While the country’s judicial system safeguards the rights of musicians for their artistic creations, “the protection is neither automatic nor unconditional,” the Court of Appeals (CA) declared.
In a recent decision, the CA said that “judicial process requires musicians to prove their claims (for royalties or other fees) with sufficient evidence.”
The CA, in a decision written by Associate Justice Eduardo S. Ramos Jr., said:
“The relationship between safeguarding musicians’ rights and necessitating proof of entitlement contributes to maintaining equilibrium within the creative industry.
“It not only deters exploitation and misrepresentation but also reinforces the importance of intellectual property, encouraging an atmosphere where artists feel inspired to continue enriching the vast landscape of music and culture.”
The CA’s declaration was contained in a decision that denied the appeal of the Filipino Society of Composers, Authors and Publishers, Inc. (FILSCAP) against the ruling of the trial courts in favor of Raven Broadcasting Corporation (RBC).
FILSCAP is a non-stock, non-profit association of composers, lyricists, and music publishers that collectively enforces the public performance rights granted by law to copyright owners of musical works.
Based on its accreditation by the Intellectual Property Office of the Philippines (IPOPHIL), FILSCAP is authorized to administer, license, enforce, and collect royalties for the public performance, among others, of the musical compositions of its members and foreign affiliate societies and entities.
RBC, on the other hand, is a domestic corporation engaged in radio broadcasting via the station identified by the callsign “DWJM” at a frequency of 88.3 MHz. In addition to its main terrestrial radio station known as “Jam 88.3,” RBC also offers its broadcast online via its website through a “mirror broadcast.”
CA’s records on the appeal filed by FILSCAP stated that RBC obtained separate licenses for its radio and online platforms to legitimately broadcast copyrighted music or musical works within FILSCAP's collection.
RBC was granted a license for its radio station on March 27, 2017. For its online platform, it was granted a “Website License” covering the period from Jan. 1, 2017 to Dec.31, 2017, which will auto-renew annually unless a written termination notice is provided at least one month prior to expiration date. The license fee for the website was fixed at P33,600.00.12.
With no written notice on termination of RBC’s website license before the end of 2017, FILSCAP automatically extended the license and send a billing statement to RTC.
When RBC failed to settle the license fee, FILSCAP issued a demand letter for the payment of P40,992, inclusive of penalty charge, as of Jan. 9, 2019.
On Jan. 18, 2019, FILSCAP filed a small claims case against RBC before the Quezon City metropolitan trial court (METC) for the collection of P33,600 plus two percent monthly interest from Jan. 31, 2018.
RBC denied financial liability. It said it has an existing license agreement with FILSCAP for the use of the songs of the artists for its radio business. But, it said, it has no financial obligation for its website license because it does not operate a business of hosting internet sites and does not stream music independently of its radio broadcasts.
It also said that the music it streams online directly “mirrors” what it transmits over the radio. Thus, it argued, it should not pay license fees twice for broadcasting the same song on both radio and online platforms.
During the MeTC proceedings, RBC submitted four receipts which showed that it paid FILSCAP P91,483.40 for the required license fees.
On April 12, 2019, the MeTC denied FILSCAP’s small claims case with a ruling that the latter failed to establish RBC’s liability by preponderance of evidence.
The MeTC ruled that FILSCAP failed to submit as evidence the statements of account in relation to the demand letters dated June 15, 2018; July 25, 2018; Sept. 7, 2018; and the statement of accounts in connection with the final demand letter dated Oct. 4, 2018.
It also said that the demand letters erroneously indicated “Reference No. 18-1832,” instead of Reference No. 17-1946, which pertains to the RBC's website license, and that although FILSCAP submitted a statement of account as of Jan. 9, 2019 for Invoice No. 5406, indicating the amount due of P40,992, there was no showing that RBC was properly notified thereof.
The MeTC noted that FILSCAP already received a total of P91,483.40 from RBC, as evidenced by four receipts, and that the former failed to prove that the fee for the website license was not included in this amount reflected in the four receipts.
When the regional trial court (RTC) affirmed the MeTC’s decision, FILSCAP elevated the case to the CA.
The CA ruled:
“Under Article 1169 of the Civil Code, demand is generally necessary to place the debtor in default. Demand letters and Statement of Accounts in the context of outstanding debts generally serve as a preliminary step in the extrajudicial collection process.
“By sending a demand letter, the creditor places the debtor on notice that payment is due, default has already taken place, and a legal action may ensue if the debt is not settled.
“Jurisprudence ordains that an incomplete demand, or one that leaves the debtor unable to make a valid payment, is ineffective and is insufficient for the purpose of rendering the debtor in default of the obligation.
“It also bears mentioning that although the demand letters state that a copy of the relevant Statement of Account was attached thereto, FILSCAP failed to submit the same before the MeTC for reasons only known to it.
“Following the principle that ‘the burden of proof lies with the person who sues,’ without these pertinent Statements of Account, FILSCAP miserably failed to meet the required quantum of proof, i.e., preponderance of evidence. Given that these Statements of Account were not introduced to the trial court, the same constitute ‘hearsay
evidence’ devoid of any probative value.
“In contrast, RBC provided four (4) receipts from July 2018 to October 2018, which show that it paid FILSCAP a total of P91,483.40 for the license fees. FILSCAP insists that these receipts are irrelevant to this case as they pertain to a different licensing agreement. The Court is not impressed.
“Based on the evidence, RBC was required to pay FILSCAP an annual license fee of P33,600 for its website. Records also reveal that RBC already paid a total of P91,483.40 as evidenced by receipts. FILSCAP was unable to prove that such amount did not cover the applicable license fee for its website, referenced as No. 17-1946.
“It is important to note that the receipts provided by RBC did not differentiate between the payments made.
“In civil cases, the party having the burden of proof must establish his case by preponderance of evidence, which means evidence which is of greater weight, or more convincing than that which is offered in opposition to it.
“Moreover, parties must rely on the strength of their own evidence, not upon the weakness of the defense offered by their opponent. As demonstrated, FILSCAP failed to discharge its burden of proof.
“In fine, the Court finds that the RTC did not commit any error in concluding that the MeTC did not exhibit grave abuse of discretion in dismissing FILSCAP's Small Claims case against RBC.
“Musicians must assert their rights in a manner that aligns with the legal concepts of fairness and due process. Just as courts work to protect intellectual property, they must also ensure that claims are valid and backed by verifiable evidence. This dual responsibility establishes a balanced framework that prevents frivolous or unsupported claims.
“Accordingly, the present Certiorari on appeal (filed by FILSCAP) is denied. he Decision dated Dec. 11, 2020, and Order dated March 17, 2021, of the Regional Trial Court, in Civil Case No. RQZN-19-13039-CV, are hereby affirmed. So ordered.”