SY 2012-2013, First Semester
- An Assessment of Philippine Senate Bill No. 2965
- The Legality of Fan Art in the Philippines
- File-Sharing and Copyright Laws
The Data Privacy Act of 2011 (Senate Bill No. 2965), was approved by the Philippines Senate on its third reading on March 20, 2012. As of July 10, 2012, enrolled copies of SBN 2965 has been sent to the House of Representatives for the signature of the Speaker and Secretary General.
Senator Edgardo J. Angara, the sponsor of the bill, stressed that the main intention of the same “was to generate confidence in IT-BPO, e-governance and e-commerce in the country.”
Thus, it it stated in Section 2 of Chapter 1 of SBN 2965 that “(i)t is the policy of the State to protect the fundamental human right of privacy of communication. The State recognizes the vital role of information and communications technology in nation-building and its inherent obligation to ensure that personal information in information and communications systems in the government and in the private sector are secured and protected.”
The proposed law is comprehensive. The terms as used in the bill are clearly defined. Section 4 provides for intra and extra-territorial scope of application, as well as specific limitations. Further, it provides for the creation of a National Privacy Commission (NPC), the functions of which are enumerated. Moreover, the proposed law provides for when the processing of personal information shall be allowed, what may be processed, how the same shall be done, who shall be accountable, and the penalties for the violation of any provision.
The rights of the person whose personal information is processed or a data subject are plainly established. SBN 2965 also devotes separate chapters on security of personal information in the private sector and the security of personal information in government, with an emphasis on the responsibility of the heads of agencies.
Other salient features of the proposed law are as follows: (a) private entities and the government are mandated to protect the integrity of personal information; (b) the use for journalistic, artistic, research and law enforcement purposes is not covered; (c) the Department of Justice (DOJ), and not the NPC, has the authority to prosecute and impose penalties; (d) the non-liability of a sub-contractor; (e) the right of a data subject to be informed when personal information pertaining to him or her shall be, are being or have been processed is indisputably established; (f) non-applicablity to processing of personal information for the purpose of investigations in relation to any criminal, administrative or tax liabilities of a data subject; and (g) liability of responsible reporter, writer, president, publisher, manager and editor-in-chief for breach of confidentiality resulting in the publication or reporting of personal information by the media, among others.
The proposed law would be beneficial to different groups, i.e. (a) employees/personnel (or internal customers), whose records are kept by the company for the purposes of employment; (b) external customers, especially of BPOs whose business include the processing of customer information, who are generally of a foreign character, e.g. credit card companies, banking institutions, telecommunications provider, medical firms, and the likes; (c) stakeholders in the IT-BPO industry because of the projected growth in investment; (d) the government who will benefit from the projected revenue increase and the advantages of e-governance; (e) the labor sector because of the increased workforce demand, and others.
However, SBN 2965 has its flaws, albeit only minor ones. The provision on the non-applicability of the proposed law to the use of personal information for journalistic, artistic, literary or research purposes is absolute and may be abused. The NPC has no direct power of enforcement, and in the event that there are violations, it may only recommend the prosecution and imposition of penalties to the DOJ.
In the case of the members of the Commissison, experience in Information Technology is not a mandatory requirement for the selection of a Privacy Commissioner, nor is the experience in the practice of law. Moreover, the number of the members of the Secretariat is not fixed.
In any case, pending the promulgation of the implementing rules and regulations of the Data Privacy Act of 2011, it is premature to assume that the abovementioend flaws, or any other existing defect, will not be addressed.
Another cause for concern is the penal nature of the offenses in violation of the Data Privacy Act of 2011, considering that most of the personal information is stored in electronic format, and that Section 2 of Rule I of the Rules on Electronic Evidence (A.M. No. 01-7-01-SC) provides that the Rules “shall apply to all civil actions and proceedings, as well as quasi-judicial and administrative cases” and consequently not to criminal actions. No less than the Supreme Court has expounded on this in the case of Ang vs. Court of Appeals and Sagud (G.R. No. 182835, April 20, 2010).
