BUSINESS LAW AND REGULATIONS

Trademarks

INTELLECTUAL PROPERTY
Under Sec. 4 of RA 8293 the Intellectual Property Code of the Philippines, the term
Intellectual Property consists of;
Copyright and Related Rights
Trademarks and Service Marks;
Geographic Indications;
Industrial Designs;
Patents;
Layout-Designs (Topographies) of Integrated Circuits; and
Protection of Undisclosed Information (n, TRIPS).
A. Concepts

1. Geographic indications - indications which identify a good as originating in the

territory or a region or locality in that territory, where a given quality, reputation or
characteristics of the good is essentially attributable to its geographical origin (Art.
22[1] AGREEMENT ON TRADE-RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS
[TRIPS for brevity]).
Example: Indications which identify wine as coming from a specific region in France.
2. Protection of Undisclosed Information - Natural and legal persons shall have the possibility
of preventing information lawfully within their control from being disclosed to, acquired by, or
used by others without their consent in a manner contrary to honest commercial practices so
long as such information:
a) is secret in the sense that it is not, as a body or in the precise configuration and
assembly of its components, generally known among or readily accessible to persons
within the circles that normally deal with the kind of information in question;
b) has commercial value because it is secret; and
c) has been subject to reasonable steps under the circumstances, by the person
lawfully in control of the information, to keep it secret.
I. TRADEMARKS
Trademark - any visible sign capable of distinguishing the goods (trademark) or
services (service mark) of an enterprise and shall include a stamped or marked
container of goods (Sec. 121.1, IPC). In relation thereto, trade name means the name
or designation identifying or distinguishing an enterprise. Trademark refers to the
goods while trade name refers to business and its goodwill.
Collective Mark - any visible sign designated as such in the application for registration
and capable of distinguishing the origin or any other common characteristic, including
the quality of goods or services of different enterprises which use the sign under the
control of the registered owner of the collective mark (Sec. 121.2, IPC).
What are the functions of trade mark?
To indicate the origin of the goods to which they are attached;
To guarantee the standard of quality of the goods;
To advertise the goods
How marks are acquired?
The rights in a mark shall be acquired through registration with the Intellectual
Property Office (Sec. 122, IPC). Registration is necessary before one can file an action
for infringement. Prior use in the Philippines is not required before registration.
However, there must be actual use after registration.
What marks may be registered?
Any word, name, symbol, emblem, device, figure, sign, phrase, or any combination
thereof except those enumerated under Section 123, IPC
A mark cannot be registered if it:
(a) Consists of immoral, deceptive or scandalous matter, or matter which may
disparage or falsely suggest a connection with persons, living or dead, institutions,
beliefs, or national symbols, or bring them into contempt or disrepute;
(b) Consists of the flag or coat of arms or other insignia of the Philippines or any of its
political subdivisions, or of any foreign nation, or any simulation thereof;
(c) Consists of a name, portrait or signature identifying a particular living individual
except by his written consent, or the name, signature, or portrait of a deceased
President of the Philippines, during the life of his widow, if any, except by written
consent of the widow;
(d) Is identical with a registered mark belonging to a different proprietor or a mark
with an earlier filing or priority date, in respect of:
(i) The same goods or services, or
(ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to deceive or cause confusion;
(e) Is identical with, or confusingly similar to, or constitutes a translation of a mark
which is considered by the competent authority of the Philippines to be well-known
internationally and in the Philippines, whether or not it is registered here, as being
already the mark of a person other than the applicant for registration, and used for
identical or similar goods or services: Provided, That in determining whether a mark is
well-known, account shall be taken of the knowledge of the relevant sector of the
public, rather than of the public at large, including knowledge in the Philippines
which has been obtained as a result of the promotion of the mark;
(f) Is identical with, or confusingly similar to, or constitutes a translation of a mark
considered well-known in accordance with the preceding paragraph, which is
registered in the Philippines with respect to goods or services which are not similar to
those with respect to which registration is applied for: Provided, That use of the mark
in relation to those goods or services would indicate a connection between those
goods or services, and the owner of the registered mark: Provided, further, That the
interests of the owner of the registered mark are likely to be damaged by such use;
(g) Is likely to mislead the public, particularly as to the nature, quality,
characteristics or geographical origin of the goods or services;
(h) Consists exclusively of signs that are generic for the goods or services that they
seek to identify;
(i) Consists exclusively of signs or of indications that have become customary or usual
to designate the goods or services in everyday language or in bona fide and
established trade practice;
(j) Consists exclusively of signs or of indications that may serve in trade to designate
the kind, quality, quantity, intended purpose, value, geographical origin, time or
production of the goods or rendering of the services, or other characteristics of the
goods or services;
(k) Consists of shapes that may be necessitated by technical factors or by the nature
of the goods themselves or factors that affect their intrinsic value;
(l) Consists of color alone, unless defined by a given form; or
(m) Is contrary to public order or morality.

What are the requirements for a mark to be registered?

