Amended IP Code “disadvantageous” to students, teachers, researchers – says copyright expert-lawyer Ping Peria

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By Raïssa Robles

A few weeks ago, writing about amendments to RA 8293 was farthest from my mind. RA 8293 is a mind-bending law. I was drawn to the story when my hubby Alan told me about a post written by Winthrop Yu on Facebook.

Yu, the senior vice-president for advocacies of the Philippine Internet Commerce Society, said:

Yu was referring to Congress’ approval of amendments to RA 8293, which only Interaksyon seems to have monitored. Here is a link to their story. By the way, the “Al” whom Yu was referring to in his Facebook post is Al Alegre, Executive Director of the Foundation for Media Alternatives.

That was what started me wading through the legal jungle that is RA 8293. I had a lot of help from:

• Alan who has lectured on Internet Politics in Berlin for many years;
• Harvard University law graduate JJ Disini, who teaches Technology and the Law at the University of the Philippines College of Law;
• Ricardo Blancaflor, Director General of the Intellectual Property Office;
• as well as from two other senior lawyers at the IPO who asked not to be named.

I will try to explain and elaborate on what they all told me and they are free to correct me.

Amended IP Code has negative impact on education sector

But first, let me mention a very important update from a lawyer who has closely been following copyright developments here and abroad for years.  Atty. Elpidio V. Peria is an expert on the subject and is the Executive Director of Biodiversity, Innovation, Trade and Society (BITS) Policy Center, Inc. based in General Santos City.

He was among those I wanted to interview on the amendments to RA 8293 but he was busy.

I’m glad that today, he posted on his foundation website how the IP Code amendments will be “disadvantageous  to ordinary users, students and researchers.”

Atty. Ping Peria wrote:

What about (the impact on)  students and researchers? On this I remember my son in Philippine Science High School in Davao City who had failing grades in one subject once and when I asked him, he said he cannot cope with the reading requirements as they were limited from photocopying in their library the required readings in class to only ten (10) pages per day, the assigned readings are usually more than the ten (10) pages limit and the queue is very long for photocopying oftentimes he didn’t bother queuing. I raised this in a Parent’s meeting one time and I said that the school should prioritize the learning of the students above all else and the respect of intellectual property rights of the authors of books will have to come later after they have graduated and they can afford to buy these books on their own, after all there is a long-standing principle in copyright law called fair use.

But lo and behold, now I cannot say that anymore as, with these amendments to the IP Code, the right to fair use of students and researchers has been limited. When before, the right to fair use to make “multiple” copies for classroom use, scholarship, research and similar purposes is not considered an infringement of copyright, that word “multiple” is now replaced with the word “limited”, and who sets this limitation, it is the Intellectual Property Office.

The Intellectual Property Office explained that there is no problem with the word “limited” as they can set the number of how many these are in the implementing rules and regulations to take into account the concerns of the copyright holders and the users, students and researchers.

But that is not the point of the provision of the law on fair use since the amendment shifts the power to make that decision on the copyright holder and the Intellectual Property Office. The previous wording of the law, the word “multiple”, gives to the user, student and researchers the right without even the permission of the copyright holder and the Intellectual Property Office, to make such reproduction or copying as that is the nature of the right of fair use.

Atty. Peria was referring to the amendments in Section 185.1 [highlighted in red]:

Sec. 185. Fair Use of a Copyrighted Work. –185.1 The fair use of a copyrighted work for criticism, comment, news reporting, teaching including multiple limited number of copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright. Decompilation, which is understood here to be the reproduction of the code and translation of the forms of the a computer program to achieve the inter-operability of an independently created computer program with other programs may also constitute fair use under the criteria established by this section, to the extent that such decompilation is done for the purpose of obtaining the information necessary to achieve such inter-operability.

To read the rest of Atty. Peria’s highly authoritative piece, please click on this link. 

Why Congress erased your right to bring home books, software, music and movies

And now, to resume where I left off in Part 1 of  my  piece entitled – Congress erased every Filipino’s right to bring home music, movies and books from abroad.

Let me start by talking about the right of every Filipino overseas to bring back home legally acquired books, software, music and movie DVDs and CDs. This has been enshrined in the Intellectual Property Code for the last 15 years under Section 190.1 of RA 8293.

