LEGAL IMPLICATIONS OF THE REMOVAL OF SECTIONS 190.1 AND 190.2 IN THE AMENDED LAW, REPUBLIC ACT NO. 10372, WITH REGARD TO THE IMPORTATION OF COPYRIGHTED MATERIALS

On February 28, 2013, Republic Act No. 10372 “An Act Amending Certain Provisions of Republic Act No. 8293, otherwise known as the ‘Intellectual Property Code of the Philippines’, And For Other Purposes” was signed into law. The enactment of this law has caused lots of controversies particularly the removal of Sections 190.1 and 190.2. The said sections pertain to the Importation for Personal Purposes. Some critics believe that the deletion of these two particular sections infringes the right to import copyrighted materials. Since it became a public concern, the government, on March 11, 2013, released on its official website http://www.gov.ph an info graphic to answer the question pertaining to the importation of copyrighted materials, among others. In the said website the question and the answer are posted as follow:

Am I still allowed to import books, DVDs, and CDs from abroad?

Yes. In fact, the amendments to the Intellectual Property Code have removed the original limitation of three copies when bringing legitimately acquired copies of copyrighted material into the country. Only the importation of pirated or infringed material is illegal. As long as they were legally purchased, you can bring as many copies you want, subject to Customs regulations.

Despite this explanation, many are still thinking that the removal of Sections 190.1 and 190.2 from the Intellectual Property Code creates not only a room for ambiguity as to the existence of the right to import copyrighted materials but also opens a door for extortion at the airport.

  

Under Republic Act No. 8293, the old rule provides:

Section 190. Importation for Personal Purposes. –

190.1. Notwithstanding the provision of Subsection 177.6, but subject to the limitation under the Subsection 185.2, the importation of a copy of a work by an individual for his personal purposes shall be permitted without the authorization of the author of, or other owner of copyright in, the work under the following circumstances:

(a) When copies of the work are not available in the Philippines and:

(i) Not more than one (1) copy at one time is imported for strictly individual use only; or

(ii) The importation is by authority of and for the use of the Philippine Government; or

(iii) The importation, consisting of not more than three (3) such copies or likenesses in any one invoice, is not for sale but for the use only of any religious, charitable, or educational society or institution duly incorporated or registered, or is for the encouragement of the fine arts, or for any state school, college, university, or free public library in the Philippines.

(b) When such copies form parts of libraries and personal baggage belonging to persons or families arriving from foreign countries and are not intended for sale: Provided, That such copies do not exceed three (3).

 

190.2. Copies imported as allowed by this Section may not lawfully be used in any way to violate the rights of owner the copyright or annul or limit the protection secured by this Act, and such unlawful use shall be deemed an infringement and shall be punishable as such without prejudice to the proprietor’s right of action.

 

190.3. Subject to the approval of the Secretary of Finance, the Commissioner of Customs is hereby empowered to make rules and regulations for preventing the importation of articles the importation of which is prohibited under this Section and under treaties and conventions to which the Philippines may be a party and for seizing and condemning and disposing of the same in case they are discovered after they have been imported.

 

Under the new law, Republic Act No. 10372 completely deleted Sections 190.1 and 190.2 but retained Section 190.3 with expanded coverage to include exportation as well. Section 190.3 remains the sole provision under Section 190 and it provides:

Section 190. Importation and Exportation of Infringing Materials. – Subject to the approval of the Secretary of Finance, the Commissioner of Customs is hereby empowered to make rules and regulations for preventing the importation or exportation of infringing articles prohibited under Part IV of this Act and under relevant treaties and conventions to which the Philippines may be a party and for seizing and condemning and disposing of the same in case they are discovered after they have been imported or before they are exported.

 

Comparing the old text of Republic Act No. 8293 from the new law under Republic Act No. 10372, I wonder if it is really wise to removed Sections 190.1 and 190.2 completely from the Intellectual Property Code to give more freedom and leeway (as claimed by the government) to import more copyrighted materials as opposed to the limited right to import bestowed by the old rule. The stipulation that the importation of copyrighted materials is for personal purpose/s was also nowhere to be found or missing in the new Section 190.

 

The explicit right provided by Sections 190.1 and 190.2 has been replaced by ambiguous enactment. It is truly confusing to rely on a law or a certain provision of the law which does not exist. The government claims that the removal of Sections 190.1 and 90.2 does not mean the removal of the right to import copyrighted materials or diminution of such right rather it should be interpreted to mean more freedom and the removal of the limitation set forth by the old provisions. The government is right in one thing – the removal of Sections 190.1 and 190.2 becomes subject to interpretation. Though this interpretation can be one way or the other since the law granting the right to import copyrighted materials becomes silent. The express and clear intent of the old provisions becomes hazy and equivocal.

