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2025 WIPO IP Judges Forum Informal Case Summary - Supreme Court of the Philippines [2023]: Philippine Home Cable Holdings, Inc. v Filipino Society of Composers, Authors & Publishers, Inc., GR No. 188933

This is an informal case summary prepared for the purposes of facilitating exchange during the 2025 WIPO IP Judges Forum.

 

Session 5: Copyright Related Rights

 

Supreme Court of the Philippines [2023]: Philippine Home Cable Holdings, Inc. v Filipino Society of Composers, Authors & Publishers, Inc., GR No. 188933 

 

Date of judgment: February 21, 2023

Issuing authority: Supreme Court of the Philippines  

Level of the issuing authority: Final Instance

Type of procedure: Judicial (Civil)

Subject matter: Copyright and Related Rights (Neighboring Rights)

Plaintiff: Filipino Society of Composers, Authors, and Publishers, Inc.

Defendant: Philippine Home Cable Holdings, Inc.

Keywords: Copyright infringement; copyright related rights, communication to the public; musical compositions; derivative work, audiovisual work

 

Basic facts: 

 

Philippine Home Cable Holdings, Inc. (Home Cable) faced a claim for copyright infringement lodged by the Filipino Society of Composers, Authors & Publishers, Inc. (FILSCAP). FILSCAP, which represented local and international composers and publishers, averred that Home Cable, a cable television operator, played musical compositions from the former’s repertoire on Channels 22 and 32 without a license or paying the necessary fees. FILSCAP had acquired the rights to these musical works and had previously advised Home Cable to secure a license, but received no response.

 

Consequently, FILSCAP filed a complaint seeking an injunction and damages against Home Cable. The Regional Trial Court initially found Home Cable liable for copyright infringement and ordered them to pay damages. This decision was chiefly upheld by the Court of Appeals, which affirmed the finding of infringement, but modified the amount of temperate damages awarded. Home Cable then elevated the case to the Supreme Court through a Petition for Review.

 

In its petition, Home Cable contended that its retransmission of Channels 22 and 32 did not constitute copyright infringement, maintaining the application of the ABS-CBN Broadcasting Corp. v. Philippine Multi-Media System, Inc. ruling where the Supreme Court previously held that retransmission by a broadcast service was not deemed infringement. On this score, Home Cable asserted that its functions were limited by its mandate and NTC rules, arguing that liability should rest with broadcasting organizations, not cable operators complying with the “must-carry” rule. Moreover, Home Cable claimed that FILSCAP did not hold the specific “communication to the public” rights over its principals’ musical compositions, asserting FILSCAP’s authority was limited only to “performing rights.” Home Cable also argued that other entities, specifically Precision Audio, which provided the videoke laser discs, Star TV and Cable Box were indispensable parties due to guarantees on copyright or content provision in their contracts, and that Home Cable merely provided the transmission medium, with no control over content selection.

 

In response, FILSCAP argued that the ABS-CBN ruling cannot be applied retroactively and that Home Cable’s retransmission constituted a broadcast or rebroadcast, which was a “public performance” or “communication to the public” under the Intellectual Property Code. FILSCAP maintained that Home Cable was indeed liable due to its control over the broadcast content, notwithstanding the “must-carry” rule, and that Home Cable’s retransmission generated additional audience and profit. FILSCAP also asserted its standing as the real party-in-interest, representing copyright owners through deeds of assignment that granted it broad powers to license and enforce “performing rights,” which it argued similarly encompass the “communication to the public” right, even if not explicitly termed as such in older deeds of assignment.

 

Held:

 

The Supreme Court ultimately denied the Petition for Review on Certiorari filed by Home Cable, thereby affirming with modification the Decision and Resolution of the Court of Appeals. The Supreme Court largely upheld the lower courts’ finding that Home Cable had committed copyright infringement.

 

The Supreme Court unequivocally ruled that Home Cable was liable for copyright infringement as it exercised the “communication to the public” right without authorization. This infringement stemmed directly from Home Cable’s operation of Channels 22 and 32, which actively cablecast musical compositions from FILSCAP’s repertoire. The Supreme Court also clarified that Home Cable’s actions constituted an infringement of the “communication to the public” right, specifically under Section 177.7 of the Intellectual Property Code, rather than merely a “public performance” right. This distinction was decisive, as cablecasting effectively makes the work accessible to the public from a place and time individually chosen by them. Likewise, the Court rejected Home Cable’s argument that its retransmission was exempt, like those under the “must-carry” rule established in the ABS-CBN case. The Supreme Court emphasized that Home Cable was not simply retransmitting free-to-air signals from other broadcasters. Instead, it was engaging in “program origination” for Channels 22 and 32, a fact evidenced by its direct control and responsibility over these karaoke channels, including providing the necessary equipment and laser discs.

