Copyright owners have more rights than heinous crime victims with Congress’ IP Code changes – lawyers say

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By Raïssa Robles

The amended Intellectual Property Code, Republic Act 8293, allows warrantless searches and raids and seizure – a violation of the Bill of Rights of the 1987 Constitution.

Several lawyers said the amended law actually gives copyright owners more rights than victims of such crimes as murder, rape and terrorism.

It gives the Intellectual Property Office (IPO) unprecedented power, making “IPO officials both judge and executioner of the cases involving violations of IPRs,” one lawyer said.

All these in the name of protecting the interests of copyright owners who, in many cases, are foreign multinational companies.

Constitutional principles set aside for copyright owners

JJ Disini, University of the Philippines College of Law professor, pointed out  that one new provision that gave him serious concern was the expanded power under Section 7 (D). It gave the IPO Director General and Deputies Director General the new power to:

d) Conduct visits during reasonable hours to establishments and businesses engaging in activities violating intellectual property rights and provisions of this act based on report, information or complaint received by the office;

Prof. Disini explained the implications:

“If you are a victim of copyright infringement, under the new law you can ask a government agency (the IPO) to enter a privately owned space in order to search, to look around.

Let’s take another situation – let’s take the case of rape or murder. Let’s say you’re related to someone who was murdered. You know that certain evidence about the suspected murderer is located in a particular place. As a victim’s relative, you cannot just go to the place and enter. You need a warrant.

Why is it that Congress will give the victim of intellectual property rights violations more rights than the victim of heinous crimes?

What about securing evidence against suspected terrorists? They need to get warrants.

But for suspected copyright infringements, authorities are allowed ”visits” which invade the privacy of alleged infringers.

Are these crimes so terrible that we are willing to set aside constitutional principles? I think there’s a disconnect there.

Criminal law professor says IPO amendment violates Bill of Rights

Another lawyer, a professor who teaches criminal law and evidence at the University of the Philippines College of Law, agrees. Professor  Victoria Avena told me that this particular amendment violates Section 2 of the Bill of Rights of the 1987 Constitution.

This is how our exchange went on March 3, 2013:

RAISSA: If I’m a relative of a murder victim. I accuse someone of hiding the murder weapon in his office. Can the police get a warrant without presenting me as a witness to the judge?

PROF. AVENA: No. For a search warrant to issue, the judge has to ask questions, and you have to answer his questions under oath…the complainant and the witnesses.

RAISSA: So I have to be presented to the judge so the judge will decide whether there is great reliability on what I’m saying?

PROF. AVENA: Yes, yes, he should ask you personally.

RAISSA: I am asking because Congress has passed amendments to the Intellectual Property Code, whereby the Director-General of the Intellectual Property Office will have the power to conduct visits during reasonable hours to establishments and businesses engaging in activities violating intellectual property rights and provisions of this act based on report, information or complaint received by the office. So the Director-General can do that based on a mere report or information that is not under oath. Can that be done?

PROF. AVENA: No. Because the judge has to have probable cause to issue a search warrant. And there can be probable cause only if the judge is able to ask questions from the complainant and his witnesses, who should answer under oath.

RAISSA: Prof. Disini said he doesn’t feel good about this. He said in a murder case you have to get a witness. And he (the witness) has to be presented to the judge.

PROF. AVENA: First of all, to give context and perspective, all statutes from Congress must comply with the Constitution. Is there anything on this in the Constitution? Absolutely yes. It’s precisely in the Bill of Rights – the right against unreasonable search and seizure. The right against arrest without warrant. That is Article 3 Bill of Rights, Section 2.

This section of the Bill of Rights states that:

The right of the people to be secure in their persons, houses papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons of things to be seized.

When I asked DG Blancaflor about the new power of his office to conduct visits and told him that Prof. Disini thought this violated the Constitution, Blancaflor seemed to make light of it, telling me this was “nothing new”. He said it merely copied Section 10 of the Optical Media Act or RA 9239.

