G.R. No.

195835, March 14, 2016

SISON OLAÑO, SERGIO ONG, MARILYN GO, JAP FUK HAI, Petitioners, v. LIM ENG CO, The only instance when a useful article may be the subject of copyright protection is when it incorporates
a design element that is physically or conceptually separable from the underlying product. This
A copyright is "the right granted by a statute to the proprietor of an intellectual production to its exclusive means that the utilitarian article can function without the design element. In such an instance, the design
use and enjoyment to the extent specified in the statute. Copyright or Economic Rights consist of the element is eligible for copyright protection.
exclusive right to CPA: RDF-RPPO
The design of a useful article shall be considered a pictorial, graphic, or sculptural work only if, and
Copyright infringement is committed by using original literary or artistic works, or derivative works, only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be
without the copyright owner's consent in such a manner as to violate the copy and economic rights. The identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.
evidence on record must demonstrate:
In the this case, LEC's hatch doors bore no design elements that are physically and conceptually separable,
(1) ownership of a validly copyrighted material by the complainant; and independent and distinguishable from the hatch door itself. The allegedly distinct set of hinges and distinct
(2) infringement of the copyright by the respondent. jamb, were related and necessary hence, not physically or conceptually separable from the hatch door's
utilitarian function as an apparatus for emergency egress. Without them, the hatch door will not function.
There is no proof that the respondents reprinted the copyrighted sketches/drawings of LEC's hatch doors.
The raid conducted by the NBI on Metrotech yielded no copies or reproduction of LEC's copyrighted More importantly, they are already existing articles of manufacture sourced from different suppliers.
sketches/drawings of hatch doors. What were discovered were finished and unfinished hatch doors. Being articles of manufacture already in existence, they cannot be deemed as original creations. As earlier
stated, valid copyright ownership denotes originality of the copyrighted material. Originality means that the
COR pertain to class work "I" covers "illustrations, maps, plans, sketches, charts and 3D works relative to material was not copied, evidences at least minimal creativity and was independently created by the
geography, topography, architecture or science." As such, LEC's copyright protection there under covered author.70 It connotes production as a result of independent labor.71 LEC did not produce the door jambs
only the hatch door sketches/ drawings and not the actual hatch door they depict. and hinges; it bought or acquired them from suppliers and thereafter affixed them to the hatch doors. No
independent original creation can be deduced from such acts.
Copyright, is purely a statutory right.; the rights are limited to what the statute confers. It may be obtained
and enjoyed only with respect to the subjects and by the persons, and on terms and conditions specified Absent originality and copyrightability as elements of a valid copyright ownership, no infringement can
in the statute. Accordingly, it can cover only the works falling within the statutory enumeration or subsist.
description.54
G.R. No. 195956 March 11, 2015
Since the hatch doors cannot be considered as either illustrations, maps, plans, sketches, charts and 3D ABS-CBN, Petitioner, vs. FELIPE GOZON, GILBERTO DUAVIT, JR., MARISSA FLORES, JESSICA
works relative to geography, topography, architecture or science, to be properly classified as a copyrightable SORO, GRACE DELA PENA-REYES, JOHN OLIVER MANALASTAS, et al, Respondents.
class "I" work, what was copyrighted were their sketches/drawings only, and not the actual hatch doors
themselves.
The news footage is copyrightable. Under the Code, "works are protected by the sole fact of their
creation, irrespective of their mode or form of expression, as well as of their content, quality and purpose."
"Unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only to the
These include "audiovisual works and cinematographic works and works produced by a process analogous
expression of the idea — not the idea itself.
to cinematography or any process for making audiovisual recordings."80
Anent, LEC's COR, the Court finds that the ownership thereof was not established by the evidence on record
because the element of copyrightability is absent. Contrary to the old copyright law, IPC does not require registration of the work to fully recover in an
infringement suit. Both copyright laws provide that copyright for a work is acquired by an intellectual creator
"Ownership of copyrighted material is shown by proof of originality and copyrightability." from the moment of creation.
While it is true that where the complainant presents a copyright certificate in support of the claim of
infringement, the validity and ownership of the copyright is presumed. This presumption, however, is It is true that under Sec. 175 of the Code, "news of the day and other miscellaneous facts having the
rebuttable and it cannot be sustained where other evidence in the record casts doubt on the question of character of mere items of press information" are considered unprotected subject matter. However, the
ownership,59 as in the instant case. Code does not state that expression of the news of the day, particularly when it underwent a
creative process, is not entitled to protection.
It is clear that the hatch doors were not artistic works within the meaning of copyright laws. A
copyrightable work refers to literary and artistic works defined as original intellectual creations in the literary
and artistic domain. P.D. 49, §2, in enumerating what are subject to copyright, refers to finished works and not to
concepts. The copyright does not extend to an idea, procedure, process, system, method of operation,
A hatch door, by its nature is an object of utility. It is thus by nature, functional and utilitarian serving concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or
as egress access during emergency. It is not primarily an artistic creation but rather an object of utility embodied in such work.
designed to have aesthetic appeal. It is intrinsically a useful article, which is not eligible for copyright.
SEC. 175. Unprotected Subject Matter. No protection shall extend, under this law, to any idea, procedure,
A "useful article”: article "having an intrinsic utilitarian function that is not merely to portray the system, method or operation, concept, principle, discovery or mere data as such, even if they are expressed,
appearance of the article or to convey information" is excluded from copyright eligibility.
explained, illustrated or embodied in a work; news of the day and other miscellaneous facts having the Having established the protectible nature of news footage, we now discuss the concomitant rights accorded
character of mere items of press information; or any official text of a legislative, administrative or legal to authors. SECTION 177. Copyright or Economic Rights. 177.1. Reproduction of the work or substantial
nature, as well as any official translation thereof. portion of the work;

What then is the subject matter of petitioners’ copyright? This Court is of the opinion that petitioner BJPI’s 1. Reproduction of the work or substantial portion of the work;
copyright covers audio-visual recordings of each episode of Rhoda and Me, as falling within the class of 2. Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work;
works mentioned in P.D. 49, §2(M),to wit: 3. First public distribution of the original and each copy of the work by sale or other forms of transfer
of ownership;
4. Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a
Cinematographic works and works produced by a process analogous to cinematography or any process for
sound recording, a computer program, a compilation of data and other materials or a musical work in
making audio-visual recordings;
graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental;
5. Public display of the original or a copy of the work;
The copyright does not extend to the general concept or format of its dating game show. 6. Public performance of the work; and
Accordingly, by the very nature of the subject of petitioner BJPI’s copyright, the investigating prosecutor 7. Other communication to the public of the work
should have the opportunity to compare the videotapes of the two shows.
Under Section 211, broadcasting organizations are granted a more specific set of rights called related or
A television show includes more than mere words can describe because it involves a whole spectrum of neighboring rights:
visuals and effects, video and audio, such that no similarity or dissimilarity may be found by merely
describing the general copyright/format of both dating game shows.
SECTION 211. Scope of Right. — Subject to the provisions of Section 212, broadcasting organizations shall
enjoy the exclusive right to carry out, authorize or prevent any of the following acts:
Ideas can be either abstract or concrete.91 It is the concrete ideas that are generally referred to as
expression:
 rebroadcasting of their broadcasts;
 recording in any manner, including the making of films or the use of video tape, of their
The difference between the two things, letters patent and copyright, may be illustrated by reference to the broadcasts for the purpose of communication to the public of TV broadcasts of the same;
subjects just enumerated. Take the case of medicines. Certain mixtures are found to be of great value in  use of such records for fresh transmissions or for fresh recording. (Sec. 52, P.D. No. 49)
the healing art. If the discoverer writes and publishes a book on the subject (as regular physicians generally
do), he gains no exclusive right to the manufacture and sale of the medicine; he gives that to the public. If
Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply where the acts referred to
he desires to acquire such exclusive right, he must obtain a patent for the mixture as a new art, manufacture
in those Sections are related to:
or composition of matter. He may copyright his book; but that only secures to him the exclusive right of
printing and publishing his book. So of all other inventions or discoveries.
 The use by a natural person exclusively for his own personal purposes;
 Using short excerpts for reporting current events;
The copyright of a book on perspective, no matter how many drawings and illustrations it may contain,
 Use solely for the purpose of teaching or for scientific research; and
gives no exclusive right to the modes of drawing described, though they may never have been known or
 Fair use of the broadcast subject to the conditions under Section 185.
used before. By publishing the book without getting a patent for the art, the latter is given to the public.