Lastly, it still cannot be ascertained whether the proposed law will encourage IT-BPO industry expansion or curtail growth because of the stringent requirements. Or if the government has the resources or is capable of setting up the resources in order to comply with the standards set by the bill. All those remains to be seen once SBN 2965is enacted into law.
Fan art is the collective term for artworks, which may include but are not limited to drawings, paintings, posters, collages and banners, that are based on characters and stories from literary works and visual media. These artworks are created by any person other than the artist; as such, issues have been raised as to their legality, particularly in the realm of intellectual property (IP) rights, i.e. copyright and trademark.
Unfortunately, a search of Philippine jurisprudence on the subject yielded zero results, albeit it has been tackled in American courts. However, even in American jurisprudence there is no definitive answer on the issue, and courts are given wide latitude in deciding similar cases.
In the Philippine setting, issues of copyright or trademark infringement generally raise five (5) important questions, to wit:
(I) Is the subject matter that is the basis of fan art protected by copyright?
(II) Is fan art considered a derivative work?
(III) Is the making of fan art compatible with fair use?
(IV) Is the subject matter that is the basis of fan art a registrable trademark?
(V) Does the doctrine of secondary meaning apply?
Copyright is that intellectual property right which one has over “original intellectual creations in the literary and artistic domain protected from the moment of their creation” and the works are generally protected “during the life of the author and fifty (50) years after his death”.
There are certain literary and artistic works as well as derivative works that are protected by copyright. The literary works and visual media that are often the basis for fan art are included in this list, viz:
“172.1 Literary and artistic works, hereinafter referred to as “works”, are original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include in particular:
(a) Books, pamphlets, articles and other writings;
(l) Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(o) Other literary, scholarly, scientific and artistic works.”
Having established that the base materials for fan art are protected by copyright, the question now arises whether a particular scene from a literary or artistic work or a character therein is also copyrightable or not.
Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines, is silent on this. It is a sound practice in statutory construction that where the law is silent on a subject, recourse may be had to foreign law or international law from which the domestic law is patterned. In this case, the view of the World Intellectual Property Organization (WIPO) may be persuasive. On the question whether a character is protected by copyright, the WIPO is of the view that “(a) character could be protected under copyright if it is an original expression of an author. Merchandising items such as toys, interactive games, books and clothing including characters can also be protected by intellectual property rights in certain circumstances, mainly copyright and trademarks, along with other areas of law.”
The rulings in American jurisprudence also support the view that a character is protected by copyright, particularly in the cases Anderson v. Sylvester Stallone [1989 WL 206431 (C.D. Cal.)], Nichols v. Universal Pictures Corp. [45 F.2d 119 (2d Cir. 1930)] and Metro-Goldwyn-Mayer v. American Honda Motor Co. [900 F. Supp. 1287 (C.D. Cal. 1995)].
II. Fan Art as Derivative Work
Derivative works that are protected by copyright are enumerated in Section 173 of R.A. No. 8293, to wit:
“Sec. 173. Derivative Works. –
173.1. The following derivative works shall also be protected by copyright:
(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary or artistic works; and
(b) Collections of literary, scholarly or artistic works, and compilations of data and other materials which are original by reason of the selection or coordination or arrangement of their contents. (Sec. 2, [P] and [Q], P. D. No. 49)
173.2. The works referred to in paragraphs (a) and (b) of Subsection 173.1 shall be protected as a new works: Provided however, That such new work shall not affect the force of any subsisting copyright upon the original works employed or any part thereof, or be construed to imply any right to such use of the original works, or to secure or extend copyright in such original works. (Sec. 8, P. D. 49; Art. 10, TRIPS)”
It is clear from the aforementioned provision that fan art is considered as a derivative work as it is an adaptation or even an alteration of a literary or artistic work. Consequently, copyright protection of the original author extends to the derivative work because “such new work shall not affect the force of any subsisting copyright upon the original works employed or any part thereof, or be construed to imply any right to such use of the original works, or to secure or extend copyright in such original works.”
