INTELLECTUAL PROPERTY CODE

Prepared by: Micle Antoinnette F. Bercasio

INTRODUCTION

In as early as 1947, the Philippine government sought to promote the protection of the
intellectual property creations. It established the first patent system (RA 165) and protection of
trademark (RA 166) PD No 49 which was the decree on Intellectual Property. 50 years later, the
10th Congress authored the bill which when signed by President Fidel V. Ramos became known
as Republic Act No. 8293 or the Intellectual Property Code (IPC) of the Philippines was born. It
repealed the provisions of the earlier law which were inconsistent to its provisions and Articles
188 and 189 of the Revised Penal Code. This law was likewise enacted to give effect to the
Agreement of Trade-Related Aspects of the Intellectual Property Rights (TRIPS) which was
ratified by the Senate on December 14, 1994.

International Convention and Reverse Reciprocity

This law granted any person who is a national or who is domiciled or has a real and
effective industrial establishment in a country which is a party to any convention, treaty or
agreement relating to intellectual property rights or the repression of unfair competition, to which
the Philippines is also a party, or extends reciprocal rights to nationals of the Philippines by law,
shall be entitled to benefits to the extent necessary to give effect to any provision of such
convention, treaty or reciprocal law, in addition to the rights to which any owner of an
intellectual property right is otherwise entitled by the IPC.

In the same manner that the rights and privileges are applied, this law has a provision
called Reverse Reciprocity of Foreign Laws. This imposed any condition, restriction, limitation,
diminution, requirement, penalty or any similar burden imposed by the law of a foreign country
on a Philippine national seeking protection of intellectual property rights in that country, shall
reciprocally be enforceable upon nationals of said country, within Philippine jurisdiction.

Intellectual Property Rights, defined

The term in "intellectual property rights" consists of: a) Copyright and Related Rights; b)
Trademarks and Service Marks; c) Geographic Indications; d) Industrial Designs; e) Patents; f)
Layout-Designs (Topographies) of Integrated Circuits; and g) Protection of Undisclosed
Information. Under the IPC there are 3 classes of intellectual properties – copyright, trademark,
and patent.

The case of Pearl & Dean (Phil.), Incorporated vs. Shoemart, Incorporated, And North
Edsa Marketing, Incorporated (G.R. No. 148222; August 15, 2003) defined and illustrated the
differences between the three. Trademark, copyright and patents are different intellectual
property rights that cannot be interchanged with one another. A trademark is any visible sign
capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and
shall include a stamped or marked container of goods. In relation thereto, a trade name means the
name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a
copyright is confined to literary and artistic works which are original intellectual creations in the
literary and artistic domain protected from the moment of their creation. Patentable inventions,
on the other hand, refer to any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially applicable.

Intellectual Property Office

The Intellectual Property Office (IPO) was created by the IPC which replaced the Bureau
of Patents, Trademarks, and Technology Transfer.

The functions of the IPO are as follows: a) Examine applications for grant of letters
patent for inventions and register utility models and industrial designs; b) Examine applications
for the registration of marks, geographic indication, integrated circuits; c) Register technology
transfer arrangements and settle disputes involving technology transfer payments covered by the
provisions of Part II, Chapter IX on Voluntary Licensing and develop and implement strategies
to promote and facilitate technology transfer; d) Promote the use of patent information as a tool
for technology development; e) Publish regularly in its own publication the patents, marks,
utility models and industrial designs, issued and approved, and the technology transfer
arrangements registered; f) Administratively adjudicate contested proceedings affecting
intellectual property rights; and g) Coordinate with other government agencies and the private
sector efforts to formulate and implement plans and policies to strengthen the protection of
intellectual property rights in the country.

The IPO is divided into six (6) bureaus: a) The Bureau of Patents; b) The Bureau of
Trademarks; c) The Bureau of Legal Affairs; d) The Documentation, Information and
Technology Transfer Bureau; e) The Management Information System and EDP Bureau; and f)
The Administrative, Financial and Personnel Services Bureau.

The Bureau of Patents has the following functions (1) Search and examination of patent
applications and the grant of patents; (2) Registration of utility models, industrial designs, and
integrated circuits; and, (3) Conduct studies and researches in the field of patents in order to
assist the Director General in formulating policies on the administration and examination of
patents.

The Bureau of Trademarks has the following functions (1) Search and examination of the
applications for the registration of marks, geographic indications and other marks of ownership
and the issuance of the certificates of registration; and (2) Conduct studies and researches in the
field of trademarks in order to assist the Director General in formulating policies on the
administration and examination of trademarks.

