1

INTRODUCTION

1. GENERAL CONCEPTS.
1.01. Commercial law has been defined as that branch of
private law which regulates the juridical relations
arising from commercial acts and according to which
the questions or controversies which may arise
therefrom are resolved (Vivante’s Institutiones, p. 3;
Espejo de Hinojasa, p. 61 cited in Tolentino, Commentaries
and Jurisprudence on the Commercial Laws of the
Philippines, 6th Ed., Vol. 1, p. 1).
a) Traditionally, Commercial laws in the Philip-
pines include laws governing the following: (1)
commercial documents such as negotiable in-
struments, warehouse receipts, letters of credit
and the like, (2) business organizations like cor-
porations, single proprietorship and joint ac-
counts, (3) commercial contracts like insurance
or mortgage, (4) banking regulations, (5) insol-
vency, (6) securities, (7) intellectual properties,
(8) public utilities and other activities or transac-
tions involving commerce.
1.02. Commerce is the mass of acts of human life, which
tend to the satisfaction of necessities by means of
exchange or of the rendition of services, effected with
a purpose of gain and falling within the domain of
mercantile laws (ibid.).

2. APPLICABLE LAWS.
2.01. Code of Commerce — This law was extended to the
Philippines by Royal Decree of August 6, 1888. It

1
2 REVIEWER ON COMMERCIAL LAW

took effect on December 1, 1888. However, with the

passage of the New Civil Code, only the following are
still governed by the Code of Commerce:
a) Merchants, Commercial Registries, Book of Mer-
chants, General Provisions on Commercial Con-
tracts (Arts. 1-63);
b) Joint Accounts (Arts. 239-243);
c) Transfer of Non-Negotiable Credits (Arts. 347-
348);
d) Overland Transportation (Arts. 349-379);
e) Letters of Credit (Arts. 567-572); and
f) Maritime Commerce (Arts. 573-869).
2.02. New Civil Code — The New Civil Code repealed the
provisions of the Code of Commerce on: (1) Sales, (2)
Partnership, (3) Agency, (4) Loan, (5) Guaranty, and
(6) Deposit. Hence, the New Civil Code provisions
now govern such contracts.
The New Civil Code is likewise the primary
governing law on Common Carriers.
2.03. Special Laws — Commercial laws include but are not
limited to the following statutes:
a) Corporation Code of the Philippines (Batas Pam-
bansa Blg. 68);
b) Negotiable Instruments Laws (Act No. 2031);
c) Insurance Code of the Philippines (Presidential
Decree No. 1460 as amended);
d) Financial Rehabilitation and Insolvency Act of
2010 (Republic Act No. 10142);
e) Securities Regulation Code (Republic Act No.
8799);
f) General Banking Law (Republic Act No. 8791);
g) New Central Bank Act (Republic Act No. 7653);
 INTRODUCTION 3

h) Warehouse Receipts Law (Act No. 2137);

i) Trust Receipts Law (Presidential Decree No. 115)
j) Business Name Law (Act No. 3883);
k) Chattel Mortgage Law (Act No. 1508);
l) Public Service Law (Commonwealth Act No.
146);
m) Intellectual Property Code (Republic Act No.
8293).

3. COMMERCIAL CONTRACTS.
3.01. Concept and Formalities. Contracts that are governed
by the Code of Commerce are called commercial
contracts.
a) In the absence of any requirement under the
Code of Commerce or Special Law that certain
formalities are required, commercial contracts
are valid in whatever form they appear (Arts. 51
and 52, CC). Example: Joint Accounts.
b) Contracts that are expressly required to be in
writing under the Code of Commerce are: (1)
Letters of Credit (Art. 267, CC), (2) Loans on Bot-
tomry and Respondentia (Art. 720, CC), and (3)
Charter Parties (Art. 652, CC).
3.02. Perfection.
The general rule under the New Civil Code is
that contracts are perfected upon the meeting of minds
with respect to the object and the consideration.
a) In perfection by correspondence, the applicable rule
is the Cognition Theory under which the contract is
perfected the moment the offeror learns about the
acceptance of his offer by the offeree (Art. 1409, NCC).
Thus, Cognition Theory should apply to all consensual
contracts that are governed by Commercial laws.
To my wife Felicitas, my children Macaria, Jocelyn, Jose, Jr.,
and Renato and their families

