I FORMS OF INTELLECTUAL PROPERTY PROTECTION

Republic Act No. 8293 or the Intellectual Property Code of the Philippines (the IP Code) defines the term ‘intellectual property rights’ as the following:

  1. copyright and related rights;
  2. trademarks and service marks;
  3. geographical indications;
  4. industrial designs;
  5. patents;
  6. layout designs (topographies) of integrated circuits; and
  7. protection of undisclosed information.2
i Copyright and related rights

Under Part IV of the IP Code,3 which covers the law on copyright, literary and artistic works refer to original intellectual creations in the literary and artistic domain, which are protected from the moment of their creation. Copyright registration is not required, but in an action for infringement, registration shall be prima facie proof of the matters stated therein, until proved otherwise, and of ownership of the copyright. Under the newly amended IP Code, the moral right of an author insofar as his or her right of attribution as author is concerned shall last during his or her lifetime and in perpetuity after death and shall not be assignable or subject to licence. Copyright infringement is actionable by administrative, civil and criminal proceedings and in the latter case punishable by imprisonment and fine. The Philippines is a signatory to the Berne Convention.

ii Trademarks and service marks

Only visible signs capable of distinguishing the goods (trademarks) or services (service marks) of an enterprise, including a stamped or marked container, are registrable in the Philippines. The rights in a mark are acquired through registration made validly.4 The filing of a declaration of actual use (DAU) is required within three years of the filing date of the applicant, with evidence of such use, otherwise the application shall be refused or the mark shall be removed from the register. A certificate of trademark registration shall remain in force for 10 years, renewable for periods of 10 years at its expiration provided that a DAU is filed within one year of the fifth anniversary of the date of registration of the mark, otherwise the mark shall be removed from the register.

iii Geographical indications

Marks consisting exclusively of signs or indications that may serve in trade to designate a geographical origin are not registrable in the Philippines.5

iv Industrial designs

The law on industrial designs and layout-designs (topographies) of integrated circuits is included in the law on patents.6 An industrial design refers to any composition of lines or colours or any three-dimensional form that gives a special appearance to and can serve as a pattern for an industrial product or handicraft. It must be new or ornamental to be registrable. Two or more industrial designs may be the subject of the same application provided that they relate to the same subclass of the international classification or to the same set or composition of articles. No substantive examination is conducted on an industrial design application. Registration ensues upon compliance with the formal requirements and shall be for a period of five years from the filing date of the application, renewable for two consecutive periods of five years each.

v Patents

The law on patents is Part II of the IP Code. Any technical solution of a problem in any field of human activity that is new, involves an inventive step and is industrially applicable, is patentable. It may relate to a product, or process or an improvement of the foregoing.7 Among the inventions that are not patentable in the Philippines are methods of doing business; computer programs; methods for treatment of the human body by surgery or therapy; and diagnostic methods practised on humans or animals.8 The Philippines switched from the first-to-invent rule to the first-to-file rule when the IP Code took effect on 1 January 1998. The Philippines acceded to the Patent Cooperation Treaty on 17 August 2001. There are no pre-grant or post-grant oppositions to patent applications, but third parties are allowed to submit their observations in writing within six months of the publication date of the application in the e-Gazette or the request for substantive examination by the applicant, whichever is later. In the case of utility models and designs, the Intellectual Property Office of the Philippines (IPOPHL) notifies the concerned community upon publication. Any person may present written adverse information in the form of a sworn statement concerning the registrability of the utility model or design application within 30 days of the date of publication. These third-party observations are communicated to the applicant by the IPOPHL for comment, and these comments are considered by the Director of Patents when granting the patent. After the patent is granted, the available action is one of cancellation of the patent itself, or any of the claims thereof on the grounds of lack of novelty, failure to disclose the invention sufficiently clear and complete for it to be carried out by any person skilled in the art, or that the patent is contrary to public order or morality. The making, using, offering for sale, selling or importing of a patented product or a product obtained directly or indirectly from a patented process without the authorisation of the patentee constitutes patent infringement.9 However, there are certain acts that patentees cannot prevent third parties from performing without their authorisation: using a patented product that has been put on the Philippine market by the owner of the product or with their express consent; when the act is done privately and on a non-commercial scale or for a non-commercial purpose; and for experiments.10 An action for patent infringement may be administrative or civil. A criminal action for patent infringement is available only if it is repeated by the infringer or by anyone in connivance with him or her after the finality of the judgment of the court against the infringer.11