In short, the original author still has the exclusive right to use the original work in making the derivative work. Therefore, based solely on the above-cited provision, it can be gleaned that fan art is unlawful if the right to use the original work has not been transferred or assigned to the “fan”. This, however, admits of an exception which would be discussed on the next section.
III. Fan Art and the Doctrine of Fair Use
The Doctrine of Fair Use is a limitation on the various rights, i.e. economic, moral and neighboring, of a copyright holder. It is provided in Section 185 of R.A. No. 8293 that “(t)he fair use of a copyrighted work for criticism, comment, news reporting, teaching including multiple copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright.” Hence, a derivative work (like fan art) may be made by any person aside from the original author if the use is compatible with fair use.
To determine the compatibility with fair use, the following factors shall be considered:
(a) The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit education purposes;
(b) The nature of the copyrighted work;
(c) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(d) The effect of the use upon the potential market for or value of the copyrighted work.
This is where the water gets murky. The abovementioned factors are couched in general and vague terms, and are likely to give rise to several more questions. One example is, in the determination of the amount and substantiality of the portion used, the baseline for what is compatible with fair use is not established. In view of this difficulty, the Courts enjoy wide latitude in deciding cases involving copyright infringement especially if fair use is used as a defense.
Thus, a categorical answer on the legality of fan art in the Philippines, particulary with regard to copyright, cannot be made. As usual, we revert to the practice that instances like this are considered on a case-to-case basis, and is best left to the discretion of the courts.
Trademark is that intellectual property right which one has over any visible sign capable of distinguishing the goods of an enterprise. The rights in a mark are acquired through valid registration and the certificate of registration shall remain in force for ten (10) years.
V. Fan Art and the Doctrine of Secondary Meaning
The issue of the legality of fan art in relation to trademark would only arise when a character can be used to distinguish goods of an enterprise, and such character is the subject of fan art. A character may be protected when it has been validly registered or if it has attained secondary meaning.
When a character has been validly registered and used to distinguish the goods of an enterprise and the same is used in a fan art there may only be infringement if used in a manner as to cause confusion as to a product or service or would tend to indicate a connection between different goods or services and the owner of the registered mark and the interests of the owner of the registered mark are likely to be damaged by such use. Inversely, if there is no confusion or if damage is not likely to be caused there is no infringment of the right over the trademark.
On the other hand, in Philippine Nut Industry, Inc. v. Standard Brands, Inc. and Evalle, the doctrine of secondary meaning was exlained thus: ” … a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product.” 
Thus, when upon perceiving a character or any sign the purchasing public associates such with a specific source of a product, then that character or other sign has attained a secondary meaning. Consequently, the use of the same in a fan art that is likely to cause confusion or damage, or if it would constitute unfair competition, renders the fan art unlawful.
Fan art is legal in the Philippines in any of the following circumstances: (1) the literary or artistic work that is the basis of the fan art is not protected by copyright; (2) the author of the fan art has the right (transferred or assigned) to use the original as basis for the derivative work; (3) the use of fan art is compatible with fair use; (4) the character or sign which is the basis of the fan art is not a registrable trademark; (5) the character or sign which is the basis of the fan art has not attained secondary meaning; (6) the fan art, although similar to the original sign, is used for a different purpose and does not cause confusion as to the source of the original goods; and (7) the fan art does not tend to indicate a connection between different goods or services and the owner of the registered mark and the interests of the owner of the registered mark are both likely to be damaged by such use.
