In a landmark ruling issued on 25 February 2025, the Philippine Supreme Court in Filipino Society of Composers and Publishers v. Wolfpac Communications, Inc. G.R. No. 184661 (25 February 2025) addressed a novel intersection between copyright protection and consumer access to digital media. At issue was whether the act of allowing consumers to listen to 20-second audio samples of ringback tones before purchase constitutes a “public performance” or “communication to the public,” and whether such use infringes upon copyright or qualifies as fair use under Section 185 of the Intellectual Property Code (“IP Code”).

This decision is remarkable not only for clarifying the boundaries of these statutory rights in the digital context, but also for marking the first comprehensive application of the four-factor fair use test by the Supreme Court in Philippine jurisprudence.

Wolfpac Communications, Inc. (“Wolfpac”), a mobile content distributor, marketed downloadable ringback tones through telecommunications platforms such as Smart Communications. Users of the Smart website were permitted to listen to 20-second previews of songs, referred to as a “pre-listening function”, prior to downloading the ringtones.

The Filipino Society of Composers and Publishers (“FILSCAP”), an organization acting on behalf the copyright owners of the musical works involved, demanded that Wolfpac obtain licenses and remit royalties for this use. It contended that the pre-listening feature amounted to a “public performance” of protected works. Wolfpac disagreed, arguing that the previews were streamed for private evaluation, involved no public exhibition by the platform, and were incidental to its licensed distribution services.

The Regional Trial Court dismissed FILSCAP’s complaint, holding that the pre-listening function constituted “communication to the public,” but did not amount to a public performance. The RTC also found that the use fell within the ambit of fair use.

The Supreme Court affirmed this distinction, ruling that the “pre-listening function” constitutes communication to the public, but not as a public performance. The Supreme Court then found that Wolfpac’s agreements with composers only authorized the conversion of musical works into downloadable ringtones and their commercial distribution. These agreements did not explicitly include authorization to stream free 20-second samples. Because all unassigned rights remained reserved to the composers, Wolfpac’s use of the pre-listening function exceeded the scope of its license and infringed upon the copyright owner’s right of communication to the public.

Crucially, the Court determined that this unauthorized use was not actionable because it qualified as fair use.

First Full Application of the Four-Factor Test

In resolving the fair use issue, the Supreme Court undertook a full analysis of the four statutory factors enumerated under Section 185.1 of the IP Code:

“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.” [Emphasis supplied]

The Supreme Court applied these factors as follows:

1. Purpose and Character of the Use. While the use had a commercial dimension, the Supreme Court emphasized its transformative character, serving a different function from the original work. The samples were to help potential consumers make an informed decision. Otherwise stated, the samples served informational purposes, serving the public purpose of consumer protection. This factor weighed in favor of fair use.

2. Nature of the Copyrighted Work. The Court acknowledged that musical compositions are creative, which generally weighs against fair use. This factor favored the copyright owners.

3. Amount and Substantiality of the Portion Used. Although 20 seconds is a material portion of a song, the Supreme Court deemed it reasonable and necessary to the purpose of allowing song identification. The factor was neutral to fair use.

4. Effect on the Market. The Supreme Court found no substantial economic harm for copyright owners. The pre-listening function could not serve as a mark replacement for copyrighted works, as users still had to purchase the song to fully access the same. This factor also favored fair use.

Balancing these considerations, the Supreme Court ruled that the pre-listening function qualified as fair use, shielding Wolfpac from liability.

This ruling is significant for offering a structured framework for future courts to apply the four-factor test in adjudicating unauthorized uses of copyright. This is particularly important as creative content increasingly circulates through digital spaces. The Supreme Court’s approach balances acknowledging developments caused by innovative digital technologies while preserving the fundamental legislative policy of incentivizing creativity.

For practitioners, content creators, and digital distributors alike, this decision is a vital precedent that refines the scope of copyright and its limitations in the Philippine context.