Intellectual Property Code

Module 1
Intellectual Property Rights
1. Declaration of State Policy (Sec. 2)
The State recognizes that an effective intellectual and industrial property system is vital to the
development of domestic and creative activity, facilitates transfer of technology, attracts foreign
investments, and ensures market access for our products. It shall protect and secure the exclusive
rights of scientists, inventors, artists and other gifted citizens to their intellectual property and
creations, particularly when beneficial to the people, for such periods as provided in this Act.
The use of intellectual property bears a social function. To this end, the State shall promote the
diffusion of knowledge and information for the promotion of national development and progress
and the common good.
It is also the policy of the State to streamline administrative procedures of registering patents,
trademarks and copyright, to liberalize the registration on the transfer of technology, and to
enhance the enforcement of intellectual property rights in the Philippines.

Intellectual Property Association of the Philippines (IPAP) Vs. Ochoa

G.R. No. 204605 Date: July 19, 2016

Facts: The Madrid System for the International Registration of Marks (Madrid System), which is the
centralized system providing a one-stop solution for registering and managing marks worldwide, allows
the trademark owner to file one application in one language, and to pay one set of fees to protect his mark
in the territories of up to 97 member-states. The Madrid System is governed by the Madrid Agreement,
concluded in 1891, and the Madrid Protocol, concluded in 1989.

The Madrid Protocol, which was adopted in order to remove the challenges deterring some countries from
acceding to the Madrid Agreement, has two objectives, namely: (1) to facilitate securing protection for
marks; and (2) to make the management of the registered marks easier in different countries.

In the meanwhile, the IPOPHL mounted a campaign for information dissemination to raise awareness of
the Madrid Protocol. It launched a series of consultations with stakeholders and various business groups
regarding the Philippines' accession to the Madrid Protocol. It ultimately arrived at the conclusion that
accession would benefit the country and help raise the level of competitiveness for Filipino brands. Hence,
it recommended in September 2011 to the Department of Foreign Affairs (DFA) that the Philippines should
accede to the Madrid Protocol.
After its own review, the DFA endorsed to the President the country's accession to the Madrid Protocol.
Conformably with its express authority under Section 9 of Executive Order No. 459 dated November 25,
1997, the DFA determined that the Madrid Protocol was an executive agreement. The IPOPHL, the
Department of Science and Technology, and the Department of Trade and Industry concurred in the
recommendation of the DFA.

On March 27, 2012, President Benigno C. Aquino III ratified the Madrid Protocol through an instrument of
accession, The instrument of accession was deposited with the Director General of the World Intellectual
Property Organization (WIPO) on April 25, 2012. The Madrid Protocol entered into force in the Philippines
on July 25, 2012.
Petitioner IPAP, an association of more than 100 law firms and individual practitioners in Intellectual
Property Law whose main objective is to promote and protect intellectual property rights in the Philippines
through constant assistance and involvement in the legislation of intellectual property law, has
commenced this special civil action for certiorari and prohibition to challenge the validity of the President's
accession to the Madrid Protocol without the concurrence of the Senate.

The IPAP has argued that the implementation of the Madrid Protocol in the Philippines; specifically the
processing of foreign trademark applications, conflicts with the IP Code, whose Section 125 conflicts with
Article 2 of the Madrid Protocol.

Issue:
1. Whether or not the President's ratification of the Madrid Protocol is valid and constitutional.
2. Whether or not the Madrid Protocol is in conflict with the IP Code.

Ruling: 1. Yes, accession to the Madrid Protocol was constitutional.