Jose R. Sundiang

To my wife Bea and my children Leona Isabelle, Lean Carlo

and Lauren Margaret

Timoteo B. Aquino

iii
iv
 PREFACE TO THE FIFTH EDITION

The last revision of this work was made when the Fourth
Edition was reprinted in March 2010. While less than a year
is normally too short to release a new edition, the passage
of the Financial Rehabilitation and Insolvency Act of 2010
necessitated the revision of the present work. As a consequence
of the same law, discussions on rehabilitation of corporations
which were previously included in Part III are now included
in the discussions on rehabilitation, insolvency and liquidation
of all business organizations in Part V on Credit Transactions.
The authors likewise took the opportunity to include new and
important cases on other subjects as well as new rules like those
pertaining to business names.
This edition adheres to the basic aim of the previous
editions — to present the core subjects of Commercial Law in
a simplified but comprehensive manner. The structure of the
book was purposely designed to help students review for the
Bar Examinations.
The authors extend their heartfelt gratitude to all those
who used this book in the past ten years. The authors hope that
this new edition will continue to be of help to students and Bar
Reviewees.

THE AUTHORS

v
vi
 PREFACE

This book aims to provide law students with materials

for careful review of the fundamental principles, doctrines
and rules on the cluster of laws that encompasses Commercial
Law. Like similar books of its type, this book does not contain
extended discussion of the statutory provisions or jurisprudence.
It includes rules that are presented in outline form, concise
statements of doctrinal pronouncements of the Supreme Court,
summary of significant cases, sample bar examination problems
and problems based on cases.
However, since the book embodies what should be a
student’s core knowledge of Commercial Law, it may be used
not only by students who are preparing for the bar examinations
but also as study guide of students who are taking Commercial
Law subjects in law school, especially Commercial Law Review.
The present edition incorporates new laws and jurispru-
dence. For instance, this work includes salient features of the Hu-
man Security Act of 2007, Civil Aviation Act of 2008 and the Uni-
versally Accessible Cheaper and Quality Medicine Act of 2008.
New topics like the laws on real estate mortgage, salvage, and
ship mortgage are now included. The authors re-arranged the
different parts of the book without deviating from the general
format of presentation of the materials. All laws and discussion
involving credit transactions are now part of Part V of this vol-
ume.
The authors, in the preparation of the present edition,
are still guided by their belief that there is no such thing as
exceedingly early preparation for the bar examinations. Indeed,
such preparation should properly start when the law student
embarks on his study of law. Every student should heed the

vii
caution given by Professor Henry Ballentine who declared that
students should not wait for the writing on the wall — “Thou art
to be weighed in the balance by bar examiners, Woe unto thee if thou
art found wanting.”

THE AUTHORS

viii
 CONTENTS

INTRODUCTION

1. General Concepts....................................................................... 1
1.01. Commercial Law Defined. .............................................. 1
1.02. Commerce Defined. ......................................................... 1
2. Applicable Laws ........................................................................ 1
2.01. Code of Commerce ........................................................ 1
2.02. New Civil Code ............................................................. 2
2.03. Special Laws ................................................................... 2
3. Commercial Contract ................................................................ 3
3.01. Concept and Formalities .............................................. 3
3.02. Perfection of Contracts.................................................. 3

