MERCANTILE LAW REVIEWER

158

2012 UP LAW
BAR REVIEWER
MERCANTILE
Intellectual Property Law LAW
MERCANTILE LAW TEAM
BAR OPERATIONS COMMISSION 2012
2012
Subject Heads | Anna
EXECUTIVE COMMITTEE Katarina Rodriguez• Mickey
Ramon Carlo Marcaida |Commissioner Chatto
Raymond Velasco • Mara Kriska Chen |Deputy Commissioners
Barbie Kaye Perez |Secretary LAYOUT TEAM 2012
Carmen Cecilia Veneracion |Treasurer
Hazel Angeline Abenoja|Auditor Layout Artists | Alyanna
Apacible • Noel Luciano • RM
COMMITTEE HEADS Meneses • Jenin Velasquez •
Eleanor Balaquiao • Mark Xavier Oyales | Acads Mara Villegas • Naomi
Monique Morales • Katleya Kate Belderol • Kathleen Mae Tuason (D) • Rachel Quimpo • Leslie Octaviano •
Miranda (D) |Special Lectures Yas Refran • Cris Bernardino
Patricia Madarang • Marinella Felizmenio |Secretariat Layout Head| Graciello
Victoria Caranay |Publicity and Promotions Timothy Reyes
Loraine Saguinsin • Ma. Luz Baldueza |Marketing
Benjamin Joseph Geronimo • Jose Lacas |Logistics
Angelo Bernard Ngo • Annalee Toda|HR
Anne Janelle Yu • Alyssa Carmelli Castillo |Merchandise
Graciello Timothy Reyes |Layout
Charmaine Sto. Domingo • Katrina Maniquis |Mock Bar
Krizel Malabanan • Karren de Chavez |Bar Candidates’ Welfare
Karina Kirstie Paola Ayco • Ma. Ara Garcia |Events

OPERATIONS HEADS
Charles Icasiano • Katrina Rivera |Hotel Operations
Marijo Alcala • Marian Salanguit |Day-Operations
Jauhari Azis |Night-Operations
Vivienne Villanueva • Charlaine Latorre |Food
Kris Francisco Rimban • Elvin Salindo |Transpo
Paula Plaza |Linkages

UP LAW BAR OPERATIONS COMMISSION

 COMMERCIAL LAW REVIEWER

B. Differences between
Intellectual Property copyrights, trademarks and
MERCANTILE LAW patent 159
Letters of Credit I. Intellectual Property in general
Warehouse Receipts II. Patents Patentable Inventions: refer to any technical
Law III. Trademarks solution of a problem in any field of human activity,
Trust Receipts Law IV. Copyright which is new, involves an inventive step and is
Negotiable industrially applicable. It may be, or refer to, any
Instruments Law
V. Registration Flowcharts
product, process, or an improvement of any of the
Insurance Code foregoing. [Sec. 21, RA 8293] It is vested from the
Transportation Law issuance of letters of patent.
Corporation Law
Securities Regulation Trademark: any visible sign capable of distinguishing
Code the goods (trademark) or services (service mark) of
Banking and Finance an enterprise and shall include a stamped or marked
Intellectual Property container of goods. [Kho v. CA, et al. (2002)] It is
vested from registration.

Trade Name: the name or designation identifying or

I. Intellectual Property in General distinguishing an enterprise [Sec. 121.3, RA 8293]
A. Intellectual property Rights
Copyright: right granted by statute to the author or
B. Differences between copyrights, originator of literary, scholarly, scientific, or artistic
trademarks and patent productions, including computer programs. A
C. Technology transfer arrangements copyright gives him the legal right to determine how
D. International Conventions and Reciprocity the work is used and to obtain economic benefits
from the work. For example, the owner of a
A. Intellectual Property Rights copyright for a book or a piece of software has the
exclusive rights to use, copy, distribute, and sell
copies of the work, including later editions or
Intellectual Property versions of the work. If another person improperly
uses material covered by a copyright, the copyright
State Policies owner can obtain legal relief. [Rule 2, Copyright
1. To protect and secure the exclusive rights Safeguards and Regulations]
of scientists, inventors, artists and other
gifted citizens to their intellectual property Copyright is confined to literary and artistic works
and creations, particularly when beneficial which are original intellectual creations in the
to the people, for such periods as provided literary and artistic domain protected from the
in this Act. moment of their creation. [Kho v. CA, et al. (2002)]
2. To promote the diffusion of knowledge and It is vested from the moment of creation.
information for the promotion of national
development and progress and the common Other forms of Intellectual Property
good.
3. To streamline administrative procedures of
Geographic Indication
registering patents, trademarks and
copyright, to liberalize the registration on
One which identifies a good as originating in the
the transfer of technology, and to enhance
territory of a TRIPS member, or a region or locality
the enforcement of intellectual property
in that territory where a given quality, reputation or
rights in the Philippines. [Sec. 2, RA 8293]
other characteristic of a good is essentially
attributable to its geographical origin [Art. 22, TRIPS
Intellectual Property Rights under the Agreement]
Intellectual Property Code
1. Copyright; Industrial Design
2. Related Rights of copyright;
3. Trademarks and Service Marks; Any composition of lines or colors or any three-
4. Geographic Indications; dimensional form, whether or not associated with
5. Industrial Designs; lines or colors: Provided, that such composition or
6. Patents; form gives a special appearance to and can serve as
7. Layout-Designs (Topographies) of Integrated pattern for an industrial product or handicraft. [Sec.
Circuits; [Sec. 4, RA 8293] 112.1, RA 8293]
8. Protection of Undisclosed Information
[TRIPS Agreement].
 MERCANTILE LAW REVIEWER
Layout Design (Topography) of an Integrated
Circuit
160
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 the interconnections of an integrated circuit,
or such a three-dimensional disposition prepared for
an integrated circuit intended for manufacture.
[Sec. 112.3, RA 8293]
Integrated Circuit: a product, in its final form, or an
intermediate form, in which the elements, at least
one of which is an active element and some or all of
the interconnections are integrally formed and/or on
a piece of material, and which is intended to
perform an electronic function. [Sec. 112.2, RA
8293]
Undisclosed Information
Information which:
1. Is a secret in a sense that it is not, as a
body or in the precise configuration and
assembly of components, generally known
among or readily accessible to persons
within the circles that normally deal with
the kind of information in question;
2. Has a commercial value because it is secret;
and
3. Has been subject to reasonable steps under
the circumstances, by the person lawfully in
control of the information, to keep it secret
[Art. 39, TRIPS]
C. Technology Transfer
Arrangement
Refers to contracts or agreements involving:
1. the transfer of systematic knowledge for
the manufacture of a product
2. the application of a process, or rendering of
a service including management contracts;
3. the transfer, assignment or licensing of all
forms of intellectual property rights,
including licensing of computer software
except computer software developed for
mass market. [Sec. 4.2, RA 8293]
D. International Conventions and
Reciprocity
Reciprocity Rule
Any person who is a national or who is domiciled or
has a real and effective industrial establishment in a
country which:
1. 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
2. extends reciprocal rights to nationals of the
Philippines by law, shall be entitled to
benefits to the extent necessary to give effect
to any provision of such convention, treaty or
reciprocal law, in addition to the rights to
which any owner of an intellectual property
right is otherwise entitled by this Act. [Sec. 3,
RA 8293]
Reverse Reciprocity of Foreign Laws
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, RA 8293]
Philip Morris v. Fortune Tobacco (2006). True, the
Philippines’ adherence to the Paris
Convention effectively obligates the country to
honor and enforce its provisions as regards the
protection of industrial property of foreign
nationals in this country. However, any protection
accorded has to be made subject to the limitations
of Philippine laws. Hence, despite Article 2 of the
Paris Convention which substantially provides that
(1) nationals of member-countries shall have in this
country rights specially provided by the Convention
as are consistent with Philippine laws, and enjoy the
privileges that Philippine laws now grant or may
hereafter grant to its nationals, and (2) while no
domicile requirement in the country where
protection is claimed shall be required of persons
entitled to the benefits of the Union for the
enjoyment of any industrial property rights, foreign
nationals must still observe and comply with the
conditions imposed by Philippine law on its
nationals.
Principles under the TRIPS Agreement:
1. National Treatment: It is a principle which
states that each member of the WTO must
treat the nationals of every other member
as favorably as its own with respect to
intellectual property, i.e. no discrimination
may be made against foreign nationals of
members.[Art. 3, TRIPS]
2. Most-favored Nation Treatment: It requires
that each member give other members‘
nationals the same treatment as its own,
but that each member should not prefer
any other member‘s nationals or those of
any non0member country, over the
nationals of any member.[Art.4,TRIPS]
3. Exhaustion of First Sale Doctrine: The term
generally refers to doctrine that extinguish
certain exclusive rights of the holder of
intellectual property with respect to a
particular physical item embodying the
intellectual property after the item has first
been sold under the holder‘s authority. The
TRIPS Agreement explicitly disclaims in
Article 6 an intent to impose any particular
requirements regarding the issue of the
exhaustion of intellectual property rights,
thus, members of the WTO are free to
implement exhaustion of intellectual

property rights as they please. [Art.6
subject to Arts. 3 and 4, TRIPS]
II. Patents
A. Patentable Inventions
B. Non-patentable Inventions
C. Ownership of a Patent
D. Cancellation of a Patent
E. Remedy of the True and Actual Inventor
F. Rights conferred by a Patent
G. Limitations on Rights of Patentees
H. Patent Infringement
I. Licensing
J. Assignment and Transmission of Rights
A. Patentable Inventions
A patentable invention is any technical solution of
a problem in any field of human activity which is
new, involves an inventive step and is industrially
applicable shall be Patentable. It may be, or may
relate to, a product, or process, or an
improvement of any of the foregoing. [Sec. 21, RA
8293]
1. Invention Patent
Standards:
a. Novelty - An invention shall not be
considered new if it forms part of a prior
art. [Sec. 23, RA 8293]
Prior art shall consist of:
i. 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; [Sec. 24.1,
RA 8293]
ii. The whole contents of an application
for a patent, utility model, or
industrial design registration,
published in accordance with this
Act, 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 this Act, shall be 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. 24.2, RA
8293]
Non-Prejudicial Disclosures: This is an
exception to the General Rule on Prior
Art under Sec. 24. It provides that the
disclosure of the information contained
COMMERCIAL LAW REVIEWER
in the application during the 12 months
preceding the filing date or the priority
date of the application shall not
prejudice the applicant on the ground of 161
lack of novelty if such disclosure was
made by:
1. The inventor
2. A patent office and the
information contained (1) in
another application filed by the
inventor and should not have been
disclosed by the office, or (2) 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
3. A third party which obtained the
information directly or indirectly
from the inventor [Sec. 25, RA
8293]
b. Inventive Step - An invention 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. 26.1, RA
8293, as amended by RA 9502]
Cheaper Medicines Act: In 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 enhancement of the
known efficacy of that substance, or the
mere discovery of any new property or
new use of a known substance or the
mere use of a known process unless such
known process results in a new product
that employs at least one reactant. [Sec.
26.2, RA 8293 as amended by RA 9502]
c. Industrial Applicability - An invention
that can be produced and used in any
industry shall be industrially applicable.
[Sec. 27, RA 8293]
2. Utility Model
It is any technical solution of a problem in any field
of human activity which is new and industrially
applicable. Unlike an invention patent, a utility
model need not be inventive. The law merely
requires that it be novel and industrially applicable.
[Sec. 109.1, RA 8293]
A utility model registration shall expire, without any
possibility of renewal, at the end of the seventh year
after the date of the filing of the application. [Sec.
109.3, RA 8293]
Statutory Classes of Utility Models
A Utility Model may be, or may relate to:
 MERCANTILE LAW REVIEWER
a. A useful machine;
b. An implement or tool;
162 c. A product or composition;
d. A method or process; or
e. An improvement of any of the foregoing.
[Rule 201, Rules and Regulations on Utility
Models and Industrial Designs as amended]
Grounds for Cancellation of Utility Models
a. That the claimed invention does not qualify
for registration as a utility model and does
not meet the requirements of registrability;
b. That the description and the claims do not
comply with the prescribed requirements;
c. That any drawing which is necessary for the
understanding of the invention has not been
furnished;
d. That the owner of the utility model
registration is not the inventor or his
successor in title [Sec 109.4, RA 8293]
3. Industrial Design
An industrial design is 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. 112.1, RA 8293 as amended by
RA 9150]
4. Lay-out Designs (Topographies) of
Integrated Circuits
Integrated Circuit means a product, in its final
form, or an intermediate form, in which the
elements, at least one of which is an active element
and some or all of the interconnections are
integrally formed in and/or on a piece of material,
and which is intended to perform an electronic
function. [Sec. 112.2, RA 8293 as amended by RA
9150]
Layout-Design is synonymous with 'Topography' and
means 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. [Sec.
112.3, RA 8293 as amended by RA 9150]
B. Non-patentable Inventions
The following shall be excluded from patent
protection:
1. Discoveries, scientific theories and
mathematical methods, and in the case of
drugs and medicines, 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, or the mere discovery of any
new property or new use for a known
substance, or the mere use of a known
process unless such known process results in
a new product that employs at least one
new reactant.
Salts, esters, ethers, polymorphs,
metabolites, pure form, particle size,
isomers, mixtures of isomers, complexes,
combinations, and other derivatives of a
known substance shall be considered to be
the same substance, unless they differ
significantly in properties with regard to
efficacy; [Sec. 22.1, RA 8293 as amended by
RA 9502]
2. Schemes, rules and methods of performing
mental acts, playing games or doing
business, and programs for computers; [Sec.
22.2, RA 8293]
3. Methods for treatment of the human or
animal body by surgery or therapy and
diagnostic methods practiced on the human
or animal body. This provision shall not
apply to products and composition for use
in any of these methods; [Sec. 22.3, RA
8293]
4. 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; [Sec. 22.4, RA 8293]
5. Aesthetic creations; [Sec. 22.5, RA 8293]
6. Anything which is contrary to public order
or morality. [Sec. 22.6, RA 8293]
Cheaper Medicines Act: In addition to discoveries,
scientific theories and mathematical methods, the IP
Code now includes, in case of drugs and medicines:
1. 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
2. the mere discovery of any new property or
new use of a known substance
3. the mere use of a known process unless
such known process results in a new product
that employs at least one reactant [Sec.
26.2, RA 8293 as amended by RA 9502]
C. Ownership of a Patent
1. Right to a Patent
General Rule: The right to patent belongs to the
inventor, his heirs, or assigns. When two (2) or more
persons have jointly made an invention, the right to
a patent shall belong to them jointly. [Sec.28, RA
8293]
Exception: Inventions created pursuant to a
commission (Work for Hire Doctrine)

i. The employer has the right to the patent if
the invention is the result of the
performance of the employee‘s regularly
assigned duties [Sec. 30.2, RA 8293]
ii. In case of inventions created pursuant to a
commission, the person who commissions
the work shall own the patent [Sec. 30.1,
RA 8293]
2. 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 who has the earliest
filing date or, the earliest priority date. [Sec. 29, RA
8293]
3. Inventions created pursuant to a
Commission
Commission: Person who commissions the work shall
own the patent, unless otherwise provided in the
contract [Sec. 30.1, RA 8293]
Employment Contract: Patent belongs to 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. [Sec.
30.2(a), RA 8293]
Patent belongs to 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(b), RA
8293]
4. Right of priority
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: Provided, That: (a) the local
application expressly claims priority; (b) it is filed
within twelve (12) months from the date the earliest
foreign application was filed; and (c) a certified
copy of the foreign application together with an
English translation is filed within six (6) months from
the date of filing in the Philippines. [Sec. 31, RA
8293]
D. Cancellation of a Patent
1. Grounds for Cancellation of Patent
Any interested person may, upon payment of the
required fee, petition to cancel the patent or any
claim thereof, or parts of the claim, on any of the
following grounds:
COMMERCIAL LAW REVIEWER
a. That what is claimed as the invention is not
new or patentable;
b. That the patent does not disclose the
invention in a manner sufficiently clear and 163
complete for it to be carried out by any
person skilled in the art; or
c. That the patent is contrary to public order
or morality. [Sec. 61.1, RA 8293]
Where the grounds for cancellation relate to some of
the claims or parts of the claim, cancellation may be
effected to such extent only. [Sec. 61.2, RA 8293]
2. Requirement of the Petition
The petition for cancellation shall be in writing,
verified by the petitioner or by any person in his
behalf who knows the facts, specify the grounds
upon which it is based, include a statement of the
facts to be relied upon, and filed with the Office.
Copies of printed publications or of patents of other
countries, and other supporting documents
mentioned in the petition shall be attached thereto,
together with the translation thereof in English, if
not in English language. [Sec. 62, RA 8293]
3. Notice of Hearing
Upon filing of a petition for cancellation, the
Director of Legal Affairs shall forthwith serve notice
of the filing thereof upon the patentee and all
persons having grants or licenses, or any other right,
title or interest in and to the patent and the
invention covered thereby, as appears of record in
the Office, and of notice of the date of hearing
thereon on such persons and the petitioner. Notice
of the filing of the petition shall be published in the
IPO Gazette. [Sec. 63, RA 8293]
4. Effect of Cancellation of Patent or
Claim.
The rights conferred by the patent or any specified
claim or claims cancelled shall terminate. Notice of
the cancellation shall be published in the IPO
Gazette. Unless restrained by the Director General,
the decision or order to cancel by Director of Legal
Affairs shall be immediately executory even pending
appeal. [Sec. 66, RA 8293]
E. Remedy of the True and Actual
Inventor
If a person, who was deprived of the patent without
his consent or through fraud is declared by final
court order or decision to be the true and actual
inventor, the court shall order for his substitution as
patentee, or at the option of the true inventor,
cancel the patent, and award actual and other
damages in his favor if warranted by the
circumstances. [Sec. 68, RA 8293]
Time to file action in court: The actions indicated in
Sections 67 and 68 shall be filed within one (1) year
from the date of publication made in accordance
 MERCANTILE LAW REVIEWER
with Sections 44 and 51, respectively. [Sec. 70, RA
8293]
164
Remedy of persons not having the right to a
patent: If a person other than the applicant, is
declared by final court order or decision as having
the right to the patent, such person may, within
three (3) months after the decision has become
final:
1. Prosecute the application as his own
application in place of the applicant;
2. File a new patent application in respect of
the same invention;
3. Request that the application be refused; or
4. Seek cancellation of the patent, if one has
already been issued. [Sec. 67, RA 8293]
F. Rights conferred by a Patent
A patent shall confer on its owner the following
exclusive rights:
1. Where the subject matter of a patent is a
product, to restrain, prohibit and prevent any
unauthorized person or entity from making,
using, offering for sale, selling or importing
that product. [Sec. 71.1(a), RA 8293]
2. Where the subject matter of a patent is a
process, to restrain, prevent or prohibit any
unauthorized person or entity from using the
process, and from manufacturing, dealing in,
using, selling or offering for sale, or importing
any product obtained directly or indirectly
from such process. [Sec. 71.1(b), RA 8293]
3. Patent owners shall also have the right to
assign, or transfer by succession the patent,
and to conclude licensing contracts for the
same. ( Sec. 71.2, RA 8293]
To be able to effectively and legally preclude
others from copying and profiting from the
invention, a patent is a primordial requirement.
No patent, no protection. The ultimate goal of a
patent system is to bring new designs and
technologies into the public domain through
disclosure. Ideas, once disclosed to the public
without the protection of a valid patent, are
subject to appropriation without significant
restraint. [Pearl Dean, Inc. v. Shoemart,
Inc.(2003)]
G. Limitations on the Rights of
Patentees
1. Limitation on Patent Rights
The owner of a patent has no right to prevent
third parties from performing, without his
authorization, the acts referred to in Section 71
hereof in the following circumstances:
a. Using a patented product which has been
put on the market in the Philippines by the
owner of the product, or with his express
consent, insofar as such use is performed
after that product has been so put on the
said market: Provided, That, with regard to
drugs and medicines, the limitation on
patent rights shall apply after a drug or
medicine has been introduced in the
Philippines or anywhere else in the world by
the patent owner, or by any party
authorized to use the invention: Provided,
further, That the right to import the drugs
and medicines contemplated in this section
shall be available to any government agency
or any private third party; [Sec. 72.1, RA
8293 as amended by RA 9502]
b. Where the act is done privately and on a
non-commercial scale or for a non-
commercial purpose: Provided, That it does
not significantly prejudice the economic
interests of the owner of the patent; [Sec.
72.2, RA 8293 as amended by RA 9502]
c. Where the act consists of making or using
exclusively for experimental use of the
invention for scientific purposes or
educational purposes and such other
activities directly related to such scientific
or educational experimental use; [Sec.
72.3, RA 8293 as amended by RA 9502]
d. 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: Provided, That,
in order to protect the data submitted by
the original patent holder from unfair
commercial use provided in Article 39.3 of
the Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS
Agreement), the Intellectual Property
Office, in consultation with the appropriate
government agencies, shall issue the
appropriate rules and regulations necessary
therein not later than one hundred twenty
(120) days after the enactment of this law;
[Sec. 72.4, RA 8293 as amended by RA 9502]
e. 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 shall apply after
a drug or medicine has been introduced in
the Philippines or anywhere else in the
world by the patent owner, or by any party
authorized to use the invention: Provided,
further, That the right to import the drugs
and medicines contemplated in this section
shall be available to any government agency
or any private third party; [Sec. 72.5, RA
8293 as amended by RA 9502]

There shall be no infringement of trademarks or
tradenames of imported or sold drugs and medicines
allowed as well as imported or sold off-patent drugs
and medicines: Provided, That said drugs and
medicines bear the registered marks that have not
been tampered, unlawfully modified, or infringed.
[Sec.159.4 RA 8293 as amended by RA 9502]
2. Prior User
Notwithstanding Section 72 hereof, any prior user,
who, in good faith was using the invention or has
undertaken serious preparations to use the invention
in his enterprise or business, before the filing date
or priority date of the application on which a patent
is granted, shall have the right to continue the use
thereof as envisaged in such preparations within the
territory where the patent produces its effect. [Sec.
73.1, RA 8293]
The right of the prior user may only be transferred
or assigned together with his enterprise or business,
or with that part of his enterprise or business in
which the use or preparations for use have been
made. [Sec. 73.2, RA 8293]
3. Use by the government
A Government agency or third person authorized by
the Government may exploit the invention even
without agreement of the patent owner where:
a. the public interest, in particular, national
security, nutrition, health or the
development of other sectors, as
determined by the appropriate agency of
the government, so requires; [Sec. 74.1(a),
RA 8293]
b. A judicial or administrative body has
determined that the manner of
exploitation, by the owner of the patent or
his licensee, is anti-competitive. [Sec.
74.1(b), RA 8293]
The use by the Government, or third person
authorized by the Government shall be subject,
mutatis mutandis, to the conditions set forth in
Sections 95 to 97 and 100 to 102 on compulsory
licensing. [Sec. 74.2, RA 8293]
All cases arising from the implementation of this
provision shall be cognizable by courts with
appropriate jurisdiction provided by law. No court
except the Supreme Court of the Philippines, shall
issue any temporary restraining order or preliminary
injunction or such other provisional remedies that
will prevent its immediate execution. [Sec. 74.3, RA
8293 as amended by RA 9502]
H. Patent Infringement
It is the making, using, offering for sale, selling, or
importing a patented product or a product obtained
directly or indirectly from a patented process, or the
use of a patented process without the authorization
COMMERCIAL LAW REVIEWER
of the patentee. [Sec 76.1, RA 8293 as amended by
RA 9502]
Contributory Infringer: One who actively induces the 165
infringement of a patent or provides the infringer
with a component of a patented product or of a
product produced because of a patented process
knowing it to be especially adopted for infringing
and not suitable for substantial non-infringing. He is
jointly and severally liable with the infringer. [Sec.
76.6, RA 8293]
Doctrine of Patent Exhaustion: 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 use of the purchaser without further
restriction. [Adams v. Burke, in Notes on Selected
Commercial Laws, Catindig 2003 ed.]
1. Tests in patent infringement
a. Literal infringement
In using literal infringement as a test, resort must be
had in the first instance to the words of the claim.
To determine whether the particular item falls
within the literal meaning of the patent claims, the
court must juxtapose the claims of the patent and
the accused product within the overall context of
the claims and specifications, to determine whether
there is exact identity of all material elements.
[Godinez v. CA (1993)]
b. Doctrine of equivalents
Under the doctrine of equivalents, an infringement
also occurs when a device appropriates a prior
invention by incorporating its innovative concept
and, albeit with some modification and change,
performs substantially the same function in
substantially the same way to achieve substantially
the same result. [Godinez v. CA (1993)]
In order to infringe a patent, a machine or device
must perform the same function, or accomplish the
same result by identical or substantially identical
means and the principle or mode of operation must
be substantially the same. [Del Rosario v. CA (1996)]
The doctrine of equivalents provides that an
infringement also takes place when a device
appropriates a prior invention by incorporating its
innovative concept and, although with some
modification and change, performs substantially the
same function in substantially the same way to
achieve substantially the same result. The principle
or mode of operation must be the same or
substantially the same. The doctrine of equivalents
thus requires satisfaction of the function-means-and-
result test, the patentee having the burden to show
that all three components of such equivalency test
are met. [Smith Klein Beckman Corp. v. CA (2003)]
 MERCANTILE LAW REVIEWER
2. Remedies against Infringement
166 a. Civil Action for damages
If the damages are inadequate or cannot be readily
ascertained with reasonable certainty, the court
may award by way of damages a sum equivalent to
reasonable royalty. [Sec. 76.3, RA 8293]
The court may, according to the circumstances of
the case, award damages in a sum above the amount
found as actual damages sustained: Provided, that
the award does not exceed three (3) times the
amount of such actual damages. [Sec. 76.4, RA 8293]
Civil action for infringement shall not apply to
instances covered by the Limitations of Patent Rights
(Sec. 72); Use of Invention by Government (Sec. 74);
Compulsory Licensing (Sec. 93.6); and Procedures on
Issuance of a Special Compulsory License under the
TRIPS Agreement (Sec. 93-A). [Sec.76.1, RA 8293 as
amended by RA 9052]
Notice Requirement: Damages cannot be recovered
for acts of infringement committed before the
infringer had known, or had reasonable grounds to
know of the patent. It is presumed that the infringer
had known of the patent. [Sec. 80, RA 8293]
Infringement Action by a Foreign National: Any
foreign national or juridical entity who meets the
requirements of Section 3 and not engaged in
business in the Philippines, to which a patent has
been granted or assigned under this Act, may bring
an action for infringement of patent, whether or not
it is licensed to do business in the Philippines under
existing law. [Sec.77, RA 8293]
Prescription: No damages can be recovered for acts
of infringement committed more than four (4) years
before the institution of the action for infringement.
[Sec. 79, RA 8293]
b. Injunction
Any patentee, or anyone possessing any right, title
or interest in and to the patented invention, whose
rights have been infringed, may bring a civil action
before a court of competent jurisdiction, to recover
from the infringer such damages sustained thereby,
plus attorney‘s fees and other expenses of litigation,
and to secure an injunction for the protection of his
rights. [Sec. 76.2, RA 8293]
c. Destruction or disposal of infringing
goods
The court may, in its discretion, order that the
infringing goods, materials and implements
predominantly used in the infringement be disposed
of outside the channels of commerce or destroyed,
without compensation. [Sec. 76.5, RA 8293]
d. Criminal Action for repeated
infringement
If infringement is repeated by the infringer or by
anyone in connivance with him after finality of the
judgment of the court against the infringer, the
offenders shall, without prejudice to the institution
of a civil action for damages, be criminally liable
therefore and, upon conviction, shall suffer
imprisonment for the period of not less than six (6)
months but not more than three (3) years and/or a
fine of not less than One hundred thousand pesos
(P100,000) but not more than Three hundred
thousand pesos (P300,000), at the discretion of the
court.
Prescription: The criminal action herein provided
shall prescribe in three (3) years from date of the
commission of the crime. [Sec 84, RA 8293]
3. Defenses in action for
infringement
In an action for infringement, the defendant, in
addition to other defenses available to him, may
show the invalidity of the patent, or any claim
thereof, on any of the grounds on which a petition of
cancellation can be brought under Section 61. [Sec
81, RA 8293]
Patent found invalid may be cancelled: In an action
for infringement, if the court shall find the patent or
any claim to be invalid, it shall cancel the same, and
the Director of Legal Affairs upon receipt of the final
judgment of cancellation by the court, shall record
that fact in the register of the Office and shall
publish a notice to that effect in the IPO Gazette.
[Sec 82, RA 8293]
Doctrine of File Wrapper Estoppel: Patentee is
precluded from claiming as part of patented product
that which he had to excise or modify in order to
avoid patent office rejection, and he may omit any
additions he was compelled to add by patent office
regulations. [Advance Transformer Co. v. Levinson
837 F.2d 1081(1988)]
I. Licensing
1. Voluntary Licensing
Voluntary Licensing is the grant by the patent owner
to a third person of the right to exploit the patented
invention. [Sec. 85, RA 8293]
Mandatory Provisions
The following provisions shall be included in
voluntary license contracts:
a. That the laws of the Philippines shall govern
the interpretation of the same and in the
event of litigation, the venue shall be the
proper court in the place where the
licensee has its principal office; [Sec. 88.1,
RA 8293]
b. Continued access to improvements in
techniques and processes related to the

technology shall be made available during
the period of the technology transfer
arrangement; [Sec. 88.2, RA 8293]
c. In the event the technology transfer
arrangement shall provide for arbitration,
the Procedure of Arbitration of the
Arbitration Law of the Philippines or the
Arbitration Rules of the United Nations
Commission on International Trade Law
(UNCITRAL) or the Rules of Conciliation and
Arbitration of the International Chamber of
Commerce (ICC) shall apply and the venue
of arbitration shall be the Philippines or any
neutral country; [Sec. 88.3, RA 8293]
d. The Philippine taxes on all payments
relating to the technology transfer
arrangement shall be borne by the licensor.
[Sec. 88.4, RA 8293]
Prohibited clauses
The following provisions shall be deemed prima facie
to have an adverse effect on competition and trade:
a. Those 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; [Sec. 87.1, RA 8293]
b. Those pursuant to which the licensor
reserves the right to fix the sale or resale
prices of the products manufactured on the
basis of the license; [Sec. 87.2, RA 8293]
c. Those that contain restrictions regarding
the volume and structure of production;
[Sec. 87.3, RA 8293]
d. Those that prohibit the use of competitive
technologies in a non-exclusive technology
transfer agreement; [Sec. 87.4, RA 8293]
e. Those that establish a full or partial
purchase option in favor of the licensor;
[Sec. 87.5, RA 8293]
f. Those that obligate the licensee to transfer
for free to the licensor the inventions or
improvements that may be obtained
through the use of the licensed technology;
[Sec. 87.6, RA 8293]
g. Those that require payment of royalties to
the owners of patents for patents which are
not used; [Sec. 87.7, RA 8293]
h. Those that prohibit the licensee to export
the licensed product unless justified for the
protection of the legitimate interest of the
licensor such as exports to countries where
exclusive licenses to manufacture and/or
distribute the licensed product(s) have
already been granted; [Sec. 87.8, RA 8293]
COMMERCIAL LAW REVIEWER
i. Those which restrict the use of the
technology supplied after the expiration of
the technology transfer arrangement,
except in cases of early termination of the 167
technology transfer arrangement due to
reason(s) attributable to the licensee; [Sec.
87.9, RA 8293]
j. Those which require payments for patents
and other industrial property rights after
their expiration, termination arrangement;
[Sec. 87.10, RA 8293]
k. Those which require that the technology
recipient shall not contest the validity of
any of the patents of the technology
supplier; [Sec. 87.11, RA 8293]
l. Those which restrict the research and
development activities of the licensee
designed to absorb and adapt the
transferred technology to local conditions
or to initiate research and development
programs in connection with new products,
processes or equipment; [Sec. 87.12, RA
8293]
m. Those which prevent the licensee from
adapting the imported technology to local
conditions, or introducing innovation to it,
as long as it does not impair the quality
standards prescribed by the licensor; [Sec.
87.13, RA 8293]
n. Those which exempt the licensor for
liability for non-fulfillment of his
responsibilities under the technology
transfer arrangement and/or liability arising
from third party suits brought about by the
use of the licensed product or the licensed
technology; [Sec. 87.14, RA 8293]
o. Other clauses with equivalent effects. [Sec.
87.15, RA 8293]
Effect of Non-compliance with any provisions
of Secs. 87 and 88
The technology transfer arrangement shall
automatically be rendered unenforceable, unless
said technology transfer arrangement is approved
and registered with the Documentation, Information
and Technology Transfer Bureau under the provisions
of Section 91 on exceptional cases. [Sec. 92, RA
8293]
Right of Licensor: Unless otherwise provided in the
technology transfer agreement, the licensor shall
have the right to:
a. Grant further licenses to third person
b. Exploit the subject matter of the
technology transfer agreement [Sec. 89, RA
8293]
 MERCANTILE LAW REVIEWER
Right of the Licensee: To exploit the subject matter
of the technology transfer agreement during the
168 whole term of the agreement. [Sec. 90, RA 8293]
Exceptional cases
a. In exceptional or meritorious cases where
substantial benefits will accrue to the
economy, such as high technology content,
increase in foreign exchange earnings,
employment generation, regional dispersal
of industries and/or substitution with or use
of local raw materials
b. The case of BOI-registered companies with
pioneer status [Sec. 91, RA 8293]
2. Compulsory Licensing
Compulsory Licensing is the grant of the Director of
Legal Affairs of a license to exploit a patented
invention, even without the agreement of the patent
owner, in favor of any person who has shown his
capability to exploit the invention. [Sec. 93, Ra 8293
as amended by RA 9502]
Grounds
The Director General of the Intellectual Property
Office may grant a license to exploit a patented
invention, even without the agreement of the patent
owner, in favor of any person who has shown his
capability to exploit the invention, under any of the
following circumstances:
a. National emergency or other circumstances
of extreme urgency; [Sec. 93.1, RA 8293 as
amended by RA 9502]
b. Where the public interest, in particular,
national security, nutrition, health or the
development of other vital sectors of the
national economy as determined by the
appropriate agency of the Government, so
requires; [Sec. 93.2, RA 8293 as amended
by RA 9502]
c. Where a judicial or administrative body has
determined that the manner of exploitation
by the owner of the patent or his licensee is
anti-competitive; ; [Sec. 93.3, RA 8293 as
amended by RA 9502]
d. In case of public non-commercial use of the
patent by the patentee, without
satisfactory reason; [Sec. 93.4, RA 8293 as
amended by RA 9502]
e. If the patented invention is not being
worked in the Philippines on a commercial
scale, although capable of being worked,
without satisfactory reason: Provided, That
the importation of the patented article
shall constitute working or using the patent;
[Sec. 93.5, RA 8293 as amended by RA 9502]
f. Where the demand for patented drugs and
medicines is not being met to an adequate
extent and on reasonable terms, as
determined by the Secretary of the
Department of Health. [Sec. 93.6, RA 8293
as amended by RA 9502]
g. If the invention protected by a patent,
hereafter referred to as the "second
patent," within the country cannot be
worked without infringing another patent,
hereafter referred to as the "first patent,"
granted on a prior application or benefiting
from an earlier priority, a compulsory
license may be granted to the owner of the
second patent to the extent necessary for
the working of his invention, subject to
certain conditions. [Sec. 97, RA 8293]
h. Manufacture and export of drugs and
medicines to any country having insufficient
or no manufacturing capacity in the
pharmaceutical sector to address public
health problems: Provided, That, a
compulsory license has been granted by
such country or such country has, by
notification or otherwise, allowed
importation into its jurisdiction of the
patented drugs and medicines from the
Philippines in compliance with the TRIPS
Agreement. [Sec. 93-A.2, RA 8293 as
amended by RA 9502]
Period of filing a Petition for Compulsory License: At
any time after the grant of patent. However, a
compulsory license may not be applied for on the
ground stated in Sec. 93.5 before the expiration of a
period of four (4) years from the date of filing of the
application or three (3) years from the date of the
patent whichever period expires last. [Sec. 94, RA
8293 as amended by RA 9502]
Requirement to Obtain a License on
Reasonable Commercial Terms
General Rule: The license will only be granted after
the petitioner has made efforts to obtain
authorization from the patent owner on reasonable
commercial terms and conditions but such efforts
have not been successful within a reasonable period
of time. [Sec. 95.1, RA 8293 as amended by RA 9502]
Exceptions: The requirement of authorization shall
not apply in the following cases:
a. Where the petition for compulsory license
seeks to remedy a practice determined
after judicial or administrative process to
be anti-competitive;
b. In situations of national emergency or other
circumstances of extreme urgency;
c. In cases of public non-commercial use.
d. In cases where the demand for the patented
drugs and medicines in the Philippines is not
being met to an adequate extent and on
reasonable terms, as determined by the
Secretary of the Department of Health.
[Sec. 95.2, RA 8293 as amended by RA 9502]

Terms and Conditions of Compulsory License
a. The scope and duration of such license shall
be limited to the purpose for which it was
authorized;[Sec. 100.1, RA 8293]
b. The license shall be non-exclusive; [Sec.
100.2, RA 8293]
c. The license shall be non-assignable, except
with that part of the enterprise or business
with which the invention is being exploited;
;[Sec. 100.3, RA 8293]
d. Use of the subject matter of the license
shall be devoted predominantly for the
supply of the Philippine market: Provided,
that this limitation shall not apply where
the grant of the license is based on the
ground that the patentee's manner of
exploiting the patent is determined by
judicial or administrative process, to be
anti-competitive. ;[Sec. 100.4, RA 8293]
e. The license may be terminated upon proper
showing that circumstances which led to its
grant have ceased to exist and are unlikely
to recur: Provided, That adequate
protection shall be afforded to the
legitimate interest of the licensee; ;[Sec.
100.5, RA 8293]
f. The patentee shall be paid adequate
remuneration taking into account the
economic value of the grant or
authorization, except that in cases where
the license was granted to remedy a
practice which was determined after
judicial or administrative process, to be
anti-competitive, the need to correct the
anti-competitive practice may be taken into
account in fixing the amount of
remuneration. (;[Sec. 100.6, RA 8293]
J. Assignment and Transmission of
Rights
Assignment of Rights: The assignment may be of the
entire patent or a portion thereof, or be limited to a
specified territory. [Sec. 104, RA 8293]
Transmission of Rights: Patents or applications for
patents and invention to which they relate, shall be
protected in the same way as the rights of other
property under the Civil Code. [Sec. 103.1, RA 8293]
Inventions and any right, title or interest in and to
patents and inventions covered thereby, may be
assigned or transmitted by inheritance or bequest or
may be the subject of a license contract. [Sec.
103.2, RA 8293]
COMMERCIAL LAW REVIEWER
Requirements for Recording of Assignment
a. It must be in writing and accompanied by an
English translation, if it is in a language 169
other than English of Filipino
b. It must be notarized
c. It must be accompanied by an appointment
of a resident agent, if the assignee is not
residing in the Philippines
d. It must identify the letters patent involved
by number and date and give the name of
the owner of the patent and the title of the
invention. In the case of an application for
a patent, it should state the application
number and the filing date of the
application and give the name of the
applicant and the title of the invention. If
the assignment was executed concurrently
with or subsequent to the execution of the
application but before the application is
filed or before its application number is
ascertained, it should adequately identify
the application by its date of execution, the
name of the applicant, and the title of the
invention.
e. It must be accompanied by the required
fees. [Sec. 105; Rules and Regulations on
Inventions, Rule 1200]
Effect of non-recording of assignment with
the IPO
The non-recording will not affect the binding
agreement between the assignor and assignee.
However, such registration would be necessary to
bind third parties. An assignment would be void as
against any subsequent purchaser or mortgagee for
valuable consideration and without notice unless
recorded in the IPO within 3 months from the date of
the assignment or prior to the subsequent purchase
or mortgage. [Sec. 106, RA 8293]
III. Trademarks
A. Definitions of Marks, Collective Marks, Trade
Names
B. Acquisition of Ownership of Marks
C. Acquisition of Ownership of Trade Name
D. Non-registrable Marks
E. Tests to Determine Confusing Similarity
between Marks
F. Well-known Marks
G. Rights conferred by Registration
H. Use by Third Parties of names etc. similar to
Registered Marks
I. Cancellation of Trademark
J. Infringement and Remedies
K. Unfair Competition
L. Trade Names or Business Names
M. Collective Marks
N. Criminal Penalties
 MERCANTILE LAW REVIEWER
A. Definitions of Marks, Collective
Marks, Trade Names
170
Marks: 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, RA 8293]
Trademark Service Mark
Any visible sign which is Any visible sign capable
adopted and used to of distinguishing the
identify the source of services of an enterprise
origin of goods, and from the service of other
which is capable of enterprises.
distinguishing them from
goods emanating from a
competitor.
Collective Marks: 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, RA 8293]
Trade Name: The name or designation identifying or
distinguishing an enterprise [Sec. 121.3, RA 8293].
Any individual name or surname, firm name, device
or word used by manufacturers, industrialists,
merchants, and others to identify their businesses,
vocations or occupations. [Converse Rubber Corp. v.
Universal Rubber Products, Inc. (1980)]
Functions of a Trademark
1. To point out distinctly the origin or
ownership of the goods and to which it is
affixed;
2. To secure him, who has been instrumental
in bringing into the market a superior
article of merchandise, the fruit of his
industry and skill;
3. To assure the public that they are producing
the genuine article;
4. To prevent fraud and imposition; and
5. To protect the manufacturer against
substitution and sale of an inferior and
different article as its product [Mirpuri v.
CA (1998)]
B. Acquisition of Ownership of
Marks
The rights to a mark shall be acquired through
registration made validly in accordance with law.
[Sec. 122, RA 8293]
Use of mark as a requirement: The applicant or the
registrant shall file a declaration of actual use of the
mark with evidence to that effect, as prescribed by
the Regulations within three (3) years from the filing
date of the application. Otherwise, the application
shall be refused or the mark shall be removed from
the Register by the Director. [Sec. 124.2, RA 8293]
For the requirement of ―actual use in commerce in
the Philippines‖ before one may register a
trademark, trade name and service mark under the
law pertains to the territorial jurisdiction of the
Philippines and is not only confined to a certain
region, province, city or barangay. [McDonald’s
Corporation v. MacJoy Fastfood(2007)]
Trademark is a creation of use and, therefore,
actual use is a pre-requisite to exclusive ownership;
registration is only an administrative confirmation of
the existence of the right of ownership of the mark,
but does not perfect such right; actual use thereof is
the perfecting ingredient. [Shangri-La International
Hotel v. DCC (2006)]
Non-use of mark when excused
1. If caused by circumstances arising
independently of the will of the trademark
owner. Lack of funds shall not excuse non-
use of a mark; [Sec. 152.1, RA 8293]
2. A use which does not alter its distinctive
character thought he use is different from
the form in which it is registered. [Sec.
152.2, RA 8293]
3. Use of a mark in connection with one or
more of the goods/services belonging to the
class in which the mark is registered. [Sec.
152.3, RA 8293]
4. The use of mark by a company related to
the applicant or registrant
5. The use of mark by a person controlled by
the registrant. [Sec. 152.4, RA 8293]
The use of a mark by a company related with the
registrant or applicant shall inure to the latter's
benefit, and such use shall not affect the validity of
such mark or of its registration: Provided, that such
mark is not used in such manner as to deceive the
public. [Sec.152.4, Ra 8293]
A certificate of registration shall remain in force for
10 years [Sec. 145, RA 8293] and may be renewed for
periods of 10 years at its expiration upon payment of
the prescribed fee and upon filing of a request. [Sec
146, RA 8293]
C. Acquisition of Ownership of
Trade Name
Notwithstanding any laws or regulations providing for
any obligation to register trade names, such names
shall be protected, even prior to or without
registration, against any unlawful act committed by
third parties. [Sec. 165.2 (a), RA 8293] The
ownership of a trade name is acquired through
adoption and use.
A name or designation may not be used as a trade
name if by its nature or the use to which such name
or designation may be put, it is contrary to public
order or morals and if, in particular, it is liable to
deceive trade circles or the public as to the nature
of the enterprise identified by that name. [Sec.
165.1, RA 8293]