The Code defines what broadcasting is and who broadcasting organizations include:
The use of the art is a totally different thing from a publication of the book explaining it. The copyright of
a book on bookkeeping cannot secure the exclusive right to make, sell and use account books prepared
upon the plan set forth in such book. It was not patented, and is open and free to the use of the public. 202.7. "Broadcasting" means the transmission by wireless means for the public reception of sounds
And, of course, in using the art, the ruled lines and headings of accounts must necessarily be used as or of images or of representations thereof; such transmission by satellite where the means for
incident to it. decrypting are provided to the public by the broadcasting organization or with its consent;

News or the event itself is not copyrightable. However, an event can be captured and presented in a 202.8. "Broadcasting organization" shall include a natural person or a juridical entity duly authorized to
specific medium. A television "involves a whole spectrum of visuals and effects, video and audio."95 News engage in broadcasting
coverage in television involves framing shots, using images, graphics, and sound effects.96 It involves
creative process and originality. Television news footage is an expression of the news.
Developments in technology, including the process of preserving once ephemeral works and disseminating
them, resulted in the need to provide a new kind of protection as distinguished from copyright.102 The
It is axiomatic that copyright protection does not extend to news "events" or the facts or ideas designation "neighboring rights" was abbreviated from the phrase "rights neighboring to
which are the subject of news reports. it is equally well-settled that copyright protection does extend copyright."103 Neighboring or related rights are of equal importance with copyright as established in the
to the reports themselves, as distinguished from the substance of the information contained in the reports. different conventions covering both kinds of rights.104
Article 13 Minimum Rights for Broadcasting Organizations. Broadcasting organisations shall enjoy the right Copyright protection is not absolute. The Code provides the limitations on copyright:
to authorize or prohibit:
Section 184. Limitations on Copyright. - 184.1. Notwithstanding the provisions of Chapter V, the
 the rebroadcasting of their broadcasts; following acts shall not constitute infringement of copyright: . . . .
 the fixation of their broadcasts;
 the reproduction:
184.2. The provisions of this section shall be interpreted in such a way as to allow the work to be used in
(i) of fixations, made without their consent, of their broadcasts;
a manner which does not conflict with the normal exploitation of the work and does not unreasonably
(ii) of fixations, made in accordance with the provisions of Article 15, of their broadcasts,
prejudice the right holder's legitimate interests.
if the reproduction is made for purposes different from those referred to in those
provisions;
 (d) the communication to the public of their television broadcasts if such communication is made Section 212. Limitations on Rights. - Sections 203, 208 and 209 shall not apply where the acts referred to
in places accessible to the public against payment of an entrance fee; it shall be a matter for the in those Sections are related to:
domestic law of the State where protection of this right is claimed to determine the conditions
under which it may be exercised. 212.2. Using short excerpts for reporting current events;
212.4. Fair use of the broadcast subject to the conditions under Section 185.(Sec. 44, P.D. No. 49a)
The determination of what constitutes fair use depends on several factors. Section 185 of the Intellectual
With regard to the neighboring rights of a broadcasting organization in this jurisdiction, this court has
Property Code states:
discussed the difference between broadcasting and rebroadcasting:

SECTION 185. Fair Use of a Copyrighted Work. —

Section 202.7 of the IP Code defines broadcasting 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 organization 185.1. The fair use of a copyrighted work for criticism, comment, news reporting, teaching including multiple
or with its consent." copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright. .
. . In determining whether the use made of a work in any particular case is fair use, the factors to be
considered shall include:
On the other hand, rebroadcasting as defined in Article 3(g) of the International Convention for the
Protection of Performers, Producers of Phonograms and Broadcasting Organizations, otherwise known as
the 1961 Rome Convention, of which the Republic of the Philippines is a signatory, is "the simultaneous  The purpose and character of the use, including whether such use is of a commercial nature or is
broadcasting by one broadcasting organization of the broadcast of another broadcasting organization." for non-profit educational purposes;
 The nature of the copyrighted work;
 The amount and substantiality of the portion used in relation to the copyrighted work as a whole;
. . . . Under the Rome Convention, rebroadcasting is "the simultaneous broadcasting by one
and
broadcasting organization of the broadcast of another broadcasting organization." The Working
 The effect of the use upon the potential market for or value of the copyrighted work.
Paper defines broadcasting organizations as "entities that take the financial and editorial responsibility for
the selection and arrangement of, and investment in, the transmitted content."
Fair use as "aprivilege to use the copyrighted material in a reasonable manner without the consent of
the copyright owner or as copying the theme or ideas rather than their expression."115 Fair use is an
News as expressed in a video footage is entitled to copyright protection. Broadcasting
exception to the copyright owner’s monopoly of the use of the work to avoid stifling "the very creativity
organizations have not only copyright on but also neighboring rights over their broadcasts. Copyrightability
which that law is designed to foster."116
of a work is different from fair use of a work for purposes of news reporting.

Determining fair use requires application of the four-factor test. Section 185 of the Intellectual Property
VI The Angelo dela Cruz footage does not fall under the rule on Section 212.4 of the Intellectual Property
Code lists four (4) factors to determine if there was fair use of a copyrighted work:
Code on fair use of the broadcast . . . .

