IMPLICATIONS OF THE
AMENDMENTS ON THE INTELLECTUAL PROPERTY CODE
The evolving needs of society on
intellectual property rights have demanded the parallel improvement of various
regulatory structures around the world. Most countries have come a long way in
protecting the creative minds of its citizens from the evils of copyright,
trademark, and trade name infringement. Notably, the initiatives seem to be directed
towards harmonization of regulatory provisions and structures with Philippines
in tow. One of the manifestations of the push for improvement is the passage of
Republic Act No. 10372 which amended certain provisions in the Intellectual
Property Code of the Philippines.
However,
despite the purported aim of the legislators to strengthen the law on intellectual
creations, the aforementioned act was strongly criticized by various legal
practitioners. In the article of Dimacali[1],
it was reported that Atty. JJ Disini who is considered to be a technology law
expert, expressed his inhibitions on certain changes made in the Intellectual
Property Code. He was quoted saying that
the new law allowed for warrantless arrests and seizures in violation of the
Constitution, has dangerously expanded the meaning of infringement, and has
provided for the vicarious liability of mall owners when infringement is proven
to take place within its facilities.
In
the same article, other problems such as the abolishment of the consumer’s
right to import copyrighted materials without the consent of the copyright
owner and exception of personal use to the economic rights of copyright owners
and producers were likewise mentioned.
For
its part, the government has issued a clarification on the criticisms held
against the new law on the website of its Official Gazette[2].
On the issue of importing copyrighted materials, it explained that the new law
in fact took out the limitation on the number of copies that may be imported
contrary to claims that importation in itself was prohibited if made without
the consent of the copyright owners. It states: “Only the importation of pirated or infringed material is illegal. As
long as they were legally purchased, you can bring as many copies you want,
subject to Customs regulations”. In terms of the warrantless searches and
seizures, it stated: “The IPO may visit
establishments based on reports and complaints; this in itself is
constitutional. However, if the IPO intends to perform a search and seizure, it
must comply with constitutional requirements, such as having a search warrant.
A warrant wouldn’t be required, however, if the IPO is accompanied by the
Bureau of Customs or the Optical Media Board—two agencies that can perform a
search and seizure on their own right without a warrant (per Republic Act No.
1937 and 9239, respectively).”
This
paper will discuss the implications of the above mentioned issues together with
the following changes in the new law: added requirement for the designation of
societies that will manage the owners’ economic rights, change in the wordings
of “fair use of a copyrighted work”, amendment on the period of protection in
light of delineating moral rights from economic rights, and the added
alternative of statutory damages as a claim for infringement.
Warrantless searches
and seizure
Section 7 of the Intellectual
Property Code[3]
was amended to include within the powers of the Director General and Deputies
Director General, the power to “conduct
visits during reasonable hours to establishments and business engaging in activities
violating intellectual property rights and provisions of this act based on
report, information or complaint received by the office.” Atty. Disini, as reported in the article of
Dimacali[4],
stated that the quoted provision is in violation of the constitutional right of
people against unreasonable searches and seizures. This interpretation is
further bolstered by the clarification made by the government[5]
where it confirmed that a search warrant will not be required in the event that
the IPO is accompanied by the Bureau of Customs or the Optical Media Board.
The
Constitution safeguards the right of the people to be secure in their houses,
as such the bill of rights[6]
provides: “The right of the people to be
secure in their persons, houses, papers, and effects against unreasonable searches and seizures of
whatever nature and for any purpose shall be inviolable (emphasis supplied), and
no search warrant or warrant of arrest shall issue except upon probable cause
to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched and persons or things to be
seized.”
Well
settled is the rule that the Constitution is the supreme law of the land and no
statute can be passed that contravenes the former. The interpretation of Atty.
Disini that the amendments on the said section are violative of the
constitution must be upheld because it clearly does not provide for the above
quoted constitutional limitation. Should this provision continue to be left
without the proper rectifications, it will set a bad precedent that statutes
may eventually render the constitution worthless.
Moreover,
the sound protection consistently established by our jurisprudence against
unreasonable searches and seizures will drastically be dented and eventually
crack the foundation of the basic human rights of the people. This power,
without the proper safeguards is very much susceptible to abuse and arbitrary
exercise by cunning and greedy officers. It can open the floodgate for
harassment or extortion and lead to the detriment of legitimately operator of
businesses. In the same vein, the projected hesitation of businesses to operate
in the Philippines, may affect our economy in general.
Expansion of the
definition of infringement
Another criticism thrown against
the R.A. 10372 is the expanded definition of “infringement” which included the
making of temporary copies as an act of infringement. Sec. 171.9 of R.A. 8293
was amended to read as follows: “Reproduction
is the making of one or more copies, temporary
or permanent (emphasis supplied), in whole or in part, of a work or a sound
recording in any manner or form xxx.”
According to Atty. Disini[7],
the provision implies that the temporary usage of a pirated software, whether
the same be made in a coffee shop or not, will constitute infringement already.
He explained thus: "The mere act of
running software which triggers the OS to temporarily copy software into random
access memory (RAM) already constitutes infringement.”
