G.R. No. 222537 , February 28, 2023
COSAC, INC., PETITIONER, VS. FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, INC., RESPONDENT.

FACTS

The respondent, Filipino Society of Composers, Authors and Publishers, Inc. (FILSCAP), is a non-stock, non-profit collective management organization comprised of composers, authors, and music publishers. It is authorized to enforce the performing rights of copyright owners of musical works in its repertoire by issuing licenses and collecting license fees for their public performance. FILSCAP’s authority is derived from deeds of assignment executed by local copyright owners and reciprocal representation agreements with foreign performing rights societies.
FILSCAP monitored the petitioner’s establishment, Off the Grill Bar and Restaurant, on February 3, 2005 and January 13, 2006, and discovered that copyrighted musical works from its repertoire were being performed live by a band and played mechanically as background music without the requisite license from FILSCAP. FILSCAP sent demand letters to COSAC, Inc. (COSAC), but the latter refused to secure a license or pay fees. Consequently, FILSCAP filed a Complaint for infringement of copyright and damages.
COSAC argued that FILSCAP was not a real party-in-interest, denied infringement, and claimed that songs, once aired and performed, become public property. The Regional Trial Court (RTC) ruled in favor of FILSCAP, finding COSAC liable for copyright infringement. The Court of Appeals (CA) affirmed the RTC’s decision. COSAC elevated the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

The core issue is whether COSAC is liable for copyright infringement for the unauthorized public performance of copyrighted musical works in its restaurant, and consequently liable to pay FILSCAP license fees/royalties and damages.

RULING

The Supreme Court DENIED the petition and AFFIRMED the assailed CA Decision and Resolution with MODIFICATION regarding the award of damages.
The Court held that COSAC is liable for copyright infringement. The public performance of copyrighted musical works in COSAC’s restaurant for the entertainment of customers, without the necessary license from FILSCAP, constitutes infringement under Section 177.6 of the Intellectual Property Code (IPC). The Court rejected COSAC’s defenses: (1) FILSCAP sufficiently proved it was a real party-in-interest through the presented deeds of assignment and reciprocal agreements; (2) the act of allowing the performance in a commercial establishment constitutes public performance, for which the establishment owner is liable; and (3) copyrighted works do not enter the public domain merely by being performed or aired.
The Court sustained the award of unpaid license fees in the amount of ₱73,800.00, computed based on FILSCAP’s rate schedule for bars from the date of first demand. However, the Court deleted the awards for temperate damages (₱25,000.00) and attorney’s fees for lack of factual and legal basis. The Court awarded nominal damages in the amount of ₱50,000.00 in recognition of FILSCAP’s violated right, pursuant to Articles 2221 and 2222 of the Civil Code. Moral and exemplary damages were denied.