Intellectual Property Rights, In General STATE POLICIES (1) To protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in this Act. (2) To promote the diffusion of knowledge and information for the promotion of national development and progress and the common good. (3) To streamline administrative procedures of registering patents, trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the Philippines. [Sec. 2, RA 8293] INTELLECTUAL PROPERTY RIGHTS DEFINITION: Those property rights which result from the physical manifestation of original thought. [Ballantine’s Law Dictionary] Note: There are no property rights protected by law in mere ideas or mental conceptions. When creations of mind are put in tangible form, there is appropriate subject of property that is protected by law. [63A Am Jur 3rd Property, Section 5] INTELLECTUAL PROPERTY RIGHTS UNDER THE INTELLECTUAL PROPERTY CODE
(1) Copyright; (2) Related Rights of copyright; (3) Trademarks and Service Marks; (4) Geographic Indications; (5) Industrial Designs; (6) Patents; (7) Layout-Designs (Topographies) of Integrated Circuits; [Sec. 4, RA 8293] (8) Protection of Undisclosed Information (TRIPS Agreement). DIFFERENCES BETWEEN COPYRIGHTS, TRADEMARKS AND PATENT PATENTABLE INVENTIONS Refer to any technical solution of a problem in any field of human activity, which is new, involves an inventive step and is industrially applicable. It may be, or refer to, any product, process, or an improvement of any of the foregoing. [Sec. 21, RA 8293] It is vested from the issuance of letters of patent. TRADEMARK any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods. [Kho v. CA, et al. (2002)] It is vested from registration. TRADE NAME: the name or designation identifying or distinguishing an enterprise [Sec. 121.3, RA 8293] COPYRIGHT: right granted by statute to the author or originator of literary, scholarly, scientific, or artistic productions, including computer Page 1 of 54
programs. A copyright gives him the legal right to determine how the work is used and to obtain economic benefits from the work. For example, the owner of a 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 versions of the work. If another person improperly uses material covered by a copyright, the copyright owner can obtain legal relief. [Rule 2, Copyright Safeguards and Regulations] Copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. [Kho v. CA, et al. (2002)] It is vested from the moment of creation. Copyright (1995) What intellectual property rights are protected by copyright? SUGGESTED ANSWER: Sec 5 of PD 49 provides that Copyright shall consist in the exclusive right: a) to print, reprint, publish, copy, distribute, multiply, sell and make photographs, photo engravings, and pictorial illustrations of the works; b) to make any translation or other version or extracts c) or arrangements or adaptation thereof; to dramatize if it be a nondramatic work; to convert it into a non-dramatic work if it be a drama;
to complete or execute it if it be a model or design; d) to exhibit, perform, represent, produce or reproduce the work in any manner or by any method whatever for profit or otherwise; if not reproduced in copies for sale, to sell any manuscripts or any record whatsoever thereof; e) to make any other use or disposition of the work consistent with the laws of the land Copyright; Commissioned Artist (1995) Solid Investment House commissioned Mon Blanco and his son Steve, both noted artists, to paint a mural for the Main Lobby of the new building of Solid for a contract price of P2m. a) who owns the mural? Explain b) Who owns the copyright of the mural? Explain. SUGGESTED ANSWER: a) Solid owns the mural. Solid was the one who commissioned the artists to do the work and paid for the work in the sum of P2m b) Unless there is a stipulation to the contrary in the contract, the copyright shall belong in joint ownership to Solid and Mon and Steve.
Copyright; Commissioned Artist (2004) BR and CT are noted artists whose paintings are highly prized by collectors. Dr. DL commissioned them to paint a mural at the main lobby of his new Page 2 of 54
hospital for children. Both agreed to collaborate on the project for a total fee of two million pesos to be equally divided between them. It was also agreed that Dr. DL had to provide all the materials for the painting and pay for the wages of technicians and laborers needed for the work on the project. Assume that the project is completed and both BR and CT are fully paid the amount of P2M as artists' fee by DL. Under the law on intellectual property, who will own the mural? Who will own the copyright in the mural? Why? Explain. (5%) SUGGESTED ANSWER: Under Section 178.4 of the Intellectual Property Code, in case of commissioned work, the creator (in the absence of a written stipulation to the contrary) owns the copyright, but the work itself belongs to the person who commissioned its creation. Accordingly, the mural belongs to DL. However, BR and CT own the copyright, since there is no stipulation to the contrary. Copyright; Infringement (1997) In an action for damages on account of an infringement of a copyright, the defendant (the alleged pirate) raised the defense that he was unaware that what he had copied was a copyright material. Would this defense be valid? SUGGESTED ANSWER: No. An intention to pirate is not an element of infringement. Hence, an honest intention is no defense to an action for infringement.
ALTERNATIVE ANSWER: Yes. The owner of the copyright must make others aware that the material in question is under or covered by a copyright. This is done by the giving of such notice at a prominent portion of the copyright material. When the alleged pirate is thus made aware thereof, his act of pirating the copy material will constitute infringement. Copyright; Infringement (1998) Juan Xavier wrote and published a story similar to an unpublished copyrighted story of Manoling Santiago. It was, however, conclusively proven that Juan Xavier was not aware that the story of Manoling Santiago was protected by copyright. Manoling Santiago sued Juan Xavier for infringement of copyright. Is Juan Xavier liable? (2%) SUGGESTED ANSWER: Yes. Juan Xavier is liable for infringement of copyright. It is not necessary that Juan Xavier is aware that the story of Manoling Santiago was protected by copyright. The work of Manoling Santiago is protected at the time of its creation.