ii RECENT DEVELOPMENTS

i Nagoya Protocol

On 28 December 2015, the Philippines acceded to the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization. The Protocol is a supplementary agreement to the 1992 Convention on Biological Diversity (CBD), and the latter’s instrument for the implementation of its access and benefit provisions. The objective of the Protocol is the fair and equitable sharing of the benefits arising from the utilisation and access to genetic resources. The Philippines joined in approving the Cancun Declaration crafted in December 2016 during the 13th Meeting of the Conference of the Parties to the Convention on Biological Diversity (COP 13), which recognises that ‘it is essential to live in harmony with nature as a fundamental condition for the well-being of all life’. Enhancing the ability of the Philippines to contribute to the implementation of the objectives of the CBD, on 28 February 2017, the president of the Philippines signed the Instrument of Accession to the Paris Agreement on Climate Change, which the Senate ratified on 14 March 2017 voting 22-0. This officially binds the Philippines to limit its average global temperatures to ‘well below 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels’. The Philippines is not a major carbon emitter.

ii Patent Prosecution Highway (PPH)

The IPOPHL has renewed the Patent Prosecution Highway programme with the Japan Patent Office (JPO) for another three years starting 12 March 2018. The IPOPHL has existing bilateral PPH agreements with the JPO, the US Patent and Trademark Office (USPTO), the Korean Intellectual Property Office (KIPO), and the European Patent Office (EPO).

iii ASEAN Patent Examination Cooperation programme (ASPEC)

The ASPEC commenced on 15 June 2009, but it is only in 2014 that the IPOPHL begun accepting ASPEC request forms, and after rules implementing the said programme had been modified or amended. The nine participating ASEAN Member States (AMS) are: Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The ASPEC is the first regional patent cooperation project among intellectual property offices in the ASEAN to use the search and examination results from another participating AMS IP Office as its reference in its own search and examination work. The participating AMS Office may consider the search and examination documents it shall receive under the ASPEC. It is not, however, obliged to adopt any of the findings and conclusions reached by the other IP Office, and shall decide whether to grant the patent in the manner in accordance with its national laws. The objectives of the ASPEC are to reduce work and have a faster turnaround time, and better search and examination. All documents for the purpose of the ASPEC must be in English.

iv IPOPHL Regulations

The IPOPHL issued several Memorandum Circulars in 2017:

  1. IPOPHL Memorandum Circular No. 17-010, effective 1 August 2017 – Trademark Rules and Regulations. This Circular updates the Implementing Rules and Regulations on Trademarks issued on 1 January 1998 with the amendments issued after said date. Some of the more recent amendments issued were: (1) doing away with the submission of a certified copy of the foreign application or registration that serves as basis for claiming priority right, if verifiable from the official website of the foreign IP office where such application was filed, and if not, a photocopy of the same can be accepted, (2) requiring the submission of a DAU within one year of the date of renewal, and within one year of the fifth anniversary of each renewal, (3) providing a maximum period of six years for the declaration of non-use, except when the mark is subject to pending litigation.
  2. IPOPHL Memorandum Circular No. 17-012, effective 1 August 2017 – Expediting the Trial of Cases by Amending Certain Provisions of the Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property Rights. This Circular mandates successive and continuous hearing for the reception of evidence and that parties shall complete the presentation of their evidence in two years.
  3. IPOPHL Memorandum Circular No. 17-013, effective 1 August 2017 – Amendment to the Revised Implementing Rules and Regulations for Patents, Utility Models and Industrial Design. This Circular allows for the revival without cost of an application deemed withdrawn due to the loss of the applicant’s response or the examiner’s action that was not received as evidenced by the post office return card, or other unforeseen circumstances that may be considered as fault by the IPOPHL, provided that the revival petition is filed within four months of the mailing date of the notice of withdrawal.
v Data Privacy Act of 2012