This is now gone:

Section 190. Importation for Personal Purposes. –

190.1. Notwithstanding the provision of Subsection 177.6, but subject to the limitation under the Subsection 185.2, the importation of a copy of a work by an individual for his personal purposes shall be permitted without the authorization of the author of, or other owner of copyright in, the work under the following circumstances:

(a) When copies of the work are not available in the Philippines and:

(i) Not more than one (1) copy at one time is imported for strictly individual use only;

or
(ii) The importation is by authority of and for the use of the Philippine Government;

or
(iii) The importation, consisting of not more than three (3) such copies or likenesses in any one invoice, is not for sale but for the use only of any religious, charitable, or educational society or institution duly incorporated or registered, or is for the encouragement of the fine arts, or for any state school, college, university, or free public library in the Philippines.

(b) When such copies form parts of libraries and personal baggage belonging to persons or families arriving from foreign countries and are not intended for sale: Provided, That such copies do not exceed three (3).

190.2. Copies imported as allowed by this Section may not lawfully be used in any way to violate the rights of owner the copyright or annul or limit the protection secured by this Act, and such unlawful use shall be deemed an infringement and shall be punishable as such without prejudice to the proprietor’s right of action.

Section 190.1, under the law now awaiting President Aquino’s signature, is all gone.

I asked DG Blancaflor why they felt the need to remove this particular section

Blancaflor replied:

Our approach has always been ‘international exhaustion of economic rights’. It’s not as if we took it out of the air. We have treaty obligations in effect.

This is how a lower-ranking IPO official explained the concept of ‘international exhaustion of economic rights’ to me and why this particular section had to be deleted from RA 8293 (the emphases are mine):

In the copyright world, there are two kinds of exhaustion – ‘international exhaustion’ and ‘national exhaustion’. Under the principle of international exhaustion, “when a copyrighted work has been sold or distributed the copyright owner’s right over that work becomes exhausted. Once you sell the book, the buyer can do anything with that book. He can sell it again or destroy it.

Once you have publicly distributed or sold your copyrighted work anywhere in the world, your rights are exhausted. Another person (anywhere in the world) can import it (under the principle of international exhaustion).

In contrast, under the principle of national exhaustion, “the distribution should happen here in the country itself. This means, the right (of a foreign copyright owner) will not be exhausted unless the book is sold here in the Philippines.

Some people are suggesting that because of Sections 190.1 and 190.2 there is an implication of national exhaustion. Which means once a copyright owner distributes his work in some other countries in the world, unless it hasn’t been distributed in the Philippines, then importing it (to Manila) is illegal.

The work has to be sold in the Philippines for the rights to be exhausted…Some sectors claim therefore that we are adopting the national exhaustion principle, therefore they have a right of importation by implication.

When I asked which sectors he was referring to, the source said:

There was some clamor from some sectors to add exhaustion as part of the economic rights (of copyright owners). Our take is that the international treaties like those of WIPO (World Intellectual Property Organization, a United Nations agency which administers treaties) gives member countries of WIPO the flexibility as to the exhaustion principle that states may adopt. To us, it would be to the benefit of the Philippines if we adopt a liberal exhaustion principle – which is international exhaustion.

Those two (deleted) provisions will simply generate controversy – whether or not there is right of importation (by the copyright holder).

If any other country produces (the same) work at a cheaper price, we can legally import it.

To explain how this works, the source gave the following example.  Suppose a very expensive medical book was published in the US and suppose the publisher licensed someone in India to reprint the same and sell these at a much lower price in India. Invoking the principle of “international exhaustion“, someone in the Philippines can now import these legitimate Indian reprints of the same book.

On the surface, the prospects of obtaining cheaper imported books not only in medicine  but also in engineering and other specialized fields sound very attractive.

But UP Law professor notes how foreign copyright holders can stop cheaper imports of their products

However, Prof. Disini outlined for me another scenario which would defeat the very purpose for deleting Section 190.1 and stop  importation of cheaper books.  He said:

The amendments to RA 8293 say the Secretary of Finance can issue rules regulating or prohibiting the importation of infringing articles. The question is, how do you know what is infringing and what is not? If you are the Bureau of Customs, you won’t know.

What could happen is, if you are a foreign book publisher, you can send a letter to the Bureau of Customs and say:

‘We don’t allow anyone except our exclusive distributor to import these books into the Philippines. On that basis, if anybody imports, it’s in violation of the license we gave. We don’t allow anyone of our licensees to export books except us.’

From the standpoint of the Bureau of Customs, when something arrives – even if authentic but if it does not come from the publisher, they can block it.

Another example – Microsoft could send Customs a letter –

‘We don’t allow the any importation of any Microsoft products into the country because our license prohibits the end users from importing the same.’

