IP Views

Proposed Amendments to Copyright Provisions of the Intellectual Property Code

March 23, 2011

By: Alpheus D. Macalalad

On 8 December 2010, House Bill No. 3841 (“Copyright Bill”) was filed in the House of Representatives. The Copyright Bill proposes amendments to the Intellectual Property Code of the Philippines (“IP Code”), specifically with regard to copyright provisions. It also proposes certain changes to the current structure of the Intellectual Property Office of the Philippines (“IPOPHL”).

The Copyright Bill seeks to cover the current gaps in the provisions of the IP Code with regard to copyright and to bolster copyright protection and enforcement. It is the consolidation of three House Bills pending in the 15th Congress: House Bill Nos. 47, 267, and 2041. House Bill Nos. 47 and 267 both seek to address the problems brought about by the Internet: rampant unauthorized reproduction of copyrighted works. House Bill No. 2041 sought an expansion of the concept of fair use: exemption from securing permission for reproduction of the work in a specialized format for the blind or visually-impaired. The consolidated bill adds several other provisions, ultimately with the goal to secure stronger rights for artists and authors.

Presently, the Copyright Bill is scheduled for second reading in the House of Representatives and its principal author is also scheduled to deliver his sponsorship speech.

The addition of the Bureau of Copyright

The first change provides for the expansion of the IPOPHL from six to seven bureaus, by adding the Bureau of Copyright. The Bureau of Copyright is given the following functions:

9A.1. Accept, review and decide on applications for the accreditation of collective management organizations or similar Entities;

9A.2. Conduct studies and researches in the field of copyright and related rights in order to assist the Director General in formulating policies on the administration and management of copyright and related rights;

9A.3. Exercise original jurisdiction to resolve disputes relating to the terms of a license involving the author’s right to public performance of his work. The decisions of the Director of Copyright in these cases shall be appealable to the Director General;

9A.4. Assist the Documentation, Information, and Technology Transfer Bureau (DITTB) in education the public and building awareness of copyright and related rights through seminars, lectures and other similar activities;

9A.5. Provide information to the Director General regarding matters of copyright and related rights that require publication in the IPO Gazette;

9A.6. Coordinate with the National Library and the Supreme Court Library for the Bureau to maintain a database of deposited works, assignments or exclusive licenses of copyrighted works and other documents, particularly those mentioned in Sections 182, 183, 191, and 198;

9A.7 Coordinate with other government agencies and the private sector efforts for the Bureau to formulate and implement plans and policies to strengthen the protection of copyright and related rights; and

9A.8 Provide other copyright and related rights service and charge reasonable fees therefore.

The Bill adjusts the power of the Director General by giving exclusive appellate jurisdiction over the decisions rendered by the Director of Copyright over disputes relating to licensing terms involving the author’s right to public performance or other communication of his work.

Also, the Administration Services arm of IPOPHL will now be mandated to maintain registers of assignments, mergings, licenses, and bibliography on copyright.

The amendment and addition of definitions

The Bill proposes the amendment and addition of several new terms in the list of definitions.

First, “Communication to the public” or “communicate to the public” now means “any Communication to the public, including broadcasting, rebroadcasting, retransmitting by cable, broadcasting and retransmitting by satellite and includes the making of a work available to the public by wire or wireless means in such a way that members of the public may access these works from a place and time individually chosen by them.”

Second, “Reproduction” is redefined to mean “the making of one (1) or more copies, temporary or permanent, in whole or in part, of a work or a sound recording in any manner or form without prejudice to the provisions of Section 185 of this Act.”

Third, it defines new terms such as: “Technological measure” and “Rights Management Information.” “Technological Measures” are “any technology, device, or component that, in the normal course of its operation, restricts acts in respect of a work, performance or sound recording, which are not authorized by the authors, performers or producers of sound recordings concerned or permitted by law.”