Any change in the ownership of a trade name shall
be made with the transfer of the enterprise or part
thereof identified by that name. [Sec. 165.4, RA
8293]
D. Non-registrable Marks
A mark cannot be registered if it:
1. 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; [Sec 123.1(a),
RA 8293]
2. Consists of flags, coat of arms or other
insignia of the Philippines or any foreign
country; [Sec 123.1(b), RA 8293]
3. Consists of a name, portrait or signature
identifying a particular living individual
except by his written consent, or of a
deceased President of the Philippines,
during the life of his widow, except by
written consent of the widow; [Sec
123.1(c), RA 8293]
4. Is identical with a registered mark of
another or a mark with an earlier filing or
priority date, in respect of:
a. The same goods or services, or
b. Closely related goods or services, or
c. If it nearly resembles such a mark as to
be likely to deceive or cause
confusion; [Sec 123.1(d), RA 8293]
5. Is identical with, or confusingly similar to,
or constitutes a translation of a well-known
mark, whether or not registered in the
Philippines, and used for identical or similar
goods or services; [Sec 123.1(e), RA 8293]
6. Is identical with, or confusingly similar to,
or constitutes a translation of a well-known
mark which is registered in the Philippines,
and used for goods or services which are not
similar; [Sec 123.1(f), RA 8293]
7. Likely to mislead the public, particularly as
to the nature, quality, characteristics or
geographical origin of the goods or services;
[Sec 123.1(g), RA 8293]
8. Consists exclusively of signs that are generic
for the goods or services that they seek to
identify; [Sec 123.1(h), RA 8293]
9. Consists exclusively of signs or of
indications that have become customary or
usual to designate the goods or services in
everyday language or in a bona fide and
established trade practice; [Sec 123.1(i), RA
8293]
COMMERCIAL LAW REVIEWER
10. Consists exclusively of signs or of
indications that may serve in trade to
designate the kind, quality, quantity, 171
intended purpose, value, geographical
origin, time or production of the goods or
rendering of the services, or other
characteristics of the goods or services;
[Sec 123.1(j), RA 8293]
11. 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; [Sec 123.1(k), RA 8293]
12. Consists of color alone, unless defined by a
given form; [Sec 123.1(l), RA 8293]
13. Is contrary to public order or morality. [Sec
123.1(m), RA 8293]
Doctrine of Secondary Meaning: When the marks
referred to in nos. 10, 11 and 12 has become
distinctive, because of its long, continuous and
exclusive use for 5 years, as used in connection with
the applicant‘s goods or services in commerce and in
the mind of the public indicates a single source to
consumers, it may be registered. The Office may
accept as prima facie evidence that the mark has
become distinctive, as used in connection with the
applicant's goods or services in commerce, proof of
substantially exclusive and continuous use thereof by
the applicant in commerce in the Philippines for five
(5) years before the date on which the claim of
distinctiveness is made. [Sec 123.2, RA 8293]
The nature of the goods to which the mark is applied
will not constitute an obstacle to registration. [Sec
123.3, RA 8293]
E. Tests to Determine Confusing
Similarity between Marks
1. Colorable Imitation
Colorable imitation denotes 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. In
ascertaining whether one mark is confusingly similar
to or is a colorable imitation of another, no set rules
can be deduced. Each case must be decided on its
own merits. The complexities attendant to an
accurate assessment of likelihood of confusion
requires that the entire panoply of elements
constituting the relevant factual landscape be
comprehensively examined. [Societe des Produits
Nestlé, S.A. v. CA (2001)]
2. Dominancy test
Infringement is determined by the test of
―dominancy‖ rather than by differences or variations
 MERCANTILE LAW REVIEWER
in the details of one trademark and of another.
Similarity in size, form and color, while relevant is
172 not conclusive. 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 and
San Miguel (1993)]
3. Holistic test
To determine whether a trademark has been
infringed, we must consider the mark as a whole and
not as dissected. If the buyer is deceived, it is
attributable to the marks as a totality, not usually to
any part of it. The court therefore should be guided
by its first impression, for the buyer acts quickly and
is governed by a casual glance, the value of which
may be dissipated as soon as the court assumed to
analyze carefully the respective features of the
mark. [Del Monte Corporation, et al. v. CA (1990)]
The dominancy test considers the dominant features
in the competing marks in determining whether they
are confusingly similar. Under the dominancy test,
courts give greater weight to the similarity of the
appearance of the product arising from the adoption
of the dominant features of the registered mark,
disregarding minor differences. Courts will consider
more the aural and visual impressions created by the
marks in the public mind, giving little weight to
factors like prices, quality, sales outlets and market
segments. [McDonald’s Corporation v. L.C. Big Mak
Burger, Inc., et al. (2004)]
As to the goods or services in connection with
which the marks are used (Doctrine of Related
Goods/Services):
1. Goods are related when they belong to the
same class or have the same descriptive
properties or physical attributes, or they
serve the same purpose or flow through the
same channel of trade.
2. The use of identical marks on non-
competing but related goods may likely
cause confusion.
3. Corollarily, the use of identical marks on
non-competing and unrelated goods is not
likely to cause confusion. [UP 2011 Bar
Reviewer]
F. Well-known Marks
A mark which a competent authority of the
Philippines has designated to be well-known
internationally and in the Philippines.
In determining whether a mark is well-known,
account shall be taken of the knowledge of the
relevant sector of the public, rather than the public
at large, including knowledge in the Philippines
which has been obtained as a result of the promotion
of the mark. [Sec 123.1(e), RA 8293]
Determinants (need not concur)
a. The duration, extent and geographical area
of any use of the mark;
b. The market share in the Philippines and
other countries of the goods/services to
which the mark applies;
c. The degree of the inherent or acquired
distinction of the mark;
d. The quality-image or reputation acquired by
the mark;
e. The extent to which the mark has been
registered in the world;
f. The exclusivity of the registration attained
by the mark in the world;
g. The extent of use of the mark in the world;
h. The exclusivity of use in the world;
i. The commercial value attributed to the
mark in the world;
j. The record of successful protection of the
rights in the mark;
k. The outcome of litigations dealing with the
issue of whether the mar is well-known; and
l. The presence or absence of identical or
similar testmarks validly registered or used
on other similar goods [Rule 102, Rule on
Trademarks]
Protection extended to Well-Known Marks
a. If not registered in the Philippines
A mark cannot be registered if it 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 goods or services. ([Sec
123.1(e), RA 8293]
b. If registered in the Philippines
A mark cannot be registered if it is identical with or
confusingly similar to, or constitutes a translation of
a mark considered well-known in accordance with
the Sec. 123.1 (e), 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. [Sec 123.1(f), RA 8293]
Priority Right: An application for registration of a
mark filed in the Philippines by a person referred to
in Section 3, and who previously duly filed an
application for registration of the same mark in one
of those countries, shall be considered as filed as of
the day the application was first filed in the foreign
country. [Sec. 131.1, RA 8293]
No registration of a mark in the Philippines by a
person described in this section shall be granted
until such mark has been registered in the country of
origin of the applicant. [Sec. 131.2, RA 8293]
Significance of Priority Right: A Philippine
application filed by another applicant after the

priority date but earlier than the foreign applicant‘s
actual filing may be refused registration if it is
identical to the mark with a priority date. [The Law
on Trademark, Infringement and Unfair
Competition, Agpalo (2000)]
Rights Conferred by a Well-Known Mark
1. Right to be protected whether or not it is
registered in the Philippines;
2. If registered under Sec 123.1(e), extension
of protection to goods and services which
are not similar to those in respect of which
the mark is registered, provided that:
a. The use of the mark in relation to
unrelated or dissimilar goods or services
would indicate a connection between
those goods or services and the owner of
the mark; and
b. The interests of the owner of the
registered mark are likely to be
damaged by such use. [Sec. 147.2, RA
8293]
G. Rights Conferred by
Registration
Except in cases of importation of drugs and
medicines allowed under Section 72.1 of this Act and
of off-patent drugs and medicines, the owner of a
registered mark shall have the exclusive right to
prevent all third parties not having the owner's
consent from using in the course of trade identical
or similar signs or containers for goods or services
which are identical or similar to those in respect of
which the trademark is registered where such use
would result in a likelihood of confusion. In case of
the use of an identical sign for identical goods or
services, a likelihood of confusion shall be
presumed. [Sec. 147.1, RA 8293 as amended by RA
9502]
Limitations on such rights
1. Duration (except that, inasmuch as the
registration of a trademark could be
renewed every 10 years, a trademark could
conceivably remain registered forever);
2. Territorial (except well-known marks).
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:
Provided, That such use is confined to the purposes
of mere identification or information and cannot
mislead the public as to the source of the goods or
services. [Sec. 148, RA 8293]
Assignment and Transfer of Application and
Registration
COMMERCIAL LAW REVIEWER
1. An application for registration of a mark, or
its registration, may be assigned or
transferred with or without the transfer of
the business using the mark. [Sec. 149.1, RA 173
8293]
2. Such assignment or transfer shall, however,
be null and void if it is liable to mislead the
public, particularly as regards the nature,
source, manufacturing process,
characteristics, or suitability for their
purpose, of the goods or services to which
the mark is applied. [Sec. 149.2, RA 8293]
3. The assignment of the application for
registration of a mark, or of its registration,
shall be in writing and require the
signatures of the contracting parties.
Transfers by mergers or other forms of
succession may be made by any document
supporting such transfer. [Sec. 149.3, RA
8293]
4. Assignments and transfers of registrations of
marks shall be recorded at the Office on
payment of the prescribed fee; assignment
and transfers of applications for registration
shall, on payment of the same fee, be
provisionally recorded, and the mark, when
registered, shall be in the name of the
assignee or transferee. [Sec. 149.4, RA
8293]
5. Assignments and transfers shall have no
effect against third parties until they are
recorded at the Office. [Sec. 149.5, RA
8293]
Any license contract concerning the registration of a
mark, or an application therefor, shall provide for
effective control by the licensor of the quality of the
goods or services of the licensee in connection with
which the mark is used. If the license contract does
not provide for such quality control, or if such
quality control is not effectively carried out, the
license contract shall not be valid. [Sec. 150.1, RA
8293]
Protection limited to goods specified in
registration certificate
The certificate of registration can confer upon the
petitioner the exclusive right to use its own symbol
only to those goods specified in the certificate,
subject to any conditions a limitations stated
therein. One who has adopted and used a trademark
on his goods does not prevent the adoption and use
of the same trademark by others for products which
are of a different description. [Faberge, Inc. v. IAC
and Co Beng Kay (1992)]
H. Use by Third Parties of names,
etc. similar to Registered Marks
The IPC deems unlawful any subsequent use of the
trade name by a third party, whether as a trade
name or a mark or collective mark, or any such use
of a similar trade name or mark, likely to mislead
the public. [Sec. 165.2(b), RA 8293]
 MERCANTILE LAW REVIEWER
I. Cancellation of Trademark
174
Upon petition, with due process and hearing, based
on the following grounds:
1. Within 5 years from registration: Belief that
the registered mark has damaged or will
damage the petitioner
2. At any time
a. Becomes the generic name for the
goods or services for which it has
registered; or
b. Has been abandoned; or
c. The registration was obtained
fraudulently or contrary to the
provisions of the IPC; or
d. Is being used by, or with the permission
of the registrant so as to misrepresent
the source of the goods or services in
connection with which the mark is used
e. If the registered owner of the mark,
without legitimate reason, fails to use
the mark within the Philippines, or to
cause it to be used in the Philippines by
virtue of a license, for an uninterrupted
period of at least 3 years. [Sec. 151, RA
8293]
The use of the mark in a form different from the
form in which it is registered, which does not alter
its distinctive character, shall not be ground for
cancellation or removal of the mark and shall not
diminish the protection granted to the mark. [Sec.
152.2, RA 8293]
The use of a mark in connection with one or more of
the goods or services belonging to the class in
respect of which the mark is registered shall prevent
its cancellation or removal in respect of all other
goods or services of the same class. [Sec. 152.3, RA
8293]
J. Infringement and Remedies
1. Trademark infringement
Any person who shall, without the consent of the
owner of the registered mark:
1. Use in commerce any reproduction,
counterfeit, copy, or colorable imitation of
a registered mark or the same container or
a dominant feature thereof in connection
with the sale, offering for sale, distribution,
advertising of any goods or services
including other preparatory steps necessary
to carry out the sale of any goods or
services on or in connection with which
such use is likely to cause confusion, or to
cause mistake, or to deceive; [Sec. 155.1,
RA 8293]
2. Reproduce, counterfeit, copy or colorably
imitate a registered mark or a dominant
feature thereof and apply such
reproduction, counterfeit, copy or colorable
imitation to labels, signs, prints, packages,
wrappers, receptacles or advertisements
intended to be used in commerce upon or in
connection with the sale, offering for sale,
distribution, or advertising of goods or
services on or in connection with which
such use is likely to cause confusion, or to
cause mistake, or to deceive. [Sec. 155.2,
RA 8293]
Mighty Corporation v. E. & J. Gallo Winery
(2004). A crucial issue in any trademark
infringement case is the likelihood of confusion,
mistake or deceit as to the identity, source or
origin of the goods or identity of the business as a
consequence of using a certain mark. Likelihood of
confusion is admittedly a relative term, to be
determined rigidly according to the particular (and
sometimes peculiar) circumstances of each case.
In determining likelihood of confusion, the court
must consider: (a) the resemblance between the
trademarks; (b) the similarity of the goods to
which the trademarks are attached; (c) the likely
effect on the purchaser; and (d) the registrant‘s
express or implied consent and other fair and
equitable considerations.
McDonald’s Corporation v. L.C. Big Mak Burger,
Inc., et al., (2004). To establish trademark
infringement, the following elements must be
shown: (1) the validity of the mark; (2) the
plaintiff‘s ownership of the mark; and (3) the use of
the mark or its colorable imitation by the alleged
infringer results in ―likelihood of confusion.‖ Of
these, it is the element of likelihood of confusion
that is the gravamen of trademark infringement.
Two types of confusion arise from the use of similar
or colorable imitation marks, namely, confusion of
goods (product confusion) and confusion of business
(―source or origin confusion‖). 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 or affiliation.
In order to bring a civil action for infringement, it is
not required that there is an actual sale of the goods
or services using the infringing material. [Sec. 155.2,
RA 8293] Infringement takes place upon the mere
use or reproduction of the registered mark.
No article of imported merchandise which shall copy
or simulate the name of any domestic product, or
manufacturer, or dealer, or which shall copy or
simulate a mark registered in accordance with the
provisions of this Act, or shall bear a mark or trade
name calculated to induce the public to believe that
the article is manufactured in the Philippines, or
that it is manufactured in any foreign country or
locality other than the country or locality where it is
in fact manufactured, shall be admitted to entry at
any customhouse of the Philippines. [Sec. 166, RA
8293]
A mere distributor and not the owner cannot assert
any protection from trademark infringement as it
had no right in the first place to the registration of