A visible sign (not sounds or scents); and
 Capable of distinguishing one’s goods and services from another.
What is the doctrine of secondary meaning?
This doctrine is to the effect that a word or phrase originally incapable of exclusive
appropriation with reference to an article on the market, because it is geographical
or otherwise descriptive, may nevertheless be used exclusively by one producer with
reference to his article so long as in that trade and to that branch of the purchasing
public, the word or phrase has come to mean that the article was his product. (G. and
C. Merriam Co. v. Saalfield, 198 F. 369, 373, cited in Ang v. Teodoro, G.R. No. L‐
48226, Dec. 14, 1942)
Who may file an opposition to trademark registration and on what ground?
Any person who believes that he would be damaged by the registration of a mark
may, upon payment of the required fee and within thirty (30) days after the
publication referred to in Subsection 133.2, file with the Office an opposition to the
application. (Sec. 134, IPC)
What are the tests in determining whether there is a trademark infringement?
Dominancy test – Focuses on the similarity of the prevalent features of the
competing marks. If the competing trademark contains the main or essential or
dominant features of another, and confusion is likely to result, infringement
takes place. (Asia Brewery v. CA, G.R. No. 103543, 5 July 1993)
Totality or holistic test – Confusing similarity is to be determined on the basis
of visual, aural, connotative comparisons and overall impressions engendered
by the marks in controversy as they are encountered in the marketplace.
Note: The dominancy test only relies on visual comparisons between two trademarks
whereas the totality or holistic test relies not only on the visual but also on the aural
and connotative comparisons and overall impressions between the two trademarks.
(Societe Des Produits Nestl, S.A. v. CA, G.R. No. 112012, Apr. 4, 2001)
What is the so‐called “related goods principle”?
Goods are related when they; 1) belong to the same class or have the same
descriptive properties; 2) when they possess the same physical attributes or essential
characteristics with reference to their form, composition, texture or quality.
What is the rule of idem sonans?
Two names are said to be "idem sonantes" if the attentive ear finds difficulty in
distinguishing them when pronounced. (Martin v. State, 541 S.W. 2d 605)
Note: Similarity of sound is sufficient to rule that the two marks are confusingly
similar when applied to merchandise of the same descriptive properties. (Marvex
Commercial v. Director of Patent, G.R. No. L‐19297, Dec. 22, 1966)
What are the types of confusion that arise from the use of similar or colorable imitation
marks?
Confusion of goods (product confusion); and
Confusion of business (source or origin confusion). (McDonald’s Corporation v.
L.C. Big Mak Burger, Inc., et al., G.R. No. 143993, Aug. 18, 2004)
Note: While there is confusion of goods when the products are competing, confusion
of business exists when the products are non‐competing but related enough to
produce confusion of affiliation.
What is colorable imitation?
Such a close or ingenious imitation as to be calculated to deceive ordinary persons, or
such a resemblance to the original as to deceive an ordinary purchaser giving such
attention as a purchaser usually gives, as to cause him to purchase the one supposing
it to be the other. (Societe des Produits Nestlé, S.A. v. CA, G.R. No. 112012, Apr. 4,
2001)
What constitutes an internationally well‐ known mark?
Considered by the competent authority of the Philippines to be “well‐known”
international and in the Philippines as the mark of a person other than the
applicant or registrant
Need not be used or registered in the Philippines
Need not be known by the public at large but only by relevant sector of the
public.
What does the law provide as regards internationally‐well known marks?
Prohibition on subsequent registration does not include services and goods of different
nature or kind, except:
If the internationally well‐known mark is not registered in the Philippines, the
application for registration of a subsequent or similar mark can be rejected
only if the goods or services specified in the application are similar to those of
the internationally well‐ known mark
If the internationally well‐known mark is registered in the Philippines, the
application for registration of a subsequent or similar mark can be refused even
if the goods or services specified in the application are not identical or similar
to those of the internationally well‐known mark.
What is the duration of a certificate of trademark registration?
10 years, renewable for a period of another 10 years. Each request for renewal must
be made within 6 months before or after the expiration of the registration.
What are the rights of a registered mark owner?
Protection against reproduction, or imitation or unauthorized use of the mark
(infringement of mark)
To stop entry of imported merchandise into the country containing a mark
identical or similar to the registered mark
To transfer or license out the mark.
What is the effect of use of Indications by third parties for purposes other than those for
which the mark is used?
Registration of the mark shall not confer on the registered owner the right to
preclude third parties from using bona fide their names, addresses, pseudonyms, a
geographical name, or exact indications concerning the kind, quality, quantity,
destination, value, place of origin, or time of production or of supply, of their goods
or services.
What is trademark infringement?