The Data Privacy Act of 2012 of the Philippines (RA 10173) took effect on 8 September 2012 mandating the creation of the National Privacy Commission (NPC). The NPC, however, was only established in March 2016, and the implementing rules and regulations of the Act became effective on 9 September 2016. This brings the Philippines, with a growing IT and business processing industry, on a par with international data protection standards. Protected information under the implementing rules and regulations refers to personal information such as ‘any information, whether recorded in a material form or not, from which the identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding the information, or when put together with other information would directly and certainly identify an individual’. The implementing rules and regulations also protect privileged information, such as client–attorney communications. The implementing rules and regulations impose penalties of imprisonment and a fine for violations. Personal information controllers and processors have one year to register data-processing systems that process sensitive personal information of 1,000 data subjects or more with the NPC.

vi Philippine Design Competitiveness Act of 2013 (RA 10557)

On 15 May 2013, President Aquino signed into law Republic Act No. 10557 or the Philippine Design Competitiveness Act of 2013 with the objective of promoting and strengthening the Philippine design industry. One of the provisions of the Act is to promote the protection of designs by registration and licensing through the Intellectual Property Office of the Philippines. The implementing rules and regulations of the Act took effect on 25 October 2015.

vii The Philippine Competition Act

The Philippine Competition Act (RA No. 10667) was signed into law on 21 July 2015 and created the Philippine Competition Commission, a quasi-judicial body, to enforce it. Its implementing rules and regulations took effect on 19 June 2016 with the main objective of regulating and prohibiting combinations in restraint of trade or unfair competition. Some of its major provisions are:

  1. prohibiting: (1) anticompetitive agreements; (2) abuse of dominant position; and (3) anticompetitive mergers and acquisitions; and
  2. compulsory notification of mergers and acquisitions wherein the value of the transactions exceeds 1 billion pesos.

Anticompetitive agreements may be classified into two types: those are prohibited per se (e.g., price fixing) and those that contemplate controlling or setting production, markets, technical developments, etc. The PCA imposes administrative, civil and criminal liabilities that apply to anticompetitive agreements. For violations involving abuse of dominant position and anticompetitive mergers, only administrative and civil liabilities shall be imposed.

viii Supreme Court decisions on intellectual property law

Some of the more notable decisions of the Supreme Court of the Philippines issued in 2017 relate to intellectual property law.

W Land Holdings, Inc v. Starwood Hotels and Resorts Worldwide, Inc12

This case is a petition to cancel Starwood’s trademark registration for the ‘W’ mark covering services in Classes 43 and 44 filed by W Land Holding, on the ground of non-use because Starwood had no hotel or establishment in the Philippines rendering the services covered by its registration. The Supreme Court denied the petition and held that Starwood’s use of its ‘W’ mark in its reservation services through its interactive website constituted use of the mark sufficient to protect its registration under the entire subject classification from non-use cancellation, notwithstanding the absence of a Starwood hotel or establishment in the Philippines. This is significant because it makes clear the issue of online transactions as acceptable proof of use of the mark.

Societe Des Produits, Nestle, SA v. Puregold Price Club, Inc13

The Supreme Court resolved both the procedural and substantive issues in this case. On the substantive aspect, the SC held that the Puregold’s mark ‘Coffee Match’ was not confusingly similar with the mark ‘Coffee-Mate’ owned by Nestlé, which opposed Puregold’s application. The SC ruled that the dominant element of both marks ‘Coffee’ cannot be appropriated exclusively because it is generic or descriptive of the goods covered, and while ‘Match’ and ‘Mate’ contain the same first three letters, the last two letters of Puregold’s mark rendered it visually, aurally and phonetically distinguishable from Nestlé’s mark. On the procedural aspect, the SC ruled that the failure of Nestlé to prove the authority of the person signing the certification of non-forum shopping was fatal to its petition and was sufficient ground for dismissal. This teaches us that while there should be liberal application of technical rules, the same does not apply to the requirement to submit proof of authority to sign the certification of non-forum shopping.