The
government[8]has
explained that the interpretation of the expanded definition by critics is not
accurate as it pertains to the making of multiple copies to be utilized for
distribution that is punishable. In its FAQ section, it stated thus: “Infringement in this context refers to the
economic rights of the copyright owner. So, if you transfer music from a
lawfully acquired CD into a computer, then download it to a portable device for
personal use, then you didn’t commit infringement. But if, for example, you
make multiple copies of the CD to sell, then infringement occurs.”
It
can be noted that the clarification made by the government is based on the
intent of the proponents of the act while the contention of legal experts is
based on what is written in the law itself. A plain reading of the provisions
of the amendment will divulge that the interpretation of the critics is proper
because Sec. 171.9 in defining “reproduction” does not make any qualification
as to intent nor number of copies. On the contrary, it merely added the word
“temporary” in its definition which highlighted the intention of the lawmakers
to include all forms of reproduction in relation to infringement.
The
problem posited by this change is the lack of qualification in law which would
delineate the temporary reproduction for personal use from the temporary
reproduction for the purpose of committing infringement. One cannot simply rely
on the interpretation made by the government for the implementation of the law
because it can change throughout the course of events. Ultimately, what is
specifically written in the law will prevail and hence a qualification must be
made to address the discussed implication.
Vicarious liability
of mall owners and other owners of establishments
Sec. 216 (b) of R.A. 8293 was
amended to include the liability of “another
person who commits an infringement if the person benefitting has been given notice (emphasis supplied)
of the infringing activity and has the right and ability to control the
activities of the other person.” The critics expressed their apprehension
against the said provision due to the seemingly automatic liability of owners
of establishments wherein infringement may take place without being given a
leeway to take appropriate action against people who commit infringement. On
the other hand, it was explained that the liability of the mall owners and
other establishments will only attach after they have been given ample time to
address the infringement activity after they
are given notice of the same.
However,
the interpretation of the critics is not without basis because of the noted
lack of additional elements for the liability to attach. Again, sole reliance
on the interpretation of the implementing department or proponents of the bill
is not legally sound and the needed requirements must be established in the law
itself to ensure proper implementation. It is suggested that an additional
requisite be made before the liability can attach to owners of establishment
such as a specific duration of time after they receive notice of infringement
activities to gauge their willingness to address the problem.
It
is submitted that the vicarious liability of mall owners and other business
establishments is an additional barricade against the evils of infringement. It
can be reasonably expected that the mall owners are aware of the activities
being conducted by its tenants and they cannot escape liability on the excuse
of ignorance. More often than not, they are inclined to turn the other cheek
when it comes to illegal activities of their tenants in exchange for the
consistent return of investments. There is thus the need to positively impose
upon these owners of establishments the responsibility of putting an end to
infringement activities that are very well within their control. The role of
the owners is not confined to profit making but extends to the need of the
protection of the public as part of the economic enrichment of our country.
Importation of
copyrighted materials
Perhaps one of the most
resounding criticisms against the amendment is on the importation of
copyrighted materials. Originally, Sec. 190.1 and 190.2 of R.A. 8293 provided
for the importation of copyrighted materials for personal use. It has given a
limitation of one copy for personal use and three copies for the use of any
religious, charitable, or educational society or institution.[9]
Sec. 14 of R.A. 10372 has deleted the
allowance, thus: “Sections 190.1 and
190.2 of R.A. 8293 are deleted in its entirety.” Yet again, the government has attempted to
clarify that the deletion of the mentioned provisions are aimed to take away
the limitation of copies of copyrighted materials that may be imported. In the
same article of Dimacali[10]
it explained: “Amendments to the
Intellectual Property Code have removed the original limitation of three copies
when bringing legitimately acquired copies of copyrighted material into the
country. Only the importation of pirated or infringed material is illegal. As
long as they were legally purchased, you can bring as many copies you want,
subject to Customs regulations.”
With
the retention and amendment of Sec. 190.3 of R.A. 8293 the Commissioner of
Customs is “empowered to make rules and
regulation for preventing the importation or exportation of infringing
materials…”, it is deemed that the clarification made by the government
cannot find basis in law and that it in fact presents more limitation than
freedom. As Atty. Disini has posited “What's
going to happen now is that copyright owners can simply go to the Bureau of
Customs and say that copyrighted items can't be imported except by certain
identified persons.”
Requirement for the
designation of societies that will manage the owners’ economic rights
Sec.
183 of R.A. 8293 provides for the designation of societies of artists,
composers and other right holders that will collectively manage the copyright
owners’ economic or moral rights. It was amended to add that the said societies
must first secure the necessary accreditation from the Intellectual Property
Office. This addition is a positive indication of the political will to
properly secure the rights of copyright owners. Certainly, the accreditation of
societies will lead to strengthen their credibility and a more efficient
regulation of their affairs.