At first glance, it did look like a copy. Sec. 10 of RA 9239 gave the Optical Media Board the power to:

(d) Conduct inspections, by itself or in coordination with other competent agencies of the government, at anytime, with or without prior notice, of establishments or entities including those within the economic zones engaged in the activities as provided in Section 13(a), (b) and (c) of this Act, and employ reasonable force in the event that the responsible person or persons of such establishment or entity evades, obstructs, or refuses such inspection. For this purpose, the agents of the OMB shall be considered agents in authority;

I asked DG Blancaflor whether, during their visit, they could seize any computer found to have infringing material.

He replied,

“If it’s in plain view.”

I then asked yet another lawyer, Atty. Elpidio V. Peria, to compare the OMB power to “conduct inspections” with the IPO power to “conduct visits”.  Atty. Peria is also a copyright expert and is the Executive Director of Biodiversity, Innovation, Trade and Society (BITS) Policy Center, Inc. based in General Santos City.

He said the impact of both powers isn’t the same because:

“That (OMB) agency is a minor agency and if DG (Blancaflor) says they merely copied its powers, it’s not exactly accurate.”

Atty. Peria said the OMB’s inspection powers were limited by RA 9239 to those companies that are required to obtain licenses and register with the OMB so they could import, export, sell optical media or equipment or parts to manufacture optical media.

In contrast, Atty. Peria said, the IPO power covers any establishment accused of violating intellectual property rights. He added:

“Prof. JJ Disini of the University of the Philippines College of Law characterizes this latter set of powers as warrantless searches which are unconstitutional, but what we will highlight is that this enforcement function makes the IPO officials both judge and executioner of the cases involving violations of IPRs and this is what makes it problematic….Putting together these quasi-judicial and enforcement functions in one agency appears to have no precedent in Philippine law.” (the emphases are mine)

You can read more of Atty. Peria’s explanation here.

Just a word about deleting “personal purpose” from the amended IP Code

DG Blancaflor took strong exception to my statements in my previous reports that the phrase “personal purpose” was deleted from two sections. One of them – Section 190.1 – expressly stated that returning Filipinos could bring home three copies of each copyrighted work in their personal baggage.

DG Blancaflor wrote on the IPO website that the deletion meant that OFWs “can in fact bring home more copies (emphasis his) for personal use that fall under the fair use exceptions.”

There’s one thing that DG Blancaflor forgot to say: He and his people always use “books” as an example. Whereas I pointed out that “personal purpose” includes books, movies, music  and software.

Under the present IP Code (RA 8293),  a returning Filipino can bring in as many non-pirated movie DVDs, music CDs and software he wants so long as these do not exceed three copies each and these are for “personal purpose.”

I would like DG Blancaflor to state categorically how many DVD movies and music CDs and copies of software returning Filipinos can actually bring home because he always qualifies his statement by saying – for as long as these “fall under the fair use exception.”

The IP Code (RA 8293) protects returning OFWs with the phrase “for personal purposes”

It has this particular provision –  Section 212.1. This allows, as part of “fair use”,  – “The use by a natural person exclusively for his own personal purposes.”

But the Blancaflor-backed amendments deleted that provision as well.

Which is why DG Blancaflor needs to say categorically what the status of bringing in movies, music and software really is.

New IPO power to conduct visits not only covers Copyright but also Trademarks, Patents, Industrial Designs, etc.

I now realize that the new visitation powers given to the IP Office not only covers copyright but ALL Intellectual Property Rights  – which RA 8293 defines as the following:

Section 4. Definitions. – 4.1. The term “intellectual property rights” consists of:
a) Copyright and Related Rights;
b) Trademarks and Service Marks;
c) Geographic Indications;
d) Industrial Designs;
e) Patents;
f) Layout-Designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information (TRIPS)

Let me explain why.

As DG Blancaflor explained to me, the Intellectual Property Code is divided into four Parts:

Part I – The Intellectual Property (IPO) Office from Sections 1 to 19

Part II – The Law on Patents (Sections 20-120)

Part III – The Law on Trademarks, Service Marks and Trade Names (Sections 121-170)

Part IV – The Law on Copyright (Sections 171-241)

The bulk of amendments were in Part IV (The Law on Copyright). But the new powers of the IPO were inserted in Part I (The IPO).This means, the new powers cover all the various forms of intellectual property rights (IPRs).