“Rights Management Information” is information identifying the following:

a) the work, sound recording, or performance;
b) the author of the work, the producer of the sound recording or the performer of performance;
c) the owner of any right in the work, sound recording, or performance; or
d) information about the terms and conditions of the use of the work, sound recording or performance; and
e) any numbers or codes that represent such information, when any of these items is attached to a copy of the work, sound recording or fixation of performance or appears in conjunction with the communication of the public of a work, sound recording, or performance.

These new definitions seek to address problems encountered with the protection of works found in new media such as electronic formats, online streaming audio and video, e-books, social networking, etc.

The addition of licensing as a mode of transmitting copyright

The Bill proposes express provisions on licensing, alongside the provisions of transfer and assignment of copyright. It provides that “any exclusivity in the economic rights in a work may be exclusively licensed. Within the scope of the exclusive license, the licensee is entitled to all the rights and remedies which the licensor had with respect to the copyright.”

Thus, “the copyright owner has the right to regular statements of accounts from the assignee or the licensee with regard to the assigned or licensed work. The accounting shall be made in writing and shall be given to the author at least once a year accompanied by such information including books of accounts, contracts re-assigning his rights to his work, and other such documents that will help the author or copyright owner determine the proper remuneration due him.”

Similar to transfer or assignment of copyright, the Bill states that “licensing of copyright does not by itself constitute a transfer or assignment of the material object.” Conversely, “a transfer or assignment of the sole copy or of one or several copies of the work also does not imply transfer, assignment or licensing of the copyright.”

The regulation of societies of artists, writers, and copyright holders

In order to aid copyright owners and their heirs in protecting copyright, the bill introduces the requirement that societies of artists, writers, and other copyright holders must first be accredited by the IPOPHL before they can enforce the rights of their members. Of course, this serves as protection for copyright owners from opportunist groups posing as partners to copyright owners but with shameless ulterior motives.

The amendment of the fair use provisions

The Bill amends the fair use provisions of the IP Code. It changes the word “multiple” and instead provides for “limited number of” copies for classroom use, research, and similar purposes.

Decompilation is also expounded upon, by adding the requirement that decompilation is done for the purpose of obtaining the information necessary to achieve inter-operability between computer programs.

It extends fair use to reproduction and distribution of published works in specialized formats exclusively for the use of the blind. It is required, however, that such copies must be distributed on a non-profit basis and that the copyright owner and date of publication must be indicated in such reproduction. Also, the reproduction must not be in conflict with the normal exploitation of the work and does not prejudice the legitimate interests of the copyright owner. Distribution is also allowed, even if the specialized copies are made abroad, provided the foregoing requirements are fulfilled.

The amendments to the provisions on the power of libraries to make copies of works for the purpose of preservation and to the provisions on deposit of works

The Bill no longer limits non-profit libraries and archives to make a single copy but allows such institutions to make a limited number of copies as needed to fulfill their mandate to preserve original works.

The provision on depositing works with the National Library and the Supreme Court Library is minimally changed by providing that only works of law are deposited with the Supreme Court Library. Also, the receiving institution will issue a notice of deposit instead of the former certificate of deposit.

The grant of power to the Commissioner of Customs to regulate interstate movement of works

The Bill simplifies the rule on interstate movement of works by deleting the old provisions regarding importation of works. It grants the Commissioner of Customs the power to make Rules and Regulations, subject to the approval of the Secretary of Finance, to prevent the importation and exportation of prohibited goods or articles under the IP Code.

The extension of the term of moral right of authors

The Copyright Bill extends the moral right of authors “to require that authorship of the works be attributed to him” and that his name “be indicated in a prominent way on the copies and in connection with the public use of his work” to a perpetual term. Thus, the moral right secured in Sec. 193.1 of the IP Code is no longer limited to 50 years after the author’s death.

However, the authors’ rights “to make alteration of his work prior to, or withhold it from publication; to object to distortion, mutilation or other modification of, or other derogatory action in relation to his work which would be prejudicial to his honor or reputation; and to restrain the use of his name with respect to any work not of his own creation or in a distorted version of his work,” are still considered coterminous with his economic rights. All moral rights are still not subject to an assignment or license.