PART I
NEGOTIABLE INSTRUMENTS LAW
1. Definition of Negotiable Instrument ...................................... 5
2. Requisites of Negotiability ..................................................... 5
2.01. Negotiation Defined ...................................................... 6
2.02. How Negotiability is Determined .............................. 6
3. Governing Law .......................................................................... 6
4. Functions of Negotiable Instruments ..................................... 7
4.01. Enumeration of Functions ............................................ 7
4.02. What is Legal Tender .................................................... 7
4.03. Coins as Legal Tender ................................................... 8
5. Distinctive Features of Negotiable Instruments ................... 8
6. Kinds of Negotiable Instruments ............................................ 8
6.01. Bill of Exchange ............................................................. 8
6.02. Promissory Note ............................................................ 8
6.03. Kinds of Bill of Exchange ............................................. 9
6.04. Kinds of Promissory Note ............................................ 9
6.05. Bill of Exchange treated as Promissory Note ............ 10
6.06. Distinctions ..................................................................... 10

ix
 6.07. Negotiability of Certain Documents ........................... 11
7. Persons/Parties Involved ......................................................... 12
8. Distinctions ................................................................................. 13
8.01. Negotiable and Non-Negotiable Instruments ........... 13
8.02. Negotiability and Assignability .................................. 13
9. Requisites of Negotiability ....................................................... 14
9.01. In Writing signed by Maker or Drawer. ..................... 14
9.02. Unconditional Promise or Order ................................ 15
9.03. Sum Certain in Money .................................................. 18
9.04. When Payable ............................................................... 19
9.05. Payable to Order or Bearer ........................................... 21
9.06. Identification of Drawee ............................................... 24
10. Omissions and Additional Provisions .................................. 24
11. Transfer and Negotiation.......................................................... 27
12. Holders ....................................................................................... 32
13. Real and Personal Defenses ..................................................... 39
13.01. Distinctions .................................................................... 40
13.02. Forgery ............................................................................ 40
13.03. Complete and Incomplete Instruments...................... 45
13.04. Insertion of Wrong Date ............................................... 48
13.05. Material Alteration ........................................................ 49
13.06. Fraud .............................................................................. 49
13.07. Failure of, Absence of, or Illicit
Consideration.......................................................... 50
13.08. Minority or Incapacity ................................................. 51
13.09. Prescription .................................................................... 52
14. Secondary and Primary Liability ............................................ 53
14.01. Liability of Maker, Drawer, and Acceptor ................. 53
14.02. Warranties of Qualified and General Indorser .......... 54
14.03. Accommodation Party .................................................. 55
15. How to Enforce Liability .......................................................... 57
15.01. Enforcement of Primary Liability................................ 57
15.02. Enforcement of Secondary Liability ........................... 57
15.03. Presentment for Payment ............................................. 59
15.04. Presentment for Acceptance......................................... 61
15.05. Acceptance ..................................................................... 62
15.06. Notice of Dishonor ........................................................ 64
15.07. Protest ............................................................................. 67
15.08. Acceptance for Honor ................................................... 68
15.09. Payment for Honor........................................................ 69
16. Bills-in-Set ................................................................................... 70
17. Discharge .................................................................................... 71
18. Checks ......................................................................................... 72

x
 PART II
INSURANCE CODE

1. Definitions .............................................................................. 75
2. Characteristics of Insurance Contract.................................... 76
3. Elements of Insurance .............................................................. 78
4. Perfection of Insurance Contract ............................................. 81
4.01. Cover Notes ................................................................ 83
4.02. The Policy (Contents, Cancellation,
Kinds, Rider) ...................................................... 84
5. Types of Insurance Contracts ................................................... 87
6. Parties ......................................................................................... 88
6.01. Insurer .............................................................................. 88
6.02. Insured ............................................................................. 89
6.03. Beneficiary ........................................................................ 90
7. Insurable Interest ...................................................................... 92
7.01. Basic Concepts ............................................................... 92
7.02. Property and Life Insurance Distinguished .............. 97
7.03. Mortgagor and Mortgagee .......................................... 99
7.04. Insurable Interest Retained by Mortgagor ................ 102
7.05. Assignor and Beneficiary ............................................ 104
7.06. Expectancy ...................................................................... 105
7.07. Effect of Change of Interest. ........................................ 105
8. Risks Insured Against ............................................................... 106
9. Premium ..................................................................................... 107
10. Transfer of Policy ....................................................................... 109
11. Devices for Ascertaining and Controlling
the Risk and Loss ............................................................. 110
11.01. Primary Concerns ......................................................... 110
11.02. Devices Defined ............................................................ 110
11.03. Concealment ............................................................... 111
11.04. Representation................................................................ 116
11.05. Warranty.......................................................................... 116
11.06. Warranty and Representation Distinguished ............ 117
11.07. Other Insurance Clause .............................................. 118
12. Incontestability Clause ............................................................. 120
13. Double Insurance and Reinsurance ........................................ 122
14. Loss and Claims Settlement ..................................................... 126
15. Prescription ................................................................................ 130
16. Right of Subrogation ................................................................. 131
17. Marine Insurance ..................................................................... 132
18. Fire Insurance ........................................................................... 144
19. Casualty Insurance .................................................................... 146

