Dear PAO,

As an owner of a bar and restaurant, I want to confirm if there is really a need to get a license and pay royalties for playing music in my establishment. I have a live entertainment band that performs popular foreign and local songs in my bar every night, and we also have music playing as a background during daytime. I was recently told by another bar owner that there was already a Supreme Court decision requiring payment to and license from the copyright owners of the songs. What was the case about? Are the owners of a bar really required to get a license for this? I hope you can enlighten us about this matter. Thank you!

Magomed

Dear Magomed,

To answer your query, we shall refer to the landmark decision of the Supreme Court in the case of COSAC Inc. vs. Filipino Society of Composers, Authors and Publishers Inc., GR 222537, Feb. 28, 2023, penned by Associate Justice Ramon Paul Hernardo.

In this case, the Filipino Society of Composers, Authors and Publishers Inc. (Filscap) is a nonstock, nonprofit organization managing copyright-related issues for music compositions of artists who assigned their rights to it. Filscap claimed that a commercial establishment owned by COSAC infringed on copyrights of artists under Filscap by playing copyrighted music without a license from Filscap. Despite several notices, the said establishment did not secure the necessary license, which made Filscap file a copyright infringement complaint. Both the Regional Trial Court and Court of Appeals ruled in favor of Filscap before the case was elevated to the Supreme Court.

In its ruling, Supreme Court explained the overview of copyright by citing that musical works are protected by copyright from the moment of its creation in accordance with the Intellectual Property Code, which states that:

“SECTION 172. Literary and Artistic Works. – 172.1. Literary and artistic works, hereinafter referred to as ‘works,’ are original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include in particular:x x x

(f) Musical compositions, with or without words; x x x”

The Supreme Court ruled in said case that COSAC committed copyright infringement by highlighting that “all the elements of copyright infringement, (1) ownership of a validly copyrighted material by the complainant and (2) infringement of the copyright by the respondent, are present in this case. The songs that were played in Off the Grill are copyrighted works, and the copyright owners have a right to enforce their exclusive economic rights.” In so ruling, the high court held that such performances were not covered by the limitations on copyright or the fair use doctrine considering that these were carried out to realize profits for the establishment.The Supreme Court recognized that Filscap, as the assignee of artists, has the right to demand compensation for the public playing or performance of copyrighted musical works under its catalog in establishments, when infringement is being committed due to absence of license and payment of fees. It was further ruled that the COSAC should have obtained a license from Filscap and paid necessary fees for: a) allowing live bands to play copyrighted music, and b) playing recorded copyrighted music in its premises.

Lastly, in recognizing the rights of copyright owners, the Supreme Court stated that:

“Although it seems trivial or outrageous to collect fees for this purpose, especially when almost everything is readily accessible to the listening public, the copyright owners are still entitled to be compensated for their creative work. There is no question that they invested time, creativity, talent and effort in the creation and development of their compositions. Thus, assigning Filscap to pursue their intellectual property rights on their behalf should not be taken against Filscap, as it is acting not merely for its own benefit, but for the copyright owners’ as well. Still, Filscap’s monitoring, licensing and its other functions should all be exercised within reasonable, proper and just means.”

It is clear from this cited Supreme Court case decision that establishment and venue owners must recognize the legal rights of copyright owners by obtaining license and paying the necessary fees for live or recorded performance of copyrighted music in its premises.

We hope that we were able to answer your queries. This advice was based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Thank you for your continued trust and support.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected].