Section 33(b) of the Electronic Commerce Act

Section 4 of the Electronic Commerce Act or Republic Act No. 8792 provides that the Act "shall apply to any kind of electronic document used in the context of commercial and non-commercial activities." Non-commercial activities is defined as "those not falling under commercial activities." (Sec. 6, Implementing Rules and Regulations) It is under this expanded scope that Sec. 33 (b) becomes a very important provision in Act.

Section 33 of the Act provides that the following shall be penalized by fine and/or imprisonment as follows:

"(b) Piracy or the unauthorized copying, reproduction, dissemination, distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting of protected material, electronic signature or copyrighted works including legally protected recordings and phonograms or information material on protected works, through the use of telecommunication networks, such as, but not limited to, the internet, in a manner that infringes intellectual property rights shall be punished by a minimum fine of one hundred thousand pesos (P100,000) and a maximum commensurate to the damage incurred, and a mandatory imprisonment of six (6) months to three (3) years;"

This provision may be divided as follows:

(1) the acts punishable, namely, "unauthorized copying, reproduction, dissemination, distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting;"
(2) the object of the acts enumerated which should be "protected material, electronic signature or copyrighted works;"
(3) the means of commission which should be "through the use of telecommunications networks;"
(4) the manner of commission which should be "in a manner that infringes intellectual property rights," and;
(5) the penalty provided.

In Relation the IP Code

This provision has been the subject of discussion in various fora on electronic commerce. Atty. Christopher L. Lim, the Legal Counsel of the Business Software Alliance (BSA), claimed that the Act, with the above-stated provision, punishes Internet piracy by a minimum fine of P100,000 and a maximum commensurate to the damage incurred, as well as, mandatory imprisonment of six (6) months to three (3) years "without prejudice to the rights, liabilities and remedies under the Intellectual Property Code."

When asked how the said provision relates with the provisions of the IP Code, particularly in relation to a single act, Lim took the position that Section 33(b) is in addition to the provisions of the IP Code. Following this interpretation, a person infringing on the intellectual property rights of another through the use of telecommunication networks may be charged and penalized under both the IPC and Sec. 33(b).

Atty. Vicente Amador of Sycip Salazar and Gatmaitan Law Offices agrees that, from the language of the provision, Lim and the BSA may have some legal basis for their interpretation, although he himself questioned the wisdom of the provision. There are two reasons behind this ambiguous interpretation. Firstly, the provision does not expressly provide how it relates to the IP Code, and secondly, Sec. 33(b) seems to define new acts of infringement which are conceptually different from the acts of infringement which violate and author's exclusive rights under Sec. 177 of the IP Code.

Legislative Intent

Atty. Rodolfo Noel Quimbo, the Chief-of-Staff of Senator Flavier, explained that the provision was introduced at the House of Representatives as a committee amendment, and that no record, as far as he knows, exists that would reveal the legislative intent of the provision. However, Quimbo said that, if we use the discussions of the bicameral technical working group as a guide, the provision was accepted because (1) there was no conflicting provision in the Senate version, and (2) there was an understanding that the enumeration in the provision is to be interpreted in relation to the phrase "in a manner that infringes intellectual property rights." In fact, Quimbo believes that the "saving grace" of the provision may actually be the above-stated phrase.

According to Quimbo, the acts enumerated in Section 33(b) should not be punishable unless it is done "in a manner that infringes intellectual property rights" and that this phrase should be understood as referring to the provisions of the IP Code. Thus, the exemptions provided for in the IP Code also apply to the E-Commerce Act. Moreover, no on can be penalized under Section 33(b) unless his act is also punishable under the IP Code. The effect of such an interpretation would be that the constitutional rule against double jeopardy shall apply.

What is interesting, however, is that Lim of the BSA justified his interpretation of Section 33(b) with a provision of the Implementing Rules and Regulations (IRR), which seems to defeat the above interpretation. It states that "The foregoing shall be without prejudice to the rights, liabilities and remedies under the Act No. 8293 or Intellectual Property Code of the Philippines and other applicable laws." The BSA seems to be saying that, based on the IRR, the prosecution and punishment of an act under Section 33(b) does not prejudice the right, if any, to prosecute and punish the same under the IP Code. If this interpretation is correct, then Quimbo's saving grace may not be a saving grace after all.

Double Jeopardy

Some people have likened Section 33(b) and the Intellectual Property Code to Batas Pambansa No. 22 (The Bouncing Checks Law), and the Revised Penal Code's provision on Estafa. I believe that this comparison to the case of BP 22 is misplaced.