This presumably means the IPO teams can “visit” Internet cafes, clothing stores and their bodegas, all kinds of stores selling goods, establishments making Integrated Circuits, drug laboratories and any other establishment that are the subject of a complaint or report that they are “engaging in activities violating intellectual property rights (IPR).”

Were any of these affected sectors invited to give their reaction to the amended IP Code? No.

IP Code has always classified torrents downloading of copyrighted materials as illegall; now amendments will enable law enforcers to act on this

When I asked DG Blancaflor whether the amended IP Code would make downloading of copyrighted songs from torrents sites illegal, he replied that the rampant practice has long been considered illegal.

To emphasize this point, he wrote me saying:

Downloading pirated music has always been illegal, and especially detrimental to our local artists. In fact, all organizations of Philippine singers, performers, composers, artists, and producers, have been pushing for the amendments because they have been severely affected by music piracy. However, even before the E-Commerce Act provision against piracy and hacking, downloading pirated music has already been penalized by R.A. 8293, enacted as early as 1997, which punishes copyright infringement or the reproduction of a work without authorization by the copyright owner (Sec 177, IP Code).

He was referring to Section 177 which reserved the following economic rights for copyright owners: But reading the section, it isn’t at all clear that it specifies torrents downloading.

Check it out for yourself here:

CHAPTER V

COPYRIGHT OR ECONOMIC RIGHTS

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 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; and

177.7. Other communication to the public of the work. (Sec. 5, P. D. No. 49a)

But again, I must emphasize that Section 212.1 of the same IP Code had placed the following as an exception to the rights of the copyright owner – “The use (of the copyrighted work)  by a natural person exclusively for his own personal purposes.”

As I said earlier, this has been deleted from the amended IP Code.

Amended law intends to turn your ISPs into “cops”

Another new section now makes it possible to stop individuals from downloading from torrents that foreign companies have tagged as illegal download centers. Section 216 will now make Internet Service Providers (ISPs) liable if they are notified that a customer is downloading from such torrents sites and they do not do anything about it. Here is the section (emphases mine):

Sec. 216. 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 and has the right and ability to control the activities of the other person; or
(c) with knowledge of infringing activity, induces, causes or materially contributes to the infringing conduct of another

Prof. Disini, however, pointed out that the wording of the law makes it unfair to ISPs because no prior notice is necessary:

“There’s this copyrighted material. This law says you benefit (from the download) because  you sell bandwidth. The moment they (the IPO) notify them (ISPs) of that, they are committing copyright infringement. That’s unfair to the service provider.”

With these amendments, how far are we from a scenario where – while you are downloading something on the Internet in your house – the police suddenly break down your door to confiscate your PC for illegally downloading? Or your Internet Service Provider (ISP) suddenly suspends your account for the same reason?

I asked DG Blancaflor if the amended law “will make it illegal to download from torrents sites”.

Here is how he replied:

“That’s under the cybercrime law and e-commerce law.

Our existing procedure is that there must be a finding of infringement. There must be a case to determine the content is not owned by the user. With or without this law, the copyright holder can file a case in the Philippines. There were filings in cable piracy – cam-cording.”

I noticed only now that he said “our existing procedure”. He did not say how the amended IP Code could change the procedure.

But did he just mention the cybercrime law, which is now under an indefinite TRO by the Supreme Court? Is it possible that authorities were planning to use the suspended cybercrime law in order to monitor digital traffic of downloading activities  and possibly block websites that allow such downloads to take place?

The long arm of foreign multinational media companies

If you think the scenarios I just painted of the police knocking at your door to investigate copyright infringement or ISPs suspending accounts are pure fantasy or an exaggeration, well, this is already  happening in other parts of the world.

In the last 10 years, movie and recording companies in the US and elsewhere have been going after individuals downloading from torrents sites like Kazaa. They have sued thousands – among them a nine-year old girl whose Winnie-the-Pooh laptop they confiscated as evidence. Another is a grandmother whose Internet service turned out to have been wrongfully suspended by her ISP.