the disputed trademarks. [Superior Commercial
Enterprises v. Kunnan Enterprises (2010)]
False Designations of Origin; False
Description or Representation
Any person who, on or in connection with any goods
or services, or any container for goods, uses in
commerce any word, term, name, symbol, or device,
or any combination thereof, or any false designation
of origin, false or misleading description of fact, or
false or misleading representation of fact, which:
a. Is likely to cause confusion, or to cause
mistake, or to deceive as to the affiliation,
connection, or association of such person
with another person, or as to the origin,
sponsorship, or approval of his or her goods,
services, or commercial activities by
another person;[Sec. 169.1(a), RA 8293]
b. In commercial advertising or promotion,
misrepresents the nature, characteristics,
qualities, or geographic origin of his or her
or another person's goods, services, or
commercial activities, shall be liable to a
civil action for damages and injunction
[Sec. 169.1(b), RA 8293]
Any goods marked or labeled in contravention of the
provisions of this Section shall not be imported into
the Philippines or admitted entry at any
customhouse of the Philippines. The owner,
importer, or consignee of goods refused entry at any
customhouse under this section may have any
recourse under the customs revenue laws or may
have the remedy given by this Act in cases involving
goods refused entry or seized. [Sec. 169.2, RA 8293]
Infringement of Name and Marks of
Ownership Stamp on Containers
General Rule: It is unlawful for any person, without
the consent of the manufacturer, bottler or seller
who has registered the mark of ownership to fill such
bottles, boxes, kegs, barrels or other containers so
marked and stamped, for the purpose of sale,
dispose of, or wantonly destroy the same, whether
filled or not, to use the same for drinking vessels or
drain pipes, foundation pipes, for any other purpose
than that registered. [Sec. 2, RA 623 as amended by
RA 5700]
The use of the same without apparent permission
from the trademark owners thereof, shall be prima
facie presumption that such possession or use is
unlawful. [Sec. 3, RA 623 as amended by RA 5700]
Exceptions:
1. Use of the bottles as containers for sisi,
bagoong, patis, and similar native products
[Sec. 6 RA 623 as amended by RA 5700]
2. Persons in whose favor the containers were
sold [Distelleria Washington v. LA Tondena
Distillers (1997)]
COMMERCIAL LAW REVIEWER
2. Actions, Damages and Injunction
for Infringement
175
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. 156.1, RA 8293]
The owner of the registered mark shall not be
entitled to recover profits or damages unless the
acts have been committed with knowledge that such
imitation is likely to cause confusion, or to cause
mistake, or to deceive. Such knowledge is presumed
if the registrant gives notice that his mark is
registered by displaying with the mark the words
'"Registered Mark" or the letter R within a circle or if
the defendant had otherwise actual notice of the
registration. [Sec. 158, RA 8293]
Should damages be recoverable, the measure of the
damages suffered shall be either:
a. the reasonable profit which the complaining
party would have made, had the defendant
not infringed his rights; or
b. the profit which the defendant actually
made out of the infringement; or
c. 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 if such measure of
damages cannot be readily ascertained with
reasonable certainty. [Sec. 156.1, RA 8293]
3. Other remedies available:
1. Injunction (Sec. 156.4);
2. Impounding of sales invoices and other
documents (Sec. 156.2);
3. Double damages in case of actual intent to
defraud or to mislead (Sec. 156.3);
4. Court order for the disposal or destruction
of the infringing goods (Sec. 157);
5. Criminal Action;
6. Administration sanctions
Any foreign national who qualifies under the
principle on reciprocity and does not engage in
business in the Philippines, whether or not it is
licensed to do business in the Philippines, may bring
civil or administrative action for:
1. Opposition
2. Cancellation
3. Infringement
 MERCANTILE LAW REVIEWER
4. Unfair Competition
5. False designation of origin or false
176 description [Sec. 160. RA 8293]
Notice of registration of trademark is necessary for
an owner of a trademark to recover damages in an
action for infringement since knowledge that such
imitation is likely to cause confusion, or to cause
mistake, or to deceive is an element of
infringement. Requirement of notice may be
complied by displaying with the mark the words
'"Registered Mark" or the letter R within a circle.
[Sec. 158, RA 8293]
4. Limitations to actions for
infringement
The remedies given to the owner of a right infringed
shall be limited as follows:
a. registered mark shall have no effect
against any person who, in good faith,
before the filing date or the priority date,
was using the mark for the purposes of his
business or enterprise: Provided, That his
right may only be transferred or assigned
together with his enterprise or business or
with that part of his enterprise or business
in which the mark is used. [Sec. 159.1, RA
8293]
b. Where an infringer who is engaged solely in
the business of printing the mark or other
infringing materials for others is an
innocent infringer, the owner of the right
infringed shall be entitled as against such
infringer only to an injunction against
future printing. [Sec. 159.2, RA 8293]
c. Where the infringement complained of is
contained in or is part of paid
advertisement in a newspaper, magazine,
or other similar periodical or in an
electronic communication, the remedies of
the owner of the right infringed as against
the publisher or distributor of such
newspaper, magazine, or other similar
periodical or electronic communication
shall be limited to an injunction against the
presentation of such advertising matter in
future issues of such newspapers,
magazines, or other similar periodicals or in
future transmissions of such electronic
communications.
The limitations shall apply only to innocent
infringers: Provided, That such injunctive
relief shall not be available to the owner of
the right infringed with respect to an issue
of a newspaper, magazine, or other similar
periodical or an electronic communication
containing infringing matter where
restraining the dissemination of such
infringing matter in any particular issue of
such periodical or in an electronic
communication would delay the delivery of
such issue or transmission of such electronic
communication is customarily conducted in
accordance with the sound business
practice, and not due to any method or
device adopted to evade this section or to
prevent or delay the issuance of an
injunction or restraining order with respect
to such infringing matter. [Sec. 159.3, RA
8293]
d. There shall be no infringement of
trademarks or tradenames of imported or
sold drugs and medicines allowed under
Section 72.1 as well as imported or sold off-
patent drugs and medicines: Provided, That
said drugs and medicines bear the
registered marks that have not been
tampered, unlawfully modified, or infringed
upon as defined under Section 155. [Sec.
159.4 RA 8293 as amended by RA 9502]
K. Unfair Competition
A person who has identified in the mind of the public
the goods he manufactures or deals in, his business
or services from those of others, whether or not a
registered mark is employed, has a property right in
the goodwill of the said goods, business or services
so identified, which will be protected in the same
manner as other property rights. [Sec. 168.1, RA
8293]
Any person who shall employ deception or any other
means contrary to good faith by which he shall pass
off the goods manufactured by him or in which he
deals, or his business, or services for those of the
one having established such goodwill, or who shall
commit any acts calculated to produce said result,
shall be guilty of unfair competition, and shall be
subject to an action therefor. [Sec. 168.2, RA 8293]
The following shall be deemed guilty of unfair
competition:
a. Any person, who is selling his goods and
gives them the general appearance of goods
of another manufacturer or dealer, either
as to the goods themselves or in the
wrapping of the packages in which they are
contained, or the devices or words thereon,
or in any other feature of their appearance,
which would be likely to influence
purchasers to believe that the goods
offered are those of a manufacturer or
dealer, other than the actual manufacturer
or dealer, or who otherwise clothes the
goods with such appearance as shall deceive
the public and defraud another of his
legitimate trade, or any subsequent vendor
of such goods or any agent of any vendor
engaged in selling such goods with a like
purpose;[Sec. 168.3(a), RA 8293]
b. Any person who by any artifice, or device,
or who employs any other means calculated
to induce the false belief that such person
is offering the services of another who has
 COMMERCIAL LAW REVIEWER

identified such services in the mind of the which the controversy relates. One of the essential
public; [Sec. 168.3(b), RA 8293] requisites in an action to restrain unfair competition
is proof of fraud; the intent to deceive must be
c. Any person who shall make any false shown before the right to recover can exist. The 177
statement in the course of trade or who advent of the IP Code has not significantly changed
shall commit any other act contrary to good these rulings as they are fully in accord with what
faith of a nature calculated to discredit the Section 168 of the Code in its entirety provides.
goods, business or services of another. [Sec. Deception, passing off and fraud upon the public are
168.3(c), RA 8293] still the key elements that must be present for
unfair competition to exist. [Coca-Cola v. Gomez
McDonald’s Corporation v. L.G. Big Mak Burger, (2008)]
Inc., et al. (2004). The elements of an action for
unfair competition are: [1] confusing similarity in Infringement of Unfair Competition
the general appearance of the goods, and [2] intent Trademark
to deceive the public and defraud a competitor. The Unauthorized use of a passing off of one‘s
confusing similarity may or may not result from trademark goods as those of
similarity in the marks, but may result from other another
external factors in the packaging or presentation of Fraudulent intent is Fraudulent intent is
the goods. The intent to deceive and defraud may be unnecessary essential
inferred from the similarity in appearance of the prior registration of the registration is not
goods as offered for sale to the public. Actual trademark is a necessary
fraudulent intent need not be shown. prerequisite to the
action
An action for unfair competition is based on the [Del Monte Corporation, et al. v. CA (1990)]
proposition that no dealer in merchandise should be
allowed to dress his goods in simulation of the goods The law on unfair competition is broader and more
of another dealer, so that purchasers desiring to buy inclusive than the law on trademark infringement.
the goods of the latter would be induced to buy the The latter is more limited but it recognizes a more
goods of the former. The most usual devices exclusive right derived from the trademark adoption
employed in committing this crime are the and registration by the person whose goods or
simulation of labels and the reproduction of form, business is first associated with it. Hence, even if
color and general appearance of the package used one fails to establish his exclusive property right to a
by the pioneer manufacturer or dealer. [Caterpillar, trademark, he may still obtain relief on the ground
Inc v. Samson (2006)] of his competitor‘s unfairness or fraud. Conduct
constitutes unfair competition if the effect is to pass
Articles 168.1 and 168.2 provide the concept and off on the public the goods of one man as the goods
general rule on the definition of unfair competition. of another. [Mighty Corporation v. E. & J. Gallo
The law does not thereby cover every unfair act Winery (2004)]
committed in the course of business; it covers only
acts characterized by ―deception or any other means L. Trade Names and Business
contrary to good faith‖ in the passing off of goods
and services as those of another who has established Names
goodwill in relation with these goods or services, or
any other act calculated to produce the same result. It is the name or designation identifying or
distinguishing an enterprise. [Sec. 121.3, RA 8293]
What unfair competition is, is further particularized
under Section 168.3 when it provides specifics of Any individual name or surname, firm name, device
what unfair competition is ―without in any way or word used by manufacturers, industrialists,
limiting the scope of protection against unfair merchants, and others to identify their businesses,
competition.‖ Part of these particulars is provided vocations or occupations [Converse Rubber Corp. v.
under Section 168.3(c) which provides the general Universal Rubber Products, Inc. (1980)]
―catch-all‖ phrase that the petitioner cites. Under
this phrase, a person shall be guilty of unfair What may NOT be used as trade name
competition ―who shall commit any other act
contrary to good faith of a nature calculated to 1. If by its nature or the use to which the
discredit the goods, business or services of another.‖ name or designation may be put, it is
contrary to public order or morals.
From jurisprudence, unfair competition has been 2. If it is liable to deceive trade circles or the
defined as the passing off (or palming off) or public as to the nature of the enterprise
attempting to pass off upon the public the goods or identified by the name
business of one person as the goods or business of 3. If the trade name is similar to a mark or a
another with the end and probable effect of trade name owned by another person and
deceiving the public. It formulated the ―true test‖ its use would likely mislead the public.
of unfair competition: whether the acts of defendant [Sec.165.1, RA 8293]
are such as are calculated to deceive the ordinary
buyer making his purchases under the ordinary
conditions which prevail in the particular trade to
 MERCANTILE LAW REVIEWER
Acquisition of ownership: Trade names are protected
even prior to or without registration. The ownership
178 of a trade name is acquired through adoption and
use.
Right of owner: The IPC deems unlawful any
subsequent use of the trade name by a third party,
whether as a trade name or a mark or collective
mark, or any such use of a similar trade name or
mark, likely to mislead the public. [Sec. 165.2(b), RA
8293]
Trade names, unlike trademarks, need not be
registered with the IPO before an infringement suit
may be filed by its owner against the owner of an
infringing trademark. All that is required is that the
trade name is previously used in trade or commerce
in the Philippines. [Prosource International v.
Horphag Research Management (2009)]
M. Collective Marks
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, RA 8293]
An application for registration of a collective mark
shall designate the mark as a collective mark and
shall be accompanied by a copy of the agreement, if
any, governing the use of the collective mark. [Sec.
167.2, Ra 8293]
Grounds for Cancellation
In addition to the grounds under Section 149, the
Court shall cancel the registration of a collective
mark if the person requesting the cancellation
proves:
1. that only the registered owner uses the
mark; or
2. that he uses or permits its use in
contravention of the agreements referred
to in Subsection 166.2; or
3. that he uses or permits its use in a manner
liable to deceive trade circles or the public
as to the origin or any other common
characteristics of the goods or services
concerned. [Sec. 167.3, RA 8293]
The registration of a collective mark, or an
application therefor shall not be the subject of a
license contract. [Sec. 167.4, RA 8293]
N. Criminal Penalties
Independent of the civil and administrative sanctions
imposed by law, a criminal penalty of imprisonment
from two (2) years to five (5) years and a fine
ranging from Fifty thousand pesos (P50,000) to Two
hundred thousand pesos (P200,000), shall be
imposed on any person who is found guilty. [Sec.
170, RA 8293]
IV. Copyright
A. Basic Principles
B. Copyrightable Works
C. Non-copyrightable Works
D. Rights of Copyright Owner
E. Rules on Ownership of Copyright
F. Deposit of Copyrightable Materials
G. Limitations on Copyright
A. Basic Principles
1. Works are protected by the sole fact
of their creation
Principle of Automatic Protection: Copyright is
vested from the very moment of creation. [Sec.
172.2, RA 8293]
The enjoyment and exercise of copyright, including
moral rights, shall not be the subject of any
formality; such enjoyment and such exercise shall be
independent of the existence of protection in the
country of origin of the work. [Article 5(2), Berne
Convention for the Protection of Literary and Artistic
Works]
The Denicola Test in intellectual property law states
that if design elements of an article reflect a merger
of aesthetic and functional considerations, the
artistic aspects of the work cannot be conceptually
separable from the utilitarian aspects; thus, the
article cannot be copyrighted. [UP 2011 Bar
Reviewer]
2. Protection extends only to the
expression of an idea, not the idea
itself.
No protection shall extend, under this law, to any
idea, procedure, system method or operation,
concept, principle, discovery or mere data as such,
even if they are expressed, explained, illustrated or
embodied in a work. [Sec 175, RA 8293]
3. The copyright is distinct from the
property in the material object
subject to it. [Sec 181, RA 8293]
4. Copyright is a statutory right.
Copyright, in the strict sense of the term is purely a
statutory right. Being a mere statutory grant, the
rights are limited to what the statute confers. It may
be obtained and enjoyed only with respect to the
subjects and by the persons, and on terms and
conditions specified in the statute. Accordingly, it
can cover only the works falling within the statutory
enumeration or description. [Pearl and Dean vs.
Shoemart (2003)]