Emerald Garment Manufacturing Corporation v. The HD Lee Company, Inc14

This was an opposition case filed by Emerald against HD Lee’s mark ‘Lee & Ogive curve design’ claiming confusing similarity with its earlier registration for its marks ‘double curve lines’ and ‘double reversible wave line’. There was an earlier opposition action15 filed by HD Lee against Emerald’s ‘double reversible wave line’ wherein the former claimed that Emerald’s mark was confusingly similar to its mark ‘Ogive curve design’, which it claimed was internationally well known and protected by the Paris Convention. In this case, HD Lee failed to provide proof of earlier use of its mark, over the evidence of use provided by Emerald dating back to October 1973, and to prove that its mark was well known in the Philippines, hence, Emerald prevailed. HD Lee argued that GR 195415 should not bar the opposition case GR 210693 because there is no identity of issues. GR 195415 dealt with the registrability of the mark ‘Ogive curve design’, which is distinct and separate from ‘Lee & Ogive curve device’, which is the subject of 210693. However, the Supreme Court looked at HD Lee’s arguments as an engagement in ‘hair-splitting distinctions’, and ruled that the principle of conclusiveness of judgment applies to the case at hand because the issues all point to the ‘registrability of the confusingly similar marks “double curve lines”, “double reversible wave line” and “Ogive curve design”’, which has already been passed upon on GR No. 195415. This case underscores the need to present evidence compliant with the required formalities.

III OBTAINING PROTECTION

i Genetic material

Genetic material may be protected by patent. The IP Code in Section 22.4 states exclusion from patent protection does not apply to ‘microorganisms and non-biological and microbiological processes’. Such protection is also implied in Section 35.1, which states:

The application shall disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art. Where the application concerns a microbiological process or the product thereof and involves the use of a microorganism that cannot be sufficiently disclosed in the application in such a way as to enable the invention to be carried out by a person skilled in the art, and such material is not available to the public, the application shall be supplemented by a deposit of such material with an international depository institution.

The Revised Implementing Rules and Regulations for Patents, Utility Models and Industrial Designs (Revised IRRs) are clearer on the protection of genetic material in Rules 408 and 409, which are provisions on the requirements of application relating to biological materials and microorganisms and the requirements of application relating to biological materials and microorganisms before allowance, respectively. These rules require that a culture of the microorganism used in the subject of the patent application be deposited in a depositary institution.

ii Genetically altered cells, plants and animals

Genetically altered cells are protected by patent as discussed previously. A genetically altered plant may be protected under Philippine Plant Variety Protection Act of 2002. A certificate of plant variety protection will be granted for varieties that are new, distinct, uniform and stable. According to Section 36 of that law, the right holders of plant varieties have the right to authorise any of the following acts:

  1. production or reproduction;
  2. conditioning for the purpose of propagation;
  3. offering for sale;
  4. selling or other marketing;
  5. exporting;
  6. importing; and
  7. stocking for any purpose mentioned above.

Animal breeds are excluded from the protection of a patent in Section 22.2 of the IP Code; however, the provision includes the phrase ‘shall not preclude Congress to consider the enactment of a law providing sui generis protection of . . . animal breeds’. There is currently no policy proposal regarding the protection of animal breeds.

iii Methods of production in cells, plants, animals

The methods of production in cells, plants and animals may be covered by microbiological processes (see Section III.i).

iv Business methods

Among the non-patentable inventions enumerated in Section 22 of the IP Code are ‘schemes, rules and methods of . . . doing business’. The Revised IRRs expand on this non-patentable invention further in Rule 202(d) as a ‘method of doing business, such as a method or system for transacting business without the technical means for carrying out the method or system’.

v Computer software

The provision regarding patents in the IP Code states in Section 22.2 that ‘programs for computers’ are excluded from patent protection. However, in the Section 172.1(n) or the IP Code, concerning copyright, ‘computer program’ is included in the enumeration of literary and artistic works protected from the moment of their creation.

vi Methods for treating patients, both with drugs and medical procedures

The method for treatment of humans or animals by surgery or therapy and diagnostic methods practised on the human or animal body is another item excluded from patent protection by Section 22 of the IP Code.