The Court has highlighted the difference between treaties and executive agreements in Commissioner of
Customs v. Eastern Sea Trading, thusly:
International agreements involving political issues or changes of national policy and those
involving international arrangements of a permanent character usually take the form of treaties.
But international agreements embodying adjustments of detail carrying out wellestablished
national policies and traditions and those involving arrangements of a more or less temporary
nature usually take the form of executive agreements.
In the Philippines, the DFA, by virtue of Section 9, Executive Order No. 459, is initially given the power to
determine whether an agreement is to be treated as a treaty or as an executive agreement. To determine
the issue of whether DFA Secretary Del Rosario gravely abused his discretion in making his determination
relative to the Madrid Protocol, we review the jurisprudence on the nature of executive agreements, as
well as the subject matters to be covered by executive agreements.
In view of the expression of state policy having been made by the Congress itself, the IPAP is plainly
mistaken in asserting that "there was no Congressional act that authorized the accession of the Philippines
to the Madrid Protocol."

Accordingly, DFA Secretary Del Rosario’s determination and treatment of the Madrid Protocol as an
executive agreement; being in apparent contemplation of the express state policies on intellectual property
as well as within his power under Executive Order No. 459, are upheld. We observe at this point that there
are no hard and fast rules on the propriety of entering into a treaty or an executive agreement on a given
subject as an instrument of international relations. The primary consideration in the choice of the form of
agreement is the parties' intent and desire to craft their international agreement in the form they so wish
to further their respective interests. The matter of form takes a back seat when it comes to effectiveness
and binding effect of the enforcement of a treaty or an executive agreement; inasmuch as all the parties;
regardless of the form, become obliged to comply conformably with the time-honored principle of pacta
sunt servanda. The principle binds the parties to perform in good faith their parts in the agreements.

2. No, there is no conflict between the Madrid Protocol and the IP Code.

In arguing that the Madrid Protocol conflicts with Section 125 of the IP Code, the IP AP highlights the
importance of the requirement for the designation of a resident agent. It underscores that the requirement
is intended to ensure that non-resident entities seeking protection or privileges under Philippine
Intellectual Property Laws will be subjected to the country's jurisdiction. It submits that without such
resident agent, there will be a need to resort to costly, time consuming and cumbersome extraterritorial
service of writs and processes.
The IPAP misapprehends the procedure for examination under the Madrid Protocol, The difficulty, which
the IPAP illustrates, is minimal, if not altogether inexistent. The IPOPHL actually requires the designation
of the resident agent when it refuses the registration of a mark. Local representation is further required in
the submission of the Declaration of Actual Use, as well as in the submission of the license contract. The
Madrid Protocol accords with the intent and spirit of the IP Code, particularly on the subject of the
 registration of trademarks. The Madrid Protocol does not amend or modify the IP Code on the acquisition
of trademark rights considering that the applications under the Madrid Protocol are still examined
according to the relevant national law, In that regard, the IPOPHL will only grant protection to a mark that
meets the local registration requirements.

Dispositive Portion: WHEREFORE, this Court DISMISSES the petition for certiorari and prohibition
for lack of merit; and ORDERS the petitioner to pay the costs of suit.

3. Specific Intellectual Property Right (Sec. 4)

The term “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 (n, TRIPS).