 

The new Section 190 is entitled Importation and Exportation of Infringing Materials. The infringing materials referred to in this provision pertains to copyrighted materials only as enunciated in the said section, “infringing articles prohibited under Part IV of this Act.” It bothers me though that the Bureau of Customs through its Commissioner is tasked to make implementing rules and regulations to prevent the importation or exportation of infringing articles. Given this kind of authority, the Bureau of Customs is empowered to determine whether a particular copyrighted material is infringing or not. I wonder if the Bureau of Customs has the ability or better yet the manpower to determine if each and every material that pass through the airport infringes the Copyright Law.

  

Some believes that as far as the new law is concern all importation of copyrighted materials is illegal per se unless you can prove that it is not infringing the Copyright Law since there is no clear or explicit law to back up one’s claim that he/she has the right to import copyrighted material such as books, magazines, CDs, DVDs etc… from other countries.

 

The concept of importation for “personal purposes” has also been removed from Section 190. The government is of the opinion that the concept of “personal purposes” is already incorporated and part of the fair use provision under Section 185. But nowhere in the said section does it ever mention about importation for personal purposes. Under the old law, Republic Act No. 8293, the only provision that contains use of copyrighted materials for personal purpose is Section 212.1. But the new law, Republic Act No. 10372, deleted Section 212.1. Under the old law, one can import or bring home copyrighted material without being questioned at the airport for as long as it complies with the quantity requirement provided by law and also for as long as it is for personal purpose. However, the new law does not provide this kind of right since the concept of personal purpose has been deleted. In effect, one cannot bring home copyrighted material even for personal purpose unless it will be proven first that such material is not infringing the Copyright Law.

 

In the case of Tung Chin Hui v. Rodriguez, the Court ruled that in accordance with the well-settled rule of statutory construction that provisions of an old law that were not reproduce in the revision thereof covering the same subject are deemed repealed and discarded. The revised statute or code is in effect a legislative declaration that whatever is embraced in the new statute shall prevail and whatever is excluded therefrom shall be discarded. Simply put it, “whatever the law does not include, it excludes.” The contention of the government that by deleting Sections 190.1 and 190.2, they are in fact maximizing the use of the so-called “international exhaustion.” Thus, allowing importers of copyrighted materials to bring home in the country more than three (3) copies of such protected materials.

 

The term “international exhaustion” means that the first sale of a copy of a copyrighted work anywhere in the world results in the exhaustion of rights in that copy everywhere in the world. The exhaustion of intellectual property rights constitutes one of the limits of intellectual property rights. Rights being exhausted everywhere in the world means that rights are exhausted everywhere including in the domestic territory, and as such, it is pertinent to note that references to the loss of rights in the domestic territory do not de facto preclude the loss of rights in other territories.  Simply means that if a copyrighted material has been sold by the copyright owner or by others with the consent of the owner, the intellectual property right as to the protected material is said to be exhausted. It can no longer be exercised by the copyright owner. This limitation is also known as the “exhaustion doctrine” or “first sale doctrine”.

 

In an exclusive interview conducted by Ms. Raissa Robles, UP Law Professor Disini stated that by deleting Sections 190.1 and 190.2 it is in fact defeating the very purpose of removing said sections from the Intellectual Property Code. The removal of said sections, according to Professor Disini, would allow foreign copyright holders to prevent or stop cheaper imports of their products. Since the Bureau of Customs is empowered to create implementing rules and regulations with regard to importation of infringing materials in particular, they, in effect, have the power and authority to determine whether or not a material is infringing the Copyright Law.

 

With this kind of power, any foreign book publisher can just send a letter to the Bureau of Customs and claims that they (foreign book publisher) do not allow import of the protected material except through their exclusive distributor. If any citizen of the Philippines or any foreign traveller entering the Philippine territory brought in with them a copy of the protected material legally acquired at a cheaper price but not within the distribution channel provided by the foreign book publisher, said act is already regarded as a violation of the license of the foreign book publisher. From the standpoint of the Bureau of Customs, the said copyrighted material infringes upon the Copyright Law since it violates the license of the foreign book publisher. Regardless whether the protected material is legal or not, it is still considered an infringing material.

 

Whereas, in the old law, Republic Act No. 8293, by virtue of the explicit and unequivocal right provided by Sections 190.1 and 190.2 and the use of the concept of “personal purpose”, any individual can bring home with them a copy of a legally acquired protected material without being questioned at the airport. It was also noted by Professor Disini in the said interview that the Philippines already allows parallel importation even without removing Sections 190.1 and 190.2. This is the reason why importation of used books for local resale is allowed in our country. The amended law, however, will allow foreign copyright owners to prevent or stop the importation of books labelled in a “used books” simply by sending a letter to the Bureau of Customs. This cannot be prevented unless “the Secretary of Finance will ensure that parallel importation will be preserved.”