IV ENFORCEMENT OF RIGHTS

i Possible venues for enforcement
Administrative action

The BLA is the IPOPHL’s adjudications bureau. It has jurisdiction over intellectual property violation cases claiming not less than 200,000 Philippine pesos in damages. Below this amount, administrative action can be filed before the Department of Trade and Industry’s Office of Legal Affairs. The BLA has original jurisdiction over inter partes cases (i.e., opposition to the application for registration of marks, cancellation of trademarks, cancellation of patents, utility models, and industrial designs, and petitions for compulsory licensing of patents).

Civil and criminal actions

The regional trial courts (RTCs) designated as special commercial courts have jurisdiction over civil and criminal actions involving intellectual property. RTCs can issue search warrants in the case of criminal actions and writs of seizure in the case of civil actions. The Rules of Procedure for Intellectual Property Rights Cases (see Section II.iii, above) govern these actions, but the Rules of Court are applied supplementarily. Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two years to five years and a fine ranging from 50,000 to 200,000 Philippine pesos shall be imposed on any person found guilty.16

Border control measures

Complying with the TRIPS agreement on special border control to prohibit the entry of certain prohibited merchandise, the Bureau of Customs (BoC) Customs Administrative Order 6-2002 was issued establishing the administrative guidelines to expedite the handling and disposition of prohibited goods. The prohibited goods are: (1) those that copy or simulate any mark or trade name registered with the IPOPHL; (2) those that copy or simulate any well-known mark declared as such by competent authority; (3) those that are judicially determined to be unfairly competing with products bearing marks that are registered or not; (4) those that constitute a piratical copy or likeness of any work, published or unpublished, on which a copyright subsists; (5) those that present themselves as a substantial simulation of any machine, article, product or substance duly patented under the IP Code, without the authorisation of the patentee or its authorised agent; and (6) those that use a false or misleading description, symbol, or label that is likely to cause confusion, mistake or deception as to the affiliation, connection or association of the imported goods with another person’s goods, or those that misrepresent their nature, characteristics, qualities or geographic origin. Recording of the intellectual property right holders of their products with the BoC is desirable; each record is good for two years and serves as a continuing complaint against any and all counterfeit and infringing goods.

Trademarks

Actions for trademark infringement, unfair competition, false or fraudulent declaration, false designation of origin, false description or representation may be filed as administrative, civil or criminal actions. The measure of recoverable damages is the reasonable profit that the complaining party would have made, had a defendant not infringed his or her rights, or the profit that the defendant actually made out of the infringement, or in the event such measure or damages cannot be readily ascertained, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party.17 On application by the complainant, the court may impound sales invoices and other documents evidencing sales during the pendency of the action.18 Where there is actual intent to mislead the public or defraud the complainant, at the discretion of the court, the damages may be doubled.19 The complainant, also, upon proper showing may be granted injunction.20 The court may also order the destruction of the infringing materials.21

ii Requirements for jurisdiction and venue
Administrative action

The BLA of the IPOPHL has original jurisdiction over administrative actions involving intellectual property rights cases where the claim of damages is not less than 200,000 Philippine pesos. These proceedings are adversarial and trial of the case is required. The BLA has the authority to hear and decide cases involving opposition and cancellation of trademarks, patents, utility models, industrial designs, and petition for compulsory licensing of patents. These proceedings are summary in nature and no trial is conducted. Referral to mediation is compulsory except in cases where preliminary injunctive relief is sought.

Civil action

A civil action relating to intellectual property violations is cognisable by the special commercial court where the plaintiff or respondent resides. The complaint must be verified. The application for a writ of seizure, however, may be filed with any of the special commercial courts, and the applicant has 30 days from the issuance of the writ to file the verified complaint before the proper special commercial court. The respondent can raise the relevant counterclaims coupled with payment of the docket fees, if applicable.

