ABS-CBN CORPORATION v. FELIPE GOZON, GR No.

195956, 2015-03-11

Facts:

ABS-CBN allowed Reuters Television Service (Reuters) to air the... footages it had taken earlier under a special embargo agreement.

ABS-CBN alleged that under the special embargo agreement, any of the footages it took would be for the "use of Renter's international
subscribers only, and shall be considered and treated by Reuters under 'embargo' against use by other subscribers in the Philippines. . . . [N]o...
other Philippine subscriber of Reuters would be allowed to use ABS-CBN footage without the latter's consent."

GMA-7... subscribes to both Reuters and Cable News Network (CNN). It received a live video feed of the coverage of Angelo dela Cruz's arrival
from Reuters.

GMA-7 immediately carried the live newsfeed in its program "Flash Report," together with its live broadcast.[13] Allegedly, GMA-7 did not
receive any notice or was not aware that Reuters was airing footages of ABS-CBN.[14] GMA-7's news... control room staff saw neither the "No
Access Philippines" notice nor a notice that the video feed was under embargo in favor of ABS-CBN.

ABS-CBN filed the Complaint for copyright infringement under Sections 177[16] and 211[17] of the Intellectual Property Code.

Assistant City Prosecutor Dindo Venturanza issued the Resolution[19] finding probable cause to indict Dela Peña-Reyes and Manalastas.

Department of Justice Secretary Raul M. Gonzalez (Secretary Gonzalez) ruled in favor of... respondents and held that good faith may be raised as
a defense in the case.

Department of Justice Acting Secretary Alberto C. Agra (Secretary Agra) issued the Resolution (Agra Resolution) that reversed the Gonzalez
Resolution and found probable cause

He ruled that:

Court of Appeals rendered the Decision granting the Petition and reversing and setting aside the Agra Resolution.

Court of Appeals said:

However, it is an admitted fact that petitioner GMA had only aired a five (5) second footage of the disputed live video feed that it had received
from Reuters and CNN as a subscriber. Indeed, petitioners had no notice of the right of ownership of private respondent over the... same. Without
notice of the "No Access Philippines" restriction of the live video feed, petitioner cannot he faulted for airing a live video feed from Reuters and
CNN.

Verily, as aptly opined by Secretary Gonzalez in his earlier Resolution, the act of petitioners in airing the five (5) second footage was undeniably
attended by good faith and it thus serves to exculpate them from criminal liability under the Code. While the

Intellectual Properly Code is a special law, and thus generally categorized as malum prohibitum, it bears to stress that the provisions of the Code
itself do not ipso facto penalize a person or entity for copyright infringement by the mere fact that one had used a... copyrighted work or material.

Certainly so, in the exercise of one's moral and economic or copyrights, the very provisions of Part IV of the Intellectual Property Code provide
for the scope and limitations on copyright protection under Section 184 and in fact permit fair use of copyrighted work under Section

185. With the aforesaid statutory limitations on one's economic and copyrights and the allowable instances where the other persons can
legally use a copyrighted work, criminal culpability clearly attaches only when the infringement had been knowingly and
intentionally... committed.

Issues:

whether there is probable cause to charge respondents with infringement under Republic Act No. 8293, otherwise known as the Intellectual
Property Code

Third, whether there was fair use of the broadcast material;

Fourth, whether lack of knowledge that a material is copyrighted is a defense against copyright infringement;
Fifth, whether good faith is a defense in a criminal prosecution for violation of the Intellectual Property Code

Ruling:

ABS-CBN claims that news footage is subject to copyright and prohibited use of copyrighted material is punishable under the Intellectual
Property Code. It argues that the new footage is not a "newsworthy event" but "merely an account of the arrival of Angelo dela Cruz in the

Philippines — the latter being the newsworthy event":

On the other hand, respondents argue that ABS-CBN's news footage of Angelo dela Cruz's arrival is not copyrightable or subject to protection

Certainly, the arrival of Angelo [d]ela Cruz, which aroused public attention and the consciousness of the Filipino people with regard to their
countrymen, OFWs working in foreign countries and how the Philippine government responds to the issues concerning them,... is "news". There
is no ingenuity or inventiveness added in the said news footage.

The news footage is copyrightable.

News or the event itself is not copyrightable. However, an event can be captured and presented in a specific medium. As recognized by this court
in Joaquin, television "involves a whole spectrum of visuals and effects, video and audio."[95] News... coverage in television involves framing
shots, using images, graphics, and sound effects. It involves creative process and originality. Television news footage is an expression of the
news.

Pacific & Southern Co. v. Duncan,[98] which involves a News Monitoring Service's videotaping and sale of WXIA-TVs news broadcasts:... it is
equally well-settled that copyright protection does extend to the reports themselves, as distinguished from the substance of... the information
contained in the reports.