In Ada v. Virola (172 SCRA 336), the Supreme Court applied the rule that to raise the defense of double jeopardy, the following requisites must be met: (1) a first jeopardy must have attached prior to the second, (2) the first jeopardy must have been validly terminated, and (3) the second jeopardy must be for the same offense, or the second includes or is necessarily included in the offense charged in the first information, or is an attempt to commit the same or a frustration thereof.

In that case, the Supreme Court clarified the distinctions between B.P. 22 and Art. 315 para. 2 (d) of the Revised Penal Code. In essence, they said that the two essential elements of the crime of Estafa by postdating or issuing of bad check/s, are as follows: (1) deceit prior to or simultaneous to the fraud, and (2) damage. These are not necessary elements in a violation of the B.P. 22. Instead, what is essential is the knowledge on the part of the maker or drawer of the insufficiency of his funds.

The Supreme Court also noted that the offense under Art. 315 para. 2(d) of the Revised Penal Code is a malum in se where criminal intent is necessary, while a violation of B.P. 22 is a malum prohibitum where criminal intent need not be proven.

As a result, the Supreme Court declared that the evidence required to prove Estafa by the postdating or the issuance of bad check/s is not the same evidence required to prove a violation of the B.P. 22. Therefore, double jeopardy did not attach. Is this comparable to Section 33(b), in relation to the provisions of the IP Code? Maybe not.

As pointed out earlier, the elements of a violation of Section 33(b) are: (1) the acts enumerated, (2) the object of the act, which should be protected material, electronic signature or copyrighted works, (3) that the act was committed with the use of a telecommunications network like the Internet, and (4) that the act was made "in a manner that infringes intellectual property rights." This fourth element effectively satisfies the third requisite for the defense of double jeopardy at it makes, following the interpretation suggested by Quimbo, a violation of the IP Code necessarily included in a violation of Section 33(b).

At this point, it should be pointed that B.P. 22 specifically provides in Section 5 that "Prosecution under this Act shall be without prejudice to any liability for violation of any provision in x x x. Interestingly, there is a proviion in the IRR which provides that "The foregoing shall be without prejudice to the rights, liabilities and remedies under the Republic Act No. 8293 or the Intellectual Property Code of the Philippines and other applicable laws."

According to Prof. Jesus Disini, Jr., one of the main drafters of the IRR, this provision was inserted at the suggestion of the Intellectual Property Office to ensure that a person violating Section 33(b) can be prosecuted under both the IP Code and the Electronic Commerce Act. This, I believe, is unwarranted executive legislation. At the very least, the law does not categorically state that Section 33(b) is without prejudice to the provisions of the IP Code, and for the Implementing Rules and Regulations to state so is going beyond the language of the law.

Constitutionality

The next issue is whether the fact that Section 33(b) exposes an offender to the possibility of double jeopardy is a valid ground to declare the provision unconstitutional. A similar issue was resolved by the Supreme Court en banc in the case of Baylosis v. Chavez (202 SCRA 405). The case involved the third paragraph of Sec. 1 of P.D. No. 1866 which punishes with the penalty of reclusion perpetua any person who unlawfully manufactures, deals in, acquires, disposes of, or possesses any firearm in furtherance of, or incident to, or in connection with the crimes of rebellion, insurrection or subversion. One of the defenses set up by the accused is that the law is unconstitutional because it exposes an offender to a second jeopardy, specifically, for rebellion under Art. 135.

The Supreme Court dismissed the defense by simply adverting to the resolution of that self-same contention in a previous case, Misolas v. Panga. They declared that "Moreover, even if such a subsequent or second jeopardy does arise, P.D. No. 1866 will not be rendered unconstitutional. That an accused will be exposed to double jeopardy if he is prosecuted under another law is not a ground to nullify that law. Double jeopardy is merely a defense that an accused may raise to defeat a subsequent prosecution or conviction for the same offense."

I believe, though, that the dissent in Baylosis v. Chavez, raises two important points. First was the dissent of Justice Sarmiento, where, restating his opinion in Misola v. Panga, said that "While it is true that in double jeopardy cases, first jeopardy must have first attached and that the accused is under threat of a second one, which does not obtain here, the fact that the Decree in question allows the possibility of such succeeding jeopardy makes it, the Decree, repulsive to the fundamentals of due process: (I)t is therefore no valid proposition to say that all talk of double jeopardy is too early pending conviction for the first offense, because that result would be inevitable (in case of conviction)."

Second, Justice Cruz, in his dissent, said that "Under the laws as they stood when the petitioners were formally indicted, the prosecuting officer was given the choice of the offense he could charge, depending on his discretion, which could in turn depend on his attitude toward the suspect. This circumstance gave a dangerous power to the government to discriminate in the prosecution of persons charged with practically the same offense, treating some of them with severity and the others with benign leniency: (I)t had been held that although a law may be fair and impartial on its face, it must nevertheless be annulled if it gives the administrative officer the discretion to enforce it with an evil eye and an uneven hand."