The use without consent of the trademark owner of any a) reproduction, b)
counterfeit, c) copy or d) colorable imitation of any registered mark or tradename in
connection with the sale, offering for sale, or advertising of any goods, business or
services on or in connection with which such use is likely to cause confusion or
mistake or to deceive purchasers or others as to the source or origin of such goods or
services, or identity of such business; or reproduce, counterfeit, copy or colorably
imitate any such mark or tradename and apply such reproduction, counterfeit, copy
or colorable limitation to labels, signs, prints, packages, wrappers, receptacles or
advertisements intended to be used upon or in connection with such goods, business
or services (Esso Standard Eastern v. CA, G.R. No. L‐29971, Aug. 31, 1982)
What are the elements to be established in trademark infringement?
The validity of the mark
The plaintiff’s ownership of the mark
The use of the mark or its colorable imitation by the alleged infringer results in
“likelihood of confusion.” (McDonald’s Corporation v. L.C. Big Mak Burger, Inc.,
G.R. No. 143993, Aug 18, 2004)
What is meant by non‐competing goods?
Those which, though they are not in actual competition, are so related to each other
that it might reasonably be assumed that they originate from one manufacturer. Non‐
competing goods may also be those which, being entirely unrelated, could not
reasonably be assumed to have a common source. In the case of related goods,
confusion of business could arise out of the use of similar marks; in the latter case of
non‐related goods, it could not. The vast majority of courts today follow the modern
theory or concept of "related goods" which the court has likewise adopted and
uniformly recognized and applied. (Esso Standard Eastern, Inc. v. CA, G.R. No. L‐
29971, Aug. 31, 1982)
What are the remedies of the owner of the trademark against infringers?
The owner of a registered mark may recover damages from any person who
infringes his rights, and the measure of the damages suffered shall be either
the reasonable profit which the complaining party would have made, had the
defendant not infringed his rights, or the profit which the defendant actually
made out of the infringement, or in the event such measure of damages cannot
be readily ascertained with reasonable certainty, 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. (Sec. 23, first par., R.A. No. 166a)
On application of the complainant, the court may impound during the pendency
of the action, sales invoices and other documents evidencing sales. (n)
In cases where actual intent to mislead the public or to defraud the
complainant is shown, in the discretion of the court, the damages may be
doubled. (Sec. 23, first par., R.A. No. 166)
The complainant, upon proper showing, may also be granted injunction. (Sec.
23, second par., R.A. No. 166a)[Sec. 156, IPC]
What are the limitations on the actions for infringement?
Right of prior user – registered mark shall be without affect against any person
who, in good faith, before filing or priority date, was using the mark for
purposes of his business. (Sec 159.1, IPC)
Relief against publisher – injunction against future printing against an innocent
infringer who is engaged solely in the business of printing the mark. (Sec.
159.2, IPC)
Relief against newspaper – injunction against the presentation of advertising
matter in future issues of the newspaper, magazine or in electronic
communications in case the infringement complained of is contained in or is
part of paid advertisement in such materials. (Sec. 159.3, IPC)
What is a trade name or business name?
Any individual name or surname, firm name, device nor word used by manufacturers,
industrialists, merchants, and others to identify their businesses, vocations or
occupants (Converse rubber Corp. vs. Universal Rubber Products, GR No. L‐27425, L‐
30505, April 28, 1980).
What is a collective mark?
A "collective mark" or “collective trade‐name" is a mark or trade‐name used by the
members of a cooperative, an association or other collective group or organization.
(Sec. 40, R.A. 166)

II. Trade Secrets

What is the nature of undisclosed information/trade secret?
Those trade secrets are of a privileged nature. The protection of industrial property
encourages investments in new ideas and inventions and stimulates creative efforts
for the satisfaction of human needs. It speeds up transfer of technology and
industrialization, and thereby bring about social and economic progress. Verily, the
protection of industrial secrets is inextricably linked to the advancement of our
economy and fosters healthy competition in trade. (Air Philippines Corporation v.
Pennswell, Inc., G.R. No. 172835, Dec. 13, 2007)

III. Patents
What is a patent?
A statutory grant which confers to an inventor or his legal successor, in return for the
disclosure of the invention to the public, the right for a limited period of time to
exclude others from making, using, selling or importing the invention within the
territory of the country that grants the patent.
What are the patentable inventions?
Any technical solution of a problem in any field of human activity which is new,
involves an inventive step and is industrially applicable. It may be, or may relate to, a
product, or process, or an improvement of any of the foregoing. (Sec. 21, IPC)
What are the conditions for patentability?
Novelty – An invention shall not be considered new if it forms part of a prior
art. (Sec. 23, IPC)
 Involves an inventive step – if, having regard to prior art, it is not obvious to a
person skilled in the art at the time of the filing date or priority date of the
application claiming the invention(Sec. 26, IPC)
In the case of drugs and medicines, there is no inventive step if the invention results
from the mere discovery of a new form or new property of a known substance which
does not result in the enhancement of the known efficacy of that substance. (Sec.
26.2, as amended by R.A. 9502)
Industrially Applicable – An invention that can be produced and used in any
industry, shall be industrially applicable (Sec. 27, IPC).
What is prior art?
