ABS-CBN CORPORATION, PETITIONER, VS. FELIPE GOZON, GILBERTO R. DUAVIT, JR., MARISSA L. FLORES, JESSICA A. SOHO, GRACE DELA PEÑA-REYES, JOHN OLIVER T. MANALASTAS, JOHN DOES AND J…

ABS-CBN versus Gozon

The Case

This is a petition for review brought by ABS-CBN Corporation against Felipe Gozon and the other officers and employees of GMA Network, Incorporated. ABS-CBN asks the Supreme Court to reverse the Court of Appeals, which had reinstated a Department of Justice resolution ordering the withdrawal of the criminal information for copyright infringement. The case matters because it settles two questions every student of intellectual property must know: whether a live news footage is copyrightable material, and whether good faith may be raised as a defense in a criminal prosecution under the Intellectual Property Code.

Procedural History

ABS-CBN filed a complaint for copyright infringement before the Office of the City Prosecutor of Quezon City. The assistant city prosecutor found probable cause and an information was filed against Grace Dela Peña-Reyes and John Oliver Manalastas. The accused filed a petition for review with the Department of Justice. Secretary Raul Gonzalez issued a resolution granting the petition, dismissing the case, and ordering the withdrawal of the information. ABS-CBN moved for reconsideration. Acting Secretary Alberto Agra then issued a resolution reversing the Gonzalez resolution and finding probable cause against all the respondents. The respondents went to the Court of Appeals on certiorari. The Court of Appeals granted the petition, reversed the Agra resolution, and reinstated the Gonzalez resolution. ABS-CBN's motion for reconsideration was denied, so ABS-CBN elevated the matter to the Supreme Court by petition for review.

Facts

On July 22, 2004, overseas Filipino worker Angelo dela Cruz returned to the country after being released by his captors in Iraq. His homecoming drew wide public interest, and both ABS-CBN and GMA Network covered the event. ABS-CBN conducted live audio and video coverage of his arrival at the Ninoy Aquino International Airport and the press conference that followed. ABS-CBN then allowed Reuters Television Service to air its footage under a special embargo agreement, which restricted use of the footage to Reuters' international subscribers and barred its use by other Philippine subscribers without ABS-CBN's consent.

GMA Network, which subscribed to both Reuters and Cable News Network, received a live video feed of the arrival from Reuters. It immediately carried the feed in its program Flash Report, airing a five-second footage. GMA Network claimed it received no notice that the feed was ABS-CBN's footage or that it was under embargo, and its news control room staff saw neither a No Access Philippines notice nor any embargo notice.

ABS-CBN filed a complaint for copyright infringement. The prosecutor found probable cause and an information was filed. After the Department of Justice first dismissed the case, then reversed itself and found probable cause against all respondents, the Court of Appeals reinstated the dismissal. ABS-CBN brought the matter to the Supreme Court.

Issues

• Whether or not the Secretary of Justice committed errors of jurisdiction in issuing the resolution finding probable cause, and whether certiorari was the proper remedy to assail it.
• Whether or not news footage is copyrightable under the law.
• Whether or not there was fair use of the broadcast material.
• Whether or not lack of knowledge that a material is copyrighted is a defense against copyright infringement.
• Whether or not good faith is a defense in a criminal prosecution for violation of the Intellectual Property Code.
• Whether or not the Court of Appeals was correct in overturning the finding of probable cause.

Applicable Provisions

Section 177 of the Intellectual Property Code defines infringement:

A person infringes a right protected under this Act when one: (a) Directly commits an infringement; (b) Benefits from the infringing activity of another person who commits an infringement if the person benefiting has been given notice of the infringing activity; (c) With knowledge of infringing activity, induces, causes or materially contributes to the infringing conduct of another.

This provision is the basis of the criminal charge, and its requirement of notice and knowledge bears directly on the good faith defense.

Section 11 of Rule 116 of the Rules of Criminal Procedure governs suspension of arraignment:

Upon motion by the proper party, the arraignment shall be suspended in the following cases: (a) The accused appears to be suffering from an unsound mental condition which effectively renders him unable to fully understand the charge against him and to plead intelligently thereto. In such case, the court shall order his mental examination and, if necessary, his confinement for such purpose; (b) There exists a prejudicial question; and (c) A petition for review of the resolution of the prosecutor is pending at either the Department of Justice, or the Office of the President; provided, that the period of suspension shall not exceed sixty (60) days counted from the filing of the petition with the reviewing office.

This provision limits the deferment of arraignment to sixty days, and the Court used it to remind trial courts that they retain control of the case once an information is filed.

Ruling

On the first issue, the Court held that certiorari was the proper remedy. A motion for reconsideration is generally a condition before certiorari may lie, but exceptions apply, including where the order is a patent nullity and where a motion for reconsideration would be useless. The Agra resolution was itself the product of a motion for reconsideration of the Gonzalez resolution, and the Department of Justice rules bar a second motion for reconsideration. The Court also reminded the trial court that it should have proceeded with the arraignment after the sixty-day period under Rule 116, since once an information is filed, the disposition of the case rests in the sound discretion of the court.

On the remaining issues, the Court held that news footage is copyrightable, but that the five-second footage was aired in good faith. The respondents had no notice of the embargo or of ABS-CBN's ownership of the footage. The Court ruled that good faith is a defense in a criminal prosecution for copyright infringement, because the Intellectual Property Code does not penalize infringement by the mere use of a copyrighted work. Criminal culpability attaches only when the infringement is knowingly and intentionally committed.

Doctrine

A live news footage is copyrightable material under the Intellectual Property Code. However, good faith is a valid defense in a criminal prosecution for copyright infringement. The Code does not ipso facto penalize a person for infringement by the mere fact that one had used a copyrighted work or material. Criminal culpability attaches only when the infringement is knowingly and intentionally committed. Lack of knowledge that a material is copyrighted negates the intent required for criminal liability. A motion for reconsideration is generally required before certiorari, but it may be dispensed with where the order is a patent nullity or where a motion for reconsideration would be useless. Once an information is filed, the trial court has full control and direction of the case, and the suspension of arraignment under Rule 116 cannot exceed sixty days.

Disposition

The Supreme Court denied ABS-CBN's petition and affirmed the Court of Appeals, which had reinstated the resolution ordering the withdrawal of the information against the respondents.

Remember This

The single line worth memorizing is that good faith is a defense in a criminal prosecution for copyright infringement, because the Intellectual Property Code penalizes only knowing and intentional infringement. Examiners like to use this case to test the copyrightability of news footage and the interplay between good faith and criminal liability under a special law.