Copyright Bundle

Section 177 of the IP Code recognizes the following exclusive rights of a copyright owner: (1) reproduction, (2) adaptation, (3) first public distribution, (4) rental, (5) public display, (6) public performance, and (7) communication to the public. Only the acts of persons usurping these rights may be considered as infringement of intellectual property rights" and thus punishable under the IP Code, subject, of course, to the exemptions provided.

Amador points out that, Sec. 33(b) adds to the rights, penalizing acts such as importation, use and making of copyrighted works available to the public. He explains that the right to importation is related to the right of first public distribution provided under Section 177.3 of the IP Code. Section 33(b) seems to abandon the rule of "international exhaustion" in relation to the right of first public distribution. In effect, under Sec. 33, when one distributes a copyrighted work for the first time in one jurisdiction, he retains the right to distribute the work "for the first time" in other jurisdictions, such that importation of the copyrighted work by another person in that jurisdiction would be violative of his rights. This, says Amador, is not the rule in Section 177.3 of the IP Code.

In addition, Section 33(b) penalizes the unauthorized use of copyrighted work. Amador observes that, while inventors have the exclusive right to use under Section 71.1 of the IP Code, no such right exists in favor of copyright owners. This provision, he says, seems to suggest that even after first distribution, the copyright owners still retain control over his works and that their rights are not exhausted by the first distribution.

Finally, Section 33(b) also penalizes the unauthorized "making available to the public a copyrighted work. Amador interprets-making the work available "to be a new right created under the WIPO Copyright Treaties that has been ratified by some countries, but not by the Philippines. Essentially, "making the work available means the right to store a copyrighted work in a computer server and to transmit it over a network, making it available to the users of that network.

Atty. Susan Villanueva, a senior associate and IP lawyer in Carpio Villaraza Law Offices, says that the seeming recognition of additional rights in favor of copryright owners disturbs the balance provided for in the IP Code between the copyright owners and the public, which may not be beneficial for the Philippines. Nevertheless, the unauthorized importation, use and making copyrighted works available to the public as enumerated in the prohibited acts in Section 33(b) is still qualified by and subject to the phrase in a manner that infringes intellectual property rights", whatever that means.


Conclusion

Section 33(b) of R.A. No. 8792 penalizes the unauthorized copying, reproduction, dissemination, distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting of protected materials, electronic signatures or copyrighted works through the use of a telecomunication network, if and when, the above-listed acts are done in a manner that infringes intellectual property rights.]

Absent any other Philippine law providing for additional rights of copyright owners, the last phrase should be interpreted as referring to Part IV of the IP Code. To interpret it otherwise would mean that the said phrase may result to the provision being variously interpreted thus making it ambiguous standard offensive to due process.

When Section 33(b), therefore, speaks of "intellectual property rights", it must be understood as referring, and is limited to, the copyright or economic rights enumerated in Section 177, Chapter V of Part IV of the IP Code subject to the limitations contained in Chapter VIII of the same part of the IP Code. Moreover, when the Act speaks of infringing intellectual property rights, it should be taken to mean infringing any right secured by the provisions of Part IV of the IP Code as is made punishable in Section 217 of the said Code. A violation of the IP Code, therefore, is necessarily included in a violation of Section 33(b).

Because of this, I believe the defense of double jeopardy is available to a person convicted or acquitted for a violation of Section 33(b) against a subsequent violation of the IP Code, or vice versa. As applied by the Supreme Court in Ada v. Virola, the requisites in raising the defense of double jeopardy are as follows: (1) a first jeopardy must have attached prior to the second, (2) the first jeopardy must have been validly terminated, and (3) the second jeopardy must be for the same offense, or the second includes or is necessarily included in the offense charged in the first information, or is an attempt to commit the same or a frustration thereof.

The rule, however, is that the possibility of double jeopardy is not a ground to nullify a statute (Baylosis v. Chavez). This is the rule despite the dissent in Baylosis which argued that the fact that the statute gives the prosecution the discretion to choose which offense to charge an offender is violative of due process and should be a ground to nullify the said statute.

Finally, the provision in Section 49 of the IRR of R.A. No. 8792, which states that "The foregoing shall be without prejudice to the rights, liabilities and remedies under Republic Act No. 8293 or Intellectual Property Code of the Philippines and other applicable laws" may be going beyond the letter of the law and should be invalidated, it being an executive legislation.

(Copyright 2003. Gilbert E. Lumantao. All rights reserved. No part of this article may be reproduced in any manner whatsoever without written permission except in the case of brief quotations embodied in critical articles and reviews.)