Everything which 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
The whole contents of a published application, filed or effective in the
Philippines, with a filing or priority date that is earlier than the filing or
priority date of the application. Provided, that the application which has
validly claimed the filing date of an earlier application under Section 31 of the
IPC, there shall be a prior art with effect as of the filing date of such earlier
application: Provided further, that the applicant or the inventor identified in
both applications are not one and the same. (Sec. 24, IPC)
What is meant by “made available to the public” and what are its effects?
To be “made available to the public” means at least one member of the public has
been able to access knowledge of the invention without any restriction on passing
that knowledge on to others.
When a work has already been made available to the public, it shall be non‐
patentable for absence of novelty, except Non‐prejudicial disclosure – the disclosure
of information contained in the application during the 12‐month period before the
filing date or the priority date of the application if such disclosure was made by:
The inventor;
A patent office and the information was contained:
In another application filed by the inventor and should have not have been
disclosed by the office, or
In an application filed without the knowledge or consent of the inventor by a
third party which obtained the information directly or indirectly from the
inventor;
 A third party which obtained the information directly or indirectly from the
inventor. (Sec. 25, IPC)
Who has the burden of proving want of novelty of an invention?
The burden of proving want of novelty is on him who avers it and the burden is a
heavy one which is met only by clear and satisfactory proof which overcomes every
reasonable doubt. (Manzano v. CA, G.R. No. 113388. Sept. 5, 1997)
What is the test of non‐obviousness?
If any person possessing ordinary skill in the art was able to draw the inferences and
he constructs that the supposed inventor drew from prior art, then the latter did not
really invent.
Who is considered a person of ordinary skill?
A person who is presumed to:
Be an ordinary practitioner aware of what was common general knowledge in
the art at the relevant date.
Have knowledge of all references that are sufficiently related to one another
and to the pertinent art and to have knowledge of all arts reasonably pertinent
to the particular problems with which the inventor was involved.
Have had at his disposal the normal means and capacity for routine work and
experimentation. (Rules and Regulations on Inventions, Rule 207)
What are other forms of patentable inventions?
Industrial design – Any composition of lines or colors or any three‐dimensional
form, whether or not associated with lines or colors.Provided that such
composition or form gives a special appearance to and can serve as pattern for
an industrial product or handicraft. (Sec. 112, IPC)
Integrated circuit – A product, in its final form, or an intermediate form, in
which the elements, at least one of which is an active elements and some of all
of the interconnections are integrally formed in and or on a piece of material,
and in which is intended to perform an electronic function.
Layout design/topography – The three dimensional disposition, however
expressed, of the elements, at least one of which is an active element, and of
some or all of the interconnections of an integrated circuit, or such a three‐
dimensional disposition prepared for an integrated circuit intended for
manufacture. Registration is valid for 10 years without renewal counted from
date of commencement of protection.
Utility model – A name given to inventions in the mechanical field
When does an invention qualify as a utility model?
If it is new and industrially applicable. A model of implement or tools of any industrial
product even if not possessed of the quality of invention but which is of practical
utility. (Sec. 109.1, IPC)
What is the term of a utility model?
7 years from date of filing of the application (Sec. 109.3, IPC).
What are not patentable inventions?
Discoveries, scientific theories and mathematical methods
In the case of Drugs and medicines, mere discovery of a new form or new
property of a known substance which does not result in the enhancement of
the efficacy of that substance
Schemes, rules and methods of performing mental acts, playing games or doing
business, and programs for computers
Methods for treatment of the human or Animal body
Plant varieties or animal breeds or essentially biological process for the
production of plants or animals. This provision shall not apply to micro‐
organisms and non‐biological and microbiological processes
Aesthetic creations
Anything which is Contrary to public order or morality. (Sec. 22, IPC as
amended by R.A. 9502)
Are computer programs patentable?
Computer programs are not patentable but are copyrightable. Exception: They can be
patentable if they are part of a process (e.g. business process with a step involving
the use of a computer program).
Who is entitled to a patent?
Inventor, his heirs, or assigns.
Joint invention – Jointly by the inventors. (Sec. 28, IPC)
2 or more persons invented separately and independently of each other – To
the person who filed an application;
2 or more applications are filed – the applicant who has the earliest filing date
or, the earliest priority date. First to file rule. (Sec. 29, IPC)
Inventions created pursuant to a commission – Person who commissions the
work, unless otherwise provided in the contract. (Sec. 30.1, IPC)
 Employee made the invention in the course of his employment contract:
The employee, if the inventive activity is not a part of his regular duties even if
the employee uses the time, facilities and materials of the employer.
The employer, if the invention is the result of the performance of his regularly‐
assigned duties, unless there is an agreement, express or implied, to the
contrary. (Sec. 30.2, IPC)
What is the “first to file” rule?
If two (2) or more persons have made the invention separately and
independently of each other, the right to the patent shall belong to the person
who filed an application for such invention, or
Where two or more applications are filed for the same invention, to the
applicant whichhas the earliest filing date. (Sec. 29, IPC)
Who may apply for a patent?
Any person who is a national or who is domiciled or has a real and effective industrial
establishment in a country which is a party to any convention, treaty or agreement
relating to intellectual property rights or the repression of unfair competition, to
which the Philippines is also a party, or extends reciprocal rights to nationals of the
Philippines by law. (Sec. 3, IPC)
What are the steps in the registration of a patent?
The procedure for the grant of patent may be summarized as follows:
Filing of the application
Accordance of the filing date
Formality examination
Classification and Search
Publication of application
Substantive examination
Grant of Patent
Publication upon grant
Issuance of certificate (Salao, Essentials of Intellectual Property Law: a
Guidebook on Republic Act No. 8293 and Related Laws., 2008)
How is disclosure made?
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.
What is a claim?
The application shall contain one (1) or more claims which shall define the matter for
which protection is sought. Each claim shall be clear and concise, and shall be
supported by the description (Sec. 36, IPC).
What is an abstract?
The abstract shall consist of a concise summary of the disclosure of the invention as
contained in the description, claims and drawings in preferably not more than one
hundred fifty (150) words. It must be drafted in a way which allows the clear
understanding of the technical problem, the gist of the solution of that problem
through the invention, and the principal use or uses of the invention. The abstract
shall merely serve for technical information (Sec. 37, IPC)
What is unity of invention?
The application shall relate to one invention only or to a group of inventions forming a
single general inventive concept. (Sec. 38.1) If several independent inventions which
do not form a single general inventive concept are claimed in one application, the
application must be restricted to a single invention. (Sec. 38.2, IPC)
What is the concept of divisional applications?
Divisional applications come into play when two or more inventions are claimed in a
single application but are of such a nature that a single patent may not be issued for
them. The applicant, is thus required to “divide”, that is, to limit the claims to
whichever invention he may elect, whereas those inventions not elected may be made
the subject of separate applications which are called “divisional applications”.
(Smith‐Kline Beckman Corp. v. CA, GR No. 126627, Aug. 14,2003)
What is priority date?
An application for patent filed by any person who has previously applied for the same
invention in another country which by treaty, convention, or law affords similar
privileges to Filipino citizens, shall be considered as filed as of the date of filing the
foreign application. (Sec. 31, IPC)
What are the conditions in availing of priority date?
The local application expressly claims priority;
It is filed within 12 months from the date the earliest foreign application was
filed; and
 A certified copy of the foreign application together with an English translation
is filed within 6 months from the date of filing in the Philippines. (Sec. 31, IPC)
What are the rights conferred by a patent application after the first publication?
The applicant shall have all the rights of a patentee against any person who, without
his authorization, exercised any of the rights conferred under Section 71 in relation to
the invention claimed in the published patent application, as if a patent had been
granted for that invention, provided that the said person had:
Actual knowledge that the invention that he was using was the subject matter
of a published application; or
Received written notice that the invention was the subject matter of a
published application being identified in the said notice by its serial number
Note: That the action may not be filed until after the grant of a patent on the
published application and within four (4) years from the commission of the acts
complained of (Sec. 46, IPC).
When shall the patent take effect?
A patent shall take effect on the date of the publication of the grant of the patent in
the IPO Gazette. (Sec. 50.3, IPC)
What is the duration of a patent, utility model and industrial design?
Patent – 20 years from date of filing of application without renewal. (Sec. 54,
IPC)
Utility Model – 7 years from the filing date of the application without renewal.
(Sec. 109.3, IPC)
Industrial Design – 5 years from the filing date of the application, renewable for
not more than two (2) consecutive periods of five (5) years each
What are the grounds for the cancellation of patents?
The invention is Not new or patentable;
The patent does not Disclose the invention in a manner sufficiently clear and
complete for it to be carried out by any person skilled in the art; or
Contrary to public order or morality.(Sec. 61.1, IPC)
Patent is found Invalid in an action for infringement (Sec. 82, IPC)
What are the grounds for cancellation of a utility model?
The invention does not qualify for registration as a utility model
 That the description and the claims do not comply with the prescribed
requirements
Any drawing which is necessary for the understanding of the invention has not
been furnished
That the owner of the utility model registration is not the inventor or his
successor in title. (Sec. 109.4, IPC)
What are the grounds for cancellation of an industrial design?
The subject matter of the industrial design is not registrable;
The subject matter is not new; or
The subject matter of the industrial design extends beyond the content of the
application as originally filed (Sec. 120IPC).
What are the rights conferred by a patent?
Subject matter is a product – Right to restrain, prohibit and prevent any
unauthorized person or entity from making, using, offering for sale, selling or
importing the product.
Subject matter is a process – Right to restrain prohibit and prevent any
unauthorized person or entity from manufacturing, dealing in, using, offering
for sale, selling or importing any product obtained directly or indirectly from
such process (Sec. 71, IPC).
Right to assign the patent, to transfer by succession, and to conclude licensing
contracts. (Sec. 71.2, IPC)
What are the exceptions to the rights conferred by a patent?
In generalIf put on the market in the Philippines by the owner of the product,
or with his express consent.
XPN: Drugs and medicines ‐ introduced in the Philippines or anywhere else in the
world by the patent owner, or by any party authorized to use the invention (Sec.
72.1, as amended by R.A. 9502)
Where the act is done privately and on a non‐commercial scale or for a non‐
commercial purpose. (Sec. 72.2, IPC)
Exclusively for experimental use of the invention for scientific purposes or
educational purposes (experimental use provision). (Sec. 72.3, IPC)
In the case of drugs and medicines, where the act includes testing, using,
making or selling the invention including any data related thereto, solely for
purposes reasonably related to the development and submission of information
 and issuance of approvals by government regulatory agencies required under
any law of the Philippines or of another country that regulates the
manufacture, construction, use or sale of any product.(Sec. 72.4, IPC)
Where the act consists of the preparation for individual cases, in a pharmacy or
by a medical professional, of a medicine in accordance with a medical
prescription. (Sec. 72.5, IPC)
Where the invention is used in any ship, vessel, aircraft, or land vehicle of any
other country entering the territory of the Philippines temporarily or
accidentally. (Sec. 72.5, IPC)
Prior user – Person other than the applicant, who in good faith, started using
the invention in the Philippines, or undertaken serious preparations to use the
same, before the filing date or priority date of the application shall have the
right to continue the use thereof, but this right shall only be transferred or
assigned further with his enterprise or business. (Sec. 73, IPC) .
Use by Government – A government agency or third person authorized by the
government may exploit invention even without agreement of a patent owner
where:
Public interest, as determined by the appropriate agency of the government, so
requires; or
A judicial or administrative body has determined that the manner of
exploitation by owner of patent is anti‐competitive. (Sec. 74, IPC)
Reverse reciprocity of foreign law – Any condition, restriction, limitation,
diminution, requirement, penalty or any similar burden imposed by the law of a
foreign country on a Philippine national seeking protection of intellectual
property rights in that country, shall reciprocally be enforceable upon nationals
of said country, within Philippine jurisdiction. (Sec. 231, IPC)
Who is a parallel importer?
One which imports, distributes, and sells genuine products in the market,
independently of an exclusive distributorship or agency agreement with the
manufacturer. Note: Such acts of “underground sales and marketing” of genuine
goods, undermines the property rights and goodwill of the rightful exclusive
distributor. Such goodwill is protected by the law on unfair competition. (Solid
Triangle v. Sheriff, G.R. No. 144309, Nov. 23, 2001)
What is the doctrine of exhaustion?
Also known as the doctrine of first sale, it provides that the patent holder has control
of the first sale of his invention. He has the opportunity to receive the full
consideration for his invention from his sale. Hence, he exhausts his rights in the
future control of his invention. It espouses that the patentee who has already sold
his invention and has received all the royalty and consideration for the same will be
deemed to have released the invention from his monopoly. The invention thus
becomes open to the use of the purchaser without further restriction. (Adams v.
Burke, 84 U.S. 17, 1873)

IV. Copyrights
What is copyright?
A right over literary and artistic works which are original intellectual creations in the
literary and artistic domain protected from the moment of creation. (Sec. 171.1, IPC)
What are the elements of copyrightability?
Originality – Must have been created by the author’s own skill, labor, and
judgment without directly copying or evasively imitating the work of another.
(Ching Kian Chuan v. CA, G.R. No.130360, Aug. 15, 2001)
Expression – Must be embodied in a medium sufficiently permanent or stable to
permit it to be perceived, reproduced or communicated for a period more than
a transitory duration.
What are the elements of originality?
It is independently created by the author, and
It possesses some minimal degree of creativity
When does copyright vest?
Works are protected from the time of their creation, irrespective of their mode or
form of expression, as well as of their content, quality and purpose.
What are copyrightable works?
Literary and Artistic Works
Books, pamphlets, articles and other writings
Lectures, sermons, addresses, dissertations prepared for Oral delivery, whether
or not reduced in writing or other material form
Letters
Dramatic, choreographic works
Musical compositions
 Works of Art
Periodicals and Newspapers
Works relative to Geography, topography, architecture or science
Works of Applied art
Works of a Scientific or technical character
Photographic works
Audiovisual works and cinematographic works
Pictorial illustrations and advertisements
Computer programs; and
Other literary, scholarly, scientific and artistic works. (Sec. 172.1, IPC)
Derivative Works
Dramatizations, translations, adaptations, abridgements, arrangements, and
other alterations of literary or artistic works;
Collections of literary, scholarly, or artistic works and compilations of data and
other materials which are original by reason of the selection or coordination or
arrangement of their contents. (Sec. 173)
Note: Derivative Works shall be protected as new works, provided that such new work
shall not affect the force of any subsisting copyright upon the original works employed
or any part thereof, or be construed to imply any right to such use of the original
works, or to secure or extend copyright in such original works. (Sec. 173.2, IPC)
What are the subjects not protected?