Once Customs has been informed there are certain products that cannot be imported except by certain persons identified by the publisher or copyright owner – if somebody importing is not the identified as the authorized party, then the copyright owners can claim that the material is infringing.

I’m not saying that automatically, these (amended) provisions will result in that. But if used properly in the way I outlined, it could lead to that.

If Section 190.1 and 190.2 were still there, I could say ‘ I don’t care. Under the law I’m allowed.’ Now (under the amended law) you can no longer say it.

It’s different when you have a right that’s written down. When Congress amends a law, removing certain privileges or rights from you, the presumption is that it was removed intentionally. It was the intention of Congress to deny you that right.

Prof. Disini noted that the Philippines already allows parallel importation even without deleting Section 190.1. He said this can be seen by the fact that importation of used books for local resale is allowed.

However, he reiterated that under the amended law, foreign copyright owners could write Customs to block the importation of their own books coming in as used books. Unless, he said, “the Secretary of Finance will ensure that parallel importation will be preserved.”

The words ‘personal purpose’ were deleted from the IP Code

The IPO source I talked to claimed that even under the amended law,  Filipinos flying into Manila can still bring in books, music and movies “so long as (they’re) for personal use, only because we have the fair use provision.”

There’s just one problem with the source’s explanation . Nowhere does the updated law mention importation for personal use as part of the fair use clause.

Section 184 lists specific instances that fall under the fair use clause:

CHAPTER VIII
LIMITATIONS ON COPYRIGHT

Section 184. Limitations on Copyright. – 184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright:

(a) The recitation or performance of a work, once it has been lawfully made accessible to the public, if done privately and free of charge or if made strictly for a charitable or religious institution or society; (Sec. 10(1), P.D. No. 49)

(b) The making of quotations from a published work if they are compatible with fair use and only to the extent justified for the purpose, including quotations from newspaper articles and periodicals in the form of press summaries: Provided, That the source and the name of the author, if appearing on the work, are mentioned; (Sec. 11, third par., P.D. No. 49)

(c) The reproduction or communication to the public by mass media of articles on current political, social, economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are delivered in public if such use is for information purposes and has not been expressly reserved: Provided, That the source is clearly indicated; (Sec. 11, P.D. No. 49)

(d) The reproduction and communication to the public of literary, scientific or artistic works as part of reports of current events by means of photography, cinematography or broadcasting to the extent necessary for the purpose; (Sec. 12, P.D. No. 49)

(e) The inclusion of a work in a publication, broadcast, or other communication to the public, sound recording or film, if such inclusion is made by way of illustration for teaching purposes and is compatible with fair use: Provided, That the source and of the name of the author, if appearing in the work, are mentioned;

(f) The recording made in schools, universities, or educational institutions of a work included in a broadcast for the use of such schools, universities or educational institutions: Provided, That such recording must be deleted within a reasonable period after they were first broadcast: Provided, further, That such recording may not be made from audiovisual works which are part of the general cinema repertoire of feature films except for brief excerpts of the work;

(g) The making of ephemeral recordings by a broadcasting organization by means of its own facilities and for use in its own broadcast;

(h) 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;

(i) The public performance or the communication to the public of a work, in a place where no admission fee is charged in respect of such public performance or communication, by a club or institution for charitable or educational purpose only, whose aim is not profit making, subject to such other limitations as may be provided in the Regulations; (n)

(j) Public display of the original or a copy of the work not made by means of a film, slide, television image or otherwise on screen or by means of any other device or process: Provided, That either the work has been published, or, that the original or the copy displayed has been sold, given away or otherwise transferred to another person by the author or his successor in title; and

(k) Any use made of a work for the purpose of any judicial proceedings or for the giving of professional advice by a legal practitioner.

 

Section 185 defines fair use:

Section 185. Fair Use of a Copyrighted Work. – 185.1. The 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. Decompilation, which is understood here to be the reproduction of the code and translation of the forms of the computer program to achieve the inter-operability of an independently created computer program with other programs may also constitute fair use. In determining whether the use made of a work in any particular case is fair use, the factors to be considered shall include:

(a) The purpose and character of the use, including whether such use is of a commercial nature or is
for non-profit educational 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.

Notice that this list does not include “personal purpose” or personal enjoyment.