 Sec. 172.1, R.A. No. 8293
 Sec. 213.1, R.A. No. 8293
 Op. Cit. See No. 2
 Sec. 173, R.A. No. 8293
 Sec. 185, R.A. No. 8293
 Sec. 121.1, R.A. No. 8293
 Sec. 122, R.A. No. 8293
 Sec. 145, R.A. No. 8293
 Sec. 147, R.A. No. 8293
 G.R. No. L-23035, July 31, 1975
A study of local and foreign legislation, bills and treaties about ‘downloading’ copyrighted works
Copyright is that intellectual property right which one has over “original intellectual creations in the literary and artistic domain protected from the moment of their creation.”
Most, if not all, of the works protected by copyright as enumerated under various Sections in Part IV of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines, are available on the internet. These can be viewed, streamed, copied and downloaded, often free of charge. And more often than not, these are made available or ‘shared’ by persons other than the owner of the copyrighted work.
File-Sharing/Downloading in the Philippine Setting
Any person other than the owner of the copyrighted work who without authorization makes available said work on the internet is liable for infringement because a copyright owner has “the exclusive right to carry out, authorize or prevent” the “communication to the public of the work.” This begs the question whether the person who takes advantage of the availability of the work and downloads the same is also liable for infringement.
The rights that an author of a work enjoy is three-fold in character, viz: (1) economic rights; (2) moral rights; and (3) neighboring rights. The violation of any of these rights constitutes infringement. The specific acts that constitute infringement are enumerated in R.A. No. 8293; however, the act of downloading a copyrighted work is not expressly, or even impliedly, prohibited. It is also unfortunate that the issue has not been tackled yet in the courts. Ergo, it is safe to say that there is no restriction on online downloading in the Philippines.
Stop Online Piracy Act (SOPA) / PROTECT Intellectual Property Act (PIPA) (US)
What it is:
The Stop Online Piracy Act (SOPA) is a United States bill (House Bill No. 3261) introduced on October 26, 2011 by U.S. Representative Lamar S. Smith (R-TX) to expand the ability of U.S. law enforcement to fight online trafficking in copyrighted intellectual property and counterfeit goods. Provisions include the requesting of court orders to bar advertising networks and payment facilities from conducting business with infringing websites, and search engines from linking to the websites, and court orders requiring Internet service providers to block access to the websites. This applies only to non-U.S. sites.
On the other hand, the PROTECT IP Act (Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, or PIPA) is also a United States bill (Senate Bill No. 968) introduced on May 12, 2011, by Senator Patrick Leahy (D-VT) with the stated goal of giving the US government and copyright holders additional tools to curb access to “rogue websites dedicated to the sale of infringing or counterfeit goods”, especially those registered outside the U.S.
Both proposed legislation are aimed at stopping copyright infringement at the source, meaning to say they prevent the proliferation of infringing content; but it is not clear whether the act of downloading content that has not been blocked or removed is considered unlawful.
Applicability in the Philippine setting:
Many of the provisions in the SOPA and PIPA have drawn flak from various sectors. Issues have been raised as to the consitutionality of said bills, in addition to potential financial and industrial ramifications. As they are, similar legislation should not be adopted in the Philippines.
However, the SOPA and PIPA do have provisions that would be beneficial if adopted, particularly those that provide penalties for selling counterfeit drugs and consumer goods through the internet. These may be incorporated into exisiting laws on e-commerce and intellectual property (if still not provided) in order to avoid the adoption of the other controversial provisions.
The Digital Economy Act of 2010 (UK)
What it is:
The Digital Economy Act 2010 (c. 24) is an Act of the Parliament of the United Kingdom regulating digital media. Introduced by Lord Mandelson, it received Royal Assent on 8 April 2010, and came into force on 8 June 2010.
The copyright provisions in the Act and in the proposed regulatory code of the Office of Communications outlines how to proceed against a person who commits copyright infringement. It begins with rightsholders gathering lists of Internet Protocol addresses which they believe have infringed their copyrights. They would then send each IP number to the appropriate Internet Service Provider, along with a “copyright infringement report”.
The ISP must then determine whether the infringement report is valid and send a notification to the subscriber in question if it is. The report and the subscriber it refers to are recorded by the ISP, but no further action is taken.
