Case Summary (G.R. No. 175769-70)
Procedural History
- IPO Bureau of Legal Affairs grants ABS-CBN a TRO and later orders PMSI to desist from carrying Channels 2 and 23.
- PMSI appeals before the IPO Director-General and simultaneously files certiorari in the Court of Appeals, which it later withdrew.
- IPO Director-General reverses BLA decision (December 20, 2004).
- ABS-CBN petitions CA for review, obtaining a TRO (July 18, 2005), and files contempt proceedings for alleged disobedience.
- CA consolidates petitions and, on July 12, 2006, upholds IPO Director-General, dismissing ABS-CBN’s petitions.
- Supreme Court review affirms CA.
Issues
• Whether PMSI’s carriage of ABS-CBN signals constitutes “rebroadcasting” or copyright/broadcasting-rights infringement under the IP Code and international conventions.
• Whether NTC’s must-carry rule validly compels PMSI to carry ABS-CBN’s signals.
• Whether the must-carry rule effects an uncompensated taking under Article III, Section 9 of the Constitution.
• Whether the CA erred in denying ABS-CBN’s contempt petition without comment.
IPO Bureau Decision and Reversal
The BLA found PMSI liable for infringing ABS-CBN’s exclusive rebroadcasting and copyright rights and ordered permanent cessation. The IPO Director-General reversed, reasoning that PMSI’s DTH service is analogous to cable retransmission, not origin broadcasting or rebroadcasting as defined by the IP Code or Rome Convention.
Court of Appeals Decision
The CA sustained the IPO Director-General:
• PMSI does not originate or edit content; it merely carries unaltered signals.
• Under Section 202.7 of the IP Code and Rome Convention definitions, PMSI’s service lacks key elements of broadcasting or rebroadcasting.
• Cable-style simultaneous, unaltered retransmission falls outside the Rome Convention’s rebroadcasting right.
• The must-carry rule is a valid exercise of NTC’s regulatory and police powers, promoting public interest.
Supreme Court’s Analysis on Broadcasting and Rebroadcasting
• “Broadcasting” under the IP Code covers wireless or satellite transmission where the broadcaster provides decrypting means. PMSI merely relays existing signals provided by ABS-CBN.
• “Rebroadcasting” (Rome Convention) requires simultaneous retransmission by another broadcasting organization; PMSI does not select, arrange, or invest in content production.
• Cable retransmission is expressly not protected as “rebroadcasting” under the Rome Convention; hence no infringement claim.
Application of the Must-Carry Rule
• NTC MC No. 4-08-88 mandates carriage of free-to-air signals by cable systems in Grade A/B areas; NTC letters confirm its applicability to DTH services.
• NTC MC No. 10-10-2003 did not repeal the must-carry rule; both MCs remain enforceable.
• The must-carry rule qualifies as a copyright limitation under IP Code Sec. 184.1(h) as it is “use made under direction or control of the Government . . . in the public interest.”
• It promotes broader public access to information, balanced programming, and competition in broadcasting, aligning with constitutional state policies.
Intellectual Property Rights and Limitations
• ABS-CBN’s exclusive rights (IP Code Sec. 211) do not extend to cable-style retransmission.
• PMSI did not furnish decrypting means indiscriminately; only subscribers with set-top boxes access the service.
• No substantial evidence shows PMSI derived profit from ABS-CBN signals or harmed regional ABS-CBN stations.
Franchise and Constitutional and State Policies
• Both ABS-CBN and PMSI franchises impose public-service obligations (balanced programming, airtime for government).
• Fran
Case Syllabus (G.R. No. 175769-70)
Facts
- Petitioner ABS-CBN Broadcasting Corporation is a Philippine‐licensed television and radio broadcaster operating Channel 2 on VHF and Channel 23 on UHF in Metro Manila and via satellite to provincial stations.
- Respondent Philippine Multi-Media System, Inc. (PMSI), operator of Dream Broadcasting System, offers digital direct-to-home (DTH) satellite television nationwide under NTC Provisional Authority (PA) and legislative franchise RA 8630.
- PMSI’s initial program lineup included ABS-CBN Channels 2 and 23 among other free-to-air stations and paid premium channels.
- On April 25, 2001, ABS-CBN demanded PMSI to cease retransmission of Channels 2 and 23. PMSI invoked NTC Memorandum Circular No. 4-08-88 (“must-carry rule”) requiring cable operators within a Grade “A” or “B” contour to carry authorized broadcast signals.
- Negotiations between ABS-CBN and PMSI ended April 4, 2002 when ABS-CBN alleged PMSI could not prevent illegal rebroadcasts and that regional operations were adversely affected.
- May 13, 2002: ABS-CBN filed Complaint IPV No. 10-2002-0004 with IPO for violation of property rights, seeking temporary restraining order (TRO) and preliminary injunction. IPO’s Bureau of Legal Affairs (BLA) granted TRO July 2, 2002; PMSI suspended retransmission July 12, 2002.
- PMSI filed CA certiorari SP No. 71597 and maintained that it was bound by the must-carry rule. NTC Commissioner Borje’s December 20, 2002 letter confirmed DTH services are covered by MC 4-08-88. A July 24, 2003 NTC directive further enjoined strict compliance with must-carry.
- October 10, 2003: NTC issued MC 10-10-2003 prohibiting retransmission of signals without provider authorization; NTC clarified on November 3, 2003 that MC 4-08-88 remains valid and subsisting.
- December 22, 2003: IPO BLA decision found PMSI infringed ABS-CBN’s broadcasting and copyright rights, ordering permanent cease and desist. PMSI appealed (IPO Appeal No. 10-2004-0002) and moved to withdraw CA SP No. 71597, which CA granted February 17, 2005.
- December 20, 2004: IPO Director-General reversed BLA decision, ruling PMSI did not infringe ABS-CBN’s rights.
- ABS-CBN sought CA review in SP Nos. 88092 (with TRO July 18, 2005) and 90762 (contempt), later consolidated.
- July 12, 2006: CA Decision dismissed ABS-CBN’s petitions, upheld IPO Director-General’s findings. December 11, 2006: CA denied reconsideration. ABS-CBN filed this Supreme Court petition for review on certiorari.
Procedural History
- IPO BLA granted TRO (July 2, 2002) and issued cease-and-desist (Dec 22, 2003).
- IPO Director-General reversed BLA (Dec 20, 2004).
- CA SP No. 71597: PMSI’s certiorari petition withdrawn (Feb 17, 2005).
- CA SP Nos. 88092 (petition for review) and 90762 (contempt) consolidated; CA issued TRO (July 18, 2005), dismissed both petitions (Ju