B. Copyrightable Works
1. Original Literary and Artistic Works
Sec. 172.1, RA 8293. Literary and artistic works,
hereinafter referred to as "works", are original
intellectual creations in the literary and artistic
domain protected from the moment of their creation
and shall include in particular:
a. Books, pamphlets, articles and other
writings;
b. Periodicals and newspapers;
c. Lectures, sermons, addresses, dissertations
prepared for oral delivery, whether or not
reduced in writing or other material form;
d. Letters;
e. Dramatic or dramatico-musical
compositions; choreographic works or
entertainment in dumb shows;
f. Musical compositions, with or without
words;
g. Works of drawing, painting, architecture,
sculpture, engraving, lithography or other
works of art; models or designs for works of
art;
h. Original ornamental designs or models for
articles of manufacture, whether or not
registrable as an industrial design, and
other works of applied art;
i. Illustrations, maps, plans, sketches, charts
and three-dimensional works relative to
geography, topography, architecture or
science;
j. Drawings or plastic works of a scientific or
technical character;
k. Photographic works including works
produced by a process analogous to
photography; lantern slides;
l. Audiovisual works and cinematographic
works and works produced by a process
analogous to cinematography or any process
for making audio-visual recordings;
m. Pictorial illustrations and advertisements;
n. Computer programs; and
o. Other literary, scholarly, scientific and
artistic works.
When a work is considered original:
1. the work is an independent creation of the
author; and
2. it must not be copied from the work of
another.
A person to be entitled to a copyright must be the
original creator of the work. He must have created it
by his own skill, labor and judgment without directly
copying or evasively imitating the work of another.
[Ching Kian Chuan vs. CA (2001)]
By originality is meant that the material was not
copied, and evidences at least minimal creativity;
that it was independently created by the author and
that it possesses at least some minimal degree of
creativity. Copying is shown by proof of access to
COMMERCIAL LAW REVIEWER
copyrighted material and substantial similarity
between the two works. The applicant must thus
demonstrate the existence and validity of copyright
because in the absence of copyright protection, even 179
the original creation may be freely copied. [Ching v.
Salinas (2005)]
Originality is not determined by novelty, aesthetic
merit or ingenuity but that it is an independent
creation. [2011 UP Bar Reviewer]
The requirement in US Law that the expression
should be fixed in a tangible medium is not
applicable here since our law expressly provides that
works are protected irrespective of their mode or
form of expression. [Sec. 172.2, RA 8293]
2. Derivative Works
The following derivative works shall also be
protected by copyright:
a. Dramatizations, translations, adaptations,
abridgments, arrangements, and other
alterations of literary or artistic works; and
b. 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. 173.1,
RA 8293]
Derivative works are protected as new works
provided they shall not:
a. affect the force of any subsisting copyright
upon the original works employed or any
part thereof; or
b. 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, RA 8293]
C. Non-copyrightable Works
1. Unprotected Subject matter
a. Any idea, procedure, system method or
operation, concept, principle, discovery or
mere data as such, even if they are
expressed, explained, illustrated or
embodied in a work.
b. News of the day and other miscellaneous
facts having the character of mere items of
press information;
c. Any official text of a legislative,
administrative or legal nature, as well as
any official translation thereof;
d. Pleadings;
e. Original decisions of courts and tribunals
(This pertains to the “original decisions”
not the SCRA published volumes since these
 MERCANTILE LAW REVIEWER
are protected under derivative works under
Sec 173.1) [Sec. 175, RA 8293]
180
The format or mechanics of a TV show is not
copyrightable as copyright does not extend to ideas,
procedures, processes, systems, methods of
operation, concepts, principles or discoveries
regardless of the form in which they are described,
explained, illustrated or embodied. [Joaquin Jr. et
al vs. Drilon, et al (1999)]
No one may claim originality as to facts as these do
not owe their origin to an act of authorship. The first
person to find and report a particular fact has not
created the same; he has merely discovered its
existence. [Feist Publication v Rural Telephone
Services (1991)]
2. Works of the Government of the
Philippines
Work of the Government of the Philippines: is a
work created by an officer or employee of the
Philippine Government or any of its subdivisions and
instrumentalities, including government-owned or
controlled corporations as a part of his regularly
prescribed official duties. [Sec. 171.11, RA 8293]
General Rule: Government cannot own copyright
Exceptions:
1. When copyright is assigned or bequested
in favor of the government (Sec 176.3);
2. Author of speeches, lectures, sermons,
addresses and dissertations shall have
exclusive right of making a collection of
his work.
However, prior approval of the government agency
or the office wherein the work is created shall be
necessary for the exploitation of such work for
profit. (Sec. 176.1)
Notwithstanding the foregoing provisions, the
Government is not precluded from receiving and
holding copyrights transferred to it by assignment,
bequest or otherwise; nor shall publication or
republication by the Government in a public
document of any work in which copyright is
subsisting be taken to cause any abridgment or
annulment of the copyright or to authorize any use
or appropriation of such work without the consent of
the copyright owner. [Sec. 176.3, RA 8293]
In writing judicial decisions, a judge should make the
proper attribution in copying passages from
any judicial decision, statute, regulation, or other
Works of the Government. However, the failure to
make such attribution does not violate the Law on
Copyright. The law expressly provides that Works of
the Government are not subject to copyright. This
means that there is neither a legal right by anyone
to demand attribution, nor any legal obligation from
anyone to make an attribution, when Works of the
Government are copied. The failure to make the
proper attribution of a Work of the Government is
not actionable but is merely a case of sloppy writing.
Clearly, there is no legal obligation, by a judge or by
any person, to make an attribution when copying
Works of the Government. However, misquoting or
twisting, with or without attribution, any judicial
decision, statute, regulation or other Works of the
Government in judicial writing, if done to mislead
the parties or the public, is actionable. [J. Carpio
Dissenting Opinion, In The Matter Of the Charges of
Plagiarism, Etc., Against Assoc. Justice Mariano Del
Castillo, A.M. 10-7-17-SC (2011)]
3. Works of the Public domain
These include works whose term of copyright has
expired. [2011 UP Bar Reviewer]
4. Useful articles
Useful Article Doctrine: Works whose sole purpose
is utilitarian have no separate artistic value. This can
be distinguished from a work of applied art, which
has utilitarian functions but there is an identifiable
artistic work or creation incorporated thereto. [2011
UP Bar Reviewer]
D. Rights of Copyright Owner
1. Copyright or Economic Rights
Copyright or economic rights shall consist of the
exclusive right to carry out, authorize or prevent the
following acts:
a. Reproduction of the work or substantial
portion of the work; [Sec. 177.1, RA 8293]
b. Dramatization, translation, adaptation,
abridgment, arrangement or other
transformation of the work; [Sec. 177.2, RA
8293]
c. The first public distribution of the original
and each copy of the work by sale or other
forms of transfer of ownership; [Sec. 177.3,
RA 8293]
d. Rental of the original or a copy of an
audiovisual or cinematographic work, a
work embodied in a sound recording, a
computer program, a compilation of data
and other materials or a musical work in
graphic form, irrespective of the ownership
of the original or the copy which is the
subject of the rental; [Sec. 177.4, RA 8293]
e. Public display of the original or a copy of
the work; [Sec. 177.5, RA 8293]
f. Public performance of the work; [Sec.
177.6, RA 8293]
g. Other communication to the public of the
work [Sec. 177.7, RA 8293]
Economic rights also give the author the right to
assign the copyright and/or the material object in

whole or in part, and they allow the owner to derive
financial reward from the use of his works by others.
[Sec. 180.1, RA 8293]
Copyright in a work of architecture shall include the
right to control the erection of any building which
reproduces the whole or a substantial part of the
work either in its original form or in any form
recognizably derived from the original: Provided,
That the copyright in any such work shall not include
the right to control the reconstruction or
rehabilitation in the same style as the original of a
building to which that copyright relates. [Sec. 186,
RA 8293]
Communication to the Public of Copyrighted Works:
includes point-to-point transmission of a work,
including video on demand, and providing access to
an electronic retrieval system, such as computer
databases, servers, or similar electronic storage
devices. Broadcasting, rebroadcasting,
retransmission by cable, and broadcast and
retransmission by satellite are all acts of
―communication to the public‖ within the meaning
of the IPC. [Rule 11, Copyright Safeguards and
Regulations]
First Public Distribution of Work: An exclusive right
of first distribution of work includes all acts
involving distribution, specifically including the first
importation of an original and each copy of the work
into the jurisdiction of the Republic of the
Philippines. [Rule 12, Copyright Safeguards and
Regulations]
Civil Code Provisions on Ownership of
Intellectual Creation:
Article 721. By intellectual creation, the following
persons acquire ownership:
(1) The author with regard to his literary,
dramatic, historical, legal, philosophical,
scientific or other work;
(2) The composer; as to his musical composition;
(3) The painter, sculptor, or other artist, with
respect to the product of his art;
(4) The scientist or technologist or any other
person with regard to his discovery or invention.
Article 722. The author and the composer,
mentioned in Nos. 1 and 2 of the preceding article,
shall have the ownership of their creations even
before the publication of the same. Once their works
are published, their rights are governed by the
Copyright laws.
The painter, sculptor or other artist shall have
dominion over the product of his art even before it is
copyrighted.
The scientist or technologist has the ownership of his
discovery or invention even before it is patented.
Article 723. Letters and other private
communications in writing are owned by the person
to whom they are addressed and delivered, but they
COMMERCIAL LAW REVIEWER
cannot be published or disseminated without the
consent of the writer or his heirs. However, the
court may authorize their publication or
dissemination if the public good or the interest of 181
justice so requires.
2. Moral Rights (Sec. 193)
The author of a work shall, independently of the
economic rights in Section 177 or the grant of an
assignment or license with respect to such right,
have the right:
a. To require that the authorship of the works
be attributed to him, in particular, the right
that his name, as far as practicable, be
indicated in a prominent way on the copies,
and in connection with the public use of his
work; [Sec. 193.1, RA 8293]
b. To make any alterations of his work prior
to, or to withhold it from publication; [Sec.
193.2, RA 8293]
c. To object to any distortion, mutilation or
other modification of, or other derogatory
action in relation to, his work which would
be prejudicial to his honor or reputation;
[Sec. 193.3, RA 8293]
d. 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. 193.4,
RA 8293]
In addition to the right to publish granted by the
author, his heirs, or assigns, the publisher shall have
a copyright consisting merely of the right of
reproduction of the typographical arrangement of
the published edition of the work. [Sec.174, RA
8293]
The author of speeches, lectures, sermons,
addresses, and dissertations mentioned in the
preceding paragraphs shall have the exclusive right
of making a collection of his works. [Sec. 176.2, Ra
8293]
Waiver of Moral Rights
General Rule: Moral rights can be waived in writing,
expressly stating such waiver [Sec. 195, RA 8293] or
by contribution to a collective work unless such is
expressly reserved [Sec. 196, RA 8293].
Exceptions:
Even if made in writing, waiver is still not valid if:
a. use of the name of the author, title of his
work, or his reputation with respect to any
version or adaptation of his work, which
because of alterations substantially tends to
injure the literary or artistic reputation of
another author; [Sec. 195.1, RA 8293]
 MERCANTILE LAW REVIEWER
b. it uses the name of the author in a work
that he did not create. [Sec. 195.1, RA
182 8293]
Moral rights are not assignable or subject to license.
[Sec. 198, RA 8293]
3. Rights to Proceeds in Subsequent
Transfers (Droit de Suite or Follow
Up Rights)
In every sale or lease of an original work of painting
or sculpture or of the original manuscript of a writer
or composer, subsequent to the first disposition
thereof by the author, the author or his heirs shall
have an inalienable right to participate in the gross
proceeds of the sale or lease to the extent of five
percent (5%). This right shall exist during the
lifetime of the author and for fifty (50) years after
his death. [Sec. 200, RA 8293]
Works not Covered: Prints, etchings, engravings,
works of applied art, or works of similar kind
wherein the author primarily derives gain from the
proceeds of reproductions. [Sec. 201, RA 8293]
First Sale Doctrine: After the first sale of the
lawfully made copy of the copyrighted work, anyone
who is the owner of that copy can sell or dispose of
that copy in any way without any liability for
copyright infringement. The first sale of an
authorized copy of the work exhausts the author‘s
right to control distribution of copies. [US
Jurisprudence; UP Law 2011 Reviewer]
4. Neighboring Rights
Performer‘s Rights
1. As regards their performances, the right of
authorizing:
a. The broadcasting and other
communication to the public of their
performance; and
b. The fixation of their unfixed
performance. [Sec. 203.1, RA 8293]
Such right shall be maintained and exercised
fifty (50) years after his death, by his heirs, and
in default of heirs, the government, where
protection is claimed. [Sec. 204.2, RA 8293]
2. The right of authorizing the direct or
indirect reproduction of their performances
fixed in sound recordings, in any manner or
form; [Sec. 203.2, RA 8293]
3. Subject to the provisions of Section 206,
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; [Sec. 203.3,
RA 8293]
4. 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; [Sec. 203.4, RA 8293]
5. 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. 203.5, RA 8293]
6. Independently of a performer's economic
rights, 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. [Sec.
204.1, RA 8293]
7. Unless otherwise provided in the contract,
in every communication to the public or
broadcast of a performance subsequent to
the first communication or broadcast
thereof by the broadcasting organization,
the performer shall be entitled to an
additional remuneration equivalent to at
least five percent (5%) of the original
compensation he or she received for the
first communication or broadcast. [Sec.
206, RA 8293]
Rights of Producers of Sound Recording
1. The right to authorize the direct or indirect
reproduction of their sound recordings, in
any manner or form; the placing of these
reproductions in the market and the right of
rental or lending; [Sec. 208.1, RA 8293]
2. The right to authorize the first public
distribution of the original and copies of
their sound recordings through sale or
rental or other forms of transferring
ownership; [Sec. 208.2, RA 8293]
3. The right to authorize the commercial
rental to the public of the original and
copies of their sound recordings, even after
distribution by them by or pursuant to
authorization by the producer. [Sec. 208.3,
RA 8293]
4. If a sound recording published for
commercial purposes, or a reproduction of
such sound recording, is used directly for
broadcasting or for other communication to
the public, or is publicly performed with
the intention of making and enhancing