 The purpose and character of the use, including whether such use is of a commercial nature or
In determining fair use, several factors are considered, including the nature of the copyrighted work, and
is for non-profit educational purposes;
the amount and substantiality of the person used in relation to the copyrighted work as a whole.
 The nature of the copyrighted work;
 The amount and substantiality of the portion used in relation to the copyrighted work as a whole;
In the business of television news reporting, the nature of the copyrighted work or the video footages, are  The effect of the use upon the potential market for or value of the copyrighted work.
such that, footage created, must be a novelty to be a good report. Thus, when the . . . Angelo dela Cruz
footage was used by [respondents], the novelty of the footage was clearly affected.
First, the purpose and character of the use of the copyrighted material must fall under those listed in Section
185, thus: "criticism, comment, news reporting, teaching including multiple copies for classroom use,
Moreover, given that a substantial portion of the Angelo dela Cruz footage was utilized by GMA-7 for its scholarship, research, and similar purposes."117 The purpose and character requirement is important in view
own, its use can hardly be classified as fair use.
of copyright’s goal to promote creativity and encourage creation of works. Hence, commercial use of the Infringement under the Intellectual Property Code is malum prohibitum. IPC is a special law. Copyright is a
copyrighted work can be weighed against fair use. statutory creation:

The "transformative test" is generally used in reviewing the purpose and character of the usage of the Copyright, in the strict sense of the term, is purely a statutory right. It is a new or independent right granted
copyrighted work.118 This court must look into whether the copy of the work adds "new expression, meaning by the statute, and not simply a pre-existing right regulated by the statute. Being a statutory grant, the
or message" to transform it into something else.119 "Meta-use" can also occur without necessarily rights are only such as the statute confers, and may be obtained and enjoyed only with respect to the
transforming the copyrighted work used.120 subjects and by the persons, and on terms and conditions specified in the statute.128

Second, the nature of the copyrighted work is significant in deciding whether its use was fair. If the nature The general rule is that acts punished under a special law are malum prohibitum.129 "An act which is declared
of the work is more factual than creative, then fair use will be weighed in favor of the user. malum prohibitum, malice or criminal intent is completely immaterial."130

Third, the amount and substantiality of the portion used is important to determine whether usage falls In contrast, crimes mala in seconcern inherently immoral acts:
under fair use. An exact reproduction of a copyrighted work, compared to a small portion of it, can result
in the conclusion that its use is not fair. There may also be cases where, though the entirety of the
Not every criminal act, however, involves moral turpitude. It is for this reason that "as to what crime involves
copyrighted work is used without consent, its purpose determines that the usage is still fair.121 For example,
moral turpitude, is for the Supreme Court to determine". In resolving the foregoing question, the Court is
a parody using a substantial amount of copyrighted work may be permissible as fair use as opposed to a
guided by one of the general rules that crimes mala in se involve moral turpitude, while crimes mala
copy of a work produced purely for economic gain. Lastly, the effect of the use on the copyrighted work’s
prohibita do not, the rationale of which was set forth in "Zari v. Flores," to wit:
market is also weighed for or against the user. If this court finds that the use had or will have a negative
impact on the copyrighted work’s market, then the use is deemed unfair.
It (moral turpitude) implies something immoral in itself, regardless of the fact that it is punishable by law
or not. It must not be merely mala prohibita, but the act itself must be inherently immoral. The doing of
The structure and nature of broadcasting as a business requires assigned values for each second of
the act itself, and not its prohibition by statute fixes the moral turpitude. Moral turpitude does not, however,
broadcast or airtime. In most cases, broadcasting organizations generate revenue through sale of time or
include such acts as are not of themselves immoral but whose illegality lies in their being positively
timeslots to advertisers, which, in turn, is based on market share:122 Once a news broadcast has been
prohibited. (Emphasis supplied)
transmitted, the broadcast becomes relatively worthless to the station. In the case of the aerial
broadcasters, advertising sales generate most of the profits derived from news reports. Advertising rates
are, in turn, governed by market share. Market share is determined by the number of people watching a [These] guidelines nonetheless proved short of providing a clear cut solution, for in International Rice
show at any particular time, relative to total viewers at that time. News is by nature time-limited, and so Research Institute v. NLRC, the Court admitted that it cannot always be ascertained whether moral turpitude
re-broadcasts are generally of little worth because they draw few viewers. Newscasts compete for market does or does not exist by merely classifying a crime as malum in se or as malum prohibitum. There are
share by presenting their news in an appealing format that will capture a loyal audience. Hence, the primary crimes which are mala in se and yet but rarely involve moral turpitude and there are crimes which involve
reason for copyrighting newscasts by broadcasters would seem to be to prevent competing stations from moral turpitude and are mala prohibita only. In the final analysis, whether or not a crime involves moral
rebroadcasting current news from the station with the best coverage of a particular news item, thus turpitude is ultimately a question of fact and frequently depends on all the circumstances surrounding the
misappropriating a portion of the market share. violation of the statue.131 (Emphasis in the original)

Whether the alleged five-second footage may be considered fair use is a matter of defense. We emphasize "Implicit in the concept of mala in se is that of mens rea."132 Mens reais defined as "the nonphysical element
that the case involves determination of probable cause at the preliminary investigation stage. Raising the which, combined with the act of the accused, makes up the crime charged. Most frequently it is the criminal
defense of fair use does not automatically mean that no infringement was committed. The investigating intent, or the guilty mind[.]"133
prosecutor has full discretion to evaluate the facts, allegations, and evidence during preliminary
investigation. Defenses raised during preliminary investigation are subject to further proof and evaluation Crimes mala in se pre suppose that the person who did the felonious act had criminal intent to do so, while
before the trial court. Given the insufficiency of available evidence, determination of whether the Angelo crimes mala prohibita do not require knowledge or criminal intent:
dela Cruz footage is subject to fair use is better left to the trial court where the proceedings are currently
pending. GMA-7’s rebroadcast of ABS-CBN’s news footage without the latter’s consent is not an issue. The
mere act of rebroadcasting without authority from the owner of the broadcast gives rise to the probability In the case of mala in se it is necessary, to constitute a punishable offense, for the person doing the act to
that a crime was committed under the Intellectual Property Code. have knowledge of the nature of his act and to have a criminal intent; in the case of mala prohibita, unless
such words as "knowingly" and "willfully" are contained in the statute, neither knowledge nor criminal intent
is necessary. In other words, a person morally quite innocent and with every intention of being a law abiding
VII Respondents cannot invoke the defense of good faith to argue that no probable cause exists. citizen becomes a criminal, and liable to criminal penaltes, if he does an act prohibited by these
statutes.134 (Emphasis supplied) Hence, "[i]ntent to commit the crime and intent to perpetrate the act must
Respondents argue that copyright infringement is malum in se, in that "[c]opying alone is not what is being be distinguished. A person may not have consciously intended to commit a crime; but he did intend to
prohibited, but its injurious effect which consists in the lifting from the copyright owners’ film or materials, commit an act, and that act is, by the very nature of things, the crime itself[.]"135When an act is prohibited
that were the result of the latter’s creativity, work and productions and without authority, reproduced, sold by a special law, it is considered injurious to public welfare, and the performance of the prohibited act is
and circulated for commercial use to the detriment of the latter."127 the crime itself.136
Volition, or intent to commit the act, is different from criminal intent. Volition or voluntariness refers to  Such other terms and conditions, including the payment of moral and exemplary damages,
knowledge of the act being done. On the other hand, criminal intent — which is different from motive, or which the court may deem proper, wise and equitable and the destruction of infringing copies of
the moving power for the commission of the crime137 — refers to the state of mind beyond voluntariness. the work even in the event of acquittal in a criminal case.
It is this intent that is being punished by crimes mala in se.
216.2. In an infringement action, the court shall also have the power to order the seizure and impounding
Unlike other jurisdictions that require intent for a criminal prosecution of copyright infringement, the of any article which may serve as evidence in the court proceedings. (Sec. 28, P.D. No. 49a)
Philippines does not statutorily support good faith as a defense. Other jurisdictions provide in their
intellectual property codes or relevant laws that mens rea, whether express or implied, is an element of
SECTION 217. Criminal Penalties. — 217.1. Any person infringing any right secured by provisions of Part IV
criminal copyright infringement.138
of this Actor aiding or abetting such infringement shall be guilty of a crime punishable by:

In Canada, criminal offenses are categorized under three (3) kinds: "the full mens rea offence, meaning
217.2. In determining the number of years of imprisonment and the amount of fine, the court shall
the accused’s actual or subjective state of mind has to be proved; strict liability offences where no mens
consider the value of the infringing materials that the defendant has produced or manufactured and the
rea has to be proved but the accused can avoid liability if he can prove he took all reasonable steps to avoid
damage that the copyright owner has suffered by reason of the infringement.
the particular event; [and] absolute liability offences where Parliament has made it clear that guilt follows
proof of the prescribed act only."139 Because of the use of the word "knowingly" in Canada’s Copyright Act,
it has been held that copyright infringement is a full mens rea offense.140 217.3. Any person who at the time when copyright subsists in a work has in his possession an article
which he knows, or ought to know, to be an infringing copy of the work for the purpose of: a. Selling,
letting for hire, or by way of trade offering or exposing for sale, or hire, the article;
In the United States, willful intent is required for criminal copyright infringement.141 Before the passage of
the No Electronic Theft Act, "civil copyright infringements were violations of criminal copyright laws only if
a defendant willfully infringed a copyright ‘for purposes of commercial advantage or private financial  b. Distributing the article for purpose of trade, or for any other purpose to an extent that will
gain.’"142 However, the No Electronic Theft Act now allows criminal copyright infringement without the prejudice the rights of the copyright owner in the work; or
requirement of commercial gain. The infringing act may or may not be for profit.143  c. Trade exhibit of the article in public, shall be guilty of an offense and shall be liable on conviction
to imprisonment and fine as above mentioned. (Sec. 29, P.D. No. 49a) (Emphasis supplied)
There is a difference, however, between the required liability in civil copyright infringement and that in
criminal copyright infringement in the United States. Civil copyright infringement does not require culpability The law is clear. Inasmuch as there is wisdom in prioritizing the flow and exchange of ideas as opposed to
and employs a strict liability regime144 where "lack of intention to infringe is not a defense to an action for rewarding the creator, it is the plain reading of the law in conjunction with the actions of the legislature to
infringement."145 which we defer. We have continuously "recognized the power of the legislature . . . to forbid certain acts
in a limited class of cases and to make their commission criminal without regard to the intent of the doer.
Such legislative enactments are based on the experience that repressive measures which depend for their
The Intellectual Property Code requires strict liability for copyright infringement whether for a civil action
efficiency upon proof of the dealer’s knowledge or of his intent are of little use and rarely accomplish their
or a criminal prosecution; it does not require mens rea or culpa:146
purposes."147

SECTION 216. Remedies for Infringement. —

Respondents argue that live broadcast of news requires a different treatment in terms of good faith, intent,
and knowledge to commit infringement. To argue this point, they rely on the differences of the media used
216.1. Any person infringing a right protected under this law shall be liable: in Habana et al. v. Robles, Columbia Pictures v. Court of Appeals, and this case:

 To an injunction restraining such infringement. The court may also order the defendant to desist Petitioner ABS-CBN argues that lack of notice that the Angelo dela Cruz was under embargo is not a defense
from an infringement, among others, to prevent the entry into the channels of commerce of in copyright infringement and cites the case of Columbia Pictures vs. Court of Appeals and Habana et al.
imported goods that involve an infringement, immediately after customs clearance of such goods. vs. Robles(310 SCRA 511). However, these cases refer to film and literary work where obviously there is
 Pay to the copyright proprietor or his assigns or heirs such actual damages, including legal "copying" from an existing material so that the copier knew that he is copying from an existing material not
costs and other expenses, as he may have incurred due to the infringement as well as the profits owned by him. But, how could respondents know that what they are "copying was not [theirs]" when they
the infringer may have made due to such infringement, and in proving profits the plaintiff shall be were not copying but merely receiving live video feed from Reuters and CNN which they aired? What they
required to prove sales only and the defendant shall be required to prove every element of cost knew and what they aired was the Reuters live video feed and the CNN feed which GMA-7 is authorized to
which he claims, or, in lieu of actual damages and profits, such damages which to the court shall carry in its news broadcast, it being a subscriber of these companies[.]
appear to be just and shall not be regarded as penalty.
 Deliver under oath, for impounding during the pendency of the action, upon such terms and
It is apt to stress that the subject of the alleged copyright infringement is not a film or literary work but live
conditions as the court may prescribe, sales invoices and other documents evidencing sales, all
broadcast of news footage. In a film or literary work, the infringer is confronted face to face with the
articles and their packaging alleged to infringe a copyright and implements for making them.
material he is allegedly copying and therefore knows, or is presumed to know, that what he is copying is
 Deliver under oath for destruction without any compensation all infringing copies or devices,
owned by another. Upon the other hand, in live broadcast, the alleged infringer is not confronted with the
as well as all plates, molds, or other means for making such infringing copies as the court may
fact that the material he airs or re-broadcasts is owned by another, and therefore, he cannot be charged
order.
of knowledge of ownership of the material by another. This specially obtains in the Angelo dela Cruz news
footage which GMA-7 received from Reuters and CNN. Reuters and CNN were beaming live videos from the We look at the purpose of copyright in relation to criminal prosecutions requiring willfulness: Most
coverage which GMA-7 received as a subscriber and, in the exercise of its rights as a subscriber, GMA-7 importantly, in defining the contours of what it means to willfully infringe copyright for purposes of criminal
picked up the live video and simultaneously re-broadcast it. In simultaneously broadcasting the live video liability, the courts should remember the ultimate aim of copyright. Copyright is not primarily about
footage of Reuters, GMA-7 did not copy the video footage of petitioner ABS-CBN[.]148 (Emphasis in the providing the strongest possible protection for copyright owners so that they have the highest possible
original) incentive to create more works. The control given to copyright owners is only a means to an end: the
promotion of knowledge and learning. Achieving that underlying goal of copyright law also requires access
to copyrighted works and it requires permitting certain kinds of uses of copyrighted works without the
Respondents’ arguments must fail.
permission of the copyright owner. While a particular defendant may appear to be deserving of criminal
sanctions, the standard for determining willfulness should be set with reference to the larger goals of
Respondents are involved and experienced in the broadcasting business. They knew that there would be copyright embodied in the Constitution and the history of copyright in this country.154
consequences in carrying ABS-CBN’s footage in their broadcast. That is why GMA-7 allegedly cut the feed
from Reuters upon seeing ABS-CBN’s ogo and reporter. To admit a different treatment for broadcasts would
In addition, "[t]he essence of intellectual piracy should be essayed in conceptual terms in order to
mean abandonment of a broadcasting organization’s minimum rights, including copyright on the broadcast
underscore its gravity by an appropriate understanding thereof. Infringement of a copyright is a trespass
material and the right against unauthorized rebroadcast of copyrighted material. The nature of broadcast
on a private domain owned and occupied by the owner of the copyright, and, therefore, protected by law,
technology is precisely why related or neighboring rights were created and developed. Carving out an
and infringement of copyright, or piracy, which is a synonymous term in this connection, consists in the
exception for live broadcasts would go against our commitments under relevant international treaties and
doing by any person, without the consent of the owner of the copyright, of anything the sole right to do
agreements, which provide for the same minimum rights.149
which is conferred by statute on the owner of the copyright."155