 

The ruling then tackled the procedural argument regarding indispensable parties. The Court determined that Precision Audio, from whom Home Cable purchased the videoke laser discs, was not an indispensable party to the case. It clarified that Home Cable’s liability for infringing the “communication to the public” right was separate and distinct, allowing for its determination even without Precision Audio’s presence. Any warranties from Precision Audio would merely give Home Cable a right to reimbursement, not negate its own direct liability.

 

Finally, the Supreme Court affirmed the Court of Appeals’ modified award of damages. Home Cable was ordered to pay PHP 500,000.00 as temperate damages, PHP 500,000.00 as exemplary damages, and PHP 100,000.00 in attorney’s fees. The Court did, however, modify the interest rate to six percent (6%) per annum, which was to be imposed on the total sum of the monetary awards from October 20, 2003, the date of the Regional Trial Court Decision, until full payment, in accordance with updated guidelines on interest awards.

 

Relevant holdings in relation to Copyright Related Rights:

 

While the case involves the “communication to the public” of musical works by a cable company, an activity that often overlaps with neighboring rights, the Supreme Court explicitly rejected Home Cable’s contention that the case pertained to neighboring rights. The Court clarified that the FILSCAP represents composers, authors, and publishers, and the rights assigned to FILSCAP were the economic rights of copyright holders under Section 177 of the Intellectual Property Code, not the neighboring rights enumerated in Section 203. The decision underscores that FILSCAP does not represent performers of the musical compositions, nor producers of sound recordings or broadcasting organizations. Thus, the case definitively focuses on the infringement of the primary copyright of the musical compositions held by authors and composers, rather than the distinct neighboring rights of related rightsholders, despite the “communication to the public” context.

 

On the scope of rights, the case focused on the infringement of the copyright holders’ exclusive right of “communication to the public” under Section 177.7 of the Intellectual Property Code, which the Court carefully defined in light of international treaties such as the Berne Convention. This right, though analogous to rights held by broadcasters under neighboring rights, was applied as a primary copyright holder’s right. Moral rights were not a central point of contention for FILSCAP in this specific infringement claim.

 

On the aspect of infringement, the ruling distinguished Home Cable’s unauthorized “program origination”, i.e., cablecasting its own karaoke channels, from mere retransmission, which would typically be governed by different rules and potentially neighboring rights, or the absence thereof, in accordance with the “must-carry” rule. This distinction between “program origination” and “mere retransmission” is relevant in determining the proper scope of infringement under copyright versus neighboring rights for different entities in the dissemination chain. Otherwise stated, it is imperative to ascertain which specific entity bears responsibility for an unauthorized act at each juncture of a creative work’s dissemination from its original creator to the public. For instance, the composer, the performer, the record label, the TV broadcaster, or the cable company may each play a distinct role, and the type of right infringed (copyright or a neighboring right) and who is liable depends heavily on their specific function within that process.

 

In the case at hand, this distinction was pivotal: with respect to karaoke channels, which involved “program origination,” Home Cable was deemed to be directly infringing the copyright of the musical compositions, thereby rendering Home Cable itself liable. Conversely, for instances of mere retransmission, such as for "must-carry" channels, the rules differed significantly. In such scenarios, while the original broadcaster might hold neighboring rights, the cable company would generally not be found infringing those rights if it was solely fulfilling a regulatory obligation, as stipulated by the “must-carry” rule.

 

As regards equitable remuneration and CMOs, FILSCAP’s role as a CMO was central to the case. It sought and was awarded damages as remuneration for the copyright infringement, highlighting the key function of CMOs in enforcing the rights of a multitude of copyright holders, who would otherwise be hard-pressed to pursue individual infringers. This emphasizes how CMOs facilitate remuneration for the use of protected works.

 

Finally, the case broached the subject of licensing in evolving legal and technological environments. Home Cable’s failure to obtain a license for “communication to the public” illustrates the challenges in interpreting and enforcing rights in a dynamic media landscape like cable television. The Court’s detailed analysis of “communication to the public” and its application to cablecasting reflects the ongoing adaptation of copyright law to new technologies, which is a constant challenge for both copyright and neighboring rights holders in securing proper licensing agreements.

 

As a final note, the case underscored the vital social function of intellectual property rights, highlighting that they are not just economic tools but also serve to incentivize creativity and contribute to the common good, thereby emphasizing the importance of diligent enforcement against unauthorized use thereof.

                                                                                      

Relevant legislation: Intellectual Property Code of the Philippines (Republic Act No. 8293), Civil Code of the Philippines, Berne Convention, the WIPO Copyright Treaty, the WIPO Performances and Phonograms Treaty, and the National Telecommunications Commission Memorandum Circular No. 4-08-88 which contains the “must-carry” rule.