Copyright protects the manner of expression of news reports, "the particular form or collocation of words in which the writer has communicated
it"

The idea/expression dichotomy is a complex matter if one is trying to determine whether a certain material is a copy of another.101 This
dichotomy would be more relevant in determining, for instance, whether a stage play was an infringement of an author's book involving the
same... characters and setting. In this case, however, respondents admitted that the material under review — which is the subject of the
controversy — is an exact copy of the original. Respondents did not subject ABS-CBN's footage to any editing of their own. The news footage
did not... undergo any transformation where there is a need to track elements of the original.

VI

Respondents point out that upon seeing ABS-CBN's reporter Dindo Amparo on the footage, GMA-7 immediately shut off the broadcast. Only
five (5) seconds passed before the footage was cut. They argue that this shows that GMA-7 had no prior knowledge of ABS-CBN's ownership of
the... footage or was notified of it. They claim that the Angelo dela Cruz footage is considered a short excerpt of an event's "news" footage and is
covered by fair use.

This court defined fair use as "a privilege 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 exception to the copyright... owner's monopoly of the use of the work
to avoid stifling "the very creativity which that law is designed to foster."

Determining fair use requires application of the four-factor test. Section 185 of the Intellectual Property Code lists four (4) factors to determine if
there was fair use of a copyrighted work:

The purpose and character of the use, including whether such use is of a commercial nature or is 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; and

The effect of the use upon the potential market for or value of the copyrighted work.
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, scholarship, research, and similar purposes."[117] The purpose and character
requirement is important in view of copyright's goal to promote creativity and encourage creation of works. Hence, commercial use of the
copyrighted work can be weighed against fair use.

The "transformative test" is generally used in reviewing the purpose and character of the usage of the copyrighted work.[118] This court must
look into whether the copy of the work adds "new expression, meaning or message" to transform it into something... else.[119] "Meta-use" can
also occur without necessarily transforming the copyrighted work used.[120]

Second, the nature of the copyrighted work is significant in deciding whether its use was fair. If the nature of the work is more factual than
creative, then fair use will be weighed in favor of the user.

Third, the amount and substantiality of the portion used is important to determine whether usage falls 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 copyrighted work is used without consent, its purpose determines that the usage is still fair.121 For example, a parody using a
substantial amount of copyrighted work may be permissible as fair use as opposed to a copy of a work produced purely... for economic gain.

Lastly, the effect of the use on the copyrighted work's 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.

the primary reason for copyrighting newscasts by broadcasters would seem to be to prevent competing stations from rebroadcasting current news
from the station with the best... coverage of a particular news item, thus misappropriating a portion of the market share.

However, there are also many caveats with these exceptions. A common exception is that some stations rebroadcast the news of others. The
caveat is that generally, the two stations are not... competing for market share. CNN, for example, often makes news stories available to local
broadcasters.

Whether the alleged five-second footage may be considered fair use is a matter of defense. We emphasize that the case involves determination of
probable cause at the preliminary investigation stage. Raising the defense of fair use does not automatically mean that no infringement... was
committed. The investigating 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 before the trial court. Given the... insufficiency of
available evidence, determination of whether the Angelo 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 that a crime was committed under the Intellectual Property Code.

VII

Respondents cannot invoke the defense of good faith to argue that no probable cause exists.

Infringement under the Intellectual Property Code is malum prohibitum. The Intellectual Property Code is a special law. Copyright is a statutory
creation

The general rule is that acts punished under a special law are malum prohibitum.[129] "An act which is declared malum prohibitum, malice or
criminal intent is completely immaterial."

Unlike other jurisdictions that require intent for a criminal prosecution of copyright infringement, the 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 criminal copyright infringement.

The Intellectual Property Code requires strict liability for copyright infringement whether for a civil action or a criminal prosecution; it does not
require mens rea or culpa

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 in Habana et al. v. Robles, Columbia Pictures v. Court of

Appeals, and this case:

Petitioner ABS-CBN argues that lack of notice that the Angelo dela Cruz was under embargo is not a defense in copyright infringement and cites
the case of Columbia Pictures vs. Court of Appeals and Habana et al. vs. Robles (310 SCRA 511). However, these cases... refer to film and
literary work where obviously there is "copying" from an existing material so that the copier knew that he is copying from an existing material
not owned by him. But, how could respondents know that what they are "copying was not [theirs]" when they... were not copying but merely
receiving live video feed from Reuters and CNN which they aired? What they knew and what they aired was the Reuters live video feed and the
CNN feed which GMA-7 is authorized to carry in its news broadcast, it being a subscriber of... these companies[.]