4. Technology Transfer Arrangements in General (Sec. 4.2)

The term “technology transfer arrangements” refers to contracts or agreements involving the
transfer of systematic knowledge for the manufacture of a product, the application of a process,
or rendering of a service including management contracts; and the transfer, assignment or
licensing of all forms of intellectual property rights, including licensing of computer software except
computer software developed for mass market.
5. Right of a Foreigner to Sue for Protection of IP Rights (Secs. 3 and 160)
SECTION 3. International Conventions and Reciprocity. - 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 this Act.
SECTION 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement
Action. - Any foreign national or juridical person who meets the requirements of Section 3 of this
Act and does not engage in business in the Philippines may bring a civil or administrative action
hereunder for opposition, cancellation, infringement, unfair competition, or false designation of
origin and false description, whether or not it is licensed to do business in the Philippines under
existing laws. (Sec. 21-A, R.A. No. 166a)
The Intellectual Property Office of the Philippines (Secs. 6-19)
SECTION 6. The Organizational Structure of the IPO. - 6.1. The Office shall be headed by a
Director General who shall be assisted by two (2) Deputies Director General.
6.2. The Office shall be divided into six (6) Bureaus, each of which shall be headed by a Director
and assisted by an Assistant Director. These Bureaus are:
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.
6.3. The Director General, Deputies Director General, Directors and Assistant Directors shall be
appointed by the President, and the other officers and employees of the Office by the Secretary
of Trade and Industry, conformably with and under the Civil Service Law.
SECTION 7. The Director General and Deputies Director General. - 7.1. Functions. - The Director
General shall exercise the following powers and functions:
a) Manage and direct all functions and activities of the Office, including the promulgation of rules
and regulations to implement the objectives, policies, plans, programs and projects of the Office:
Provided, That in the exercise of the authority to propose policies and standards in relation to the
following: (1) the effective, efficient, and economical operations of the Office requiring statutory
enactment; (2) coordination with other agencies of government in relation to the enforcement of
intellectual property rights; (3) the recognition of attorneys, agents, or other persons representing
applicants or other parties before the Office; and (4) the establishment of fees for the filing and
processing of an application for a patent, utility model or industrial design or mark or a collective
mark, geographic indication and other marks of ownership, and for all other services performed
and materials furnished by the Office, the Director General shall be subject to the supervision of
the Secretary of Trade and Industry;
b) Exercise exclusive appellate jurisdiction over all decisions rendered by the Director of Legal
Affairs, the Director of Patents, the Director of Trademarks, and the Director of the
Documentation, Information and Technology Transfer Bureau. The decisions of the Director
General in the exercise of his appellate jurisdiction in respect of the decisions of the Director of
Patents, and the Director of Trademarks shall be appealable to the Court of Appeals in
accordance with the Rules of Court; and those in respect of the decisions of the Director of
Documentation, Information and Technology Transfer Bureau shall be appealable to the
Secretary of Trade and Industry; and
c) Exercise original jurisdiction to resolve disputes relating to the terms of a license involving the
author’s right to public performance or other communication of his work. The decisions of the
Director General in these cases shall be appealable to the Secretary of Trade and Industry.
7.2. Qualifications. - The Director General and the Deputies Director General must be natural
born citizens of the Philippines, at least thirty-five (35) years of age on the day of their
appointment, holders of a college degree, and of proven competence, integrity, probity and
independence: Provided, That the Director General and at least one (1) Deputy Director General
shall be members of the Philippine Bar who have engaged in the practice of law for at least ten
(10) years: Provided, further, That in the selection of the Director General and the Deputies
Director General, consideration shall be given to such qualifications as would result, as far as
practicable, in the balanced representation in the Directorate General of the various fields of
intellectual property.
7.3. Term of Office. - The Director General and the Deputies Director General shall be appointed
by the President for a term of five (5) years and shall be eligible for reappointment only once:
Provided, That the first Director General shall have a first term of seven (7) years. Appointment
to any vacancy shall be only for the unexpired term of the predecessor.
7.4. The Office of the Director General. - The Office of the Director General shall consist of the
Director General and the Deputies Director General, their immediate staff and such Offices and
Services that the Director General will set up to support directly the Office of the Director General.
SECTION 8. The Bureau of Patents. - The Bureau of Patents shall have the following functions:
8.1. Search and examination of patent applications and the grant of patents;
8.2. Registration of utility models, industrial designs, and integrated circuits; and
8.3. 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.
SECTION 9. The Bureau of Trademarks. - The Bureau of Trademarks shall have the following
functions:
9.1. 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
9.2. 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.
SECTION 10. The Bureau of Legal Affairs. - The Bureau of Legal Affairs shall have the following
functions:
10.1. 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;
10.2. (a) Exercise original jurisdiction in administrative complaints for violations of laws involving
intellectual property rights: Provided, That its jurisdiction is limited to complaints where the total
damages claimed are not less than Two hundred thousand pesos (P200,000): Provided, further,
That availment of the provisional remedies may be granted in accordance with the Rules of Court.
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. (n)
(b) After formal investigation, the Director for Legal Affairs may impose one (1) or more of the
following administrative penalties:
(i) The issuance of a cease and desist order which shall specify the acts that the respondent shall
cease and desist from and shall require him to submit a compliance report within a reasonable
time which shall be fixed in the order;
(ii) The acceptance of a voluntary assurance of compliance or discontinuance as may be imposed.
Such voluntary assurance may include one or more of the following:
(1) An assurance to comply with the provisions of the intellectual property law violated;
(2) An assurance to refrain from engaging in unlawful and unfair acts and practices subject of the
formal investigation;
(3) An assurance to recall, replace, repair, or refund the money value of defective goods
distributed in commerce; and
(4) An assurance to reimburse the complainant the expenses and costs incurred in prosecuting
the case in the Bureau of Legal Affairs.
The Director of Legal Affairs may also require the respondent to submit periodic compliance
reports and file a bond to guarantee compliance of his undertaking;
(iii) The condemnation or seizure of products which are subject of the offense. The goods seized
hereunder shall be disposed of in such manner as may be deemed appropriate by the Director of
Legal Affairs, such as by sale, donation to distressed local governments or to charitable or relief
institutions, exportation, recycling into other goods, or any combination thereof, under such
guidelines as he may provide;
(iv) The forfeiture of paraphernalia and all real and personal properties which have been used in
the commission of the offense;
(v) The imposition of administrative fines in such amount as deemed reasonable by the Director
of Legal Affairs, which shall in no case be less than Five thousand pesos (P5,000) nor more than
One hundred fifty thousand pesos (P150,000). In addition, an additional fine of not more than One
thousand pesos (P1,000) shall be imposed for each day of continuing violation;
(vi) The cancellation of any permit, license, authority, or registration which may have been granted
by the Office, or the suspension of the validity thereof for such period of time as the Director of
Legal Affairs may deem reasonable which shall not exceed one (1) year;
(vii) The withholding of any permit, license, authority, or registration which is being secured by the
respondent from the Office;
(viii) The assessment of damages;
(ix) Censure; and
(x) Other analogous penalties or sanctions. (Secs. 6, 7, 8, and 9, Executive Order No. 913
[1983]a)
10.3. The Director General may by Regulations establish the procedure to govern the
implementation of this Section.
SECTION 11. The Documentation, Information and Technology Transfer Bureau. - The
Documentation, Information and Technology Transfer Bureau shall have the following functions:
11.1. Support the search and examination activities of the Office through the following activities:
(a) Maintain and upkeep classification systems whether they be national or international such as
the International Patent Classification (IPC) system;
(b) Provide advisory services for the determination of search patterns;
(c) Maintain search files and search rooms and reference libraries; and
(d) Adapt and package industrial property information.
11.2. Establish networks or intermediaries or regional representatives;
11.3. Educate the public and build awareness on intellectual property through the conduct of
seminars and lectures, and other similar activities;
11.4. Establish working relations with research and development institutions as well as with local
and international intellectual property professional groups and the like;
11.5. Perform state-of-the-art searches;
11.6. Promote the use of patent information as an effective tool to facilitate the development of
technology in the country;
11.7. Provide technical, advisory, and other services relating to the licensing and promotion of
technology, and carry out an efficient and effective program for technology transfer; and
11.8. Register technology transfer arrangements, and settle disputes involving technology
transfer payments. (n)
SECTION 12. The Management Information Services and EDP Bureau. - The Management
Information Services and EDP Bureau shall:
12.1. Conduct automation planning, research and development, testing of systems, contracts with