Many of those sued simply settled. But one woman – 45-year-old single mother Tanya Andersen –  decided to fight back the Recording Industry Association of America (RIAA) which had threatened to”ruin her financially” if she did not pay up to US$4,000 as settlement. The RIAA said it had tracked her down through an ISP address it claimed was hers.  But Andersen said she didn’t even know what filesharing was, and her legal defense not only exposed sleazy snooping practices used by the recording industry on Internet users, but also revealed that these practices were prone to error. She eventually forced the recording industry to back off.

You can read about Andersen’s fascinating tale in Businessweek by clicking here.

If you think there is little chance that a movie or record company based in the US could come after you in Manila, think again. The amended IP Code now makes that possible due to several new provisions.

A Bureau of Copyright was created under Section 9a. And one of its powers under Section 9a.2 is to “accept review and decide on applications for the accreditation of collective management organizations (CMOs)  or similar entities.”

DG Blancaflor told me that CMOs will help artists: “It collects royalties for artists, singers, performers.”

What he didn’t say was that another activity of CMOs abroad is to participate in lawsuits and arbitrations against copyright infringers. Section 9a.2 gives CMOs and “similar entities” the legal personality to do this.

Such entities are not just for performers or creators. Local licensees of foreign recording and movie companies can also form “entities” and be accredited by the IPO.

The amended Code also seems to automatically give local licensees the power to file infringement lawsuits even if they are not the copyright owner. According  to Prof. Disini, the new Section 180.4 states that:

180.4 Any exclusivity in the economic rights in a work may be exclusively licensed. Within the scope of the exclusive license, the licensee is entitled to all the rights and remedies which the licensor had with respect to the copyright.

Prof. Disini said he found this provision “weird” because “if I license you to publish my book, it doesn’t necessarily mean I allow you to engage in enforcement within your jurisdiction –  to sue someone for license infringement.”

For instance, he said, the official licensee of Microsoft products in Manila cannot pursue on its own copyright infringement lawsuits:

“Microsoft US has to authorize it and have it ‘consularized’ in the Philippine embassy.”

It’s as if this law  automatically gives the licensee the license to litigate even if he is not the copyright owner.”

He noted that treaties under the World Intellectual Property Organization (WIPO) do not require countries to have such an arrangement.

When I asked DG Blancaflor about this, he denied that Section 180.4 automatically gives  licensees the power to litigate for licensors or copyright owners. He said:

“Licensees are given the economic right. Does it also mean they can litigate? That would depend on the deed of transfer. Many contracts are normally silent on that. The most practical of course is that you have the right to protect the license.

But it’s the same thing. They (copyright owners) are always asking somebody here to pursue the case for them. It doesn’t matter one way or the other. They (the licensee) can always ask for the right to litigate.”

When I repeated what Prof. Disini said, DG Blancaflor replied,

“Whether  there is 180.4, he can still litigate if allowed by the rights holder.”

Copyright is a “private right”

Both Atty. Pernia and Prof. Disini also raised another important point. Under the amended law, the IPO can call on the police and the National Bureau of Investigation (NBI) to assist. Atty. Pernia pointed out that copyright is “a private right”. The police force –   already over-stretched in its functions – will be used to uphold these private rights. To what extent should tax money be devoted to this, especially since a large bulk, if not most copyright materials, patents and trademarks registered in the Philippines are those of foreign corporations?

In addition, Prof. Disini noted that since “the IPO does not have a registry of licensees” the police and the IPO would just have to take the word of complainants that they are the licensees officially authorized by foreign companies to distribute their branded products.

To verify, I asked DG Blancaflor:

“Does the IP have a registry of licensees?”

Blancaflor replied:

“Not yet. That’s why we want this law to be in place. Most modern countries have this. We want this to be in place.”

I also asked DG Blancaflor to give me an idea how many registered trademarks and copyright materials are foreign-owned and how many are local. He replied that he has been encouraging more Filipinos to register their creative output and the numbers are rising.

“Since I came on board, the registration of local trademarks has already surpassed foreign filings.”

He said that for 2012 as of December 15, resident filings numbered 9,862  while non-resident filings amounted to 8,106.

He said he had no  figures for the total number  of foreign and local filings to date.

DG Blancaflor told me:

“The bottom-line is – this (IP Code amendments) is really good for the country if people will only take time to analyze it.