 

Before the enactment of Republic Act No. 10372, some critics were already saying that by deleting Sections 190.1 and 190.2, it would thereby create confusion and worst it will open the door for exploitation of some scrupulous Customs officers. On December 03, 2014, the Bureau of Customs issued Customs Memorandum Circular No. 142-2014. According to this Circular, the Office of the Commissioner has received complaints about importers being charged duties and taxes on imported books, in violation of the Agreement on the Importation of Educational, Scientific, and Cultural Materials signed by the President in 1952, the National Internal Revenue Code, Section 109 (R), and DOF Department Order 57-2011. Complaints flooded the Office of the Bureau of Customs alleging that the deletion of Sections 190.1 and 190.2 and the removal of the concept of “personal purpose” gave rise to this kind of scenario. Some Customs Officers imposed duties and taxes to materials that are not supposed to be taxed by reason of a clear provisions mandated by law granting such exemptions.

 

Under Section 109, paragraph C it provides: “Importation of personal and household effects belonging to the residents of the Philippines returning from abroad and non-resident citizens coming to resettle in the Philippines: Provided, That such goods are exempt from customs duties under the Tariff and Customs Code of the Philippines.” On the other hand, Section 109, paragraph R provides: “Sale, importation, printing or publication of books and any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements.” The amended law allegedly has created confusion and gave rise to all the complaints received by the Bureau of Customs with regard to wrongful imposition of duties and taxes. Department of Finance Department Order No. 57-2011 defines personal effects or personal use as “those embracing all articles of personalty not considered as merchandise, including books.” The provision with regard to importation for personal purpose or the personal purpose provision no longer exists under the amended law, Republic Act No. 10372. In effect, any person importing copyrighted material like books for example can no longer claim exemption for payment of duties and taxes by virtue of the “personal purpose” concept because under the eyes of the law there is no more personal use or personal purpose right granted by the old law, Republic Act No. 8293. There is no more distinction between personal purpose and those involving other purposes such as but not limited to scientific, educational, cultural, research and alike. But the contention of the government that said personal purpose concept is still present in the amended law under the fair use provision. Nowhere in Section 185 does it ever mention about the concept of importation for personal purpose. Under a well-settled legal maxim, “Ubi lex non distinguit nec nos distinguere debemus,” it provides that “When the law does not distinguish, we must not distinguish.”

 

In conclusion, the author of this blog believes that the contention of the government that by deleting Sections 190.1 and 190.2 and the concept “personal purpose”, they are actually removing the limit of three (3) copies and thereby maximizing the use of “international exhaustion” is misplaced and out of bound. I would like to end this blog by posting a question, “how can the government sustains and maximizes such privilege when no law provides the basic right – Importation for Personal Purpose?”

 

 

 

 

 

REFERENCES

  1. AGPALO, R.E. (2009). STATUTORY CONSTRUCTION. MANILA: REX BOOK STORE.
  2. (2009). THE NATIONAL INTERNAL REVENUE CODE OF THE PHILIPPINES. MANILA: REX BOOK STORE.
  3. LEE, G.G., JR. (2000). HANDBOOK OF LEGAL MAXIMS. QUEZON CITY: CENTRAL PROFESSIONAL BOOKS, INC.
  4. SALAO, E.C. (2012). ESSENTIALS OF INTELLECTUAL PROPERTY LAW. MANILA: REX BOOK STORE.
  5. TUNG CHIN HUI vs. RODRIGUEZ, 340 SCRA 765 (2000).
  6. http://en.wikipedia.org/wiki/WIPO_Copyright_Treaty
  7. http://kapeo.blogspot.com/2013/05/was-malacanang-correct-in-its.html
  8. https://ralphpobre.wordpress.com/2013/03/26/amendments-to-the-intellectual-property-law/
  9. http://www.fnslaw.com.ph/PDF%20Files/2013/BBL-COPYRIGHT%20IP%20AMENDMENTS.pdf
  10. http://attyatwork.com/importation-for-personal-use-under-the-amended-intellectual-property-code/
  11. http://raissarobles.com/2013/02/14/the-legislative-history-of-amendments-to-the-intellectual-property-code-ra-8293/
  12. http://raissarobles.com/2013/02/16/amended-ip-code-disadvantageous-to-students-teachers-researchers-says-copyright-expert-lawyer-ping-peria/comment-page-1/#comment-99699
  13. http://customs.gov.ph/wp-content/uploads/2014/12/CMC-No.-142-2014-Imports-of-Books.pdf
  14. http://www.gov.ph/downloads/2011/12dec/20111212-DOF-DO-57-2011-BSA.pdf
  15. http://www.gov.ph/downloads/2011/12dec/20111212-DOF-DO-57-2011-BSA.pdf
  16. http://www.wipo.int/edocs/mdocs/sme/en/atrip_gva_99/atrip_gva_99_6.pdf
  17. http://www.wipo.int/sme/en/ip_business/export/international_exhaustion.htm
  18. http://copyright.lawmatters.in/2011/02/what-is-international-exhaustion.html
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