profit, a single equitable remuneration for
the performer or performers, and the
producer of the sound recording shall be
paid by the user to both the performers and
the producer, who, in the absence of any
agreement shall share equally. [Sec. 209,
RA 8293]
Rights of Broadcasting Organizations
1. The rebroadcasting of their broadcasts;
[Sec. 211.1, RA 8293]
2. 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; [Sec. 211.2, RA
8293]
3. The use of such records for fresh
transmissions or for fresh recording. [Sec.
211.3, RA 8293]
Must-Carry Rule: prevents cable television
companies from excluding broadcasting organization
especially in those places not reached by signal.
Also, the rule prevents cable television companies
from depriving viewers in far-flung areas the
enjoyment of programs available to city viewers.
[ABS-CBN Broadcasting vs. Philippine Multi-Media
System (2009)]
Limitations on Protection
Sections 203, 208 and 209 shall not apply where the
acts referred to in those Sections are related to:
1. The use by a natural person exclusively for
his own personal purposes;
2. Using short excerpts for reporting current
events;
3. Use solely for the purpose of teaching or for
scientific research; and
4. Fair use of the broadcast subject to certain
conditions. [Sec. 212, RA 8293]
Term of Protection
Works Term
For performances not fifty (50) years from the
incorporated in end of the year in which
recordings the performance took
place [Sec. 215.1(a), RA
8293]
For sound or image and fifty (50) years from the
sound recordings and for end of the year in which
performances the recording took
incorporated therein place. [Sec. 215.1(b), RA
8293]
Broadcasts twenty (20) years from
the date the broadcast
took place[Sec. 215.2,
RA 8293]
COMMERCIAL LAW REVIEWER
E. Rules on Ownership of
Copyright
183
1. Ownership of Copyright
Work Ownership
Single Creator of an Belongs to the author of the
Original Work work [Sec. 178.1, RA 8293]
Belongs of the co-authors; in
the absence of agreement,
their rights shall be governed
by the rules on co-ownership.
However, if the work consists
Works of Joint of parts that can be used
Authorship separately and identified,
the author of each part owns
the copyright of the part he
has created. [Sec. 178.2, RA
8293;BAR Question (1995,
2004)]
Belongs to the employee if
the creation is not a part of
his regular duties, even if he
used the time, facilities and
materials of the employer.
Work created during However, belongs to the
the course of employer if the work is in the
employment performance of the
employee‘s regular duties
unless there is an agreement
to the contrary. [Sec. 178.3,
RA 8293; BAR Question
(2008)]
The person who
commissioned the work holds
ownership of the work per
Work commissioned se, but copyright remains
by a person other with the creator unless there
than the employer was a stipulation to the
contrary. [Sec. 178.4, RA
8293; BAR Question (1995,
2004)]
Belongs to the producer,
author of the scenario,
composer of the music, film
director, and author of the
adapted work. However,
subject to stipulations, the
producers shall exercise the
Audio visual works
copyright as may be required
for the exhibition of the
work, except for the right to
collect license fees for the
performance of musical
compositions in the work.
[Sec. 178.5, RA 8293]
Belongs to the writer, but
the court may authorize their
publication or dissemination
Letters of the public good or interest
of justice requires, pursuant
to Art. 723, New Civil Code.
[Sec. 178.6, RA 8293
Anonymous and Publishers are deemed to
pseudonymous works represent the authors, unless
 MERCANTILE LAW REVIEWER
the contrary appears, the
pseudonyms or adopted
184 names leave no doubt as to
the author‘s identity or if the
author discloses his identity.
[Sec. 179, RA 8293]
A contributor is deemed to
have waived his right unless
Collective works
he expressly reserves it.
[Sec. 196, RA 8293]
2. Duration of Copyright
Works Term
Original Literary and Lifetime of author and
Artistic Works including for fifty (50) years after
Posthumous Works his death [Sec 213.1,
RA 8293]
Derivative Works including Lifetime of author and
Posthumous Works for fifty (50) years after
his death [Sec 213.1,
RA 8293]
Joint Authorship Lifetime of the last
surviving author and for
fifty (50) years after his
death [Sec 213.2, RA
8293]
Anonymous or Fifty (50) years from
Pseudonymous Works date of first lawful
publication [Sec. 213.3,
RA 8293]
Applied Art Twenty-five (25) years
from date of making
[Sec. 213.4, RA 8293]
Published Photographic Fifty (50) years from
Works publication [Sec. 213.5,
RA 8293]
Unpublished Photographic Fifty (50) years from
Works the making [Sec. 213.5,
RA 8293]
Published Audio-visual Fifty (50) years from
Works publication [Sec. 213.6,
RA 8293]
Unpublished Audio-visual Fifty (50) years from
Works the making [Sec. 213.6,
RA 8293]
3. 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, be presumed to be
the author of the work. This provision shall be
applicable even if the name is a pseudonym, where
the pseudonym leaves no doubt as to the identity of
the author. The person or body, corporate whose
name appears on an 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, RA 8293]
The term of protection subsequent to the death of
the author shall run from the date of his death or of
publication, but such terms shall always be deemed
to begin on the first day of January of the year
following the event which gave rise to them. [Sec.
214, RA 8293]
4. Transfer or Assignment of Copyright
The copyright may be assigned in whole or in part.
Within the scope of the assignment, the assignee is
entitled to all the rights and remedies which the
assignor had with respect to the copyright. [180.1,
RA 8293]
The copyright is not deemed assigned inter vivos in
whole or in part unless there is a written indication
of such intention. [180.2, RA 8293]
The submission of a literary, photographic or artistic
work to a newspaper, magazine or periodical for
publication shall constitute only a license to make a
single publication unless a greater right is expressly
granted. If two (2) or more persons jointly own a
copyright or any part thereof, neither of the owners
shall be entitled to grant licenses without the prior
written consent of the other owner or owners.
[180.3, RA 8293]
The transfer or assignment of copyright shall not
itself constitute a transfer of the materials object. A
transfer or assignment of the copyright of the sole
copy or one of the several copies of the work shall
not imply transfer or assignment of copyright
[Sec.181, RA 8293]
The copyright owners or their heirs may designate a
society of artists, writers or composers to enforce
their economic rights and moral rights on their
behalf. [Sec. 183, RA 8293]
F. Deposit on Copyrightable
Materials
Rule 5, Copyright Safeguards and Regulations
SECTION 4. Works That Shall Be Registered and
Deposited. — Two (2) copies or reproductions of the
following classes of works, and transfers and
assignments related thereto, shall be registered and
deposited with TNL Copyright Division and another
two (2) copies with the SCL:
a. Books, pamphlets, articles and other
writings;
b. Periodicals and newspapers;
c. Lectures, sermons, addresses, dissertations
prepared for oral delivery whether or not
reduced in writing or other material form;
d. Letters;
e. Musical compositions with or without words
SECTION 5. Replicas and Pictures. — For practical
purposes, only replicas and pictures of the following
classes of works, shall be registered and deposited
with The National Library Copyright Division:
a. Works of drawing, painting, architecture,
sculpture, engraving, lithography or other
works of art, models or designs for works of

art;
b. Original ornamental designs or models for
articles of manufacture, whether or not
registerable as an industrial design, and
other works of applied art;
c. Illustrations, maps, plans, sketches, charts
and three-dimensional works relative to
geography, topography, architecture or
science;
d. Drawings or plastic works of a scientific or
technical character.
SECTION 6. Works that May be Registered and
Deposited. The following works may be registered
and deposited:
a. Dramatic or dramatic-musical compositions,
choreographic works or entertainment in
shows;
b. Photographic works including works
produced by a process analogous to
photography, lantern slides;
c. Audiovisual works and cinematographic
works and works produced by a process
analogous to cinematography or any process
for making audio-visual recordings;
d. Pictorial illustrations and advertisements;
e. Computer programs;
f. Other literary, scholarly, scientific and
artistic works;
g. Sound recordings;
e. Broadcast recording [Sec. 6, Rule 5,
Copyright Safeguards and Regulations
Registration and Deposit with the National
Library and the Supreme Court Library
After the first public dissemination of performance
by authority of the copyright owner of a work there
shall, for the purpose of completing the records of
the National Library and the Supreme Court Library,
within three (3) weeks, be registered and deposited
with it, by personal delivery or by registered mail
two (2) complete copies or reproductions of the
work in such form as the directors of said libraries
may prescribe. A certificate of deposit shall be
issued for which the prescribed fee shall be
collected and the copyright owner shall be exempt
from making additional deposit of the works with the
National Library and the Supreme Court Library
under other laws.
If, within three (3) weeks after receipt by the
copyright owner of a written demand from the
directors for such deposit, the required copies or
reproductions are not delivered and the fee is not
paid, the copyright owner shall be liable to pay a
fine equivalent to the required fee per month of
delay and to pay to the National Library and the
Supreme Court Library the amount of the retail price
of the best edition of the work. Only the above
mentioned classes of work shall be accepted for
deposit by the National Library and the Supreme
Court Library. [Sec. 191, RA 8293}
All copies deposited and instruments in writing filed
with the National Library and the Supreme Court
COMMERCIAL LAW REVIEWER
Library shall become the property of the
Government [Sec. 227, RA 8293]
Notice of Copyright 185
Each copy of a work published or offered for sale
may contain a notice bearing the name of the
copyright owner, and the year of its first
publication, and, in copies produced after the
creator's death, the year of such death. [Sec. 192,
RA 8293]
G. Limitations on Copyright
1. Doctrine of Fair Use
The fair use of copyrighted work for criticism, news
reporting, teaching (including multiple copies for
classroom use), research and similar purposes is not
an infringement of copyright.
A privilege, in persons other than the owner of the
copyright, to use the copyrighted material in a
reasonable manner without his consent,
notwithstanding the monopoly granted to the owner
by the copyright. It is meant to balance the
monopolies enjoyed by the copyright owner with the
interests of the public and of society.
Decompilation: Refers to the reproduction of the
code and translation of the forms of the computer
program to achieve the inter-operability of an
independently created computer program with other
programs. This may also constitute fair use [Sec.
185.1, RA 8293].
The fact that a work is unpublished shall not by
itself bar a finding of fair use if such finding is made
upon consideration of all the above factors. [Sec
185.2, RA 8293]
Factors to consider in determining Fair Use
1. The purpose and character of the use,
including whether such use is of a
commercial nature or is for non-profit
educational purposes;
2. The nature of the copyrighted work;
3. The amount and substantiality of the
portion used in relation to the copyrighted
work as a whole; and
4. The effect of the use upon the potential
market for or value of the copyrighted work
[Sec. 185.1, RA 8293; [Harper & Row v.
Nation Enterprise, 471 US 539, 105 S.Ct.
2218, 85 L.Ed.2d 588]
2. Copyright infringement
Infringement of Copyright and Related Rights means
any violation of the rights under the Intellectual
Property Code and/or the applicable Intellectual
Property Law, including the act of any person who at
the time when copyright subsists in a work has in his
possession an article which he known, or ought to
 MERCANTILE LAW REVIEWER
know, to be an infringing copy of the work f or the
purpose of:
186
a. Selling, letting for hire, or by way of trade
offering or exposing for sale, or hire, the
article
b. Distributing the article for purpose of trade,
or for any other purpose to an extent that
will prejudice the rights of the copyright
owner in the work; or
c. Trade exhibit of the article in public. [Sec.
1(l), Rule 1, Rules and Regulations on
Administrative Complaints for Violation of
Laws involving Intellectual Property Rights]
Habana et al vs. Robles et al. (1999). Infringement
consists in 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. For there to be
substantial reproduction of a book, it does not
necessarily require 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
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 am ―injurious
effect.‖
Copyright infringement and unfair competition are
not limited to the act of selling counterfeit goods.
They cover a whole range of acts from copying,
assembling, packaging to marketing, including the
mere offering for sale of counterfeit goods.
[Microsoft Corp vs. Maxicorp Inc.(2004)]
Columbia Pictures v. CA (1996). A copy of a piracy
is an infringement of the original, and it is no
defense that the pirate, in such cases, did not know
what works he was indirectly copying, or 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
determining the question of infringement, the
amount of matter copied from the copyrighted work
is an important consideration. To constitute
infringement, it is not necessary that the whole or
even a large portion of the work shall have been
copied. If so much is taken that the value of the
original is sensibly diminished, or the labors of the
original author are substantially and to an injurious
extent appropriated by another, that is sufficient in
point of law to constitute a institution for charitable or educational
piracy.
The following shall NOT constitute
infringement of copyright:
a. Recitation or performance of a work once it
has been made accessible to the public if
(1) privately done AND free of charge OR (2)
strictly for a charitable or religious
institution; [Sec. 184.1(a), RA 8293]
b. Making of quotations from a published
work: (i) compatible with fair use, (ii)
extent is justified by the purpose, (iii)
source and name of the author, appearing
on work, must be mentioned; [Sec.
184.1(b), RA 8293]
c. Reproduction or communication to the
public by mass media of articles on current
political, social, economic, scientific or
religious topic, lectures, addresses and
other works, delivered in public: (i) for
information purposes, (ii) not expressly
reserved, and (iii) source is already
indicated; [Sec. 184.1(c), RA 8293]
d. Reproduction and communication to the
public of literary, scientific or artistic works
as part of reports of current events by
means of photography, cinematography or
broadcasting to the extent necessary for
the purpose; [Sec. 184.1(d), RA 8293]
e. Inclusion of a work in a publication,
broadcast or other communication to the
public, sound recording or film if made by
way of illustration for teaching purposes
compatible with fair use and the source and
the name of the author appearing on work,
must be mentioned; [Sec. 184.1(e), RA
8293]
f. Recording made in schools, universities, or
educational institutions of a work included
in a broadcast for the use of schools,
universities or educational institutions.
Such recording must be deleted within a
reasonable period; such recording may not
be made from audio-visual works which are
part of the general cinema, repertoire of
feature films except of brief excerpts of the
work; [Sec. 184.1(f), RA 8293]
g. Making of ephemeral recordings; (i) by a
broadcasting organization, (ii) by means of
its work or facilities, (iii) for use in its own
broadcast; [Sec. 184.1(g), RA 8293]
h. Use made of a work by or under the
direction or control of the government for
public interest compatible with fair use;
[Sec. 184.1(h), RA 8293]
i. Public performance or the communication
to the public of a work in a place where no
admission fee is charged by a club on
purpose only and the aim is not profit-
making; [Sec. 184.1(i), RA 8293]
j. 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 either the work has been published,
sold, given away, or transferred to another