The Bureau of Legal Affairs exercised has quasi-judicial functions and has jurisdiction
over administrative complaints for intellectual property rights violations (In-N-Out Burger, Inc.
vs. Sehwani, Inc. GR No 179127; 2008). It has the power to hear and decide opposition to the
application for registration of marks; cancellation of trademarks; subject to the provisions of
Section 64, cancellation of patents, utility models, and industrial designs; and petitions for
compulsory licensing of patents. It also has exercise original jurisdiction in administrative
complaints for violations of laws involving intellectual property rights, provided that the
complaint prays for damages not less than P200k. The Director of Legal Affairs shall have the
power to hold and punish for contempt all those who disregard orders or writs issued in the
course of the proceedings.

LAW ON PATENTS

Patents, defined

Patent is a set of exclusive rights granted by the state to an inventor or his assignee for a
fixed period of time in exchange for a disclosure of an invention. The goal of the law on patents
is to bring new designs and technologies into the public domain through disclosure. It has a
three-fold purpose, namely: (1) to foster and reward invention; (2) promotes disclosure of
inventions to stimulate further invention and to permit the public to practice the invention once
the patent expires; and (3) to ensure that the ideas in the public domain remain there for the free
use of the public.

What are patentable inventions and non-patentable inventions?

Patentable inventions are any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially applicable shall be
Patentable. It may be, or may relate to, a product, or process, or an improvement of any of the
foregoing. While, non-patentable inventions are the following:

(1) Discoveries, scientific theories and mathematical methods;

(2) Schemes, rules and methods of performing mental acts, playing games or doing business,
and programs for computers;
(3) Methods for treatment of the human or animal body by surgery or therapy and diagnostic
methods practiced on the human or animal body. This provision shall not apply to
products and composition for use in any of these methods;
(4) Plant varieties or animal breeds or essentially biological process for the production of
plants or animals. This provision shall not apply to micro-organisms and non-biological
and microbiological processes. Provisions under this subsection shall not preclude
Congress to consider the enactment of a law providing sui generis protection of plant
varieties and animal breeds and a system of community intellectual rights protection:
(5) Aesthetic creations; and
(6) Anything which is contrary to public order or morality.

What are the elements of patentability?

The law prescribes the following elements of patentability:

(1) novelty – an invention shall not be considered new if it forms part of a prior art.
 A prior art shall consist of everything which has been made available to the public
anywhere in the world, before the filing date or the priority date of the application
claiming the invention; and that the whole contents of an application for a patent, utility
model, or industrial design registration, published in accordance with this Act, filed or
effective in the Philippines, with a filing or priority date that is earlier than the filing or
priority date of the application.

The filing date is important as our jurisdiction follow the “first to file” rule. This rule
applies when there are two or more persons who have made the invention separately and
apply for its patent. The applicant who has an earlier filing date shall have priority over
the later application. However, the application should be complete for only when all the
requirements provided under Section 41 are present will their application be considered
complete. These requirements are: (1) an express or implicit indication that a Philippine
patent is sought; (2) information identifying the applicant; and, (3) description of the
invention and (1) more claims in Filipino or English. If the application does not contain
all the elements, the filing date should be that date when all the elements are received. If
the deficiencies are not remedied within the prescribed time limit, the application shall be
considered withdrawn.

Another important concept is priority date. Under the rule, an application for patent filed
by any person who has previously applied for the same invention in another country
which by treaty, convention, or law affords similar privileges to Filipino citizens, shall be
considered as filed as of the date of filing the foreign application: Provided, That: (a) the
local application expressly claims priority; (b) it is filed within twelve (12) months from
the date the earliest foreign application was filed; and (c) a certified copy of the foreign
application together with an English translation is filed within six (6) months from the
date of filing in the Philippines.

The element of novelty requires that the thing is not yet known to anyone besides the
inventor. Once it has been made known to the public through disclosures, this
requirement may be in peril. However, there are disclosures which shall not prejudice the
applicant on the ground of lack of novelty if such disclosure was made by: (a) The
inventor; (b) A patent office and the information was contained (a) in another application
filed by the inventor and should not have been disclosed by the office, or (b) in an
application filed without the knowledge or consent of the inventor by a third party which
obtained the information directly or indirectly from the inventor; or (c) A third party
which obtained the information directly or indirectly from the inventor.

(2) inventive step – if having regard to prior art, it is not obvious to a person skilled in the art
at the time of the filing date or priority date of the application claiming the invention.

