Copyright vs Fair Use: Restaurants Playing Radio Music in the Philippines

The Supreme Court has settled a long-standing question for restaurants, bars, and other businesses in the Philippines: when you play the radio in your establishment, do you owe the music's copyright holders a license fee? In Filipino Society of Composers, Authors and Publishers, Inc. v. Anrey, Inc. (G.R. No. 233918, August 9, 2022), the Court answered yes—playing radio broadcasts containing copyrighted music through loudspeakers in a restaurant is a public performance that requires a separate license, even if the radio station already paid its own fees.

The ruling clarifies the boundary between a business's right to entertain its customers and the economic rights of composers and publishers. For business owners who have long assumed that tuning in to the radio was free, this decision has immediate practical consequences.

The Case: Sizzling Plate in Baguio

FILSCAP, the government-accredited collective management organization for music composers and publishers in the Philippines, monitored three Sizzling Plate restaurant branches in Baguio City in 2008. Its representative documented copyrighted songs—including "Gitara," "Don't Stop the Music," and "Wherever You Will Go"—played as background music during business hours.

FILSCAP demanded license fees from Anrey, Inc., the restaurant operator. When Anrey refused, FILSCAP sued for copyright infringement, seeking damages and attorney's fees.

Anrey defended itself by arguing that it merely played whatever the radio stations broadcast, and those stations had already paid royalties. It also claimed the music was for staff benefit, not customers.

The Legal Question

The sole issue: does the unlicensed playing of radio broadcasts as background music in a restaurant's dining area amount to copyright infringement?

The Regional Trial Court and the Court of Appeals both sided with Anrey, relying on exemptions for non-profit performances and US-style "homestyle" exemptions for small businesses. FILSCAP appealed to the Supreme Court.

The Ruling: Radio Reception Is a Performance

The Supreme Court reversed the lower courts and ruled in favor of FILSCAP.

The Court explained that copyright infringement requires two elements: (1) ownership of a valid copyright, and (2) violation of at least one economic right under the Intellectual Property Code (Republic Act No. 8293). A third element is that the act must not fall under the limitations on copyright or qualify as fair use.

Under the law, copyright owners have the exclusive right to authorize or prevent the public performance of their work. The definition of public performance is broad: it covers making the work audible at places where persons outside the normal circle of a family and its closest social acquaintances are or can be present.

The Court held that playing radio broadcasts through loudspeakers is itself a performance. Citing the US case Buck v. Jewell-LaSalle Realty Co., the Court noted that receiving a radio broadcast and translating it into audible sound requires electrical instrumentalities, making it a reproduction—and therefore a performance—separate from the original broadcast.

The Doctrine of Multiple Performances

Anrey's argument that the radio station already paid royalties did not persuade the Court. The Court applied the doctrine of multiple performances: a single broadcast can create multiple performances simultaneously. The radio station performs when it transmits; the restaurant performs when it receives the broadcast and makes it audible to patrons. Each performance requires its own authorization.

The Court also rejected the US "homestyle exemption" applied by the Court of Appeals. That exemption, which allows small businesses to use ordinary radio and TV sets without licenses, is a creature of US law and has no counterpart in Philippine law.

Fair Use Does Not Apply

The Court found that playing music in a restaurant is a commercial use—it enhances the dining atmosphere to attract and retain customers. This is not the kind of transformative or non-commercial use that fair use protects. The restaurant was not a club or institution operating for charitable or educational purposes under the limitations on copyright in the Intellectual Property Code.

Practical Takeaways

• Playing the radio in a business is a public performance. If customers can hear the music, a license is required—regardless of whether the radio station already paid its own royalties.
• The doctrine of multiple performances applies. Each "performance" of a copyrighted work—the broadcast and the reception—is separate and requires its own authorization.
• US exemptions do not apply in the Philippines. The homestyle and business exemptions from American law have no counterpart in the Intellectual Property Code.
• FILSCAP has authority to collect and sue. As an accredited collective management organization, FILSCAP can enforce the economic rights of its members and affiliate foreign societies.
• Businesses should secure licenses proactively. Restaurants, bars, gyms, and similar establishments that play music for customers should obtain licenses from FILSCAP or the relevant collective management organization to avoid infringement claims.

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