© Copyright Lex Mundi Ltd.

2011

Intellectual Property and Competition Law

PHILIPPINES
Romulo Mabanta Buenaventura Sayoc & De Los Angeles

CONTACT INFORMATION
Romulo Mabanta Buenaventura Sayoc & De Los Angeles
30th Floor, Citibank Tower
8741 Paseo de Roxas
Makati City, Philippines 1260
632.848.0114
www.romulo.com

Part A - Technology Licences

1. Legislation/Rules Intellectual Property Code (Republic Act Number 8292).

s.87 provides a list of prohibited provisions

2. Market Shares N/A

3. Duration (a) intellectual property rights, generally: No specific provision limiting

duration of IP licences. Licence duration is left to agreement between
the parties. It is understood however that a patent licence may not exceed
the life time of the patent.

(b) know-how: The Philippines still has no Trade Secrets law.

Protection of Trade Secrets is effected through contractual
provisions.

4. Regulation of Price No, provisions pursuant to which the licensor reserves the right to affect the
sale or resale prices of products manufactured on the basis of the licence are
deemed prima facie to have an adverse effect on competition and trade (IP
Code Section 87.2).

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5. Limitation of Production No, provisions that contain restrictions regarding volume and structure of
production shall be deemed prima facie to have an adverse effect on
competition and trade (IP Code Section 87.3).

6. Tie-in Clauses No, provisions which impose upon the licensee the obligation to acquire
from a specific source capital goods, intermediate products, raw materials
and other technologies or of permanently employing personnel indicated by
the licensor, shall be deemed prima facie to have an adverse effect on
competition and trade (IP Code Section 87.1).

7. General Restrictions (a) specified customers: There is no prohibition of such restrictions in

section 87.

(b) customer groups: There is no prohibition of such restrictions in

section 87.

(c) field of use: There is no prohibition of such restrictions in section

87.

(d) territory: There is no prohibition of such restrictions in section 87.

1987 Constitution of the Republic of the Philippines ARTICLE XII Section

19. The State shall regulate or prohibit monopolies when the public interest
so requires. No combinations in restraint of trade or unfair competition shall
be allowed.

8. Active/Passive Sales Restrictions on active sales to territories which are justified to protect the
Restrictions legitimate interests of the licensor (e.g. where an exclusive licence has been
granted by the licensor) are excepted from the prohibition (section 87.8 of
the IP Code) on agreements that restrict a licensee from exporting licensed
products. Conversely restriction on active or passive sales to non-
exclusively licensed territories will be prohibited.

9. Restriction on exploitation of No, such restrictions prohibited by IP Code section 87.12.

Licensee IP

10. Improvements (a) an assignment of severable improvements: No. There is prohibition

on such obligations to assign improvements under section 87.6 of the
IP Code.

(b) an exclusive licence of severable improvements: No, prohibited

under section 87.6.

(c) a non exclusive licence of severable improvements: No, prohibited

under section 87.6.

(d) an assignment or exclusive licence of non severable improvements:

No, prohibited under section 87.6.

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11. Challenge to IPR No. Note: a licensor cannot include a provision in an agreement preventing a
licensee from challenging the validity of a patent right.

12. Severability [No response].

Part B - Distribution
Agreements

1. Legislation/Rules Intellectual Property Code (Republic Act Number 8292)

2. Regulation of Price (a) Recommended sales prices: Recommendation of prices is

permissible provided this does not amount to fixing of sale prices.

(b) Minimum sales prices: Prescribing a minimum sales price is

prohibited under section 87.2 of the IP Code if this amounts to a fixing of
prices.

(c) Maximum sales prices: Prescribing a maximum sales price is

prohibited under section 87.2 if this amounts to a fixing of prices.

3. Restrictions (a) Territories: No legal provision prohibiting such restrictions with

respect to resellers.

(b) Customers: No legal provision prohibiting such restrictions with

respect to resellers.

(c) Customer groups: No legal provision prohibiting such restrictions

with respect to resellers.

4. Active/Passive Sales No prohibition with respect to active or passive sales by resellers.

Restrictions

5. Non-compete provisions Yes. There are no specific prohibitions restricting inclusion of non-compete
provisions during and after the term of an agreement, however, case-law
indicates that non-compete clauses should not be allowed to continue beyond
2 years from the date of expiration of the agreement.

6. Restrictions on competing There are no statutory provisions prohibiting restriction of a reseller from
products selling competing products.

7. Severability See above, Part A - 12