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

FACTS

This case involves a copyright infringement dispute. The petitioner, COSAC, Inc., was alleged to have committed copyright infringement through the public performance of copyrighted musical compositions within its establishment without securing the necessary license from the respondent, FILSCAP. The specific acts included employees playing copyrighted music through radio, speakers, or music videos. The legal issue pertains to the liability of an establishment proprietor for infringing acts committed within its premises, particularly for acts occurring prior to the amendment of the Intellectual Property Code by Republic Act No. 10372 .

ISSUE

The primary issue is whether the proprietor of an establishment (COSAC, Inc.) can be held liable for copyright infringement for the unauthorized public performance of musical compositions within its premises, and on what legal basis such liability should be founded for acts committed before the expansion of infringement liability under Republic Act No. 10372 .

RULING

Justice Leonen, in a Separate Concurring Opinion, concurred in the result that the petitioner should be held liable for copyright infringement under Republic Act No. 8293 (the Intellectual Property Code). The opinion clarifies that profit is not the controlling factor in determining infringement; the exclusive right of the copyright holder exists regardless of profit. The absence of a profit-making aim may be relevant only when considering specific statutory defenses like fair use under Section 184, which requires a multi-factor test (purpose and character of use, nature of the work, amount and substantiality used, and effect on the potential market).
The opinion agrees that playing copyrighted music without a license constitutes an infringement of public performance rights, as settled in Filscap v. Anrey. However, it critically examines the basis for holding an establishment proprietor liable when the direct infringers are performers (like a live band). It notes that at the time of the alleged acts, Section 216 of the Intellectual Property Code only punished the direct infringer. Liability for those who benefit from or contribute to another’s infringement was introduced later by Republic Act No. 10372 .
Justice Leonen posits that for acts prior to this amendment, imputing liability to persons other than the direct infringer should not be based on foreign common law principles but on existing Philippine formulations of vicarious liability. Under Philippine jurisprudence, such as Cangco v. Manila Railroad Co., an employer can be held liable for the acts of an employee if there is an employer-employee relationship and the act was done within the scope of assigned tasks. Furthermore, following Metro Transit Organization, Inc. v. Court of Appeals, for liability to attach, the employer must have been negligent in the selection and/or supervision of the employee. This requires concrete proof of the employer’s failure to exercise due diligence in selection and supervision.
Thus, recovery from a proprietor under vicarious liability hinges on a finding that the proprietor had control or supervision over the primary infringer’s acts and had knowledge or notice of the infringing activity. Finally, the opinion agrees with the ponencia that, since the respondent only prayed for nominal damages and failed to prove actual damages, but suffered pecuniary loss from nonpayment of licensing fees, temperate damages may be awarded. The evidence was insufficient to calculate exact royalties or actual damages. Justice Leonen voted to DENY the Petition for Review on Certiorari.