xi
20. Compulsory Motor Vehicle Liability Insurance .................... 148
21. Suretyship ................................................................................... 154
22. Life Insurance ............................................................................. 154
23. Variable Contract ...................................................................... 155
24. Powers of the Insurance Commisioner .................................. 155

PART III
BUSINESS ORGANIZATIONS
A. BASIC TYPES OF BUSINESS ORGANIZATIONS ............... 159
1. Individuals and Sole Proprietorship ............................. 159
1.01. Business Name Law ............................................. 159
1.02. Merchants under Code of Commerce ............... 161
2. Partnerships ...................................................................... 165
3. Joint-Accounts (Cuentas en Participacion) ...................... 165
4. Business Trust .................................................................. 166
5. Joint Venture ..................................................................... 166
6. Cooperatives ..................................................................... 167
B. CORPORATION CODE OF THE PHILIPPINES ...................... 167
1. Corporation Defined ....................................................... 167
1.01. Enumeration of Attributes .................................. 167
2. Discussion of Attributes ................................................. 168
2.01. Artificial Being/Separate Personality ............... 168
2.02. Created by Operation of Law ............................ 178
2.03. Right of Succession .............................................. 180
2.04. Powers, Attributes and Properties .................... 180
3. Classifications and Distinctions ..................................... 180
4. Advantages and Disadvantages of Corporate Form .. 186
5. Components of a Corporation ....................................... 187
6. Formation .......................................................................... 191
6.01. Articles of Incorporation ..................................... 191
6.02. Amendment of Articles of Incorporation ......... 195
6.03. Suspension and Cancellation of Certificate .... 196
7. By-Laws ............................................................................ 196
8. Powers of a Corporation ................................................. 198
8.01. Kinds ..................................................................... 198
8.02. Express Powers .................................................... 199
8.03. Ultra Vires Acts .................................................... 200
8.04. Exercise of Powers by Board, Officers
and Stockholders ........................................ 202
8.05. Acquisition of its own Shares ............................ 207
8.06. Dividends ............................................................. 207

