ABDVol.31 No.2

Present State of Copyright and E-Commerce Laws in the Philippines
Dominador D. Buhain

Pertinent Provisions of the Above-cited Laws

It must be acknowledged at the outset that most of the discussions hereunder emanate from the views expressed by Atty. Vicente Amador, a legal luminary in Philippine copyright and related laws.
 On 1 January 1998, the Philippine Intellectual Property Code (hereinafter referred to as PIPC) was passed. The pertinent provisions of the PIPC are as follows:

Section 177. Copyright or Economic Rights.

Subject to the provisions of Chapter VIII, copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:

177.1 Reproduction of the work or a substantial portion of the work;
177.2 Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work;
177.3 The first public distribution of the original and each copy of the work by sale, or other forms of transfer of ownership;
177.4 Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound recording, a computer program, a compilation of data and other materials or a musical work in graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental (n)
177.5 Public display of the original or a copy of the work;
177.6 Public performance of the work for profit;
177.7 Other communication to the public of the work. sec. 5, P. D. No. 49a

 When the Philippine E-commerce Act (PECA) was passed on 14 June 2000, the above-mentioned rights under the PIPC, namely: 1) the right to reproduce; 2) the right to have derivative works; 3) the right to have the first public distribution; 4) the right to have rental; 5) the right to cause its public display; and 6) the right to have public performance for profit have been expanded to additionally include the following; 7) the right to import; 8) the right to use; 9) the right to make available.
 The pertinent provision of PECA provides the following:

Section 33. Penalties. - The following Acts shall be penalized by fine and/or imprisonment, as follows:

b) Piracy or the unauthorized copying, reproduction, dissemination, distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting of protected material, electronic signature or copyrighted works including legally protected sound recordings or phonograms or information material on protected works, through the use of telecommunication networks, such as, but not limited to, the internet, in a manner that infringes intellectual property rights shall be punished by a minimum fine of one hundred thousand pesos (P100,000.00) and a maximum commensurate to the damage incurred and a mandatory imprisonment of six months to three years; ...

Commentary on the Effects of the Passage of PECA to the PIPC

A) Concerning the use of the phrase "electronic signature"
All the prohibited acts mentioned in the first part of Article 33 (b) become actionable only if committed in a manner that infringes intellectual property rights. This means that the provision applies only to copyright-protected works.
 An electronic signature is just a hash digest of an electronic data message and consists of nothing more than an unintelligible series of letters and numbers; it is not the product of human creative expression, as all copyrighted works are but of an algorithmic formula run by a software program.
 To consider it as a copyrightable work may be devoid of a legal basis. Another legal justification may be needed to preserve the integrity of an electronic signature in e-commerce transaction.

B) Concerning the inclusion of "importation"
When the PECA additionally includes the right of importation (on top of the rights under the PIPC), there appears to be a concession to foreign authors and publishers of the exclusive right to decide what books should be read, when they should be read and what should be their respective prices.
 Because of the additional grant of this right of importation, the foreign publishers may allow the importation only of outdated editions without committing any legal infractions-even if new editions are already available in the market. This is particularly so if the foreign publishers have printed more copies than the whole market can absorb.
 Moreover, if foreign publishers claim that piracy exists in the Philippines, they do not even have to impose trade sanctions or import quota restrictions pursuant to their laws. They may use the Philippine laws (which include the PECA) to impose an intellectual embargo.

C) On the inclusion of the word "use"
The additional grant of the right to use suggests that even after the "first sale" or publication of the work for public appreciation or elucidation, the copyright owner retains control of his works, and that his rights are not exhausted by the first sale. It means that the right of first public distribution under the PIPC is now superseded interminably by the right of use.
 The US Supreme Court has held in Sony Corp. vs. Universal City Studios, 464 vs. 417, that "any individual may reproduce a copyrighted work under the fair use principle; the copyright owner does not have exclusive right to its use." The 'fair use doctrine' which we have been previously enjoying may no longer be possible.
 The Philippines may have granted to the US publishing industry an exclusive right which they have not even gained from their own legislature.

D) On the use of the phrase "making available to the public"
It means that a simple digital transmission over a network, even without downloading, such as video or audio streaming in the Internet, is a potential infringement if done without the consent of the copyright owner.
 The Philippines, once more, may have granted foreign principals greater protection here than they have been able to obtain under the laws of their country.

The following scenario may take place:
On the premise that double jeopardy may not set in because of the presence of two distinct laws PIPC and PECA, a miscreant artist who makes an imitation for example of the work of Philippine National Artist Fernando Amorsolo (complete with an Amorsolo's signature) may suffer comparatively lighter penalties under the PIPC. This is particularly so notwithstanding that there appears to be a serious violation of the country's national heritage.
 In contrast, a Filipino businessman who reproduces a computer programme from abroad is liable under the combined laws of the PECA and PIPC and shall suffer therefore a heavier penalty.
 While these two infringers commit essentially the same unlawful conduct, false impression is created that the Philippines value the work of foreign authors more than their own.

Legality or Constitutionality of the PECA

The PECA through its Section 33 (b) appears to make effective the rights of transmission and making rights available in the Philippines under the World Intellectual Property Organization (WIPO) Copyright Treaty without observing the Philippine constitutional requirements for making a treaty.
 In fact, similar circumstances may be obtaining when we ratified and implemented our adherence to the Paris Convention, the Berne Convention and the WTO-TRIPS Agreement.
 There are no justifiable grounds to consider the PECA as a local legislation as the rights embodied therein have international applications and the same therefore needs ratification pursuant to the WIPO Copyright Treaty.
 The treaty-making process under Section 21, Article VII of the Philippine Constitution provides that the Executive Department initiates or signs the treaty and thereafter the Senate by a two-thirds vote ratifies the same and that both the Senate and House of Representatives implement the same through a legislation.
 The usual mode of causing the passage of a local legislation through the separate majority votes of both houses of Congress, as was done in the PECA, cannot substitute the requirement to constitute a valid treaty.
 Another harmful repercussion of the PECA is the exposure of the Filipino citizenry to greater penalties like the imposition of criminal sanctions, considering that there is no international consensus as yet that the mere using, copying or downloading of copyrighted works by Internet surfers for private non-commercial use should be criminalized.
 There may therefore be a need to study the constitutionality of PECA as it is violative of the international principle of reciprocity when it gives greater rights to foreign works than to local creations.

Dominador D. Buhain
He is the President of REX Book Store, Inc., the country's leading publisher of textbooks and law books. He is likewise the President of the Philippine Educational Publishers Association (PEPA), an association of textbook publishers nationwide. He is presently the Chairman of the National Book Development Board, an agency mandated to formulate the National Book Policy and the National Book Development Plan. He was elected Vice-President of the Asian Pacific Publishers Association (APPA) in August 2000.