CHAMPERTOUS CONTRACT LIKE LITIGATION FINANCING ARRANGEMENT IS VOID FOR BEING CONTRARY TO PUBLIC POLICY

Petitioner RODCO Consultancy and Maritime Services Corporation filed a Petition for Review on Certiorari assailing the Court of Appeals (CA)’s earlier Decision and Resolution, which dismissed the Complaint for Sum of Money and Damages filed against Respondents Floserfino G. Ross (Floserfino) and Antonia T. Ross (Antonia). Petitioner argued that the Contract between the parties is a Contract of Loan wherein Petitioner undertook to pay for the expenses and extend assistance to Respondents in recovering their money with the understanding that they will reimburse Petitioner when they are able to recover their money claims. Petitioner also argued that providing legal services is incidental in case the claim necessitates the filing of the action before the competent court or quasi-judicial body. On the other hand, the Respondents countered that their consent in agreeing to the Irrevocable Memorandum of Agreement was vitiated as they were only made aware of the compensation due to Petitioner after issuing two blank checks. They also insisted that Petitioner is not permitted to collect lawyer’s fees as its employees and officers are not members of the Philippines Bar. In ruling, the Court held that the contract entered into by the Petitioner and the Respondents is void. A careful study of the terms of the Irrevocable Memorandum of Agreement and its supporting documents reveals that the arrangement between the parties is similar to a litigation financing arrangement. Here, the Petitioner gave money to finance the labor case instituted by Floserfino against his former employer and assisted him by securing the services of Atty. Concepcion to handle his case. In exchange, Floserfino and Antonia undertook to reimburse the Petitioner the expenses it incurred in litigating his labor case. The Court held that the litigation financing arrangement between the parties is prohibited because it is similar to a “Champertous Contract,” which is void for being contrary to public policy. The terms of the Irrevocable Memorandum of Agreement are ambiguous as to the exact amount to be recovered from Floserfino, which is disadvantageous to him. The Petitioner was required to show cause for its alleged unauthorized practice of law. Consequently, the Petition was DENIED. [RODCO CONSULTANCY & MARITIME SERVICES CORPORATION HEREIN REPRESENTED BY FROILAN G. CLEMENTE, JR. VS. FLOSERFINO G. ROSS & ANTONIA T. ROSS, G.R. NO. 259832, NOVEMBER 6, 2023, UPLOADED MARCH 14, 2024]

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[THE ACT OF PLAYING RADIO BROADCASTS THROUGH LOUDSPEAKERS CONSTITUTES PUBLIC PERFORMANCE, REGARDLESS OF CONTROL OVER THE SONGS PLAYED ON THE RADIO] [USING COPYRIGHTED MUSIC VIA RADIO BROADCAST PLAYED THROUGH LOUDSPEAKERS, AS BACKGROUND MUSIC IN RESTAURANTS FOR THE ENTERTAINMENT OF CUSTOMERS & FOR THE ENHANCEMENT OF THEIR DINING EXPERIENCE, FALLS OUTSIDE THE AMBIT OF FAIR USE & THUS AMOUNTS TO COPYRIGHT INFRINGEMENT]

Petitioners Icebergs Food Concepts, Inc. (Icebergs) and Allan John T. Young filed a Petition for Review on Certiorari challenging the Court of Appeals (CA)'s Decision affirming the Regional Trial Court (RTC)'s ruling that they are liable for copyright infringement. Icebergs claimed that it was not engaged in “public performance” as it did not play a sound recording, but merely switched on a radio transmitter. It also insisted that pursuant to the Principle of Reciprocity, Respondent Filipino Society of Composers, Authors, and Publishers, Inc. (FILSCAP) cannot collect License Fees from Icebergs on behalf of United States-based copyright holders. On the other hand, FILSCAP countered that the Intellectual Property (IP) Code provision on what constitutes public performance is clear, as it includes the “making audible of recorded sounds in a setting outside the immediate family circle and the playing, either directly or by means of any device or process of any work that is not a recorded sound or audio-visual work.” In ruling, the Supreme Court affirmed the rulings of the lower courts. FILSCAP had the authority to license and collect License Fees for the public performance of musical compositions through the Deeds of Assignment executed by its members and reciprocal agreements with foreign societies. Also, Icebergs committed copyright infringement by playing copyrighted music without a License. The Court relied on the definition of public performance in the IP Code, which includes making recorded sounds audible in a place where persons outside the normal circle of a family and their closest social acquaintances are present. The Court also cited previous cases that established playing radio broadcasts through loudspeakers as public performance. On the invocation of “Fair Use,” the Court concluded that Icebergs' use of copyrighted music as background music in their restaurants did not constitute “Fair Use.” FILSCAP was entitled to compensation for the infringement of their copyright, and Icebergs was ordered to pay actual damages, moral and exemplary damages, attorney's fees, and monitoring expenses. Consequently, the Petition was DENIED. [ICEBERGS FOOD CONCEPTS, INC. & ALLAN JOHN T. YOUNG VS. FILIPINO SOCIETY OF COMPOSERS, AUTHORS & PUBLISHERS, INC., G.R. NO. 256091, APRIL 12, 2023, UPLOADED JANUARY 19, 2024]

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