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 8.07. Sale of All or Substantially All Properties ........ 213
8.08. Increase or Decrease of Authorized
Capital ........................................................... 215
9. Directors and Officers .................................................... 215
10. Trust Fund Doctrine ....................................................... 224
11. Stockholders and Shares ................................................ 228
11.01. Subscription Contracts ....................................... 228
11.02. Shares of Stocks ................................................... 230
12. Certificate of Stock .......................................................... 236
13. Transfer of Shares ............................................................ 236
14. Rights and Obligations of Stockholders ...................... 239
14.01. Enumeration ......................................................... 239
14.02. Suits by Stockholders/Members ....................... 241
14.03. Pre-emptive Right ................................................ 242
14.04. Right to Vote ......................................................... 242
14.05. Appraisal Right .................................................... 244
15. Collection of Unpaid Subscription ................................ 245
16. Books of the Corporation ................................................ 248
17. Merger vs. Consolidation .............................................. 249
18. Non-Use of Corporate Charter ..................................... 252
19. Dissolution ........................................................................ 253
20. Liquidation ....................................................................... 256
21. Foreign Corporations ...................................................... 256
22. Close Corporations .......................................................... 260
23. Non-Stock Corporations ................................................. 262
24. Religious Corporations ................................................... 265
C. SECURITIES REGULATIONS CODE (SRC) ............................. 267
1. Powers and Function of SEC .......................................... 267
1.01 Transferred Jurisdiction to RTC ........................ 269
2. Securities Defined ........................................................... 270
3. Definition of Terms ......................................................... 270
4. How Public is Protected ................................................. 273
5. Rules on Registration of Securities ................................ 274
6. Exempt Securities............................................................. 275
7. Exempt Transactions........................................................ 276
8. Grounds for Revocation of Registration ....................... 279
9. Manipulation of Security Prices..................................... 280
10. Put, Call and Straddle ..................................................... 282
11. Unlawful Sale and Purchase of Securities .................... 282
12. Insider ................................................................................ 283
13. Tender Offer ...................................................................... 285
14. Margin Trading ................................................................ 288
15. Violations of SRC ............................................................. 289

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 PART IV
BANKING LAWS

1. Banks Defined................................................................... 290

1.01. Nature of Business ............................................... 291
1.02. Authority to Incorporate and Operate .............. 292
2. Classification of Banks ................................................... 292
3. Functions of Banks ........................................................... 294
4. Deposit Function .............................................................. 295
4.01. Deposit Governed by Law on
Simple Loan................................................. 295
4.02. Depositors ............................................................. 296
4.03. Kinds of Deposit .................................................. 296
4.04. Other Accounts .................................................... 298
4.05. Secrecy of Bank Deposits ................................... 298
4.06. Garnishment of Deposits .................................... 302
4.07. Deposit Insurance with PDIC ............................ 303
4.08. Unclaimed Balances Law ................................... 305
5. Loan Function of Banks .................................................. 306
5.01. Basic Rules/Restrictions ..................................... 306
5.02. DOSRI Accounts .................................................. 307
5.03. Collaterals ............................................................. 309
6. Prohibited Acts of Borrowers ......................................... 311
7. Ownership of Banks ........................................................ 311
7.01. Foreign Ownership .............................................. 311
7.02. Filipino Stockholdings ........................................ 312
7.03. Family Groups ...................................................... 313
8. Directors and Officers ..................................................... 313
9. Liquidity and Security Regulations .............................. 315
10. Ownership of Real Property........................................... 316
11. Loan to Banks ................................................................... 317
12. Conservatorship ............................................................... 317
13. Receivership and Liquidation ........................................ 318
14. Trust Operations............................................................... 322
15. The Bangko Sentral ng Pilipinas .................................... 323
A. RELATED LAWS ....................................................................... 327
1. Anti-Money Laundering Act ......................................... 327
2. Truth in Lending Act ...................................................... 332
3. Consumer Act .................................................................. 335
4. Human Security Act of 2007 ........................................... 337

