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Draft Position Paper on the Validity of Intellectual Property Code Amendments

Draft Position Paper on the Validity of Intellectual Property Code Amendments

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Published by Janette Toral
A position paper prepared by Atty JJ Disini with the intention of persuading President Noynoy Aquino to veto the proposed amendments.
A position paper prepared by Atty JJ Disini with the intention of persuading President Noynoy Aquino to veto the proposed amendments.

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Published by: Janette Toral on Feb 27, 2013
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07/16/2013

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- 1 -
POSITION PAPER ON THEPROPOSED AMENDMENTS TO THE IP CODEIntroduction
A bill proposing to amend certain provisions of the Intellectual Property Code (IPC) hasrecently been enrolled by Congress. Considering the proposed amendment’s impact onindividual rights, much has been said about it in social networking sites and in the news. Blogger Raissa Robles even went on to say that through the bill, “Congress has erased every Filipino’sright to bring home music, movies, and books from abroad.” The Intellectual Property Office(IPO), in defense of the proposed amendments, posted in its website that “the amendments aremeant to protect the Filipino artists and creators, while also making copyrighted works moreaccessible to Filipinos.”While it is true that the protection of copyright and other intellectual property rights is alegitimate state concern, the State must extend its protection in a way that strikes a balance between the rights given to the makers of “intellectual” goods and the State’s interest in promoting the progress of science and the arts. Furthermore, such rights should not interferewith the individual’s rights enshrined in no less than the Constitution. Indeed, any law that seeksto limit individual liberty must be measured against the standard of reasonableness.This paper seeks to establish that the bill proposing certain amendments to the IPCcontains unabashed violations of some of our constitutionally protected rights and that some of its proposed amendments are unreasonable considering the reality of life in the modern age.
I.Expansion of the IPO’s Powers
The bill proposes to amend the IPC as follows:
Section 7.
The Director General and Deputies Director General shall exercise thefollowing powers and functions:xxxc.
Undertake enforcement functions
supported by concerned agencies such asthe Philippine National Police, National Bureau of Investigation, Bureau of Customs, Optical Media Board, Local Government Units, among others;d.
Conduct visits
during reasonable hours to establishments and businessesengaging in activities violating intellectual property rights and provisions of thisact
based on report, information, or complaint received by the office
;(
emphasis supplied 
).
 
- 2 -Under this amendment, the IPO shall enjoy the power to enforce the law and the power toconduct searches and seizures without the benefit of a judicial warrant. This amendment isobjectionable on four grounds: first, it constitutes a usurpation of judicial powers; second, itviolates the right to due process; third, it violates the right against unreasonable searches andseizures; and fourth, it violates the equal protection clause.
 Enforcement Function Violates Due Process.
The proposed Section 7(c), assuming thatenforcement can indeed be delegated to the IPO, is still constitutionally infirm because it willviolate due process.The Article III, Section 1 of the Constitution provides that:
Section 1.
No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.The guarantee of due process has two aspects – procedural and substantive. As a procedural guarantee, it assures
 procedural fairness
, or as Daniel Webster succinctly put, “a lawwhich hears before it condemns.” On the other hand, as a substantive guarantee, it serves as a prohibition against arbitrary laws. Thus, Justice Felix Frankfurter of the U.S. Supreme Court, for example, would go no farther than to define due process — and in so doing sums it all up — asnothing more and nothing less than "the embodiment of the sporting Idea of fair play" (
Ynot v. Intermediate Appellate Court,
G.R. No., 74457, March 20, 1987, citing Frankfurter, Mr. JusticeHolmes and the Supreme Court).The enforcement functions granted by this provision to the IPO violate procedural due process. First, the IPO is the agency which processes and grants the applications for registrationof intellectual property (IP) owners. Section 5.1 of the IPC provides:
Section 5.
 
 Functions of the Intellectual Property Office (IPO)
. – 5.1. To administer and implement the State policies declared in this Act, there is herebycreated the Intellectual Property Office (IPO) which shall have the following functions:
a) Examine applications for grant of letters patent for inventions and register utilitymodels and industrial designs;b) Examine applications for the registration of marks, geographic indication,integrated circuits;c) Register technology transfer arrangements
and settle disputes involving technologytransfer payments covered by the provisions of Part II, Chapter IX on VoluntaryLicensing and develop and implement strategies to promote and facilitate technologytransfer;
 x x x
.”
(emphasis supplied)
.
 
In addition, IP owners make regular payments to the IPO in the form of registration fees.IP owners, in contrast to those whom they accuse of infringement, have more exposure to theIPO, and the IPO is, in a way, beholden to IP owners for funds. Given this close relationship between the IPO and IP owners, this provision will violate the right to procedural due process of alleged IP rights infringers because their chance to get an unbiased and fair hearing before the
 
- 3 -IPO is low, if not, nil. This requirement of fair hearing is the essence of procedural due process.Without the guarantee of a fair hearing,
 procedural fairness
is necessarily violated.Compare this with labor cases before the National Labor Relations Commission (NLRC),which is granted similar enforcement powers by the law. In these labor cases, state interventionon behalf of the labor force is justified, if not necessary, considering the power imbalance infavor of employers. Hence, in
 Fuentes v. NLRC 
, G.R. No. 110017, January 2, 1997:The State is bound under the Constitution to afford full protection to labor and whenconflicting interests of labor and capital are to be weighed on the scales of social justice
the heavier influence of the latter should be counterbalanced with the sympathy andcompassion the law accords the less privileged workingman.
In sharp contrast to cases before the IPO, IP owners already have leverage to begin with – the proximate relationship and the financial backing of the adjudicating body: the IPO. Addingthis proposed provision to the IPC will only further tilt the balance in favor of IP owners, to thedetriment of the general public whose interest the IPO is obliged to protect. Hence, Section 2 of the IPC provides:
Section 2.
 
 Declaration of State Policy
. - The State recognizes that an effectiveintellectual and industrial property system is vital to the development of domestic andcreative activity, facilitates transfer of technology, attracts foreign investments, andensures 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 andcreations, particularly when beneficial to the people, for such periods as provided in thisAct.
The use of intellectual property bears a social function. To this end, the State shallpromote the diffusion of knowledge and information for the promotion of nationaldevelopment 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 thePhilippines (
emphasis supplied 
).
Visitorial Rights Violate Substantive Due Process.
Substantive due process is the protection against arbitrary laws and the guaranty against acts of arbitrariness of government.Hence, in the landmark case of 
United States v. Toribio
, G.R. No. L-5060, January 26, 1910:To justify the State in thus interposing its authority in behalf of the public, it must appear,
first, that the interests of the public generally, as distinguished from those of aparticular class, require such interference
; and, second, that the
means arereasonably necessary for the accomplishment of the purpose, and not undulyoppressive upon individuals.
The legislature may not, under the guise of protecting the

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