Copyright Infringement: Playing Music in Commercial Establishments Without a License

The Supreme Court has clarified that commercial establishments playing copyrighted music without a license commit copyright infringement. In Cosac, Inc. v. Filipino Society of Composers, Authors and Publishers, Inc. (G.R. No. 222537, February 28, 2023), the Court ruled that bars and restaurants must secure licenses from collective management organizations like FILSCAP before publicly performing copyrighted musical works—whether through live bands or recorded music.

This decision provides important guidance for business owners who use music to enhance their customers' experience. It confirms that copyright protection extends to public performances in commercial settings, and that ignorance of the law or lack of control over performers does not excuse infringement.

The Facts of the Case

FILSCAP is a non-stock, non-profit corporation composed of composers, authors, and music publishers. It enforces and protects the performing rights of copyright owners of musical works. Filipino composers assigned their rights to FILSCAP through deeds of assignment, while foreign composers and publishers entered into reciprocal representation agreements with the organization.

In 2005 and 2006, FILSCAP representatives monitored Off the Grill Bar and Restaurant in Quezon City, owned and operated by COSAC, Inc. They discovered that the establishment played copyrighted music without obtaining a license or paying the corresponding fees. Despite several demand letters, COSAC refused to comply.

FILSCAP filed a complaint for copyright infringement and damages. COSAC argued that FILSCAP was not a real party-in-interest and that it had no knowledge of what the band members would sing. COSAC also claimed that songs once aired and performed become public property.

The Issue

The central issue was whether COSAC committed copyright infringement by allowing copyrighted musical works to be performed in its establishment without securing the necessary licenses from FILSCAP.

The Ruling

The Supreme Court ruled in favor of FILSCAP, affirming that COSAC committed copyright infringement. The Court held that musical works are protected by copyright from the moment of creation under Sections 172 and 178 of the Intellectual Property Code (RA 8293). The copyright owner has the exclusive right to authorize or prevent the public performance of the work.

The Court rejected COSAC's argument that FILSCAP's authority was defective because the deeds of assignment were not published in the IPO Gazette. Under Section 182 of the IPC, filing assignments with the National Library is discretionary, not mandatory. Non-publication does not render these agreements void.

The Court also dismissed COSAC's claim that once music is played, it becomes public property. Copyright is a statutory right, and the author or creator enjoys no more rights than are consistent with public welfare. The use of intellectual property bears a social function, but this does not mean free use without compensation.

Liability of the Establishment Owner

The Court emphasized that COSAC, as the establishment owner, benefited from the public performance of copyrighted songs. The restaurant hired bands and played recorded music to enhance the dining experience and attract more customers. By providing the venue and opportunity for these performances, COSAC consented to the public performance of copyrighted music.

The Court noted that COSAC had control over what music was played in its establishment. If it did not like a song, it could stop the band or turn off the device. This control made COSAC liable for the infringement, regardless of whether the bands were its employees.

Practical Takeaways

• Commercial establishments need music licenses. Bars, restaurants, and similar venues must secure licenses from collective management organizations like FILSCAP before playing copyrighted music, whether live or recorded.

• Copyright protection begins at creation. Musical works are protected from the moment of creation, without need for registration or publication. Business owners cannot assume that aired or performed songs are public property.

• Establishment owners are responsible. Even if a band or performer chooses the songs, the establishment owner who benefits from the performance and controls the venue is liable for infringement.

• File assignments with the National Library. While filing is discretionary, it provides evidence of authority and helps establish standing to sue for infringement.

• Seek legal advice before using music commercially. The rules on copyright infringement carry significant financial consequences, including damages and attorney's fees.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.