Contrary to respondents’ assertion, this court in Habana,150 reiterating the ruling in Columbia
Intellectual property rights, such as copyright and the neighboring right against rebroadcasting, establish
Pictures,151 ruled that lack of knowledge of infringement is not a valid defense. Habana and Columbia
an artificial and limited monopoly to reward creativity. Without these legally enforceable rights, creators will
Pictures may have different factual scenarios from this case, but their rulings on copyright infringement are
have extreme difficulty recovering their costs and capturing the surplus or profit of their works as reflected
analogous. In Habana, petitioners were the authors and copyright owners of English textbooks and
in their markets. This, in turn, is based on the theory that the possibility of gain due to creative work creates
workbooks. The case was anchored on the protection of literary and artistic creations such as books. In
an incentive which may improve efficiency or simply enhance consumer welfare or utility. More creativity
Columbia Pictures, video tapes of copyrighted films were the subject of the copyright infringement suit.
redounds to the public good.

In Habana, knowledge of the infringement is presumed when the infringer commits the prohibited act:
These, however, depend on the certainty of enforcement. Creativity, by its very nature, is vulnerable to the
free rider problem. It is easily replicated despite the costs to and efforts of the original creator. The more
The essence of intellectual piracy should be essayed in conceptual terms in order to underscore its gravity useful the creation is in the market, the greater the propensity that it will be copied. The most creative and
by an appropriate understanding thereof. Infringement of a copyright is a trespass on a private domain inventive individuals are usually those who are unable to recover on their creations.
owned and occupied by the owner of the copyright, and, therefore, protected by law, and infringement of
copyright, or piracy, which is a synonymous term in this connection, consists in the doing by any person,
Arguments against strict liability presuppose that the Philippines has a social, historical, and economic
without the consent of the owner of the copyright, of anything the sole right to do which is conferred by
climate similar to those of Western jurisdictions. As it stands, there is a current need to strengthen
statute on the owner of the copyright. . . . .
intellectual property protection.

A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such cases, did
Thus, unless clearly provided in the law, offenses involving infringement of copyright protections should be
not know whether or not he was infringing any copyright; he at least knew that what he was copying was
considered malum prohibitum. It is the act of infringement, not the intent, which causes the damage. To
not his, and he copied at his peril. . . . .
require or assume the need to prove intent defeats the purpose of intellectual property protection.

In cases of infringement, copying alone is not what is prohibited. The copying must produce an "injurious
Nevertheless, proof beyond reasonable doubt is still the standard for criminal prosecutions under the
effect". Here, the injury consists in that respondent Robles lifted from petitioners’ book materials that were
Intellectual Property Code.
the result of the latter’s research work and compilation and misrepresented them as her own. She circulated
the book DEP for commercial use and did not acknowledge petitioners as her source.152 (Emphasis supplied)
VIII Respondents argue that GMA-7’s officers and employees cannot be held liable for infringement under
the Intellectual Property Code since it does not expressly provide direct liability of the corporate officers.
Habana and Columbia Pictures did not require knowledge of the infringement to constitute a violation of
They explain that "(i) a corporation may be charged and prosecuted for a crime where the penalty is fine
the copyright. One does not need to know that he or she is copying a work without consent to violate
or both imprisonment and fine, and if found guilty, may be fined; or (ii) a corporation may commit a crime
copyright law. Notice of fact of the embargo from Reuters or CNN is not material to find probable cause
but if the statute prescribes the penalty therefore to be suffered by the corporate officers, directors or
that respondents committed infringement. Knowledge of infringement is only material when the person is
employees or other persons, the latter shall be responsible for the offense."156
charged of aiding and abetting a copyright infringement under Section 217 of the Intellectual Property
Code.153
Section 217 of the Intellectual Property Code states that "any person" may be found guilty of infringement.
It also imposes the penalty of both imprisonment and fine:
Section 217. Criminal Penalties. - 217.1. Any person infringing any right secured by provisions of Part IV of This Office, however, does not subscribe to the view that respondents Atty. Felipe Gozon, Gilberto Duavit,
this Act or aiding or abetting such infringement shall be guilty of a crime punishable by: Marissa Flores and Jessica Soho should be held liable for the said offense. Complainant failed to present
clear and convincing evidence that the said respondents conspired with Reyes and Manalastas. No evidence
was adduced to prove that these respondents had an active participation in the actual commission of the
Petitioners, being corporate officers and/or directors, through whose act, default or omission the
copyright infringement or they exercised their moral ascendancy over Reyes and Manalastas in airing the
corporation commits a crime, may themselves be individually held answerable for the crime. . .. The
said footage. It must be stressed that, conspiracy must be established by positive and conclusive evidence.
existence of the corporate entity does not shield from prosecution the corporate agent who knowingly and
It must be shown to exist as clearly and convincingly as the commission of the offense itself.163 (Emphasis
intentionally caused the corporation to commit a crime. Thus, petitioners cannot hide behind the cloak of
supplied, citations omitted)
the separate corporate personality of the corporation to escape criminal liability. A corporate officer cannot
protect himself behind a corporation where he is the actual, present and efficient actor.159
We agree with the findings as to respondents Dela Peña-Reyes and Manalastas. Both respondents
committed acts that promoted infringement of ABS-CBN’s footage. We note that embargoes are common
However, the criminal liability of a corporation’s officers or employees stems from their active participation
occurrences in and between news agencies and/or broadcast organizations.165 Under its Operations Guide,
in the commission of the wrongful act:
Reuters has two (2) types of embargoes: transmission embargo and publication embargo.166 Under ABS-
CBN’s service contract with Reuters, Reuters will embargo any content contributed by ABS-CBN from other
The principle applies whether or not the crime requires the consciousness of wrongdoing. It applies to those broadcast subscribers within the same geographical location:
corporate agents who themselves commit the crime and to those, who, by virtue of their managerial
positions or other similar relation to the corporation, could be deemed responsible for its commission, if by
Mere membership in the Board or being President per se does not mean knowledge, approval, and
virtue of their relationship to the corporation, they had the power to prevent the act. Moreover, all parties
participation in the act alleged as criminal. There must be a showing of active participation, not simply a
active in promoting a crime, whether agents or not, are principals. Whether such officers or employees are
constructive one.
benefited by their delictual acts is not a touchstone of their criminal liability. Benefit is not an operative
fact.160 (Emphasis supplied) An accused’s participation in criminal acts involving violations of intellectual
property rights is the subject of allegation and proof. The showing that the accused did the acts or Under principles of criminal law, the principals of a crime are those "who take a direct part in the execution
contributed in a meaningful way in the commission of the infringements is certainly different from the of the act; [t]hose who directly force or induce others to commit it; [or] [t]hose who cooperate in the
argument of lack of intent or good faith. Active participation requires a showing of overt physical acts or commission of the offense by another act without which it would not have been accomplished."169 There is
intention to commit such acts. Intent or good faith, on the other hand, are inferences from acts proven to conspiracy "when two or more persons come to an agreement concerning the commission of a felony and
have been or not been committed. decide to commit it":170