This connotes that the invention should not be obvious not to the general public but to a
person skilled in the art for it to be patented. The person skilled in the art is presumed to
be an ordinary practitioner aware of what was general knowledge in the art at the relevant
date.
 The Graham Factors is a test to determine the obviousness and non-obviousness of the
invention (Graham et al v John Deere Co of Kansas City 383 US 1 1966). The US
Supreme Court held that the obviousness should be determined by looking at – (1) the
scope and content of the prior art; (2) the level of ordinary skills in the art; (3) the
differences between the claimed invention and the prior art; and (4) objective evidence of
non-obviousness which are (1) commercial success (2) long felt but unsolved needs and
(3) failure of others.

(3) industrial applicability – an invention that can be produced and used in any industry shall
be industrially applicable.

Ownership of the Patent

The general rule is that the right to patent belongs to the inventor but it may be acquired
through succession or assignment. However, when the invention was made pursuant to a
commission, the person who commissioned shall be the owner of the patent unless there was an
agreement to the contrary. When the invention was made by an employee in the course of his
employment contract, the following rules shall govern:

(a) The employee, if the inventive activity is not a part of his regular duties even if the employee
uses the time, facilities and materials of the employer.
(b) The employer, if the invention is the result of the performance of his regularly-assigned
duties, unless there is an agreement, express or implied, to the contrary. (n)

Procedure
 The images shown above are lifted from the IPO website. Accessed through
https://www.ipophil.gov.ph/invention-registration-process-overview/ Accessed on 26 October
2020.
Term of Patents

The term of patens is 20 years from the filing date of the application.

What are the remedies against patent infringement?

Civil Action for Infringement

The making, using, offering for sale, selling, importing a patented product or a product
obtained directly or indirectly from a patented process, or the use of a patented process without
the authorization of the patentee constitutes patent infringement. Any pantetee or possessor of
any right, title, interest and to the patented invention may bring a civil action before a court of
competent jurisdiction to recover from the infringer such damages sustained thereby.

Section 80 of the IPC creates a presumption that the infringer had known of the patent if
on the patented product, or on the container or package in which the article is supplied to the
public, or on the advertising material relating to the patented product or process, are placed the
words "Philippine Patent" with the number of the patent.

However, the alleged infringer may set forth as defense the invalidity of the patent or any
claim thereof on any of the grounds of which a person’s patent may be cancelled under Section
61 of the same code.

Criminal Action for Infringement

Section 84 of the IPC criminalizes the repetition of the infringement. It says there that if
infringement is repeated by the infringer or by anyone in connivance with him after finality of
the judgment of the court against the infringer, the offenders shall, without prejudice to the
institution of a civil action for damages, be criminally liable therefor and, upon conviction, shall
suffer imprisonment for the period of not less than six (6) months but not more than three (3)
years and/or a fine of not less than One hundred thousand pesos (P100,000) but not more than
Three hundred thousand pesos (P300,000), at the discretion of the court. The criminal action
herein provided shall prescribe in three (3) years from date of the commission of the crime.
This provision contemplates that in order for criminal liability to attach the infringement
must be repeated.

LAW ON TRADEMARK

Trademark, defined

Trademark is defined as a distinctive mark of authenticity through which the merchandise

of a particular producer may be distinguished from that of the others. The sole function of is to
designate distinctively the origin of the products to which it is attached. It needs to be registered
to enjoin others from using the same mark. However, a trademark cannot be registered if it falls
under Section123 of the Code.
What is a mark?

It is any visible sign capable of distinguishing the goods (trademarks) and services
(service mark) of an enterprise and shall include a stamped or marked container of goods.

What is a collective mark?

A collective mark is any visible sign designated as such in the application for registration
and capable of distinguishing the origin or any other common characteristic, including the
quality of goods or services of different enterprises which use the sign under the control of the
registered owner of the collective mark.

Confusion in Trademark Infringement

There are two types of confusion in trademark infringement: (1) confusion of goods and
(2) confusion of business.

There is confusion of goods when an otherwise prudent purchaser is induced to purchase

one product in the belief that he is purchasing another in which case the defendant’s goods are
then bough as the plaintiff’s and its poor quality reflects badly on the plaintiff’s reputation.

There is confusion of business when goods of the parties are different but the defendant’s
product can reasonably be assumed to originate from the plaintiff.

Tests to Determine Confusing Similarity between Marks

First is the Dominancy Test – this focuses on the similarity of the prevalent features of
the competing trademarks which might cause confusion or deception, and thus infringement. If
the competing marks contains the main, essential, or dominant features of another and confusion
is likely to result, infringement takes place. The question is whether the use of the marks
involved is likely to cause confusion or mistake in the mind of the public or deceive purchasers.

