Rights, which defines broadcasting organisations as “entities that take the financial and editorial responsibility for the selection and arrangement of, and investment in, the transmitted content”. PMSI was found by the Court not to have the aforementioned responsibilities, in addition to the following factual findings that show that PMSI does not perform the functions of a broadcasting organisation:
- PMSI merely carries existing signals which the viewers receive in an unaltered form;
- PMSI does not produce, select, or determine the programmes to be shown in ABS-CBN’s freeto-air channels;
- PMSI does not pass itself off as the origin or author of such programmes;
- PMSI merely retransmits ABS-CBN’s free-to-air channels in accordance with the must-carry rule of NTC; and
- With regard to PMSI’s premium channels, it buys the channels from content providers and transmits on an as-is basis to its viewers.
PMSI’s direct-to-home satellite television services were taken to fall under the definition of cable retransmission. With improvements in technology, cable operators now often receive signals from satellites before retransmitting them in an unaltered form to their subscribers through cable, such as PMSI.
While the Rome Convention gives broadcasting organisations the right to authorise or prohibit the rebroadcasting of its broadcast, it does not grant rights against unauthorised cable retransmission. Cable operators can then retransmit both domestic and foreign over-the-air broadcasts simultaneously to their subscribers without permission from the broadcasting organisations or other rights owners, and without obligation to pay remuneration. Since PMSI does not qualify as a broadcasting organisation, its retransmission of ABS-CBN’s signals does not, therefore, constitute rebroadcasting in violation of ABS-CBN’s broadcasting rights under the IP Code.
AUGUSTO BUNDANG
Augusto Bundang, partner and head of the litigation department, is a holder of a bachelor of arts degree, major in economics and bachelor of laws degree from the Ateneo de Manila University. He has been engaged in active general litigation, licensing, corporate and IP practice for more than fifteen years and is a columnist of Business World, a leading national newspaper. Augusto was accorded an honorary membership by the Association of Fellows and Legal Scholars of the Center for International Studies based in Austria for his article on licensing. He participated in training courses sponsored by the Japan International Cooperation Agency and the Association of Overseas Technical Scholarship.
ANNE MARIAE CELESTE JUMADLA
Anne Mariae Celeste Jumadla obtained her bachelor of science in chemistry from the Ateneo de Manila University, her bachelor of law from the University of the Philippines and is a candidate for a master of chemistry degree at the Ateneo de Manila University. She is a licensed chemist, a registered patent agent and a member of the Integrated Chemists of the Philippines and the Philippines Association of Certified Patent Agents. Anne Mariae has been handling IP cases for the firm since December 2003.
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