ABS-CBN v. Philippine Multi-Media System, Inc.

GR No.175769-70, Jan. 19, 2009

DOCTRINE:

FACTS:
ABS-CBN is licensed under the laws of the Republic of the Philippines to engage in
television and radio broadcasting. It owns regional television stations which pattern their
programming in accordance with perceived demands of the region.

PMSI delivers digital direct-to-home (DTH) television via satellite to its subscribers all
over the Philippines. It was granted a legislative franchise under RA 8630 and was
given a Provisional Authority by the NTC to install, operate and maintain a nationwide
DTH satellite service.

Timeline:

April 25, 2001 ABS-CBN demanded for PMSI to cease and desist from
rebroadcasting Channels 2 and 23.
April 27, 2001 PMSI replied that the rebroadcasting was in accordance with
the authority granted it by NTC.
~ NEGOTIATIONS ~
April 4, 2002 Negotiations were terminated by ABS-CBN.
May 13, 2002 ABS-CBN filed with the BLA of IPO a complaint alleging that
PMSI’s unauthorized rebroadcasting of Channels 2 and 23
infringed on its broadcasting rights and copyright.
July 2, 2002 BLA granted ABS-CBN’s application for a TRO.
July 12, 2002 PMSI suspended its retransmission of Channels 2 and 23 and
likewise filed a petition for certiorari with the CA.

Subsequently, PMSI filed with the BLA a manifestation arguing

that it is subject to the must-carry rule under NTC
Memorandum Circular 04-08-88 (MC 04-08-88).
December 20, 2002 PMSI’s letter to NTC asking that DTH pay television services
should be deemed covered by the must-carry rule under MC
04-08-88.
August 26, 2003 PMSI’s manifestation filed with the BLA that it received a Letter
from NTC to strictly comply with MC 04-08-88, and air those
channels which the PMSI has cut off.
December 22, 2003 BLA finds that PMSI infringed the broadcasting rights and
copyright of ABS-CBN and ordering it to permanently cease
and desist from rebroadcasting Channels 2 and 23.
February 6, 2004 PMSI appealed to the Director-General of IPO
December 20, 2004 Director-General of IPO decided in favor of PMSI
PMSI kept on rebroadcasting Channels 2 and 23

Hence, this petition.

ABS-CBN contends that:

 (1) PMSI’s unauthorized rebroadcasting of Channels 2 and 23 is an infringement of
its broadcasting rights and copyright under the Intellectual Property Code (IP
Code)
(2) MC 04-08-88 excludes DTH satellite television operators
(3) CA’s interpretation of the must-carry rule violates Section 9 of Article III19 of the
Constitution because it allows the taking of property for public use without
payment of just compensation
Respondents argue that:
(1) PMSI’s rebroadcasting of Channels 2 and 23 is sanctioned by MC 04-08-88
(2) that the must-carry rule under MC 04-08-8 is a valid exercise of police power

ISSUES:
1. WON PMSI’s unauthorized rebroadcasting of Channels 2 and 23 is an infringement
of its broadcasting rights and copyright under the IP Code
2. WON the must-carry rule under MC 04-08-8 is a valid exercise of police power

RULING:
Petition is without merit.

1. NO. Section 202.7 of the IP Code defines broadcasting as “the transmission (1) by
wireless means for the public reception of sounds or of images or of representations
thereof; such transmission (2) by satellite is also ‘broadcasting’ where the means for
decrypting are provided to the public by the broadcasting organization or with its
consent.” On the other hand, rebroadcasting as defined in Article 3(g) of the 1961
Rome Convention, of which the Republic of the Philippines is a signatory, is “the
simultaneous broadcasting by one broadcasting organization of the broadcast of
another broadcasting organization.” Accordingly, the transmission contemplated under
Section 202.7 of the IP Code presupposes that the origin of the signals is the
broadcaster. Hence, a program that is broadcasted is attributed to the broadcaster. In
the same manner, the rebroadcasted program is attributed to the rebroadcaster.

In this case, PMSI is not engaged in rebroadcasting and thus cannot be considered to
have infringed ABS-CBN’s broadcasting rights and copyright. It is under the second
category that PMSI’s DTH satellite television service must be examined since it is
satellite-based. PMSI is not the origin nor does it claim to be the origin of the programs
broadcasted by ABS-CBN. PMSI did not make and transmit on its own but merely
carried the existing signals of ABS-CBN. When PMSI’s subscribers view ABS-CBN’s
programs in Channels 2 and 23, they know that the origin thereof was the ABS-CBN.

Moreover, PMSI would not qualify as a broadcasting organization because it does not
have the responsibilities imposed upon broadcasting organizations, such as ABS-CBN.
Broadcasting organizations are “entities that take the financial and editorial
responsibility for the selection and arrangement of, and investment in, the transmitted
content.” (ABS-CBN creates and transmits its own signals; PMSI merely carries such
signals which the viewers receive in its unaltered form. PMSI does not produce, select,
or determine the programs to be shown in Channels 2 and 23. Likewise, it does not
pass itself off as the origin or author of such programs. Insofar as Channels 2 and 23
are concerned, PMSI merely retransmits the same in accordance with Memorandum
Circular 04-08-88. With regard to its premium channels, it buys the channels from
content providers and transmits on an as-is basis to its viewers. Clearly, PMSI does not
perform the functions of a broadcasting organization; thus, it cannot be said that it is
engaged in rebroadcasting Channels 2 and 23.
2. YES. The law on copyright is not absolute, and is subject to the police power of the
State. Sec. 184.1(h) of the IP Code provides that “notwithstanding the provisions of
Chapter V, the use made of a work by or under the direction or control of the
Government, by the National Library or by educational, scientific or professional
institutions where such use is in the public interest and is compatible with fair use,
shall not constitute infringement of copyright.”

In this case, the carriage of ABS-CBN’s signals by virtue of the must-carry rule in MC
04-08-88 is under the direction and control of the government though the NTC which is
vested with exclusive jurisdiction to supervise, regulate and control telecommunications
and broadcast services/facilities in the Philippines. The imposition of the must-carry rule
is within the NTC’s power to promulgate rules and regulations, as public safety and
interest may require, to encourage a larger and more effective use of communications,
radio and television broadcasting facilities, and to maintain effective competition among
private entities in these activities whenever the Commission finds it reasonably feasible.
Accordingly, the must-carry rule falls under the foregoing category of limitations on
copyright under Sec. 184.1(h) of the IP Code.