Criminal action

As previously discussed, the special commercial courts have authority to act on applications for the issuance of search warrants involving violations of the IP Code; these search warrants shall be enforceable nationwide. Within their respective territorial jurisdictions, the special commercial courts in the judicial regions where the violation of intellectual property rights occurred shall have concurrent jurisdiction to issue search warrants.22 Whether or not there is a raid, if the intellectual property owner has sufficient evidence to take action, then a verified complaint should be filed with the prosecutor’s office. The verified complaint for preliminary investigation should be filed with the Office of the Public Prosecutor (Department of Justice) in the territorial jurisdiction where one of the elements of the crime is committed. Should the Public Prosecutor find probable cause, he or she shall then file the information (criminal complaint) before the special commercial court in that territory. With the filing of the information, the court shall issue the warrant of arrest, and the accused can put up the required bail. The court schedules the arraignment of the accused and the case is set for pretrial. Under the new procedures, the court has the discretion to resolve the case by asking for the submission of position papers, or schedule the same for trial. This procedure is also applicable to civil actions.

iii Obtaining relevant evidence of infringement and discovery

Discovery is allowed for administrative, civil and criminal actions involving intellectual property violations. However, discovery is not as widely used in the Philippines as in the United States. In the case of administrative actions, if the information sought in discovery can be obtained from witnesses presented during the trial, motions for discovery will be denied.

iv Trial decision-maker
Special commercial courts

These are regional trial courts presided over by one judge per court designated by the Supreme Court to handle civil and criminal cases involving intellectual property cases. In patent infringement cases, the court, on its own motion or upon motion by a party, may order the creation of a committee of three experts to provide advice on the technical aspects of the patent in dispute.23 To assist in trials involving highly technical evidence or matters, the court may also request the IPOPHL to provide equipment, technical facilities and personnel.

Administrative cases

In actions for the cancellation of patents or any claims therein, involving highly technical issues, on motion of any party, the Director of the BLA may order that the petition be heard and decided by a committee composed of the Director as chairman and two members who have the experience or expertise in the field of technology to which the patent relates.

v Structure of the trial
Civil action and criminal actions

Subject to the issues stated in the pretrial order, trials in the regional trial courts proceed as follows:

  1. The plaintiff adduces evidence in support of the claim. The plaintiff may present ordinary witness to support facts and may call on expert witnesses to lay down opinion on matters requiring special knowledge, skill, experience or training that they are shown to possess.24 Witnesses are to be examined in open court. The order of their questioning is: direct examination of the proponent; cross-examination by the opponent; further direct examination of the proponent; and further cross-examination of the opponent.25 In civil cases, the party having the burden of proof must establish his or her case by a preponderance of evidence.26
  2. The burden of proof falls on the party presenting evidence on the facts in issue necessary to establish a claim or defence.27 The defendant adduces evidence to support a defence or counterclaim, cross-claim or third-party claim.
  3. Third parties and so forth, if any, shall adduce evidence in support of their claim.
  4. The parties against whom any counterclaim or cross-claim has been pleaded shall adduce evidence in support of their defence.
  5. The parties adduce rebuttal evidence.
  6. The case is submitted for decision.28
Criminal action

The civil liability aspect is deemed instituted in a criminal case. A private complainant may be represented by its own private prosecutor, with the consent of the public prosecutor, for proving civil damages, and conducts the trial. The order of the trial, and witnesses to be presented, is similar to that in a civil action. The accused is entitled to an acquittal unless guilt is proved beyond reasonable doubt.29

Administrative action

The proceeding is similar to that of the civil action. A fact may be deemed established if it is supported by substantial evidence.30