Section 212 is the only other section which states that “personal purpose” is part of fair use. But again, that section was deleted by Congress and replaced with something that no longer includes “personal purpose” as part of fair use. Below is the deleted section:

CHAPTER XV
LIMITATIONS ON PROTECTION

Section 212. Limitations on Rights. – Sections 203, 208 and 209 shall not apply where the acts referred to in those Sections are related to:

212.1. The use by a natural person exclusively for his own personal purposes;

212.2. Using short excerpts for reporting current events;

212.3. Use solely for the purpose of teaching or for scientific research; and

212.4. Fair use of the broadcast subject to the conditions under Section 185. (Sec. 44, P.D. No. 49a)

I asked the IPO source why there was no more mention of importation for personal purpose listed under “fair use”. He suggested I talk to DG Blancaflor to get an official statement on the matter.

Here is how my interview with DG Blancaflor went:

R: Why did you remove Sections 190.1 and 190.2?

Blancaflor: Our approach has always been international exhaustion of economic rights. It’s not as if we took it out of the air. We have treaty obligations in effect.

R:What if a balikbayan or OCW comes home with a suitcase full of his personal collection of music CDs and DVD movies. Will he be stopped at the airport and his collection seized?

Blancaflor: I will have to answer specific cases. Case to case. I cannot– I have to make a disclaimer especially with those kinds of questions. The defense might use it. I will have to discuss each case.

I’m now in the position that I make official statements for IPO. If it comes out, that there’s a case filed within our office, that official statement of mine might be used by one party against the other.

If you can formally write me.

R: But can you just explain why those sections were deleted? Atty. (name withheld upon request) already explained to me the principle of international exhaustion.

Blancaflor: We are following international obligations of international exhaustion. Of economic rights.

If there is evidence to the effect it is properly bought, we cannot rule infringement.

R: Can they be questioned at the airport?

Blancaflor: No of course not. We are looking at certain items like optical media products which are governed by other laws. There are rules on that one.

R: Why did RA 8293 give Filipinos flying in a specific exemption? That they can bring home copyright materials – and that includes books, movies and music – as part of their personal baggage?

Blancaflor: When we introduced this (new amendment) 10 years ago, there was a move from external rights holders – from foreign rights holders of music – what they wanted was – for somebody to bring in goods, these should pass through them. In other words, (under the principle of) national exhaustion. That would explain why that section was removed.

This time, you asked me – What happens now if you bring in? As long as it’s not infringed. If it’s properly bought.

In the old law there was an insinuation of national exhaustion. We are for the intelligent norm of international exhaustion. As long as you have to prove – it’s legal – we will not rule against it. We have now removed the insinuation of national exhaustion. It even strengthens their position if they can prove they legally bought it.

R: But under the present RA 8293, they don’t even have to prove that. They have the privilege to bring in their personal baggage, no questions asked.

Blancaflor: You know – we have to – the Customs (Bureau) is part of our national committee on intellectual property rights. We can easily come out with a directive – that is the least of our worries.

R: They would be open to extortion at the airport

Blancaflor: I wish people would not draw conclusions that Customs will use this to milk people. They should read the law in its entirety. That portion was deleted to erase once and for all (the insinuation of national exhaustion).

It allows parallel importation. If I will buy that book from the US, under Section 190.1, I’m only limited to three… We removed Section 190 because we wanted to follow international exhaustion. Here (under the present RA 8293), you are only limited to (bringing in) three copies.

If you bring in five or six (books) so long as you are able to prove you properly bought it (you can do so under the amended RA 8293).

Whether we like it or not, our state of development is still low. We are still heavy on books.

If you have (Section)  190, then we can’t have parallel importation of books. Because you will exceed three. We removed that. These are what you call exceptions to the general law of copyright.

Under 190 (of RA 8293) if you exceed three or four, you are already liable. (Under the amended RA 8293) We are now allowing parallel importation.

From DG Blancaflor’s explanation, I get the following sense.

First, the government wants to encourage parallel importation of cheaper books. It says the only way it can do so is to delete Section 190.1 which expressly allows individual importation for personal purpose. The government wants to encourage bulk importation by formal entities and not by individuals.

Second, the government says it can write a directive allowing Filipinos coming from abroad to still bring home books, music and movies in their personal baggage.