Change in the
wording of “fair use of a copyrighted work”
Originally,
Sec. 185 of R.A. 8293 has utilized the word “multiple copies” to allow for the
fair use of copyrighted materials but this was amended to “limited number of copies”
by R.A. 10372[11]. It
can be gleaned from the amendment that the purpose of the author of this bill
is to restrict the number of copies for classroom use, scholarship, research
and other purposes. As opposed to the word “multiple” which is defined as
“several or many”[12],
“limited” clearly implies a more restricted number of copies although not
specified. Under this purview, the concept
of fair use is consistently established with the expression that the
dissemination copyrighted materials for classroom use and others are reasonably
restricted.
Amendment on the
period of protection in light of delineating specific moral rights
Sec.
198[13]
was amended to qualify the term of the moral rights of an author from during
the lifetime plus 50 years to during the lifetime plus in perpetuity. It
further qualified the coverage of protection under the posthumous term and
confined the same to the right of the author to be attributed. The other rights
stipulated under Arts. 193.2, 193.3 and 193.4 which are restrictions on the use
of copyrighted materials have been expressly made to be coterminous with the
economic rights of the author. It is deemed that the creation of dichotomy of
protection between the attribution and restriction of usage is but proper and
practical in view of the real purpose of our law. Aside from the respect to be
given to authors, the law likewise aim to provide the public with quality
materials coming from these well endowed authors. After all, the enrichment of
the public’s knowledge is the moving power for our country’s improvement.
Added alternative
of statutory damages as a claim for infringement
Sec.
216.1 was amended to add an alternative to claim actual damages which is the
statutory damage. It states: “The
copyright owner may elect (emphasis
supplied), at anytime before final judgment is rendered, to recover instead
of actual damages and profits, an award for statutory damages for all
infringements involved in an action in a sum equivalent to the filing fee for
the infringement action but not less than Fifty thousand pesos...” This
provision is deemed to be a floodgate for unjustifiable claims for profit. It
must be noted that the structure of our laws and jurisprudence when it comes to
awarding damages is based on either the capacity of the losing party to
actually pay the amount claimed and the definite loss sustained by the
aggrieved party. The design is to rule out the possibility of lawsuits to
become a money making business as opposed to other countries which have awarded
excessive claims and known to be clogged with baseless law suits. In providing
for the actual damages, our law confines the claim of the aggrieved party to
the value of actual loss sustained while the other forms of damages take into
consideration the circumstances that may not be obtained through pecuniary
estimation. Should the law do-away with the restriction on award for damages,
and provide this statutory damage as can be seen in the amendment without any
specification as to the maximum amount that may be recovered, there is a
possibility that shameless claimants will come forward and claim said statutory
damage instead of actual damages. This can further lead to harassments suits
that will work to the detriment of perfectly legitimate businesses.
Ultimately,
R.A. 10372 is designed to improve the safeguards of intellectual property rights
and the fair use by its public. However, as discussed above, the loopholes
found within its provisions cannot be left unheeded because the issuance of
clarificatory statements or opinions from the government will be insufficient
in litigation. In addition, the said opinions are deemed to change alongside
the current political agenda or demands of the public. The lawmakers must be
able to provide us with stable and sound laws to ensure the unbiased protection
of the various stakeholders.
[1] TJ
Dimacali, “New IP Law allows warrantless searches, 'erases' right to personal
use”, http://gmanetwork.com/news/tag/intellectualproperty,
last retrieved: 5/23/2014
[2] Official
Gazette of the Philippines, http://www.gov.ph/2013/03/11/infographic-faqs-on-the-amendments-to-the-intellectual-property-code-of-the-philippines/,
last retrieved: 5/23/2014
[3]
Sec. 7, R.A. 8293, Intellectual Property Code of the Philippines as amended by
R.A. 10372
[4]TJ
Dimacali, “New IP Law allows warrantless searches, 'erases' right to personal
use”, http://gmanetwork.com/news/tag/intellectualproperty, last retrieved:
5/23/2014
[5] Official
Gazette of the Philippines,
http://www.gov.ph/2013/03/11/infographic-faqs-on-the-amendments-to-the-intellectual-property-code-of-the-philippines/,
last retrieved: 5/23/2014
[6]
1987 Philippine Constitution, Sec.2 Article 3, Bill of Rights
[7] TJ Dimacali,
“New IP Law allows warrantless searches, 'erases' right to personal use”,
http://gmanetwork.com/news/tag/intellectualproperty, last retrieved: 5/23/2014
[8] Official
Gazette of the Philippines,
http://www.gov.ph/2013/03/11/infographic-faqs-on-the-amendments-to-the-intellectual-property-code-of-the-philippines/,
last retrieved: 5/23/2014
[9] Sec.
109.1 (a)(i-iii), R.A. 8293, Intellectual Property Code of the Philippines
[10] TJ
Dimacali, “New IP Law allows warrantless searches, 'erases' right to personal
use”, http://gmanetwork.com/news/tag/intellectualproperty, last retrieved:
5/23/2014
[11]
Sec. 12 of R.A. 10372, An act amending certain provisions of R.A. 8293,
otherwise known as the “Intellectual Property Code of the Philippines”, 2012
[12]
Merriam-Webster Dictionary, United States of America, 1989
[13]
Sec. 198 of R.A. 8293 The Intellectual Property Code of the Philippines as
amended by R.A. 10372
