FILSCAP vs ANREY
GR 233918
August 9, 2022
EN BANC
Facts:
FILSCAP assessed restaurants owned by ANREY in Baguio to pay annual license fees for the public performance of the copyrighted works of its members. FILSCAP wrote several letters to ANREY demanding payment of the fees but the latter did not pay.
FILSCAP filed a
Complaint (later on Amended) for Copyright Infringement against Anrey before
the RTC.
Anrey denied playing any copyrighted music within its establishments. It claims that the establishments it operates play whatever is being broadcasted on the radio they are tuned in. Even if the broadcast plays copyrighted music, the radio stations have already paid the corresponding royalties, thus, FILSCAP would be recovering twice: from the station that broadcasted the copyrighted music, and from it, simply because it tuned in on a broadcast intended to be heard by the public.
RTC dismissed FILSCAP's amended complaint for lack of merit. In its appeal, FILSCAP argued that regardless of whether the establishments concerned charge admission fees or if the public performance is done by simply tuning in on a radio broadcast, it can collect the fees and/or royalties due for the copyrighted music played. The CA, however, disagreed with FILSCAP and affirmed the Decision of the RTC.
Issue:
1. whether the unlicensed playing of radio broadcasts as background music in dining areas of a restaurant amount to copyright infringement.
Ruling:
1.) YES.
First, the purpose and character of the use of the copyrighted songs are undeniably commercial, being played throughout the restaurants of Anrey, which are open to the public, for the entertainment of Anrey's customers. Commercial use excludes fair use and should be weighed against it.
Second, the nature of the copyrighted songs is creative rather than factual, and thus fair use is weighed against the user, Anrey.
Third, an exact reproduction of the copyrighted songs are made when they are played by means of radio-over-loudspeakers, and not just small portions thereof, supporting the conclusion that their use is not fair. The fact that some customers may not hear or listen to the entire copyrighted music played -in the radio reception is not significant. The fact remains that the copyrighted music from the radio- reception transmitted through the loudspeakers is exactly reproduced or played in whole, and not just portions
thereof.
Fourth, the use
of the copyrighted songs in this case could "result in a substantially
adverse impact on the potential market for the [subject copyrighted songs]!'
The unrestricted and widespread conduct of playing copyrighted music by means
of radio-over-loudspeakers in public commercial places for entertainment of the
public would substantially impact restaurants, bars, clubs, ';)J1d other
commercial establishments, which are potential market for the subject
copyrighted songs. Such use should thus be deemed unfair. ·
The foregoing analysis does not favor fair use of the copyrighted works of FILS CAP. The playing of copyrighted music by means of radio-over-loudspeakers in a commercial setting is not analogous to fair use as to exempt Anrey from copyright infringement.
The free use by commercial establishments of radio broadcasts is beyond the normal exploitation of the copyright holder's creative work. Denying the petition could gravely affect the copyright holder's market where instead of paying! royalties, they use free radio reception.