DECISION

DECISION

Before the Court is the Petition for Review on Certiorari under Rule forty-five of the Rules of Court, filed by petitioners Icebergs Food Concepts, Incorporated (Icebergs) and Allan John T. Young (Young), assailing the Decision and the Resolution of the Court of Appeals in C A-G R S P Number fifteen nine one two four, dated February six, twenty twenty, and March eighteen, twenty twenty-one, respectively, which affirmed the December five, twenty eighteen Decision of the Regional Trial Court of Quezon City, Branch ninety-three (RTC), in Civil Case Number R-QZN-fourteen-one-one eight seven six-CV. The RTC found the petitioners liable for copyright infringement.

The Facts

Icebergs is a corporation, duly organized under Philippine laws, engaged in the business of operating several branches of restaurants within the country. On the other hand, Young is the President and General Supervisor of Icebergs. Respondent Filipino Society of Composers, Authors, and Publishers, Incorporated (FILSCAP) is a non-stock, non-profit association of composers, and is likewise a government-accredited Collective Management Organization (CMO), which is authorized to acquire, administer, license, and enforce the public performance rights over copyrighted musical works or compositions of its members and affiliate foreign societies. FILSCAP is also a member of the International Confederation of Societies of Authors and Composers (CISAC), which entered into reciprocal agreements with FILSCAP for the licensing of public performance rights.

As a CMO, FILSCAP has the right to collect royalties and license fees for the public performance of local or foreign copyrighted musical works. As to foreign copyrighted musical works, FILSCAP derives its right to issue licenses and collect license fees from the Deeds of Assignment executed by its members, as well as the reciprocal agreements it entered into with its affiliate foreign societies.

From twenty ten through twenty fourteen, FILSCAP monitored several Icebergs restaurants. FILSCAP discovered that Icebergs publicly played in its restaurants copyrighted musical works found in FILSCAP's musical repertoire without the required public performance license. FILSCAP found that Icebergs played around three hundred twenty-four songs in its musical repertoire without such license.

FILSCAP sent Icebergs and Young a total of five letters, from two thousand nine to two thousand ten, requiring them to secure a public performance license, as well as to pay the corresponding license fees. However, Icebergs failed to respond, which prompted FILSCAP to send two more demand letters on July two, twenty ten and on August six, twenty fourteen. Subsequently, FILSCAP sent a Final Demand Letter on September thirty, twenty fourteen.

As the letters remained unheeded, FILSCAP was constrained to file a Complaint for Copyright Infringement on December one, twenty fourteen, before the RTC, docketed as Civil Case Number R-QZN-fourteen-one-one eight seven six-CV. In its Complaint, FILSCAP alleged that Icebergs' continuous and regular unauthorized public performances of FILSCAP's musical works clearly constituted copyright infringement under Section two hundred sixteen, in relation to Section one hundred seventy-seven, of Republic Act Number eight two nine three, as amended, or the Intellectual Property Code (IP Code). Thus, FILSCAP claimed that Icebergs should pay the amount of six hundred twenty-seven thousand two hundred pesos, representing license fees for the years twenty ten to twenty fourteen, five hundred thousand pesos each for moral and exemplary damages, as well as attorney's fees in the amount of one hundred thousand pesos.

In its Answer with Counterclaim, Icebergs denied committing copyright infringement, and claimed that FILSCAP had no substantial proof that it had the authority to collect and receive royalties or license fees in behalf of the owners of the songs under its musical repertoire. Icebergs likewise alleged that FILSCAP was not the real party-in-interest to institute the complaint, as the Complaint failed to attach any proof of authority to file the same. In its counterclaim, Icebergs prayed for attorney's fees and litigation expenses.

FILSCAP replied that it had the authority to file the case by virtue of the Deeds of Assignment executed by its members, as well as the Reciprocal Agreements it entered into with its affiliate foreign societies. The Deeds of Assignment and Reciprocal Agreements have been deposited with the Copyright Office of the National Library of the Philippines.

During trial, Icebergs presented Young, its Chairman, as its lone witness. Young insisted that there were no public musical performances in their restaurants, and that whatever musical sounds were heard in the restaurants were due to the occasional tuning in to the local FM radio broadcast from radio networks made available to the public. Young likewise asserted that the subject Icebergs restaurants did not need music for its operations and that the tuning in to local radio stations was not done to entice customers or generate patronage in the concept of public performance or for commercial gain. Young also claimed that Icebergs did not advertise the musical works or charge a fee for playing the same, as the customers were billed only for food and drinks consumed.