We find that the Department of Justice committed grave abuse of discretion when it resolved to file the Conspiracy is not presumed. Like the physical acts constituting the crime itself, the elements of conspiracy
Information against respondents despite lack of proof of their actual participation in the alleged crime. must be proven beyond reasonable doubt.1âwphi1 While conspiracy need not be established by direct
evidence, for it may be inferred from the conduct of the accused before, during and after the commission
of the crime, all taken together, however, the evidence must be strong enough to show the community of
Ordering the inclusion of respondents Gozon, GMA-7 President; Duavit, Jr., Executive Vice-President; Flores,
criminal design. For conspiracy to exist, it is essential that there must be a conscious design to commit an
Vice-President for News and Public Affairs; and Soho, Director for News, as respondents, Secretary Agra
offense. Conspiracy is the product of intentionality on the part of the cohorts.
overturned the City Prosecutor’s finding that only respondents Dela Peña-Reyes and Manalastas are
responsible for the crime charged due to their duties.161 The Agra Resolution reads:
It is necessary that a conspirator should have performed some overt act as a direct or indirect contribution
to the execution of the crime committed. The overt act may consist of active participation in the actual
Thus, from the very nature of the offense and the penalty involved, it is necessary that GMA-7’s directors,
commission of the crime itself, or it may consist of moral assistance to his co-conspirators by being present
officers, employees or other officers thereof responsible for the offense shall be charged and penalized for
at the commission of the crime or by exerting moral ascendancy over the other co-conspirators[.]171
violation of the Sections 177 and 211 of Republic Act No. 8293. In their complaint for libel, respondents
Felipe L Gozon, Gilberto R. Duavit, Jr., Marissa L. Flores, Jessica A.Soho, Grace Dela Pena-Reyes, John
Oliver T. Manalastas felt they were aggrieved because they were "in charge of the management, operations In sum, the trial court erred in failing to resume the proceedings after the designated period. The Court of
and production of news and public affairs programs of the network" (GMA-7). This is clearly an admission Appeals erred when it held that Secretary Agra committed errors of jurisdiction despite its own
on respondents’ part. Of course, respondents may argue they have no intention to infringe the copyright pronouncement that ABS-CBN is the owner of the copyright on the news footage. News should be
of ABS-CBN; that they acted in good faith; and that they did not directly cause the airing of the subject differentiated from expression of the news, particularly when the issue involves rebroadcast of news
footage, but again this is preliminary investigation and what is required is simply probable cause. Besides, footage. The Court of Appeals also erroneously held that good faith, as. well as lack of knowledge of
these contentions can best be addressed in the course of trial.162 (Citation omitted) infringement, is a defense against criminal prosecution for copyright and neighboring rights infringement.
In its current form, the Intellectual Property Code is malum prohibitum and prescribes a strict liability for
copyright infringement. Good faith, lack of knowledge of the copyright, or lack of intent to infringe is not a
In contrast, the Office of the City Prosecutor, in the Resolution dated December 3, 2004, found that
defense against copyright infringement. Copyright, however, is subject to the rules of fair. use and will be
respondents Gozon, Duavit, Jr., Flores, and Soho did not have active participation in the commission of the
judged on a case-to-case basis. Finding probable cause includes a determination of the defendant's active
crime charged:
participation, particularly when the corporate veil is pierced in cases involving a corporation's criminal
liability.
G.R. No. 131522 July 19, 1999 However, we believe that even if petitioners and respondent Robles were of the same background in terms
PACITA I. HABANA, ALICIA L. CINCO and JOVITA N. FERNANDO, petitioners, vs. FELICIDAD C. of teaching experience and orientation, it is not an excuse for them to be identical even in examples
ROBLES and GOODWILL TRADING CO., INC., respondents. contained in their books. The similarities in examples and material contents are so obviously present in this
case. How can similar/identical examples not be considered as a mark of copying?
Robles' act of lifting from the book of petitioners substantial portions of discussions and examples, and
her failure to acknowledge the same in her book is an infringement of petitioners' copyrights. We consider as an indicia of guilt or wrongdoing the act of respondent Robles of pulling out from Goodwill
bookstores the book DEP upon learning of petitioners' complaint while pharisaically denying petitioners'
demand. It was further noted that when the book DEP was re-issued as a revised version, all the pages
Substantial reproduction - If so much is taken that the value of the original work is substantially
cited by petitioners to contain portion of their book College English for Today were eliminated.
diminished, there is an infringement of copyright and to an injurious extent, the work is appropriated.

The copying must produce an "injurious effect". The injury consists in that respondent Robles lifted from
If so much is taken that the value of the original is sensibly diminished, or the labors of the original author
petitioners' book materials that were the result of the latter's research work and compilation and
are substantially and to an injurious extent appropriated by another, that is sufficient to constitute piracy.
misrepresented them as her own. She circulated the book DEP for commercial use did not acknowledged
petitioners as her source.
Infringement of a copyright is a trespass on a private domain owned and occupied by the owner of the
copyright, and, therefore, protected by law, and infringement of copyright, or piracy, which is a synonymous
Hence, there is a clear case of appropriation of copyrighted work for her benefit that respondent Robles
term in this connection, consists in the doing by any person, without the consent of the owner of the
committed. Petitioners' work as authors is the product of their long and assiduous research and for another
copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright. 29
to represent it as her own is injury enough. In copyrighting books the purpose is to give protection to the
intellectual product of an author. This is precisely what the law on copyright protected, under Section 184.1
The respondents' claim that the copied portions of the book CET are also found in foreign books and other (b). Quotations from a published work if they are compatible with fair use and only to the extent justified
grammar books, and that the similarity between her style and that of petitioners can not be avoided since by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries
they come from the same background and orientation may be true. However, in this jurisdiction under Sec are allowed provided that the source and the name of the author, if appearing on the work, are mentioned.
184 of Republic Act 8293 it is provided that:
In the case at bar, the least that respondent Robles could have done was to acknowledge petitioners
Limitations on Copyright. Notwithstanding the provisions of Chapter V, the following shall not constitute Habana et. al. as the source of the portions of DEP. The final product of an author's toil is her book. To
infringement of copyright: allow another to copy the book without appropriate acknowledgment is injury enough.

(c) The making of quotations from a published work if they are compatible with fair use and only G.R. No. 175769-70 January 19, 2009
to the extent justified for the purpose, including quotations from newspaper articles and periodicals ABS-CBN, Petitioners, vs. PMSI., CESAR REYES, FRANCIS CHUA, MANUEL F. ABELLADA, RAUL B.
in the form of press summaries: Provided, That the source and the name of the author, if appearing DE MESA, AND ALOYSIUS M. COLAYCO, Respondents.
on the work, are mentioned.
There is no merit in ABS-CBN’s contention that PMSI violated its broadcaster’s rights under Section 211 of
A copy of a piracy is an infringement of the original, and it is no defense that the pirate, in such cases, did the IP Code which provides in part:
not know whether or not he was infringing any copyright; he at least knew that what he was copying was
not his, and he copied at his peril. 30
Sec. 211. Scope of Right. - Subject to the provisions of Section 212, broadcasting organizations shall enjoy
the exclusive right to CPA:
The next question to resolve is to what extent can copying be injurious to the author of the book being
copied. Is it enough that there are similarities in some sections of the books or large segments of the books
211.1. The rebroadcasting of their broadcasts; x x x x
are the same?

