Title
ABS-CBN Corporation vs. Gozon
Case
G.R. No. 195956
Decision Date
Mar 11, 2015
ABS-CBN challenged GMA-7's use of copyrighted news footage; Supreme Court ruled GMA-7's minimal use was fair use, lacked intent, and acted in good faith.

Case Summary (G.R. No. 195956)

Factual background relevant to the dispute

ABS-CBN performed live audio-visual coverage of the arrival and press conference of Angelo dela Cruz and provided its footage to Reuters under a special embargo agreement, which ABS-CBN contended restricted use by other Philippine subscribers. GMA-7, a Reuters and CNN subscriber, received a live feed from Reuters that included the contested footage. GMA-7’s control room allegedly did not see embargo or “No Access Philippines” advisory, and GMA-7 aired a brief portion (admitted by the parties to be five seconds in contention) of the live feed in its “Flash Report” program before cutting it off upon recognizing ABS-CBN’s reporter/logo.

Early prosecutor action and the Information

ABS-CBN filed a criminal complaint for copyright infringement. The City Prosecutor conducted preliminary investigation and resolved (December 3, 2004) that probable cause existed to charge two GMA-7 employees directly responsible for news control operations (Grace Dela PeAa-Reyes and John Oliver Manalastas) but declined to find sufficient evidence to charge higher corporate officers for active participation or conspiracy. An Information was filed on December 17, 2004 against the two employees.

DOJ review: Gonzalez Resolution and Agra Resolution

Respondents filed a petition for review to the DOJ. Secretary Raul M. Gonzalez (August 1, 2005) granted review, dismissed the case, and ordered withdrawal of the Information, concluding that good faith could be a defense and that the specific facts made prosecution unwarranted. Subsequent motions for reconsideration were filed. Acting Secretary Alberto C. Agra (June 29, 2010) reversed Gonzalez, found probable cause to charge the two news-control employees and also ordered inclusion of the corporate officers (Gozon, Duavit Jr., Flores, Soho) on the ground that corporate directors/officers responsible for operations should be charged when corporate broadcasts infringe. Agra treated good faith as a disputable presumption but concluded the matter required trial for resolution.

Trial court suspension and Rule 116 limits

The trial court temporarily suspended arraignment under Rule 116, Section 11(c) while the petition for review to the DOJ was pending, but suspension is statutorily limited to 60 days from filing. The Supreme Court noted that after the 60-day period the trial court had a duty to proceed with arraignment unless otherwise ordered; it criticized the trial court’s lengthy inaction until the Court of Appeals issued a TRO in 2010.

Court of Appeals decision and reasoning

The Court of Appeals (November 9, 2010) granted certiorari to annul the Agra Resolution, ruled that Agra acted with errors of jurisdiction in ordering information without proof of probable cause, recognized ABS-CBN’s copyright in the footage, but held that GMA-7’s five-second airing fell within fair use and was made in good faith absent notice of an embargo. The Court of Appeals reinstated Gonzalez’s withdrawal order.

Standard for judicial review of DOJ resolutions and for probable cause

The Supreme Court reaffirmed the limited role of courts in reviewing the Executive’s finding of probable cause: certiorari is available only where grave abuse of discretion amounting to lack or excess of jurisdiction is established. Probable cause is a practical, non-technical standard — sufficient facts to engender a well-founded belief that a crime was committed and that the respondent is probably guilty. Preliminary investigation does not equate to a trial; defenses may be raised but factual determinations relevant to probable cause need not resolve contested defenses at that stage.

Copyrightability of television news footage — idea/expression distinction

The Court held that news events themselves (facts) are not protected, but audiovisual expressions of those events (television footage) are copyrightable as audiovisual/cinematographic works under the IP Code (Section 172 definitions and protection). The idea/expression dichotomy requires distinguishing the unprotected news event from the protected creative expression (framing, audio, editing, camera work). The Court cited prior jurisprudence recognizing that television broadcasts include complex audiovisual elements that can be protected and emphasized that the parties admitted the footage aired by GMA-7 was an exact copy of ABS-CBN’s material.

Neighboring rights and the rebroadcasting right

Beyond copyright, broadcasting organizations enjoy neighboring (related) rights under Section 211 of the IP Code — notably the exclusive right to prevent rebroadcasting of their broadcasts. The IP Code’s Section 212 also enumerates limitations, including allowance for short excerpts for reporting current events and for fair use subject to Section 185. The Court referenced international instruments (Rome Convention) endorsing minimum protections for broadcasting organizations and recognized the specific protection against simultaneous rebroadcasting of another broadcaster’s broadcast.

Fair use analysis and application at the preliminary stage

Fair use under Section 185 involves a four-factor inquiry: purpose/character (including transformative use and whether commercial), nature of the copyrighted work, amount/substantiality used, and effect on the market. The Court explained the transformative test and other considerations (e.g., market value of broadcast seconds in commercial broadcasting). It emphasized that fair use is an affirmative defense that requires evaluation of multiple factors; at the preliminary-investigation stage a defendant may raise it, but the prosecuting authority need not resolve it conclusively before filing an information if probable cause otherwise exists. Given admitted copying and insufficient evidence to negate infringement at the investigation stage, a determination on fair use was better left for trial.

Good faith, knowledge, mens rea, and statutory strict liability

The Supreme Court held that under the current form of the Intellectual Property Code, criminal infringement offenses are malum prohibitum and impose strict liability; the statute does not make lack of knowledge or good faith a categorical defense to criminal liability for infringement. The IP Code prescribes criminal penalties and related liability without a statutory mens rea element for the substantive act of infringement. While good faith and lack of knowledge may be relevant defenses at trial or to negation of specific charges (e.g., aiding and abetting that requires knowledge under Section 217.3), they do not automatically negate probable cause for filing an information. The Court observed comparative foreign approaches (Canada, US) but emphasized that Philippine law, as enacted, reflects strict liability and that requiring intent would undermine statutory protection.

Corporate officer liability, piercing the corporate veil, and limits

Criminal liability of corporate officers depends on active participation, overt acts, or a showing that an officer caused or had the power and responsibility to prevent the infringing conduct. Mere corporate office or membership of the board does not alone establish individual criminal liability. The City Prosecutor had reasonably limited probable cause to the two news-control personnel who directly supervised the news control room. The DOJ Acting Secretary, however, committed grave abuse of discretion in ordering all corporate officers charged without sufficient proof of active participation or conspiracy.

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