The next stage in proceedings involves the rightsholder requesting a “copyright infringement list” from the ISP. The rightsholder can then approach a judge to gain a court order to identify some or all of the subscribers on the list, and with that information launch standard copyright infringement litigation against them.
Further, the Act allows the Secretary of State – with the consent of the Lord Chancellor, upper and lower houses of Parliament and a court of law – to block access to a location on the Internet “from which a substantial amount of material has been, is being or is likely to be made available in infringement of copyright”, or a location which “facilitates” such behaviour.
However, it was reported that the key provision of the act – sending out warning letters – has been continually delayed. The first letters are not expected to be sent until at least 2014.
Applicability in the Philippine setting:
A comparison between the SOPA/PIPA and the Digital Economy Act of 2010 reveals that the latter is less strict, and premium is given on due process (as can be seen above). A similar legislation may be adopted in the Philippines, although the “website banning” measure may have to be deliberated upon, because it may infringe on the constitutional right to freedom of expression in the Philippines.
Moreover, under the Digital Economy of Act of 2010 a website that hosts content or even links that lead to other sites that violate copyright protection may be banned. The issue here is that other content or links that do not violate copyright protection will also be banned. This collateral damage borders on internet censorship and violation of the right to freedom of expression. This kind of provision may not receive major approval in the Philippines, since in the country constitutional rights are zealously guarded.
HADOPI Law (France)
What it is:
The law creates a government agency called Haute Autorité pour la Diffusion des Œuvres et la Protection des Droits sur Internet (HADOPI) (English: the High Authority for Transmission of Creative Works and Copyright Protection on the Internet) and it was adopted by the French Senate on May 13, 2009. On October 22, 2009, the Constitutional Council approved a revised version of HADOPI. The agency is vested with the power to police Internet users. The agency’s mandate is to ensure that internet subscribers “screen their internet connections in order to prevent the exchange of copyrighted material without prior agreement from the copyright holders.”
On receipt of a complaint from a copyright holder or representative, HADOPI may initiate a ‘three-strike’ procedure. On the third violation, the internet access subscriber is blacklisted and other ISPs are prohibited from providing an internet connection to the blacklisted subscriber. The service suspension does not, however, interrupt billing, and the offending subscriber is liable to meet any charges or costs resulting from the service termination.
Further, action under the HADOPI law does not exclude separate prosecution under the French code of Intellectual Property, particularly its articles L331-1 or L335-2, or limit a claimant’s other remedies at law.
Applicability in the Philippine setting:
The HADOPI law provides for a “three-strike” rule similar to that implemented in New Zealand, among others. This concept is very simple. On the first instance of copyright infringement, a reminder will be sent via email message to the offending internet subscriber. On the second instance, a certified letter-reminder will be sent. Finally, a third violation will warrant the suspension of internet access for a specified period of time. This can only be done upon a written order from a judge.
The HADOPI law is a good measure to curb copyright infringement, mainly because of the “three-strike” rule , which provides stringent measures but puts premium on due process, a right that is given great importance in the Philippines.
The mandate may be given to the Intellectual Property Office. However, the question of feasibility or practicability arises. It would seem that in the current Philippine setting, this would only apply to internet service subscribers whose e-mail addresses and physical addresses are registered with the internet service provider. The problem is, majority of Filipinos avail of internet service using pre-paid subsciption, broadband service or Wi-Fi hotspots, among others. In the latter cases, the e-mail and physical addresses are usually not registered. Some subscribers may not even have an e-mail account. The offending person may be located by tracking the internet protocol (IP) address, but then this is a tedious process, and some would say that this is violative of the constitutional right to privacy.
Beside that, the addition of personnel to monitor internet traffic and send notices, not to mention the operational expenses, would make the implementation of this scheme very expensive.
Copyright (Infringing File Sharing) Amendment Act 2011 (NZ)
What it is:
The Copyright (Infringing File Sharing) Amendment Act of 2011 is an Act of the Parliament of New Zealand which amended the Copyright Act of 1994. It commenced on September 01, 2011.