It is apt to stress that the subject of the alleged copyright infringement is not a film or literary work but live broadcast of news footage. In a film
or literary work, the infringer is confronted face to face with the material he is allegedly copying and... therefore knows, or is presumed to know,
that what he is copying is owned by another. Upon the other hand, in live broadcast, the alleged infringer is not confronted with the fact that the
material he airs or re-broadcasts is owned by another, and therefore, he... cannot be charged of knowledge of ownership of the material by
another.

Respondents' arguments must fail.

To admit a... different treatment for broadcasts would mean abandonment of a broadcasting organization's minimum rights, including copyright
on the broadcast material and the right against unauthorized re broadcast of copyrighted material. The nature of broadcast technology is
precisely... why related or neighboring rights were created and developed. Carving out an exception for live broadcasts would go against our
commitments under relevant international treaties and agreements, which provide for the same minimum rights.

Contrary to respondents' assertion, this court in Habana,[150] reiterating the ruling in Columbia Pictures,[151] ruled that lack of knowledge of
infringement is not a valid defense. Habana and Columbia

Pictures may have different factual scenarios from this case, but their rulings on copyright infringement are analogous. In Habana, petitioners
were the authors and copyright owners of English textbooks and workbooks. The case was anchored on the protection of... literary and artistic
creations such as books. In Columbia Pictures, video tapes of copyrighted films were the subject of the copyright infringement suit.

In Habana, knowledge of the infringement is presumed when the infringer commits the prohibited act:

WHEREFORE, the Petition is partially GRANTED. The Department of Justice Resolution dated June 29, 2010 ordering the filing of the
Information is hereby REINSTATED as to respondents Grace Dela Peña-Reyes and John Oliver T. Manalastas. Branch 93 of the

Regional Trial Court of Quezon City is directed to continue with the proceedings in Criminal Case No. Q-04-131533.

[115] Habana v. Robles, 369 Phil. 764 (1999) [Per J. Pardo, First Division], citing 18 AM JUR 2D §109, in turn citing Toksvig v. Bruce
Pub. Co., (CA7 Wis) 181 F2d 664 [1950]; Bradbury v. Columbia Broadcasting

System, Inc., (CA9 Cal) 287 F2d 478, cert den 368 US 801, 7 L ed 2d 15, 82 S Ct 19 [1961]; Shipman v. R.K.O. Radio Pictures, Inc., (CA2 NY)
100 F2d 533 [1938].

[116] See Matthew D. Bunker, TRANSFORMING THE NEWS: COPYRIGHT AND FAIR USE IN NEWS-RELATED CONTEXTS, 52 J.
COPYRIGHT SOC'Y U.S.A. 309, 311 (2004-2005), citing Iowa St. Univ. Research Found., Inc. v. Am. Broad. Cos., 621 F.2d 57, 60 (2d Cir.

1980). The four factors are similarly codified under the United States Copyright Act of 1976, sec. 107:

§ 107 . Limitations on exclusive rights: Fair use Notwithstanding the provisions of sections 106 and 106 A, the fair use of a copyrighted work,
including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such ... as criticism,
comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In
determining whether the use made of a work in any particular case is a fair use the factors to be considered... shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The fact that a work is unpublished shall not itself bar a Finding of fair use if such finding is made upon consideration of all the above factors.

[117] Rep. Act No. 8293 (1997), sec. 185.

[119] Id., citing Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).

[120] Id. at 317, citing Nunez v. Caribbean International News Corp., 235 F.3d 18 (1st Cir. 2000) and Psihoyos v. National Examiner, 49
U.S.P.Q.2d 1766 (S.D. N.Y. 1998). Bunker proposes the term "meta-use" for the kind of use that does... not necessarily transform the original
work by adding expression, meaning, or message, but only changes the purpose of the work. "[Psihoyos] distinguished between using the
photograph to 'show what it depict[ed]' versus commenting upon the photograph in some... way. Certainly the Nunez use was for purposes of
commentary on the photos - the photos had engendered significant controversy, and the news article reported on that controversy. Thus, the
Nunez use was what we might refer to as a 'meta-use' of the photos that... went beyond simply using a photograph to illustrate a news story - as in
Psihoyos - and instead consisted of a news story about the photographs themselves, or at least public reaction to them.

Principles:

News should be differentiated from expression of the news, particularly when the issue involves rebroadcast of news footage. The Court of
Appeals also erroneously held that good faith, as. well as lack of knowledge of 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 defense against
copyright infringement. Copyright, however, is subject to the rules of fair use and will be judged on a case-to-case basis. Finding probable cause
includes a determination of the defendant's active participation, particularly when the corporate... veil is pierced in cases involving a corporation's
criminal liability.