Restaurants Infringe Copyright by Playing Radio Broadcasts Without a License

The Supreme Court has settled a long-standing question for restaurants, bars, and similar establishments: playing radio broadcasts as background music for customers without a license is copyright infringement. In Filipino Society of Composers, Authors and Publishers, Inc. v. Anrey, Inc. (G.R. No. 233918, August 9, 2022), the Court held that a restaurant that tunes in to a radio station and plays the broadcast through loudspeakers for its patrons creates a separate "public performance" requiring its own license—even if the radio station already paid royalties.

The Case

FILSCAP, the government-accredited collective management organization for music copyright owners in the Philippines, monitored three Sizzling Plate restaurants in Baguio City between July and September 2008. Its representative documented copyrighted songs—including "Gitara," "Don't Stop the Music," and "Wherever You Will Go"—playing in the dining areas. FILSCAP demanded license fees, but the restaurant chain refused, arguing that it merely played whatever the radio stations broadcast and that those stations had already paid royalties.

FILSCAP sued for copyright infringement. The Regional Trial Court and the Court of Appeals both dismissed the case, with the appellate court applying US "homestyle and business exemptions" that allow small establishments to play radios without a license. The Supreme Court reversed, ruling in favor of FILSCAP.

The Elements of Copyright Infringement

Under Section 177 of the Intellectual Property Code (Republic Act No. 8293), a copyright owner holds the exclusive right to authorize or prevent several acts, including the public performance of the work. To succeed in an infringement claim, a plaintiff must prove: (1) ownership of a valid copyright; (2) that the defendant violated at least one economic right under Section 177; and (3) that the act does not fall under the limitations on copyright under Section 184 or constitute fair use.

The Court found that FILSCAP satisfied the first element. As an assignee of its members' public performance rights and through reciprocal agreements with foreign societies, FILSCAP had the authority to collect royalties and sue for infringement.

Radio Reception Is a Performance

The central issue was whether simply tuning in to a radio broadcast constitutes a "public performance" under the Intellectual Property Code. The Court ruled that playing radio broadcasts containing copyrighted music through loudspeakers is itself a performance. It traced the evolution of this principle in US jurisprudence, from Buck v. Jewell-LaSalle Realty Co. (which held that a hotel playing radio broadcasts through speakers performed the works) to Twentieth Century Music Corp. v. Aiken (which briefly held otherwise), and finally Broadcast Music, Inc. v. Claire's Boutiques, Inc., which reverted to the original rule. The Court noted that the US Copyright Act's definition of "perform" and "perform publicly"—similarly worded to our own—clearly covers a restaurant playing a radio during business hours.

The Doctrine of Multiple Performances

The Court also rejected the argument that because the radio station already paid royalties, the restaurant owed nothing. Under the doctrine of multiple performances, a single broadcast can create multiple performances at once: the radio station performs when it transmits, and the restaurant performs when it plays the reception through its speakers. The restaurant's reception becomes a new public performance requiring separate authorization.

The Court further observed that the restaurant's customers constitute a "new public"—a distinct audience from the radio station's listeners. This aligns with guidance from the World Intellectual Property Organization on the Berne Convention, which the Philippines has signed since 1951. The WIPO guidance, while not binding, carries persuasive weight in interpreting Philippine intellectual property laws.

The Social Function of Intellectual Property

The Court acknowledged that property, including intellectual property, bears a social function under the Constitution and Section 2 of the IPC. However, this social function does not mean creators should be deprived of their just rewards. The law balances the public interest in accessing creative works against the need to protect and incentivize creators. The fair use doctrine and the limitations in Section 184 of the IPC already provide the appropriate balance—they do not extend to a restaurant playing music to enhance its commercial ambiance.

Practical Takeaways

• Restaurants, bars, and similar establishments that play radio broadcasts through speakers for customers must secure a license from FILSCAP, even if the radio station has already paid royalties.
• The doctrine of multiple performances means each public performance of a copyrighted work requires its own authorization, regardless of prior payments by broadcasters.
• Playing music for staff only may not constitute a public performance, but playing it where customers are or can be present likely does.
• The US "homestyle exemptions" for small businesses do not apply in the Philippines; our law contains no similar exemption for commercial establishments.
• Businesses should budget for music licensing as a routine operating expense, just like utilities and rent.

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