xiv
 PART V
CREDIT TRANSACTIONS

A. WAREHOUSE RECEIPTS LAW .............................................. 341

1. Definitions ......................................................................... 341
2. Functions of Documents of Title .................................... 342
3. Negotiability of Warehouse Receipts ............................ 342
4. Formalities ....................................................................... 342
5. Negotiation of Warehouse Receipts .............................. 344
6. Effects of Negotiation ...................................................... 345
7. Persons Who May Negotiate ......................................... 348
8. Warranties ........................................................................ 349
9. Non-Negotiable Receipts ................................................ 350
10. Defense for Non-Delivery or Misdelivery ................... 351
11. Warehouseman’s Lien ..................................................... 354
12. Adverse Claimant ........................................................... 355
13. Attachment or Levy ......................................................... 355
B. GENERAL BONDED WAREHOUSE LAW ........................... 356
C. LETTERS OF CREDIT ............................................................... 357
1. Definition .......................................................................... 357
2. Governing Laws ............................................................... 357
3. Parties ............................................................................... 358
4. Independent Contracts.................................................... 359
4.01. Independence Principle ...................................... 359
4.02. Banks Deal with Documents Only .................... 360
4.03. Fraud Exception .................................................. 360
5. Kinds .................................................................................. 360
D. TRUST RECEIPTS LAW ........................................................... 361
E. BULK SALES LAW.................................................................... 367
F. MORTGAGE .............................................................................. 368
1. Common Requisites......................................................... 368
2. Real Estate Mortgage ....................................................... 369
3. Chattel Mortgage ............................................................. 374
G. RECTO LAW .............................................................................. 378
H. FINANCIAL REHABILITATION AND INSOLVENCY
ACT OF 2010 ................................................................... 379
1. Policies and Definitions .................................................. 379
2. Excluded Debtors ............................................................. 384
3. Rehabilitation ................................................................... 384
4. Out-of-Court Rehabilitation ........................................... 391

xv
 5. Suspension of Payment ................................................... 392
6. Liquidation of Individual Debtor .................................. 396
7. Liquidation Process ......................................................... 398
8. Distribution of Assets (Concurrence and Preference
of Credits) ................................................................ 400
9. Cross-Boarder Insolvency ............................................... 405

PART VI
TRANSPORTATION AND PUBLIC UTILITIES

A. GENERAL CONCEPTS ............................................................ 407

1. Concept of Common Carriers ........................................ 407
1.01. Test ......................................................................... 407
1.02. Common Carriers and Private
Carriers Distinguished ................................. 410
2. Governing Laws ............................................................... 414
3. Extraordinary Diligence and Presumption
of Negligence .......................................................... 415
4. Defenses of Common Carriers ....................................... 416
5. Duration of Liability ....................................................... 420
6. Liability for Acts of Employees and Passengers ......... 424
7. Limiting Stipulations ....................................................... 425
7.01. Stipulation Reducing Degree Diligence............ 425
7.02. Valid Stipulations ................................................. 425
7.03. Invalid Stipulations ............................................. 426
7.04. Carriage of Goods by Sea Act (COGSA)........... 426
7.05. Purposes ................................................................ 427
8. Registered Owner Rule and Kabit System ................... 428
9. Concurrent Causes of Action ......................................... 429
10. Passenger’s Baggages ..................................................... 431
11. Successive Carriers .......................................................... 431
B. MARITIME LAW ....................................................................... 432
12. General Concepts ........................................................... 432
12.01. Maritime Law Defined...................................... 432
12.02. Vessel Defined ................................................... 432
13. Limited Liability Rule ..................................................... 433
14. Maritime Protest............................................................... 435
15. Collision ........................................................................... 435
16. Arrival Under Stress ........................................................ 437
17. Persons Involved in Maritime Commerce .................. 437
17.01. Ship Agents ........................................................... 437

xvi
 17.02. Captains and Masters .......................................... 437
17.03. Officers and Crew ................................................ 438
17.04. Supercargoes ........................................................ 439
17.05. Desertion .............................................................. 439
18. General and Particular Average .................................... 439
19. Charter Party .................................................................... 444
20. Bill of Lading ................................................................... 444
21. Loans on Bottomry and Respondentia ......................... 445
22. Procedure and Prescriptive Period for Claims ........... 446
23. Ship Mortgage Decree .................................................... 448
23.01. Who may Constitute Mortgage ......................... 448
23.02. Formal Requirements .......................................... 449
23.03. Arrest and Foreclosure ........................................ 450
23.04. Concurrence and Preference of Credits ............ 450
23.05. Maritime Lien ....................................................... 451
24. Salvage Law ...................................................................... 452
24.01. Definition of Salvage .......................................... 452
24.02. Requirements for Compensation ....................... 452
24.03. Amount of Reward or Compensation .............. 452
24.04. Persons Entitled to Reward ................................ 453
C. WARSAW CONVENTION AND CIVIL
AVIATION LAWS ............................................................ 453
25. Warsaw Convention ........................................................ 453
25.01. Transportation by Air Defined ........................... 454
25.02. Damage or Injury for Which Carrier
is Liable .......................................................... 454
25.03. Limit of Liability of Carrier ................................ 454
25.04. Tort Liability ......................................................... 455
25.05. Jurisdiction/Venue .............................................. 456
26. Civil Aviation ................................................................... 456
26.01. Definitions ............................................................. 457
26.02. Inspection of Aircraft ........................................... 458
26.03. Nationality and Ownership of Aircraft ............ 460
D. PUBLIC SERVICE ACT............................................................. 461
27. Public Service Act ............................................................ 461
27.01. Agencies that Replaced the Public
Service Commission ..................................... 461
27.02. Conditions for Issuance of Certificate
of Public Convenience
and Necessity (CPCN) ................................. 462
27.03. Certificate of Public Convenience (CPC)
as Property .................................................... 462