vi Infringement

A civil action and an administrative action to recover damages are available to the patent owner for patent infringement, which is defined as the making, using, offering for sale, selling or importing a patented product or a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorisation of a patentee. Aggrieved patentees or patent owners can also recover attorneys’ fees plus litigation expenses, and also secure an injunction for the protection of their rights.31 If the damages are inadequate or cannot be readily ascertained with reasonable certainty, the court may award a sum equivalent to reasonable royalty.32 The court may, according to the circumstances of the case, award damages in a sum above the amount found as actual damages sustained, but which should not exceed three times the amount of such actual damages. Destruction or disposition outside the channels of trade may also be ordered for infringing goods, materials and implements used in the infringement.33 The IP Code also provides for contributory infringement. No damages can be recovered for acts of infringement committed more than four years before the institution of the action for infringement.34 In the case of a second offence by the same infringer, criminal action is available. An action for infringement may be defeated by claiming that the patent, or any claim thereof, is invalid and must be cancelled; the grounds available are that the invention lacks novelty, the patent is not sufficiently disclosed for a person skilled in the art to carry out, or the patent is contrary to public policy or morality. The above remedies are also available to utility models and industrial designs covered by the law on patents.

vi Infringement

Section 75 of the IP Code states that the extent of protection conferred by the patent shall be determined by the claims, which are to be interpreted in the light of the description and drawings, and that due account shall be taken of elements that are equivalent to the elements expressed in the claims, so that a claim shall be considered to cover not only all the elements as expressed therein, but also equivalents.

vii Defences

The following defences may be raised in a patent infringement case: (1) the patented product has been put on the market with the consent of the patent owner; (2) the act is done privately and on a non-commercial scale or for a non-commercial purpose that does not significantly prejudice the economic interests of the patent owner; (3) the use is for experimental purposes; (4) the invention is used in the preparation by a medical professional for individual cases in accordance with a medical prescription; (5) the invention is used in any ship, vessel, aircraft or land vehicle of any other country entering Philippine territory for its exclusive needs, and not used for the manufacturing of anything to be sold within the Philippines; and (6) use of a prior user in good faith.35

The invalidity of the patent can be raised as a defence by presenting, for example: prior art that consists of everything that 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 the whole contents of an application for a patent, utility model or industrial design registration, published in accordance with the IP Code, filed or effective in the Philippines. National emergency, public interest and non-commercial use of the patent without satisfactory reason are some of the grounds for compulsory licensing.

viii Time to first-level decision

For administrative actions, it usually takes two to three years from the filing of the complaint to the issuance of the decision by the BLA. For civil and criminal cases, it takes a little longer, about three to five years, because of the backlog of the regional trial courts. However, the issuance of the new procedures by the Supreme Court, allowing for the resolution of a case on the basis of position papers, may well reduce the period for the issuance of the decision at the regional trial court level.

ix Remedies

At any time before the decision is issued, whether the action is administrative or civil, the plaintiffs or any proper party may move for and avail of the provisional remedies of preliminary attachment and preliminary injunction. Preliminary attachment of the adverse party’s property as security for the satisfaction of any judgment is allowed in the following cases: (1) in an action against a party who has been guilty of fraud in procuring the registration of a mark by false or fraudulent declaration or representation, or by any false means; (2) in an action for unfair competition; (3) in an action against a party who does not reside and is not found in the Philippines, or on whom summons may be served by publication; (4) in an action for the recovery of a specified amount of money or damages on a cause arising from a violation of the IP Code against a party who is about to depart from the Philippines with intent to evade the execution or judgment; or (5) in an action against a party who has removed or disposed of property, or is about to do so, with intent to defraud the aggrieved party. The party applying for the order of attachment must give a bond in the amount fixed by the court, on the condition that the applicant will pay all the costs that may be adjudged to the adverse party and all damages he or she may sustain by reason of the attachment, if the court shall finally adjudge the applicant was not entitled thereto.36 Preliminary injunction may be granted when it is established that the applicant has a right in esse, that the commission, continuance or non-performance of the act complained of during the litigation would probably cause injustice to the applicant, or that a party is doing, threatening to do or attempting to do some act in violation of the rights of the applicant tending to render the judgment ineffectual.

