Fair Use of Copyrighted Work
Iceberg's use of FILSCAP's copyrighted songs do not constitute fair use. To
repeat, copyright is primarily concerned with the advancement of a common
social good. To this end, copyright protection is not absolute. The IP Code
provides the limitations on copyright, one of which is the doctrine of fair use
as embodied in Section 185:
SECTION 185. Fair Use of a Copyrighted Work. — 185.1. The fair use of a
copyrighted work for criticism, comment, news reporting, teaching including
multiple copies for classroom use, scholarship, research, and similar
purposes is not an infringement of copyright. Decompilation, which is
understood here to be the reproduction of the code and translation of the
forms of the computer program to achieve the inter-operability of an
independently created computer program with other programs may also
constitute fair use. In determining whether the use made of a work in any
particular case is fair use, the factors to be considered shall include:
(a) The purpose and character of the use, including whether such use is of a
commercial nature or is for non-profit educational purposes;
(b) The nature of the copyrighted work;
(c) The amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
(d) The effect of the use upon the potential market for or value of the
copyrighted work.
In ABS-CBN Corporation v. Gozon (Gozon), the Court defined fair use as
follows:
Fair use is 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. 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." (Citations omitted)
The doctrine of fair use was first recognized in the case of Folsom v. Marsh,
which was decided by the United States Circuit Court for the District of
Massachusetts in 1841. In that case, it was held that in resolving questions of
fair use, the court must "look to the nature and objects of the selections
made, the quantity and value of the materials used, and the degree in which
the use may prejudice the sale, or diminish the profits, or supersede the
objects of the original work." The fair use doctrine was then codified in the
U.S. Copyright Act of 1976.
Section 107 of the U.S. Copyright Act enumerates four factors that courts
must use in evaluating whether fair use applies:
Section 107. Notwithstanding the provisions of sections 106 and 106A, the
fair use of a copyrighted work, including such use by reproduction in copies
or phonecords 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; and
(4) The effect of the use upon the potential market for or value of the
copyrighted work.
Similarly, the Court in Gozon, had occasion to discuss the four factors to be
considered in determining fair use:
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:
a. The purpose and character of the use, including whether such use is of a
commercial nature or is for non-profit educational purposes;
b. The nature of the copyrighted work;
c. The amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
d. 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." 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. This court must look into
whether the copy of the work adds "new expression, meaning or message"
to transform it into something else. "Meta-use" can also occur without
necessarily transforming the copyrighted work used.
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. x x x.
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.
Based on the above considerations, the presence of profit does not
automatically negate the application of the fair use doctrine. There are other
factors that must be looked into in deciding whether the fair use doctrine
applies. Nevertheless, the presence of profit generally presupposes the
existence of harm to the potential market for the creator's copyrighted work
under the fourth factor in determining fair use. This was elaborated by the
United States Court of Appeals in Sony Corp. of America v. Universal City
Studios, Inc., where it was held that "every commercial use of copyrighted
material is presumptively an unfair exploitation of the monopoly privilege."
However, in the Unite d States Supreme Court case of Harper & Row,
Publishers, Inc. v. Nation Enterprises, the Court tempered the heavy
assumption of exploitation and held that "[t]he fact a publication was
commercial as opposed to nonprofit is a separate factor that tends to weigh
against a finding of fair use." Further, in the same case, it was held that the
fourth factor, or the factor of harm to the potential market, is "undoubtedly
the single most important" of all the factors. This is because copyright was
developed from the need to protect the moral and economic rights of
creators.
In our IP Code, the fourth factor in determining fair use, i.e., the effect of use
upon the potential market for or the value of the copyrighted work, considers
the economic or commercial benefits or disadvantages brought about by the
alleged infringement to the original owner of the work. This concept was
illustrated by the United States Court of Appeals in Ty, Inc. v. Publications
International, in this wise:
We may say that copying that is complementary to the copyrighted work (in
the sense that nails are complements of hammers) is fair use, but copying
that is a substitute for the copyrighted work (in the sense that nails are
substitutes for pegs or screws), or for derivative works from the copyrighted
work x x x is not fair use.
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Complementary copying does not impair the potential market or value of the
copyrighted work insofar as it criticizes the work, which is the opposite of
taking a free ride on its value.
Where the profit generated by the alleged infringement is what the copyright
owner or original creator could have made, there can be no fair use. But
where the benefits are merely complementary or incidental, fair use may
properly be considered.
Based on the foregoing disquisitions, using copyrighted music via radio
broadcast played through loudspeakers, as background music in restaurants
for the entertainment of customers and for the enhancement of their dining
experience, falls outside the ambit of fair use, and thus amounts to copyright
infringement. Allowing these businesses to profit from the copyrighted works
of artists without compensating them or their assignees would seriously
injure the market of the copyright holders. (Icebergs Food Concepts, Inc. vs.
FILSCAP)