The Bill clarifies that the person charged to posthumously enforce the moral rights must be named in a written instrument.

Amendments to provisions on rights of performers, producers of sound recordings, and broadcasting organizations

The Copyright Bill streamlines the limitations on copyright by providing that the general limitations on copyright provided in Chapter VIII also applies to performers, producers of sound recordings, and broadcasting organizations.

Also, the Bill grants producers of sound recordings an additional right. Producers of sound recordings now have the “right to authorize the making available to the public of their sound recordings in such a way that members of the public may access the sound recordings in such a way that members of the public may access the sound recordings from a place and at a time individually chosen by them, as well as other transmissions of a sound recording with like effect.”

Amendments to the provisions on copyright infringement

One of the main purposes of the Copyright Bill is to redefine and expand copyright infringement. The Bill provides that copyright infringement is done by a person who: 1) “directly commits an infringement; 2) benefits financially from the infringing activity of another person who commits an infringement if the person benefitting has been given notice of the infringing activity and has the right and ability to control the activities of the other person, and; and 3) purposely and with intent to enable induce infringement by another person, and materially contributes to it.”

Double damages will be awarded if the infringement is done by circumventing technological measures or by removing or altering any electronic management rights information from a copy of the a work, sound recording, or fixation of a performance, when there are reasonable grounds to know that it will induce, enable, facilitate, or conceal the infringement. Double damages are also awarded when infringement is done by distributing, importing for distribution, broadcasting or communicating to the public works or copies of works without authority, when it is known that the electronic rights management information has been removed or altered without authority.

The Bill also give the copyright owner the option to choose, instead of actual damages and profits, an award of statutory damages for all infringements involved in an action a sum equal to the filing fee but not less than PhP50,000. The choice must be made before final judgment is rendered. In awarding statutory damages, the Court may consider the nature and purpose of the infringing act, the flagrancy of the infringement, existence of bad faith, the need to deter such acts, any loss that the plaintiff has suffered or is likely to suffer because of the infringement, and any benefit received by the defendant because of the infringement.

The Court may also reduce the statutory damages to not more than PhP10,000, if the infringer was not aware and had no reason to believe that his or her acts constitute an infringement of copyright. Again, the damages awarded will be doubled if the infringer circumvented the technological measures, or altered the electronic management rights information.

The Bill also gives Courts the power to order seizure and impounding of any article which may serve as evidence in Court proceedings, in accordance to the Rules on Search and Seizure involving violations intellectual property rights to be issued by the Supreme Court.

All of these do not preclude the filing of an independent suit for relief by the injured party by way of damages, injunction, or otherwise.

Finally, the Copyright Bill imposes the maximum term of imprisonment imposed by the IP Code if infringement is done by circumventing the technological measures or by altering the electronic management rights information included in the work, sound recording or fixation of performance.

Amendments on affidavit evidence

The Copyright Bill removes the phrase “for an offense” in Sec. 218.1 (c); the intention is to allow affidavit evidence to be admitted in any proceeding under the chapter on infringement. As currently worded, affidavit evidence is arguably admissible only in relation to offenses in criminal proceedings. Such affidavit evidence will continue to be “prima facie proof of the matters therein stated until the contrary is proved, and the court before which such affidavit is produced shall assume that the affidavit was made by or on behalf of the owner of the copyright.”

Amendment regarding notification of violations

Under the Copyright Bill, an authorized enforcement officer shall, when practicable, notify the owner of the copyright or his authorized agent, if any article is reasonably suspected to be in violation of the IP Code.

Amendment regarding the responsibility of schools and universities

Lastly, schools and universities are mandated to adopt policies which would govern the use and creation of intellectual property. The purpose of the policies would be to safeguard the intellectual creations of the learning institution and its employees and to adopt locally-established industry practice fair use guidelines. “These policies may also be developed in relation to licensing agreements entered into by the learning institution with a collective licensing organization.”

The amendments introduced by the Copyright Bill are commendable. They would help the country meet challenges in an increasingly virtual and electronic environment where the use of copyrighted content demands innovative and relevant guidelines.

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