Neither is PMSI guilty of infringement of ABS-CBN’s copyright under Section 177 of the IP Code which states
In the case at bar, there is no question that petitioners presented several pages of the books CET and DEP
that copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the
that more or less had the same contents. It may be correct that the books being grammar books may
public performance of the work (Section 177.6), and other communication to the public of the work.
contain materials similar as to some technical contents with other grammar books, such as the segment
about the "Author Card". However, the numerous pages that the petitioners presented showing similarity
in the style and the manner the books were presented and the identical examples can not pass as similarities Broadcasting as “the transmission by wireless means for the public reception of sounds or of images or
merely because of technical consideration. of representations thereof; or transmission by satellite where the means for decrypting are provided to the
public by the broadcasting organization or with its consent.”
The respondents claim that their similarity in style can be attributed to the fact that both of them were
exposed to the APCAS syllabus and their respective academic experience, teaching approach and Rebroadcasting as defined in the 1961 Rome Convention, is “the simultaneous broadcasting by one
methodology are almost identical because they were of the same background. broadcasting organization of the broadcast of another broadcasting organization.”
PMSI is not engaged in rebroadcasting and thus cannot be considered to have infringed ABS-CBN’s The Director-General of the IPO and the Court of Appeals also correctly found that PMSI’s services are
broadcasting rights and copyright. Two instances wherein there is broadcasting, to wit: similar to a cable television system because the services it renders fall under cable “retransmission,” as
described in the Working Paper, to wit:
 transmission by wireless means for the public reception of sounds or images or representations thereof;
 transmission by satellite for the public reception of sounds or of images or of representations thereof 48. In principle, cable retransmission can be either simultaneous with the broadcast over-the-air or delayed
where the means for decrypting are provided to the public by the broadcasting org. or with its consent. (deferred transmission) on the basis of a fixation or a reproduction of a fixation. Furthermore, they might
be unaltered or altered, for example through replacement of commercials, etc. In general, however, the
term “retransmission” seems to be reserved for such transmissions which are both
It is under the second category that Appellant’s DTH satellite television service must be examined since it
simultaneous and unaltered.
is satellite-based. The elements of such category are as follows:

49. The Rome Convention does not grant rights against unauthorized cable retransmission. Without such a
 There is transmission of sounds or images or of representations thereof;
right, cable operators can retransmit both domestic and foreign over the air broadcasts simultaneously to
 The transmission is through satellite;
their subscribers without permission from the broadcasting organizations or other rightholders and without
 The transmission is for public reception; and
obligation to pay remuneration.25 (Emphasis added)
 The means for decrypting are provided to the public by the broadcasting organization or with its consent.

Thus, while the Rome Convention gives broadcasting organizations the right to authorize or prohibit the
It is only the presence of all the above elements can a determination that the DTH is broadcasting and
rebroadcasting of its broadcast, however, this protection does not extend to cable retransmission. The
consequently, rebroadcasting Appellee’s signals in violation of Sections 211 and 177 of the IP Code, may
retransmission of ABS-CBN’s signals by PMSI – which functions essentially as a cable television – does not
be arrived at.
therefore constitute rebroadcasting in violation of the former’s intellectual property rights under the IP
Code.
Hence, a program that is broadcasted is attributed to the broadcaster. In the same manner, the
rebroadcasted program is attributed to the rebroadcaster.
It must be emphasized that the law on copyright is not absolute. The IP Code provides that:

Appellant is not the origin nor does it claim to be the origin of the programs broadcasted by the Appellee.
Sec. 184. Limitations on Copyright. -
Appellant did not make and transmit on its own but merely carried the existing signals of the Appellee.
When Appellant’s subscribers view Appellee’s programs in Channels 2 and 23, they know that the origin
thereof was the Appellee. 184.1. The the following acts shall not constitute infringement of copyright:

Accordingly, the nature of broadcasting is to scatter the signals in its widest area of coverage as possible. (h) The use made of a work by or under the direction or control of the Government, by the National Library
On this score, it may be said that making public means that accessibility is undiscriminating as long as it or by educational, scientific or professional institutions where such use is in the public interest and is
[is] within the range of the transmitter and equipment of the broadcaster. That the medium through which compatible with fair use;
the Appellant carries the Appellee’s signal, that is via satellite, does not diminish the fact that it operates
and functions as a cable television. It remains that the Appellant’s transmission of signals via its DTH satellite
The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No. 04-08-88
television service cannot be considered within the purview of broadcasting. x x x
is under the direction and control of the government though the NTC which is vested with exclusive
jurisdiction to supervise, regulate and control telecommunications and broadcast services/facilities in the
This Office finds that there is no rebroadcasting on the part of the Appellant of the Appellee’s Philippines.26 The imposition of the must-carry rule is within the NTC’s power to promulgate rules and
programs on Channels 2 and 23, as defined under the Rome Convention.22 regulations, as public safety and interest may require, to encourage a larger and more effective use of
communications, radio and television broadcasting facilities, and to maintain effective competition among
private entities in these activities whenever the Commission finds it reasonably feasible.27 As correctly
Rebroadcasting is “the simultaneous broadcasting by one broadcasting organization of the broadcast of
observed by the Director-General of the IPO:
another broadcasting organization.”

Accordingly, the “Must-Carry Rule” under NTC Circular No. 4-08-88 falls under the foregoing category of
ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the viewers receive
limitations on copyright. This Office agrees with the Appellant [herein respondent PMSI] that the “Must-
in its unaltered form. PMSI does not produce, select, or determine the programs to be shown in Channels
Carry Rule” is in consonance with the principles and objectives underlying EO 436,28 to wit:
2 and 23. Likewise, it does not pass itself off as the origin or author of such programs. Insofar as Channels
2 and 23 are concerned, PMSI merely retransmits the same in accordance with Memorandum
Circular 04-08-88. Clearly, PMSI does not perform the functions of a broadcasting The Court of Appeals likewise correctly observed that:
organization; thus, it cannot be said that it is engaged in rebroadcasting Channels 2 and 23.
[T]he very intent and spirit of the NTC Circular will prevent a situation whereby station owners and a few
networks would have unfettered power to make time available only to the highest bidders, to communicate
only their own views on public issues, people, and to permit on the air only those with whom they agreed
– contrary to the state policy that the (franchise) grantee like the petitioner, private respondent and other Nor indeed can there be any constitutional objection to the requirement that broadcast stations give free
TV station owners, shall provide at all times sound and balanced programming and assist in the functions air time. Even in the United States, there are responsible scholars who believe that government controls on
of public information and education. broadcast media can constitutionally be instituted to ensure diversity of views and attention to public affairs
to further the system of free expression. For this purpose, broadcast stations may be required to give free
air time to candidates in an election. Thus, Professor Cass R. Sunstein of the University of Chicago Law
This is for the first time that we have a structure that works to accomplish explicit state policy goals.30
School, in urging reforms in regulations affecting the broadcast industry, writes:

Indeed, intellectual property protection is merely a means towards the end of making society benefit from
In truth, radio and television broadcasting companies, which are given franchises, do not own the airwaves
the creation of its men and women of talent and genius. This is the essence of intellectual property laws,
and frequencies through which they transmit broadcast signals and images. They are merely given the
and it explains why certain products of ingenuity that are concealed from the public are outside the pale of
temporary privilege of using them. Since a franchise is a mere privilege, the exercise of the privilege may
protection afforded by the law. It also explains why the author or the creator enjoys no more rights than
reasonably be burdened with the performance by the grantee of some form of public service. x x x37
are consistent with public welfare.31

There is likewise no merit to ABS-CBN’s claim that PMSI’s carriage of its signals is for a commercial purpose;
Further, as correctly observed by the Court of Appeals, the must-carry rule as well as the legislative
that its being the country’s top broadcasting company, the availability of its signals allegedly enhances
franchises granted to both ABS-CBN and PMSI are in consonance with state policies enshrined in the
PMSI’s attractiveness to potential customers;38 or that the unauthorized carriage of its signals by PMSI has
Constitution, specifically Sections 9,32 17,33 and 2434 of Article II on the Declaration of Principles and State
created competition between its Metro Manila and regional stations.
Policies.35

ABS-CBN presented no substantial evidence to prove that PMSI carried its signals for profit; or that such
ABS-CBN was granted a legislative franchise under Republic Act No. 7966, Section 1 of which authorizes it
carriage adversely affected the business operations of its regional stations. Except for the testimonies of its
“to construct, operate and maintain, for commercial purposes and in the public interest, television and radio
witnesses, [39] no studies, statistical data or information have been submitted in evidence.
broadcasting in and throughout the Philippines x x x.” Section 4 thereof mandates that it “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 Administrative charges cannot be based on mere speculation or conjecture. The complainant has the burden
public participation such as in community programming; assist in the functions of public information and of proving by substantial evidence the allegations in the complaint.40 Mere allegation is not evidence, and
education x x x.” is not equivalent to proof.41

PMSI was likewise granted a legislative franchise under Republic Act No. 8630, Section 4 of which similarly Anyone in the country who owns a television set and antenna can receive ABS-CBN’s signals for free. Other
states that it “shall provide adequate public service time to enable the government, through the said broadcasting organizations with free-to-air signals such as GMA-7, RPN-9, ABC-5, and IBC-13 can likewise
broadcasting stations, to reach the population on important public issues; provide at all times sound and be accessed for free. No payment is required to view the said channels42 because these broadcasting
balanced programming; promote public participation such as in community programming; assist in the networks do not generate revenue from subscription from their viewers but from airtime revenue from
functions of public information and education x x x.” Section 5, paragraph 2 of the same law provides that contracts with commercial advertisers and producers, as well as from direct sales.
“the radio spectrum is a finite resource that is a part of the national patrimony and the use thereof is a
privilege conferred upon the grantee by the State and may be withdrawn anytime, after due process.”
In contrast, cable and DTH television earn revenues from viewer subscription. In the case of PMSI, it offers
its customers premium paid channels from content providers like Star Movies, Star World, Jack TV, and
In Telecom. & Broadcast Attys. of the Phils., Inc. v. COMELEC,36 the Court held that a franchise is a mere AXN, among others, thus allowing its customers to go beyond the limits of “Free TV and Cable TV.”43 It
privilege which may be reasonably burdened with some form of public service. Thus: does not advertise itself as a local channel carrier because these local channels can be viewed with or
without DTH television.
All broadcasting, whether by radio or by television stations, is licensed by the government. Airwave
frequencies have to be allocated as there are more individuals who want to broadcast than there are Relevantly, PMSI’s carriage of Channels 2 and 23 is material in arriving at the ratings and audience share
frequencies to assign. A franchise is thus a privilege subject, among other things, to amendment by of ABS-CBN and its programs. These ratings help commercial advertisers and producers decide whether to
Congress in accordance with the constitutional provision that “any such franchise or right granted . . . shall buy airtime from the network. Thus, the must-carry rule is actually advantageous to the broadcasting
be subject to amendment, alteration or repeal by the Congress when the common good so requires.” networks because it provides them with increased viewership which attracts commercial advertisers and
producers.
Indeed, provisions for COMELEC Time have been made by amendment of the franchises of radio and
television broadcast stations and, until the present case was brought, such provisions had not been thought On the other hand, the carriage of free-to-air signals imposes a burden to cable and DTH television providers
of as taking property without just compensation. Art. XII, §11 of the Constitution authorizes the amendment such as PMSI. PMSI uses none of ABS-CBN’s resources or equipment and carries the signals and shoulders
of franchises for “the common good.” What better measure can be conceived for the common good than the costs without any recourse of charging.44 Moreover, such carriage of signals takes up channel space
one for free air time for the benefit not only of candidates but even more of the public, particularly the which can otherwise be utilized for other premium paid channels.
voters, so that they will be fully informed of the issues in an election? “[I]t is the right of the viewers and
listeners, not the right of the broadcasters, which is paramount.”
Indeed, television is a business; however, the welfare of the people must not be sacrificed in the pursuit of
profit. The right of the viewers and listeners to the most diverse choice of programs available is
paramount.45 The Director-General correctly observed, thus:

The “Must-Carry Rule” favors both broadcasting organizations and the public. It prevents cable television
companies from excluding broadcasting organization especially in those places not reached by signal. Also,
the rule prevents cable television companies from depriving viewers in far-flung areas the enjoyment of
programs available to city viewers. In fact, this Office finds the rule more burdensome on the part of the
cable television companies. The latter carries the television signals and shoulders the costs without any
recourse of charging. On the other hand, the signals that are carried by cable television companies are
dispersed and scattered by the television stations and anybody with a television set is free to pick them up.

CA correctly upheld the decision of the IPO Director-General that PMSI did not infringe on ABS-CBN’s
intellectual property rights under the IP Code.

With regard to the issue of the constitutionality of the must-carry rule, the Court finds that its resolution is
not necessary in the disposition of the instant case. One of the essential requisites for a successful judicial
inquiry into constitutional questions is that the resolution of the constitutional question must be necessary
in deciding the case.

As a rule, the courts will not resolve the constitutionality of a law, if the controversy can be settled on other
grounds. The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts
of the political departments are valid, absent a clear and unmistakable showing to the contrary. To doubt
is to sustain. This presumption is based on the doctrine of separation of powers. This means that the
measure had first been carefully studied by the legislative and executive departments and found to be in
accord with the Constitution before it was finally enacted and approved.55

The records show that petitioner assailed the constitutionality of Memorandum Circular No. 04-08-88 by
way of a collateral attack before the Court of Appeals.

WHEREFORE, the petition is DENIED. The July 12, 2006 Decision of the Court of Appeals in CA-G.R. SP
Nos. 88092 and 90762, sustaining the findings of the Director-General of the Intellectual Property Office
and dismissing the petitions filed by ABS-CBN Broadcasting Corporation, and the December 11, 2006
Resolution denying the motion for reconsideration, are AFFIRMED.