Damages

No damages can be recovered for acts of infringement committed more than four years before the institution of the action for infringement.37 The amount of damages may be based on reasonable profit or business loss of the complaining party. The court may impound during the pendency of the action sales invoices and other documents evidencing sale.38 For civil actions, the special commercial court may issue a writ of seizure of the infringing goods.39

Border control measures

The BoC has the power to issue a warrant of seizure and detention if it has found that a shipment violated the Tariff and Customs Code or the IP Code. It will then give an opportunity to the intellectual property owners to be heard. If, with due notification, no claimant, owner or agent can be found, then such properties will be forfeited in favour of the government.

x Appellate review

Administrative actions, including inter partes cases decided by the BLA, are appealable to the ODG within 30 days of the date the parties receive the decision. The ODG can refer the case again to mediation. The ODG will request the adverse party to file its comments. No oral argument is allowed. Decisions of the ODG are appealable to the Court of Appeals, and the decision of the latter to the Supreme Court. A division of the Court of Appeals is composed of three justices. Oral arguments may be allowed. The Court of Appeals will review the facts of the case and issue its decision. The Supreme Court, in general, only deals with questions of law, but on exceptional grounds will rule upon questions of fact.

xi Alternatives to litigation

For both the IPOPHL and the regular courts, referral to mediation is mandatory. For the IPOPHL, an alternative dispute resolution office has recently been created, giving parties access to any and all alternative modes of dispute resolution, such as mediation and arbitration.

V TRENDS AND OUTLOOK

The IPOPHL published its proposed amendments to the IP Code (Republic Act No. 8293) on 22 December 2017 that shall be forwarded to the Philippine Congress. Some of the major amendments are as follows:

  1. expanding the functions and powers of the Bureau of Legal Affairs (BLA), which is the adjudication arm of the IPOPHL, to include: (1) declaration of marks as well-known, including revocation of said declarations, (2) declaration as true and actual inventor, (3) declaration of ownership or having the right to intellectual property, (4) having original and exclusive jurisdiction over administrative complaints for violation of intellectual property laws, (5) awarding of damages;
  2. creation of the Bureau of Innovation and Business Development, and the IP Academy, and dissolving the Documentation, Information and Technology Transfer Bureau;
  3. allowing the filing of two patent applications for the same subject as an invention patent application and a utility model application within one year of the filing of the first application, with the applications being processed independently. However, once the invention patent application has been granted, the utility model registration shall be automatically cancelled, and the letters patent shall be issued;
  4. allowing parts or components of products or handicrafts as subject of industrial design registrations;
  5. granting power to the director general of the IPOPHL to issue a compulsory licence to exploit a patented invention even without the agreement of the patent owner;
  6. amending the definition of a trademark by removing the requirement that it has to be visible, which would allow non-traditional marks such as scent and sound marks to be registrable; and
  7. allowing the registration of certification marks.

1 Editha R Hechanova is managing partner at Hechanova Bugay Vilchez & Andaya-Racadio.

2 Section 4, IP Code.

3 The IP Code was amended by Republic Act No. 10372, which took effect on 22 March 2013.

4 Section 122, IP Code.

5 Section 123(j), IP Code.

6 Sections 112–120.3.

7 Section 21.

8 Section 22.2, 22.3.

9 Section 76.

10 Section 72.

11 Section 84.

12 G.R. 222366, 4 December 2017.

13 G.R. No. 217194, 6 September 2017.

14 G.R. 210693, 7 June 2017.

15 G.R. No. 195415.

16 Section 170.

17 Section 156.1.

18 Section 156.2.

19 Section 156.3.

20 Section 156.4.

21 Section 157.

22 Section 2, Rule 10, AM 10-3-10-SC.

23 Section 4, Rule 17, AM 10-3-10-SC.

24 Section 49, Rule 130, Rules of Court.

25 Section 4, Rule 132, Rules of Court.

26 Section 1, Rule 133, Rules of Court.

27 Section 1, Rule 131, Rules of Court.

28 Section 5, Rule 30, Rules of Court.

29 Section 2, Rule 133, Rules of Court.

30 Section 5, Rule 133, Rules of Court.

31 Section 76.2.

32 Section 76.3.

33 Section 76.5.

34 Section 79.

35 Section 73, IP Code.

36 Rule 4, Rules and Regulations of Administrative Complaints for Violation of Laws Involving IP Rights.

37 Section 79, IP Code.

38 Section 156, IP Code.

39 Section 2, Rule 2, AM 10-3-10-SC.