The second is the Holistic Test – this entails a consideration of the entirety of the marks as
applied to the products including the labels and packaging, among other things. The discerning
eye must focus not only on the predominant words but also on the other features appearing on
both labels to draw the conclusion whether one is confusingly similar to the other.

What are the remedies against trademark infringement?

Elements of infringement

In the case of Prosource International, Inc. v Horphag Research Management, SA GR No

180073; 2009, the SC enumerated the following elements of trademark infringement:

(1) The trademark being infringed is registered in the Intellectual Property Office; however, in
infringement of trade name, the same need not be registered;
(2) The trademark or trade name is reproduced, counterfeited, copied, or colorably imitated by
the infringer;
(3) The infringing mark or trade name is used in connection with the sale, offering for sale, or
advertising of any goods, business or services; or the infringing mark or trade name is applied to
labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon
or in connection with such goods, business or services;
(4) The use or application of the infringing mark or trade name is likely to cause confusion or
mistake or to deceive purchasers or others as to the goods or services themselves or as to the
source or origin of such goods or services or the identity of such business; and
(5) It is without the consent of the trademark or trade name owner or the assignee thereof.

In the foregoing enumeration, it is the element of "likelihood of confusion" that is the

gravamen of trademark infringement. But "likelihood of confusion" is a relative concept. The
particular, and sometimes peculiar, circumstances of each case are determinative of its existence.
Thus, in trademark infringement cases, precedents must be evaluated in the light of each
particular case.

Civil Remedies

Under the IPC, any person who shall without the consent of the owner of the registered
mark: (1) Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant feature thereof in connection with the sale,
offering for sale, distribution, advertising of any goods or services including other preparatory
steps necessary to carry out the sale of any goods or services on or in connection with which
such use is likely to cause confusion, or to cause mistake, or to deceive; or (2) Reproduce,
counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply
such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements intended to be used in commerce upon or in connection
with the sale, offering for sale, distribution, or advertising of goods or services on or in
connection with which such use is likely to cause confusion, or to cause mistake, or to deceive,
shall be liable in a civil action for infringement by the registrant for the remedies hereinafter set
forth: Provided, That the infringement takes place at the moment any of the acts stated in
Subsection 155.1 or this subsection are committed regardless of whether there is actual sale of
goods or services using the infringing material.

Criminal Penalty

The rule is that criminal actions may be filed against any person who is found guilty of
committing any of the acts mentioned in Section 155, Section 168 and Subsection 169.1.

Under the Section 168 punishes Unfair Competition. A person who has identified in the
mind of the public the goods he manufactures or deals in, his business or services from those of
others, whether or not a registered mark is employed, has a property right in the goodwill of the
said goods, business or services so identified, which will be protected in the same manner as
other property rights. It likewise punishes any person who shall employ deception or any other
means contrary to good faith by which he shall pass off the goods manufactured by him or in
which he deals, or his business, or services for those of the one having established such goodwill,
or who shall commit any acts calculated to produce said result, shall be guilty of unfair
competition, and shall be subject to an action therefor.

Also, this provision punishes Any person, who is selling his goods and gives them the
general appearance of goods of another manufacturer or dealer, either as to the goods themselves
or in the wrapping of the packages in which they are contained, or the devices or words thereon,
or in any other feature of their appearance, which would be likely to influence purchasers to
believe that the goods offered are those of a manufacturer or dealer, other than the actual
manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall
deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such
goods or any agent of any vendor engaged in selling such goods with a like purpose; Any person
who by any artifice, or device, or who employs any other means calculated to induce the false
belief that such person is offering the services of another who has identified such services in the
mind of the public; or Any person who shall make any false statement in the course of trade or
who shall commit any other act contrary to good faith of a nature calculated to discredit the
goods, business or services of another.

Criminal liability will also attach in case a person violates Section 169.1 which punishes
any person who, on or in connection with any goods or services, or any container for goods, uses
in commerce any word, term, name, symbol, or device, or any combination thereof, or any false
designation of origin, false or misleading description of fact, or false or misleading
representation of fact, which: (a) Is likely to cause confusion, or to cause mistake, or to deceive
as to the affiliation, connection, or association of such person with another person, or as to the
origin, sponsorship, or approval of his or her goods, services, or commercial activities by another
person; or (b) In commercial advertising or promotion, misrepresents the nature, characteristics,
qualities, or geographic origin of his or her or another person's goods, services, or commercial
activities, shall be liable to a civil action for damages and injunction provided in Sections 156
and 157 of this Act by any person who believes that he or she is or is likely to be damaged by
such act.