However, in my view, such a directive can always be quietly modified or even erased later on. Besides, how can the government do the second thing – write a directive – when the lawmakers inserted the following additional amendment that “prevents” importation or exportation of “prohibited” materials”:

SEC. 190. IMPORTATION AND EXPORTATION OF INFRINGING MATERIALS – Subject to the approval of the Secretary of Finance, the Commissioner of Customs is hereby empowered to make rules and regulations for preventing the importation OR EXPORTATION [underlining mine] of articles the importation OR EXPORTATION of which is prohibited under this ACT and under treaties and conventions to which the Philippines may be a party and for seizing and condemning and disposing of the same in case they are discovered after they have been imported OR BEFORE THEY ARE EXPORTED. (Sec. 30, P.D. No. 49)

As Professor Disini observed in my separate interview with him:

You already have an explicit right, then you make that right silent. Why did Congress remove that right when you had that right before? On what basis can you put that (right back) in the IRR (Implementing Rules and Regulations) when Congress removed that right?.

To illustrate the impact of removing Section 190.1, Prof. Disini gave one of his relative as an example:

At the height of his loneliness, he buys music CDs. In a matter of one year, he bought 200 CDs at US$15 each. If he wants to bring home the CDs, under Section 190.1, he could. Now it’s not anymore clear if he can. Now he can be stopped at the airport and told it’s not allowed. I’m almost certain he won’t be allowed. That was the beauty of Section 190.1.

 

My take on the deletions

In my years of covering lawmakers, I have observed that they can balance competing interests if they want to. A law is often the result of such balancing acts. And they find the words to do that.

I am pretty sure that given the brain power in the Senate, the senators could have found a way to convey the idea that the Philippines follows the principle of international exhaustion BUT at the same time recognizes the right of every Filipino to physically bring home copyright material obtained overseas for personal purpose.

Frankly, I don’t see any contradiction between the two. It can be argued that by buying such copyright material abroad, Filipinos have in fact internationally exhausted the economic right of the original copyright holder.

One of the perks of working and traveling overseas is buying books, music and movies that would never be available in Manila. Now, we all will have to worry whether such items could be questioned at the airport or restricted in the future by directive.

DG Blancaflor said deleting Section 190.1 is meant to be able to import academic and highly specialized books more cheaply. However, Prof. Disini has pointed out how deleting Section 190.1 could in fact discourage parallel importation.

Who is right in this case?

And what about software, including  digital games as well as game consoles bought abroad?

Amending RA 8293 was meant to take us off the US 301 Watch List

I just learned Friday night that one of the IPO’s underlying reasons for asking Congress to delete Section 190.1 was in order to persuade the US government to drop the Philippines from the 301 Watch List.

Below is the 2012 report of the Office of the United States Trade Representative (USTR) listing what it claims are the Philippines’ intellectual property rights violations.

It shows that the USTR leaned on our government to amend RA 8293.

But even if we amend it, would that be enough to get us off the 301 Watch List?

I highly doubt it, because  the USTR has a lengthy list of laws it wants us to amend.

Among them is the law that they say “limit(s) the patentability of certain chemical forms unless the applicant demonstrates increased efficacy.” This is the law that prevents foreign pharmaceuticals from extending their patent on drugs just by  tweaking the drug formula a little.

Below is the entire list of things-to-do that the USTR requires in order for our country to be removed from the 301 Watch List:

Philippines

The Philippines remains on the Watch List in 2012. The United States is encouraged by the significant decline in the incidence of unauthorized camcording of motion pictures in theaters that followed the enactment of the Anti-Camcording Act of 2010. Philippine officials also improved enforcement efforts, leading to the closure of at least two significant notorious markets. In addition, the Philippine Supreme Court promulgated long-awaited IPR procedural rules in 2011. The United States is hopeful that effective implementation of these rules will help streamline the judicial process for IPR cases. The United States encourages the Philippines to strengthen the criminal enforcement of IPR by improving the quality of criminal investigations and prosecutions. The Philippines should also clarify its procedures for obtaining provisional measures, including by improving predictability with respect to search and seizure orders. The United States urges the Philippines to enact long-pending legislation to amend its copyright law and ensure that it fully implements the WIPO Internet Treaties. The United States remains concerned about amendments to the Patent Law that limit the patentability of certain chemical forms unless the applicant demonstrates increased efficacy. The United States encourages the Philippines to provide an effective system for protecting against the unfair commercial use, as well as unauthorized disclosure, of test or other data generated to obtain marketing approval for pharmaceutical and agricultural chemical products. The United States also remains concerned about policies that inhibit U.S. exports of IPR-intensive products to the Philippines, including measures that limit the market for imported pharmaceutical products. The United States looks forward to continuing to work with the Philippines to address these and other matters.

You can read more about the Watch List here.

If we accede to all these, what do Filipinos get in return?

Cheaper goods? Not likely.

Coming next: Part 3 – this will take some time because I first have to finish my other writing assignments, which were interrupted by this topic :)