The Copyright (Infringing File Sharing) Amendment Act 2011 provides for what is known as graduated response. Under the Act copyright owners notify fixed-line ISPs (the Act does not apply to mobile networks until 2013) that they believe an internet subscriber is infringing their copyright through peer-to-peer filesharing, the ISPs in turn send warning notices to the relevant subscribers, and after three such warnings the copyright owner may take their case to the Copyright Tribunal.
Applicability in the Philippine setting:
Please see above discussion on applicability in the Philippine setting of the HADOPI law.
Anti-Counterfeiting Trade Agreement
What it is:
The Anti-Counterfeiting Trade Agreement (ACTA), is a multinational treaty for the purpose of establishing international standards for intellectual property rights enforcement. The agreement aims to establish an international legal framework for targeting counterfeit goods, generic medicines and copyright infringement on the Internet, and would create a new governing body outside existing forums.
The treaty is according to Article 39 open for signature until May 01, 2013 for the participants involved in the negotiations as well as all members of the World Trade Organization (WTO) of which the participants agree. After entry into force, the treaty would only apply in those countries that ratified it. The finalized agreement text was published on April 15, 2011 and includes six chapters with 45 articles.
Applicability in the Philippine setting:
A perusal of the text of the ACTA reveals that the treaty stipulations are in keeping with the general principles of international law. There is a focus on enforcement and international cooperation, which is prudent because online piracy spans then entire globe.
The ACTA drew a lot of criticism because of the fact that the negotiation stage was not public, and prior requests for the full text of the same was withheld from the public. Moreover, the public has no access to the deliberations on the ACTA provisions. This poses some difficulty for countries who have yet to enter into agreement or ratify the treaty because most of the provisions are couched in general terms.
However, it would seem that there is no downside to enter into and ratify the ACTA because even after ratification, the Supreme Court has the power of judicial review over the constitutionality of any treaty, international or executive agreement, and must hear such cases en banc. Also, there are certain grounds to invalidate a treaty or even to terminate the same.
Discussed above are two (2) bills (SOPA and PIPA), three (3) legislative acts (The Digital Economy Act 2010 [UK], HADOPI Law [France], and Copyright Amendment Act 2011 [NZ]) and one (1) treaty (Anti-Counterfeiting Trade Agreement). If any or all of them are adopted or ratified in the Philippines, there will be issues of infringement of the constitutional rights to privacy and free speech.
Below is a quick run-down of possible scenarios:
- Search engines, e.g. Google, Yahoo and Altavista, may be required to delete or not show a domain name or website which contains material or links that infringe copyright, although some or most of the other contents are legitimate.
- The three-strike rule discourages many to use the internet for fear of fines, suspension of account or blacklisting.
- Stringent laws could discourage e-commerce because of the difficulty of storing, transmitting and receiving files in the internet.
- Regulatory agencies/boards that monitor internet use also have access to IP addresses, email addresses and even physical addresses of internet subscribers.
- Internet Service Providers (ISPs) may be liable for action of subscribers, especially if they do not cooperate with regulatory aegncies; hence they may be constrained to provide confidential information to avoid being impleaded during litigation.
- Free software will not be distributed with facility because peer-to-peer (P2P) hosts are regulated.
- The ACTA is said to promote invasive searches even without probable cause as long as there is suspicion of infringement.
Any of the above-mentioned scenarios can arguably lead to an infringement of constitutional rights to privacy and free speech as iterated in Sections 3 and 4 of Article III of the 1987 Philippine Constitution. Altough these rights are not absolute, still these should be treated of paramount importance; hence, extreme caution must be exercised in the adoption of any similar legislation.
 Sec. 172.1, R.A. No. 8293
 Ibid. Sec. 177
 Article VIII Section 5.2.a 1987 Philippine Constitution
 Article VIII Section 4.2, Ibid.