firms, contracting, purchase and maintenance of equipment, design and maintenance of systems,
user consultation, and the like; and
12.2. Provide management information support and service to the Office. (n)
SECTION 13. The Administrative, Financial and Human Resource Development Service
Bureau. - 13.1. The Administrative Service shall: (a) Provide services relative to procurement and
allocation of supplies and equipment, transportation, messengerial work, cashiering, payment of
salaries and other Office’s obligations, office maintenance, proper safety and security, and other
utility services; and comply with government regulatory requirements in the areas of performance
appraisal, compensation and benefits, employment records and reports;
(b) Receive all applications filed with the Office and collect fees therefor; and
(c) Publish patent applications and grants, trademark applications, and registration of marks,
industrial designs, utility models, geographic indication, and lay-out-designs of integrated circuits
registrations.
13.2. The Patent and Trademark Administration Services shall perform the following functions
among others:
(a) Maintain registers of assignments, mergings, licenses, and bibliographic on patents and
trademarks;
(b) Collect maintenance fees, issue certified copies of documents in its custody and perform
similar other activities; and
(c) Hold in custody all the applications filed with the office, and all patent grants, certificate of
registrations issued by the office, and the like.
13.3. The Financial Service shall formulate and manage a financial program to ensure availability
and proper utilization of funds; provide for an effective monitoring system of the financial
operations of the Office; and
13.4. The Human Resource Development Service shall design and implement human resource
development plans and programs for the personnel of the Office; provide for present and future
manpower needs of the organization; maintain high morale and favorable employee attitudes
towards the organization through the continuing design and implementation of employee
development programs. (n)
SECTION 14. Use of Intellectual Property Rights Fees by the IPO. - 14.1. For a more effective
and expeditious implementation of this Act, the Director General shall be authorized to retain,
without need of a separate approval from any government agency, and subject only to the existing
accounting and auditing rules and regulations, all the fees, fines, royalties and other charges,
collected by the Office under this Act and the other laws that the Office will be mandated to
administer, for use in its operations, like upgrading of its facilities, equipment outlay, human
resource development, and the acquisition of the appropriate office space, among others, to
improve the delivery of its services to the public. This amount, which shall be in addition to the
Office’s annual budget, shall be deposited and maintained in a separate account or fund, which
may be used or disbursed directly by the Director General.
14.2. After five (5) years from the coming into force of this Act, the Director General shall, subject
to the approval of the Secretary of Trade and Industry, determine if the fees and charges
mentioned in Subsection 14.1 hereof that the Office shall collect are sufficient to meet its
budgetary requirements. If so, it shall retain all the fees and charges it shall collect under the
same conditions indicated in said Subsection 14.1 but shall forthwith, cease to receive any funds
from the annual budget of the National Government; if not, the provisions of said Subsection 14.1
shall continue to apply until such time when the Director General, subject to the approval of the
Secretary of Trade and Industry, certifies that the above-stated fees and charges the Office shall
collect are enough to fund its operations. (n)
SECTION 15. Special Technical and Scientific Assistance. - The Director General is empowered
to obtain the assistance of technical, scientific or other qualified officers and employees of other
departments, bureaus, offices, agencies and instrumentalities of the Government, including
corporations owned, controlled or operated by the Government, when deemed necessary in the
consideration of any matter submitted to the Office relative to the enforcement of the provisions
of this Act. (Sec. 3, R.A. No. 165a)
SECTION 16. Seal of Office. - The Office shall have a seal, the form and design of which shall be
approved by the Director General. (Sec. 4, R.A. No. 165a)
SECTION 17. Publication of Laws and Regulations. - The Director General shall cause to be
printed and make available for distribution, pamphlet copies of this Act, other pertinent laws,
executive orders and information circulars relating to matters within the jurisdiction of the Office.
(Sec. 5, R.A. No. 165a)
SECTION 18. The IPO Gazette. - All matters required to be published under this Act shall be
published in the Office’s own publication to be known as the IPO Gazette. (n)
SECTION 19. Disqualification of Officers and Employees of the Office. - All officers and
employees of the Office shall not apply or act as an attorney or patent agent of an application for
a grant of patent, for the registration of a utility model, industrial design or mark nor acquire, except
by hereditary succession, any patent or utility model, design registration, or mark or any right, title
or interest therein during their employment and for one (1) year thereafter. (Sec. 77, R.A. No.
165a)