Idea, procedure, system, method or operation, concept, principle, discovery or
mere data as such
News of the day and other items of press information
Any official text of a legislative, administrative or legal nature, as well as any
official translation thereof(Sec. 175, IPC)
Pleadings
Decisions of courts and tribunals – this refers to original decisions and not to
annotated decisions such as the SCRA or SCAD as these already fall under the
classification of derivative works, hence copyrightable
Any work of the Government of the Philippines
GR: Conditions imposed prior the approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for
profit. Such agency or office, may, among other things, impose as condition the
payment of royalties.
XPN: No prior approval or conditions shall be required for the use of any purpose of
statutes,
rules and regulations, and speeches, lectures, sermons, addresses, and dissertations,
pronounced, read, or rendered in courts of justice, before administration agencies, in
deliberative assemblies and in meetings of public character. (Section 176, IPC)
TV programs, format of TV programs (Joaquin v. Drilon, G.R. No. 108946, Jan.
28, 1999)
Systems of bookkeeping; and
Statutes.
What is the presumption of authorship?
The natural person whose name is indicated on a work in the usual manner as the
author shall, in the absence of proof to the contrary, presumed to be the author of
the work. This is applicable even if the name is a pseudonym, where the pseudonym
leaves no doubt as to identity of the author. (Sec. 219.1, IPC)
The person or body corporate, whose name appears on the audio‐visual work in the
usual manner shall, in the absence of proof to the contrary, be presumed to be the
maker of said work. (Sec. 219.2, IPC)
What are the rights of an author?
Economic rights – The right to carry out, authorize or prevent the following
acts:
Reproduction of the work or substantial portion thereof
Carry‐out derivative work (dramatization, translation, adaptation,
abridgement, arrangement or other transformation of the work)
First distribution of the original and each copy of the work by sale or other
forms of transfer of ownership
Rental right
Public display
Public performance
Other communications to the public.
 Moral rights – For reasons of professionalism and propriety, the author has the
right:
To require that the authorship of the works be attributed to him (attribution
right)
To make any alterations of his work prior to, or to withhold it from publication
Right to preserve integrity of work, object to any distortion, mutilation or
other modification which would be prejudicial to his honor or reputation; and
To restrain the use of his name with respect to any work not of his own
creation or in a distorted version of his work. (Sec.193, IPC)
Droit de suite (Right to proceeds in subsequent transfers or follow up rights) –
This is an inalienable right of the author or his heirs to receive to the extent of
5% of the gross proceeds of the sale or lease of a work of painting or sculpture
or of the original manuscript of a writer or composer, subsequent to its first
disposition by the author.
The following works are not covered:
Prints
Etchings
Engravings
Works of applied art
Similar works wherein the author primarily derives gain from the proceeds of
reproductions. (Sec. 201, IPC)
May an author be compelled to perform his contract?
An author cannot be compelled to perform his contract to create a work or for the
publication of his work already in existence. However, he may be held liable for
damages for breach of such contract. (Sec. 195, IPC)
What is the nature of moral rights? These are personal rights independent from the
economic rights. Being a personal right, it can only be given to a natural person.
Hence, even if he has licensed or assigned his economic rights, he continues to enjoy
the above‐mentioned moral rights. (Amador, Intellectual Property Fundamentals,
2007)
What is the term of moral rights?
It shall last during the lifetime of the author and for fifty (50) years after his death
and shall not be assignable or subject to license. (Sec. 198, IPC)
What are the exceptions to moral rights?
1. Absent any special contract at the time creator licenses/permits another to use his
work, the following are deemed not to contravene creator’s moral rights, provided
they are done in accordance with reasonable customary standards or requisites of the
medium:
Editing
Arranging
Adaptation
Dramatization
Mechanical and electric reproduction
2. Complete destruction of work unconditionally transferred by creators. (Sec. 197,
IPC)
Can moral rights be waived?
Moral rights can be waived in writing, expressly so stating such waiver. Exception,
Even in writing, waiver is not valid if:
Use the name of the author, title of his work, or his reputation with respect to
any version/adaptation of his work, which because of alterations, substantially
tendto injure literary/artistic reputation of another author
Use name of author in a work that he did not create
What are the neighboring rights?
These are the rights of performers, producers of sound recording and broadcasting
organizations.
What is the scope of a performer’s rights?
Performers shall enjoy the following exclusive rights:
As regards their performances, the right of authorizing:
The broadcasting and other communication to the public of their performance;
and
The fixation of their unfixed performance.
The right of authorizing the direct or indirect reproduction of their
performances fixed in sound recordings, in any manner or form;
The right of authorizing the first public distribution of the original and copies
of their performance fixed in the sound recording through sale or rental or
other forms of transfer of ownership;
 The right of authorizing the commercial rental to the public of the original and
copies of their performances fixed in sound recordings, even after distribution
of them by, or pursuant to the authorization by the performer; and
The right of authorizing the making available to the public of their
performances fixed in sound recordings, by wire or wireless means, in such a
way that members of the public may access them from a place and time
individually chosen by them. (Sec. 203, IPC)
What are the moral rights of performers?