LAW ON COPYRIGHT

Copyright, defined

It is a legal concept that gives a creator of an original work exclusive rights to it.
Copyright is synonymous with economic rights and shall consist of the exclusive right to carry
out, authorize, or prevent the following act:

(1) Reproduction of the work or substantial portion of the work;

(2) Dramatization, translation, adaptation, abridgment, arrangement or other transformation
of the work;
(3) The first public distribution of the original and each copy of the work by sale or other
forms of transfer of ownership;
(4) Rental of the original or a copy of an audiovisual or cinematographic work, a work
embodied in a sound recording, a computer program, a compilation of data and other
 materials or a musical work in graphic form, irrespective of the ownership of the original
or the copy which is the subject of the rental; (n)
(5) Public display of the original or a copy of the work;
(6) Public performance of the work; and
(7) Other communication to the public of the work.

Scope of Copyright

The scope of copyrights is the following:

1.) Literary and artistic works, hereinafter referred to as "works", are original intellectual
creations in the literary and artistic domain protected from the moment of their creation and shall
include in particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not
reduced in writing or other material form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions; choreographic works or entertainment
in dumb shows;
(f) Musical compositions, with or without words;
(g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other
works of art; models or designs for works of art;
(h) Original ornamental designs or models for articles of manufacture, whether or not
registrable as an industrial design, and other works of applied art;
(i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to
geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical character;
(k) Photographic works including works produced by a process analogous to
photography; lantern slides;
(l) Audiovisual works and cinematographic works and works produced by a process
analogous to cinematography or any process for making audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works.
2.) Works are protected by the sole fact of their creation, irrespective of their mode or form of
expression, as well as of their content, quality and purpose.
3.) Derivative works shall also be protected by copyright:
(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other
alterations of literary or artistic works; and
(b) Collections of literary, scholarly or artistic works, and compilations of data and other
materials which are original by reason of the selection or coordination or arrangement of
their contents. (Sec. 2, [P] and [Q], P.D. No. 49)

The following shall not be protected by copyright:

 1.) Unprotected subject matter - no protection shall extend, under this law, to any idea,
procedure, system, method or operation, concept, principle, discovery or mere data as
such, even if they are expressed, explained, illustrated or embodied in a work; news of
the day and other miscellaneous facts having the character of mere items of press
information; or any official text of a legislative, administrative or legal nature, as well as
any official translation thereof
2.) Works of the Government

What is the fair use?

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.

What are the remedies against copyright infringement?

Civil Action

Under the IPC, any person infringing a right protected under this law shall be liable:
(a) To an injunction restraining such infringement. The court may also order the
defendant to desist from an infringement, among others, to prevent the entry into the channels of
commerce of imported goods that involve an infringement, immediately after customs clearance
of such goods.
(b) Pay to the copyright proprietor or his assigns or heirs such actual damages, including
legal costs and other expenses, as he may have incurred due to the infringement as well as the
profits the infringer may have made due to such infringement, and in proving profits the plaintiff
shall be required to prove sales only and the defendant shall be required to prove every element
of cost which he claims, or, in lieu of actual damages and profits, such damages which to the
court shall appear to be just and shall not be regarded as penalty.
(c) Deliver under oath, for impounding during the pendency of the action, upon such
terms and conditions as the court may prescribe, sales invoices and other documents evidencing
sales, all articles and their packaging alleged to infringe a copyright and implements for making
them.
(d) Deliver under oath for destruction without any compensation all infringing copies or
devices, as well as all plates, molds, or other means for making such infringing copies as the
court may order.
 (e) Such other terms and conditions, including the payment of moral and exemplary
damages, which the court may deem proper, wise and equitable and the destruction of infringing
copies of the work even in the event of acquittal in a criminal case.

Criminal Action

Under the rule, any person infringing any right secured by provisions of Part IV of this
Act or aiding or abetting such infringement shall be guilty. Any person who at the time when
copyright subsists in a work has in his possession an article which he knows, or ought to know,
to be an infringing copy of the work for the purpose of: (a) Selling, letting for hire, or by way of
trade offering or exposing for sale, or hire, the article; (b) Distributing the article for purpose of
trade, or for any other purpose to an extent that will prejudice the rights of the copyright owner
in the work; or (c) Trade exhibit of the article in public, shall be guilty of an offense and shall be
liable on conviction to imprisonment and fine as above mentioned.