ABS-CBN Corporation v. Gozon
REITERATIONFacts
The Antecedents: ABS-CBN Corporation (ABS-CBN) filed a complaint for copyright infringement against officers and employees of GMA Network, Inc. (GMA-7) for allegedly rebroadcasting ABS-CBN's live news coverage of the homecoming of Angelo dela Cruz on July 22, 2004. ABS-CBN had allowed Reuters Television Service (Reuters) to air its footage under an embargo agreement, restricting its use by other Philippine subscribers. GMA-7, a subscriber of Reuters, received a live video feed from Reuters and aired a portion of it. Procedural History: The City Prosecutor found probable cause against Grace Dela Peña-Reyes and John Oliver Manalastas, leading to the filing of an Information. The Department of Justice (DOJ), through Secretary Raul M. Gonzalez, initially ordered the withdrawal of the Information, ruling that good faith could be a defense. Subsequently, DOJ Secretary Alberto C. Agra reversed this, finding probable cause against Dela Peña-Reyes, Manalastas, and other GMA-7 officers. The Court of Appeals (CA) reversed Secretary Agra's resolution, reinstating Secretary Gonzalez's order and holding that GMA-7 acted in good faith and that the footage was not copyrightable. ABS-CBN then filed a Petition for Review on Certiorari before the Supreme Court. The Petition: ABS-CBN assailed the CA's decision, arguing that the CA erred in finding that Secretary Agra committed errors of jurisdiction, that a motion for reconsideration was not necessary before filing a petition for certiorari, and that respondents were not liable for copyright infringement.
Issue(s)
Whether Secretary Agra committed errors of jurisdiction in reversing the finding of probable cause. Whether news footage is copyrightable under the law. Whether there was fair use of the broadcast material. Whether lack of knowledge that a material is copyrighted is a defense against copyright infringement. Whether good faith is a defense in a criminal prosecution for violation of the Intellectual Property Code. Whether the Court of Appeals was correct in overturning Secretary Agra’s finding of probable cause, including the liability of corporate officers and piercing the corporate veil.
Ruling
The Supreme Court partially granted the petition. It reinstated the DOJ Resolution dated June 29, 2010, ordering the filing of the Information for violation of Sections 177 and 211 of the Intellectual Property Code, but only as to respondents Grace Dela Peña-Reyes and John Oliver T. Manalastas. The Regional Trial Court of Quezon City was directed to continue with the proceedings.
Ratio Decidendi
On the procedural issue of certiorari and the trial court's suspension of proceedings: The Court clarified that while a petition for review of a prosecutor's resolution is a ground for suspending arraignment for a period not exceeding sixty (60) days, the trial court retains control of the case and should proceed with arraignment or other actions after the period expires, unless otherwise ordered. The trial court erred in not acting on the case during the extended period of suspension. The Court also found that the CA correctly entertained the petition for certiorari against the DOJ Resolution, as exceptions to the rule requiring a motion for reconsideration applied, including the issuance of a resolution that was allegedly a patent nullity and the futility of filing another motion for reconsideration. On the copyrightability of news footage: The Court affirmed that news footage is copyrightable. While news of the day and mere facts are not protected, the expression of these facts, especially when captured through a creative process involving framing, images, graphics, and sound effects, is protected under the Intellectual Property Code (Rep. Act No. 8293). The Court distinguished between an idea or event and its expression, citing that the latter, when embodied in a work, is entitled to protection. On the issue of fair use: The Court noted that the determination of fair use is a matter of defense that is best left to the trial court. While Section 212.2 of the Intellectual Property Code allows for the use of short excerpts for reporting current events, and Section 185 outlines the factors for fair use (purpose, nature of work, amount used, effect on market), the Court found that the alleged five-second use by GMA-7 was disputed by ABS-CBN, which claimed a longer duration. The Court emphasized that the mere act of rebroadcasting without authority could give rise to probable cause, and the defense of fair use requires further evaluation during trial. On the defense of lack of knowledge and good faith: The Court unequivocally ruled that lack of knowledge that a material is copyrighted and good faith are not valid defenses against criminal prosecution for copyright infringement under the Intellectual Property Code. The offense is considered malum prohibitum, meaning the act itself is prohibited by law, and criminal intent (mens rea) is not required. The Court cited previous rulings in Habana v. Robles and Columbia Pictures v. Court of Appeals to support the principle that infringement is a trespass on a private domain, and the infringer acts at their peril, even without knowledge of the copyright. On the defense of lack of knowledge and good faith: The Court unequivocally ruled that lack of knowledge that a material is copyrighted and good faith are not valid defenses against criminal prosecution for copyright infringement under the Intellectual Property Code. The offense is considered malum prohibitum, meaning the act itself is prohibited by law, and criminal intent (mens rea) is not required. The Court cited previous rulings in Habana v. Robles and Columbia Pictures v. Court of Appeals to support the principle that infringement is a trespass on a private domain, and the infringer acts at their peril, even without knowledge of the copyright. On the Court of Appeals' ruling and the liability of corporate officers and piercing the corporate veil: The Court found that the CA erred in overturning Secretary Agra's finding of probable cause without sufficient basis, particularly in its pronouncements regarding the non-copyrightability of news footage and the applicability of good faith as a defense. The CA's reliance on fair use was also questioned as it seemed to contradict its finding that the footage was not copyrightable. The Court held that while corporations can be charged with crimes, their officers and employees can be held individually liable if they actively participate in the commission of the offense. The Court found that respondents Grace Dela Peña-Reyes and John Oliver T. Manalastas, due to their direct control and supervision over the news control room, had probable cause to be held liable for directly committing copyright infringement. However, the Court found that Secretary Agra committed grave abuse of discretion in ordering the filing of the Information against respondents Felipe Gozon, Gilberto Duavit, Jr., Marissa Flores, and Jessica Soho, as there was no sufficient evidence of their active participation or conspiracy. The Court reiterated that mere membership in the board or presidency does not automatically equate to knowledge or participation in the criminal act.
Main Doctrine
While news footage is copyrightable, the defense of good faith or lack of knowledge of infringement is not a valid defense against criminal prosecution for copyright infringement under the Intellectual Property Code, as the offense is considered malum prohibitum and requires strict liability. However, the determination of probable cause requires proof of active participation, especially when piercing the corporate veil.