person by the author or his successor in
title; [Sec. 184.1(j), RA 8293]
k. Use made of a work for the purpose of any
judicial proceedings or for the giving of
professional advice by a legal practitioner.
[Sec. 184.1(k), RA 8293]
Reproduction of Published Work
General Rule: The private reproduction of a
published work in a single copy, where the
reproduction is made by a natural person exclusively
for research and private study, shall be permitted,
without the authorization of the owner of copyright
in the work. [Sec. 187.1, RA 8293]
Exceptions: Such permission shall not extend to:
a. A work of architecture in the form of
building or other construction;
b. An entire book, or a substantial part
thereof, or of a musical work in graphic
form by reprographic means;
c. A compilation of data and other materials;
d. A computer program except as provided in
Section 189; and
e. Any work in cases where reproduction
would unreasonably conflict with a normal
exploitation of the work or would otherwise
unreasonably prejudice the legitimate
interests of the author. [187.2, RA 8293]
Reprographic Reproduction by Libraries
Any library or archive whose activities are not for
profit may, without the authorization of the author
of copyright owner, make a single copy of the work
by reprographic reproduction:
a. Where the work by reason of its fragile
character or rarity cannot be lent to user in
its original form;
b. Where the works are isolated articles
contained in composite works or brief
portions of other published works and the
reproduction is necessary to supply them,
when this is considered expedient, to
persons requesting their loan for purposes
of research or study instead of lending the
volumes or booklets which contain them;
and
c. Where the making of such a copy is in order
to preserve and, if necessary in the event
that it is lost, destroyed or rendered
unusable, replace a copy, or to replace, in
the permanent collection of another similar
library or archive, a copy which has been
lost, destroyed or rendered unusable and
copies are not available with the publisher.
[Sec. 188.1, RA 8293]
It shall not be permissible to produce a volume of a
work published in several volumes or to produce
missing tomes or pages of magazines or similar
works, unless the volume, tome or part is out of
stock: Provided, That every library which, by law, is
COMMERCIAL LAW REVIEWER
entitled to receive copies of a printed work, shall be
entitled, when special reasons so require, to
reproduce a copy of a published work which is
considered necessary for the collection of the library 187
but which is out of stock. [Sec.188.2, RA 8293]
Reproduction of Computer Program
The reproduction in one (1) back-up copy or
adaptation of a computer program shall be
permitted, without the authorization of the author
of, or other owner of copyright in, a computer
program, by the lawful owner of that computer
program: Provided, That the copy or adaptation is
necessary for:
a. The use of the computer program in
conjunction with a computer for the
purpose, and to the extent, for which the
computer program has been obtained; and
b. Archival purposes, and, for the replacement
of the lawfully owned copy of the computer
program in the event that the lawfully
obtained copy of the computer program is
lost, destroyed or rendered unusable.
[189.1, RA 8293]
No copy or adaptation mentioned in this Section
shall be used for any purpose other than the ones
determined in this Section, and any such copy or
adaptation shall be destroyed in the event that
continued possession of the copy of the computer
program ceases to be lawful. [189.2, RA 8293]
Importation for Personal Purposes
The importation of a copy of a work by an individual
for his personal purposes shall be permitted without
the authorization of the author of, or other owner of
copyright in, the work under the following
circumstances:
a. When copies of the work are not available
in the Philippines and:
i. Not more than one (1) copy at one
time is imported for strictly
individual use only; or
ii. The importation is by authority of
and for the use of the Philippine
Government; or
iii. The importation, consisting of not
more than three (3) such copies or
likenesses in any one invoice, is
not for sale but for the use only of
any religious, charitable, or
educational society or institution
duly incorporated or registered, or
is for the encouragement of the
fine arts, or for any state school,
college, university, or free public
library in the Philippines.
b. When such copies form parts of libraries
and personal baggage belonging to persons
or families arriving from foreign countries
and are not intended for sale: Provided,
That such copies do not exceed three (3).
[Sec. 190.1, RA 8293]
 MERCANTILE LAW REVIEWER
Copies imported as allowed by this Section may not
lawfully be used in any way to violate the rights of
188 owner the copyright or annul or limit the protection
secured by this Act, and such unlawful use shall be
deemed an infringement and shall be punishable as
such without prejudice to the proprietor's right of
action. [Sec. 190.2, RA 8293]
a. Remedies
Nature Remedy
Injunction,; Actual, Moral and
Exemplary Damages; Impounding
of documents evidencing sales,
articles and packaging that
infringe copyright and
Civil
implements for making them;
Destruction without
compensation of infringing copies
and devices and the means of
making infringing copies. [Sec.
216, RA 8293]
Imprisonment and fine-
depending on the value of the
infringing materials produced and
Criminal
the damage the copyright owner
has suffered by reason of the
infringement. [Sec. 217, RA 8293]
Administrative action; Cease and
Desist Orders; Forfeiture of the
Administrative paraphernalia used in committing
the offense; Administrative fines
[Sec. 10, RA 8293]
General Rule: Mere possession of infringing goods is
not punishable
Exception: Unless one can prove that the possessor
knows or ought to know that the goods in his
possession are infringing copies of the work and are
held for the purpose of:
1. Selling, letting for hire or by way of trade,
offering or exposing the article for sale or
hire;
2. Distributing the article for trade or for any
other purpose to an extent that will
prejudice the rights of the copyright owner;
3. Trade exhibit of the article [Sec. 217.3, RA
8293]
No damages may be recovered under this Act after
four (4) years from the time the cause of action
arose. [Sec. 226, RA 8293]
Rule on Search and Seizure in Civil
Actions for Infringement of Intellectual
Property Rights
(A.M. No. 02-1-06-SC)
Application for Search and Seizure [Sec. 3]
Examination of Applicant and Witnesses [Sec. 5]
Issuance of Writ [Sec. 7]
Search conducted in the presence of defendant,
his representative or witnesses [Sec. 13]
Verified Return filed by Sheriff to the court w/in
3 days from enforcement [Sec. 17]
Judge shall ascertain WON writ was served or
return made w/in 5 days
Trial/Hearing
Judgment [Sec. 22]
Contents of Application
a. Ground upon which application is based
b. Specific description and location of
documents
c. Articles to be searched, inspected copied or
seized
d. Names of applicant, representative, witness
and counsel
e. Other information necessary for identification
of articles [Sec. 4]
Grounds for Issuance of Writ
a. Applicant is the right holder or his duly
authorized representative
b. There is probable cause to believe that the
applicant‘s right is being infringed
c. Damage likely to be caused is irreparable
d. Demonstrable risk of evidence that the
alleged defendant may destroy, hide or
remove the document
e. Documents and articles to be seized
constitute evidence of the alleged
defendant‘s infringing activity or that they
infringe or are used or intended to be used as
means of infringing the applicant‘s
intellectual property right [Sec. 6]
Contents of Writ
a. An order to the alleged defendant to permit
 COMMERCIAL LAW REVIEWER

persons named in the writ to enter into the
premises for purpose of searching, inspecting,
copying or removing from the premises the
documents and articles subject to the control
of the court
b. An order to the alleged defendant to disclose
to the sheriff the location of the documents
and articles subject of the writ
c. Period when writ shall be enforced (w/in 10
days from issuance)
d. Names of applicants or his agent and the
Commissioner who will supervise the
enforcement of writ
e. Other terms and conditions that will ensure
proper execution of the writ [Sec. 8]
Third and Subsequent Offenses: Imprisonment of six
(6) years and one (1) day to nine (9) years plus a fine
ranging from five hundred thousand pesos (P500,000)
to One million five hundred thousand pesos 189
(P1,500,000). ). [Sec. 217.1 (c), RA 8293]
In all cases, subsidiary imprisonment in cases of
insolvency. [Sec. 217.1(d), RA 8293]
In determining the number of years of imprisonment
and the amount of fine, the court shall consider the
value of the infringing materials that the defendant
has produced or manufactured and the damage that
the copyright owner has suffered by reason of the
infringement. [Sec. 217.2, RA 8293]

Discharge of Writ
a. Writ was improperly or irregularly issued or
excessively enforced
b. Bond was insufficient
c. Safeguards in the writ was violated by the
applicant or the sheriff
f. Documents and articles seized are not
infringing copies or means for making the
materials alleged to infringe the applicant‘s
intellectual property right [Sec. 18]

Failure to file the complaint – the writ, upon motion,

shall be set aside [Sec. 20]

Alleged defendant may claim for damages

a. Writ was discharged
b. Finding or no infringement or threat of
infringement of an intellectual property right
[Sec. 21]

Judgment
a. Finding of Infringement – Court shall order the
destruction of goods or donation to
charitable, educational institution with
prohibition against bringing the same into
channels of commerce
b. Finding of no infringement – Seized materials
shall be immediately returned to defendant
[Sec. 22]

b. Criminal penalties

Any person infringing any right secured by provisions

of Part IV of this Act or aiding or abetting such
infringement shall be guilty of a crime punishable
by:

First Offense: Imprisonment of one (1) year to three

(3) years plus a fine ranging from Fifty thousand
pesos (P50,000) to One hundred fifty thousand pesos
(P150,000). [Sec. 217.1(a), RA 8293]

Second Offense: Imprisonment of three (3) years and

one (1) day to six (6) years plus a fine ranging from
One hundred fifty thousand pesos (P150,000) to Five
hundred thousand pesos (P500,000) for the second
offense. [Sec. 217.1(b), RA 8293]
 MERCANTILE LAW REVIEWER

190 V. Registration Flowcharts

A. Patent Application
B. Utility Model and Industrial Design
C. Copyright Registration and Deposit
D. Trademark

A. Patent Application [Source: http://ipophil.gov.ph; Secs. 32-39, RA 8293]

Application Requirements to get a filing date [Sec.

Formality Examination
Classification and Search
40, RA 8293]
1. Request for Philippine Patent
2. Description of Invention
3. Drawings necessary
4. Claim(s)
5. Abstract
6. Identification of Inventor (NRA shall
appoint an agent in the Philippines)

Publication of Unexamined Application in the IPO

Gazette after 18 months from filing or priority date

Request for Substantive Exam (w/in 6 months from

date of publication)

Substantive Examination

Applicant is notified of reasons for refusal

Opinion and/or Amendment

Decision to Grant Final Refusal by Examiner

Patent

Publication of Patent in Appeal to Director of Patents

the IPO Gazette

Final Refusal by Director

Issuance of Patent
Certification
Appeal to Director General

Final Refusal

Court of Appeals

Refusal

Appeal to Supreme Court

Refusal
 COMMERCIAL LAW REVIEWER

B. Utility Model and Industrial Design [Source: http://ipophil.gov.ph]

191

Application is Received

Application is not Formal

Applicant‘s Request
Application is subjected to Applicant is Notified of the
Formality Examination Result of Examination

Application is Received
Application is Formal
With Response No Response

Application is recommended
for Publication Application Deemed
Withdrawn

Director‘s Request Opposition Filed

Petition for Revival
Application is published

BOP Director
No Opposition Filed

BOP Director Application is confirmed for

Registration
Application Revived

Decision

Application is Application is
Refused Affirmed for
Registration

Appeal on the Decision of

the Director

Director General

Decision

Application is Application is
Refused Affirmed for
Registration Third Party‘s Request
Request
Issuance of Certificate Registrability Report
 MERCANTILE LAW REVIEWER

C. Copyright Registration and Deposit [Source: IPOPHL Office Order No. 93 Series of 2011]
192

Submission of Registration and Deposit Form (RDF) with

IP Satellite Office (IPSO)

IPSO Field Specialist shall review entries and documents

Statement of Account (SOA) is issued to Applicant

Payment of Filing Fee to Landbank

IPSO Field Specialist received RDF and RDF Number and

date of filing upon showing of validated deposit slip

IPSO Field Specialist issues Acknowledgment Receipt

(AR) pending release of Official Receipt (OR)

IPSO Field Specialist encodes bibliographic entry in data

base and scan documents including AR, SOA and deposit
slip

IPSO Field Specialist transmit scanned documents to IP

Field Operations Unit (IPFOU) to verity completeness of
documents

IPFOU transmit documents to IP Office Philippines

(IPOPHL) Cashier for preparation of Official Receipt (OR)

Notification by IPOPHL Cashier of the release of OR

Copyright Support Services (CSS) shall print the

Certificate of Registration and Deposit

Certificate released to applicant after 5 working days

from filing
 COMMERCIAL LAW REVIEWER

D. Trademark [Source: http://ipophil.gov.ph] 193

Filing of Application
Requirements [Sec.
124, RA 8293]
According of Filing or
Priority
Search and Examination
1. Request for Registration
2. Applicant‘s Name and address
3. Nationality or Domicile and
Place of Business
4. Reproduction of Marks
5. Translation or marks
6. Names of goods or services for
w/c registration is sought
7. Signature of Applicant
8. Juridical Entity: law under w/c
organized
9. NRA: appointment of agent
10. Claims of Priority Right
11. Claims of color as distinctive
feature of mark
12. 3D mark, statement to that
effect

Actions and
Responses

Allowance for Publication

Certificate of Registration [Sec.
138, RA 8293]
Prima Facie evidence of:
1. Validity of registration
2. Registrant‘s ownership of the
Publication
mark
3. Registrant‘s exclusive right to
use the same in connection with
the goods or services and those
that are related thereto

NO YES
Is there an
opposition? Opposition
Issuance of Certificate of
Registration

Decision
Publication

YES Favorable to
Applicant

NO

Motion for Reconsideration or

Appeal to the Director General