xvii
 27.04. CPC and CPCN Distinguished .......................... 462
27.05. Prior Operator Rule ............................................. 462
27.06. Grounds for Revocation of Certificate .............. 463
27.07. Notice and Hearing ............................................. 463
27.08. Franchise Defined ................................................ 464
27.09. Public Utility Defined.......................................... 465
27.10. Rate Regulation .................................................... 466
27.11. Foreign Equity ...................................................... 468
27.12 Non-Exclusivity of Franchise .............................. 469

PART VII
INTELLECTUAL PROPERTY CODE

1. State Policies .................................................................... 470

2. Kinds of Intellectual Property ........................................ 471
3. International Law Related Provisions........................... 473
3.01. Reciprocity ............................................................ 473
3.02. National Treatment .............................................. 473
3.03. Most-Favoured-Nation Treatment..................... 473
4. Intellectual Property Office ............................................ 474
5. Copyright .......................................................................... 475
5.01. Definitions ............................................................. 475
5.02. Civil Code Provisions .......................................... 475
5.03. When Rights are Conferred ................................ 476
5.04. Who Owns the Copyright................................... 476
5.05. Duration of Copyright......................................... 477
5.06. Copyrightable Objects ......................................... 478
5.07. Unprotected Works .............................................. 479
5.08. Rights of Authors ................................................. 481
5.09. Publisher’s Rights ................................................ 482
5.10. Acts that Do Not Infringe Copyright ................ 482
5.11. Fair Use.................................................................. 484
5.12. Importation for Personal Purposes ................... 484
5.13. Infringement ......................................................... 485
6. Trademarks ....................................................................... 488
6.01. Functions ............................................................... 488
6.02. Acquisition of Marks ........................................... 488
6.03. Marks that Cannot be Registered ...................... 490
6.04. Limitations ............................................................ 491
6.05. Internationally Well-Known Marks .................. 492
6.06. Rights Conferred .................................................. 492
6.07. Duration ............................................................... 493

xviii
 6.08. Infringement ......................................................... 493
6.09. Protection of Tradename ..................................... 499
6.10. Unfair Competition.............................................. 499
6.11. Inter-Partes Cases................................................. 500
7. Patents ............................................................................... 504
7.01. Definitions, Requisites and Purposes ............... 504
7.02. Classes of Patentable Inventions ....................... 506
7.03. Non-Patentable Inventions ................................. 506
7.04. Person Entitled to Right ...................................... 507
7.05. Limitations of Patent Rights ............................... 507
7.06. Prejudicial Disclosure .......................................... 509
7.07. Non-Prejudicial Disclosure ................................. 509
7.08. Term of a Patent ................................................... 509
7.09. Infringement ......................................................... 509
7.10. Compulsory Licensing ........................................ 511
7.11. Concept of Divisional Applications .................. 513
8. Trade Secrets ..................................................................... 515
8.01. Applicable Laws................................................... 516
8.02. Factors.......................................................................... 516

xix