The performer, shall, as regards his live aural performances or performances fixed in
sound
recordings, have the right to claim to be identified as the performer of his
performances, except where the omission is dictated by the manner of the use of the
performance, and to object to any distortion, mutilation or other modification of his
performances that would be prejudicial to his reputation.
When are performer’s rights lost?
Once a performer has authorized broadcasting or fixation of his performance. (Sec
205, IPC)
When are performers entitled to additional remuneration on their performance?
The performer shall be entitled to an additional remuneration equivalent to at least
5% of the original compensation he received for the first communication or broadcast
in every communication to the public or broadcast of a performance subsequent to
the first communication or broadcast, unless otherwise provided in the contract (Sec.
206, IPC).
What is the scope of the rights of broadcasting organizations?
Broadcasting organizations shall enjoy the exclusive right to carry out, authorize or
prevent
any of the following acts:
The rebroadcasting of their broadcasts
The recording in any manner, including the making of films or the use of video
tape, of their broadcasts for the purpose of communication to the public of
television broadcasts of the same
The use of such records for fresh transmissions or for fresh recording(Sec. 211,
IPC)
What are the term of protection given to performers, producers and broadcasting
organizations?
 For performances not incorporated in recordings, 50 years from the end of the
year in which the performance took place; and
For sound or image and sound recordings and for performances incorporated
therein, 50 years from the end of the year in which the recording took place.
In case of broadcasts, the term shall be 20 years from the date the broadcast
took place. The extended term shall be applied only to old works with
subsisting protection under the prior law. (Sec. 215, IPC)
What are the general limitations on copyright?
The following acts shall not constitute infringement of copyright:
Performance of a work, once it has been lawfully made accessible to the
public, if done privately and free of charge or for a charitable or religious
institution or society.
The making of quotations from a published work if they are compatible with
fair use and only to the extent justified for the purpose.
Communication to the public by mass media of articles on current political,
social, economic, scientific or religious topic, lectures, addresses and other
works of the same nature
As part of reports of current events (e.g. music played or tunes on the occasion
of a sporting event and such tunes were picked up during a new coverage of
the event).
For teaching purposes, provided that the source and of the name of the author,
if appearing in the work, are mentioned.
Recording made in educational institutions of a work included in a broadcast
for the use of such educational institutions, provided that such recording must
be deleted within a reasonable period after they were first broadcast.
The making of ephemeral recordings by a broadcasting organization by means
of its own facilities and for use in its own broadcast.
The use made of a work by or under the direction or control of the
government, by the National Library or by educational, scientific or
professional institutions where such use is in the public interest and is
compatible with fair use.
The public performance of a work, in a place where no admission fee is
charged.
Public display of the original or a copy of the work not made by means of a
film, slide, television image or otherwise on screen or by means of any other
 device or process (e.g. Public display using posters mounted on walls and
display boards).
Any use made of a work for the purpose of any judicial proceedings or for the
giving of professional advice by a legal practitioner.
What is the doctrine of “fair use”?
“Fair use” permits a secondary use that “serves the copyright objective of stimulating
productive thought and public instruction without excessively diminishing the
incentives for creativity”.
What is the “must carry rule”?
Must‐carry rule is another limitation on copyright. It obligates operators to carry the
signals of local channels within their respective systems. This is to give the people
wider access to more sources of news, information, education, sports event and
entertainment programs other than those provided for by mass media and afforded
television programs to attain a well informed, well‐versed and culturally refined
citizenry and enhance their socio‐economic growth. (ABS‐CBN Broadcasting
Corporation v. Philippine Multimedia System, G.R. No. 175769‐ 70, Jan. 19, 2009)
What is copyright infringement?
It is the doing by any person, without the consent of the owner of the copyright, of
anything the sole right to do which is conferred by statute on the owner of the
copyright. The act of lifting from another’s book substantial portions of discussions
and examples and the failure to acknowledge the same is an infringement of
copyright. (Habana v. Robles, G.R. No. 131522, July 19, 1999)
What does substantial reproduction mean?
It is not necessarily required that the entire copyrighted work, or even a large portion
of it, be copied. If so much is taken that the value of the original work is substantially
diminished, there is an infringement of copyright and to an injurious extent, the work
is appropriated. It is no defense that the pirate did not know whether or not he was
infringing any copyright; he at least knew that what he was copying was not his, and
he copied at his peril. In cases of infringement, copying alone is not what is
prohibited. The copying must produce an “injurious effect”. (Habana v. Robles, G.R.
No. 131522, July 19, 1999)
What is plagiarism?
It is the practice of claiming or implying original authorship of (or incorporating
material from) someone else’s written or creative work, in whole or in part, into
one’s own without adequate acknowledgment.