We have to protect creation whether it’s foreign or Filipino.

People should realize that it’s not always a one-way street. If we have a very good copyright regime system, this country can take advantage of its artists.”

He said stricter copyright laws would lead to a flowering of a local creative industry:

“We are looking at animators, graphic artists, illustrators. (Right now) they are just contracting work to big comics companies in the US.”

The assumption here is that enacting such stringent laws will be good for the Philippines. The assumption here is that these harsh measures are the only way to combat copyright infringement.

But why is it that US companies are dealing with piracy differently in China?

In China, US movie companies have unilaterally cut DVD movie prices drastically

In 2006, Time Warner began selling its LATEST DVD movies for around 10 yuan (US$1.61) or close to the price of pirated movies in China. Twentieth Century Fox followed suit with a plan to sell DVDs at 20 to 25 yuan (US$3.21).

You can view the story by clicking here.

The following year 2007, Warner Home video also cut its price for DVDs from Paramount and Dreamworks Animation to 22 yuan (US$3.53) You can view the story by clicking here.

Why aren’t US movie companies doing the same thing here in the Philippines? Why do they continue to sell movies using the old VCD technology at the same price as they’re selling DVD movies in China?

Perhaps because no prominent Filipino personality has urged them to do otherwise.

And DG Blancaflor is the last person who will do so, because he said:

“We are merely the implementers of public policy, to protect and encourage creation of IP (intellectual Property).”

This is not entirely true, because it was the IPO which peddled the amendments to the IP Code. And it is the IPO which will implement them, too.

Sounds familiar?

Yes it does. Remember what happened with the Cybercrime Law? Those who would end up implementing it, like Justice Assistant Secretary Geronimo Sy, were also those who lobbied for its approval in Congress.

A digital iron ring around the Philippines

During my lengthy interview with DG Blancaflor, I noticed that in answer to some of my questions as to which sections of the IP Code made certain activities such as torrents downloading illegal, he would cite other laws  such as the Optical Media Act, the E-Commerce Law, and the suspended Cybercrime Law.

It was then I recalled what my hubby Alan – an expert on Internet and Politics – told me about what Philippine authorities are doing. They are building a digital “iron ring” around the country. We don’t realize it yet because it is made up of different laws that, when taken altogether, are intended to strictly regulate Internet behavior — initially to protect the rights of (foreign multinational) content owners. But it could be expanded to let government use the laws for its own purposes.

Now contrast the attitude of DG Blancaflor and our lawmakers to that of the President of Romania

When Microsoft founder Bill Gates visited Romania in 2007, Romanian president Traian Basescu said during their joint press conference:

“Piracy helped the young generation discover computers. It set off the development of the IT industry in Romania.”

“It helped Romanians improve their creative capacity in the IT industry, which has become famous around the world … Ten years ago, it was an investment in Romania’s friendship with Microsoft and with Bill Gates.”

You can read the Washington Post article here.

The same can be said of the Philippines.

My hubby Alan reminded me that the Philippines exports IT professionals to the United States. How do you think they started learning computers? With pirated software, of course. So in that sense, the American IT industry is benefiting from piracy.

Another thing. We now have a booming Business Process Outsourcing industry which benefits many American companies. Guess how  BPO employees in general learned how to use computers.

Last November, critics of stringent copyright laws in the US got an unexpected backer from a surprising quarter. A staffer of the Republican Study Committee in the US House of Representatives wrote a policy brief urging reforms in US copyright laws, but in the totally opposite direction.

Derek Khanna, 24, wrote that:

One – It’s a myth to say that the purpose of copyright is to compensate the creator of content. It’s not, he said.

Two – It’s a myth to say copyright is free market capitalism at work. On the contrary, he said, “copyright violates nearly every tenet of laissez faire capitalism.” In fact, he said, it guarantees “government-subsidized content monopoly.”

Three – It’s a myth to say the US copyright regime, which Blancaflor’s office is so frenziedly copying, “leads to the greatest innovation and productivity.” Excessive copyright protection “will greatly stifle innovation,” Khanna warned.

For writing so frankly, Khanna was fired last January. You can read his brief below.