Copyright; Infringement (2006) In a written legal opinion for a client on the difference between apprenticeship and learnership, Liza quoted without permission a labor law expert's comment appearing in his book entitled "Annotations on the Labor Code." Page 3 of 54
Can the labor law expert hold Liza liable for infringement of copyright for quoting a portion of his book without his permission? (5%) SUGGESTED ANSWER: Liza cannot be held liable for infringement of copyright since under the Intellectual Property Code, one of the limitations to the copyright is the making of quotations from a published work for purpose of any judicial proceedings or for giving of professorial advice by legal practitioner, provided that the source and name of the author are identified (See Section 184.1[k] of the Intellectual Property Code of the Philippines). Copyright; Photocopy; when allowed (1998) May a person have photocopies of some pages of the book of Professor Rosario made without violating the copyright law? (3%) SUGGESTED ANSWER: Yes. 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, is permitted, without the authorization of the owner of the copyright in the work. Infringement vs. Unfair Competition (1996) What is the distinction between infringement and unfair competition? SUGGESTED ANSWER:
The distinction between infringement (presumably trademark) and unfair competition are as follows: 1) Infringement of trademark is the unauthorized use of a trademark, whereas unfair competition is the passing off of one’s goods as those of another; 2) Fraudulent intent is unnecessary in infringement of trademark, whereas fraudulent intent is essential in unfair competition; 3) The prior registration of the trademark is a prerequisite to an action for infringement of trademark, whereas registration of the trademark is not necessary in unfair competition. (Del Monte Corp v CA 78325 Jan 25,90 181s410) OTHER FORMS OF INTELLECTUAL PROPERTY Geographic Indication One which identifies a good as originating in the territory of a TRIPS member, or a region or locality in that territory where a given quality, reputation or other characteristic of a good is essentially attributable to its geographical origin [Art. 22, TRIPS Agreement]
Industrial Design Any composition of lines or colors or any three-dimensional form, whether or not associated with lines or colors: Provided, that such composition or form gives a special appearance to and can Page 4 of 54
serve as pattern for an industrial product or handicraft. (Sec. 112.1, RA 8293) Layout Design (Topography) of an Integrated Circuit 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 threedimensional 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]
TECHNOLOGY TRANSFER ARRANGEMENTS 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] Patents 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]
Patent; Non-Patentable Inventions (2006) Supposing Albert Einstein were alive today and he filed with the Intellectual Property Office (IPO) an application for patent for his theory of relativity expressed in the formula E=mc2. The IPO disapproved Einstein's application on the ground that his theory of relativity Page 5 of 54
is not patentable. Is the IPO's action correct? (5%)
both applications are not one and the same. [Sec. 24.2, RA 8293]
SUGGESTED ANSWER: Yes, the IPO is correct because under the Intellectual Property Code, discoveries, scientific theories and mathematical methods, are classified to be as "nonpatentable inventions." Eintein's theory of relativity falls within the category of being a nonpatentable "scientific theory."
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 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 lack of novelty if such disclosure was made by:
INVENTION PATENT
(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
Standards: 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: (1) 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] (2) 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
(3) A third party which obtained the information directly or indirectly from the inventor [Sec. 25, RA 8293] (a) 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 Page 6 of 54
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]
(b) Industrial Applicability. —An invention that can be produced and used in any industry shall be industrially applicable. [Sec. 27, RA 8293] Utility 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: (a) A useful machine; (b) An implement or tool; (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] INDUSTRIAL DESIGN An industrial design is any composition of lines or colors or any threedimensional 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] 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 Page 7 of 54
electronic function. [Sec. 112.2, RA 8293 as amended by RA 9150] Layout-Design is synonymous with 'Topography' and means the threedimensional 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 threedimensional disposition prepared for an integrated circuit intended for manufacture. [Sec. 112.3, RA 8293 as amended by RA 9150] 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 microorganisms 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 Page 8 of 54
one reactant (Sec. 26.2, RA 8293 as amended by RA 9502) OWNERSHIP OF A PATENT 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 (Work for Hire Doctrine) (1) 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] (2) In case of inventions created pursuant to a , the person who s the work shall own the patent [Sec. 30.1, RA 8293] 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] Patents: Gas-Saving Device: first to file rule (2005)
Cezar works in a car manufacturing company owned by Joab. Cezar is quite innovative and loves to tinker with things. With the materials and parts of the car, he was able to invent a gassaving device that will enable cars to consume less gas. Francis, a co-worker, saw how Cezar created the device and likewise, came up with a similar gadget, also using scrap materials and spare parts of the company. Thereafter, Francis filed an application for registration of his device with the Bureau of Patents. Eighteen months later, Cezar filed his application for the registration of his device with the Bureau of Patents. 1) Is the gas-saving device patentable? Explain.
SUGGESTED ANSWER: Yes, the gas-saving device is patentable because it provides a technical solution to a problem in a field of human activity. It is new and involves an inventive step, and certainly industrially applicable. It therefore fulfills the requisites mandated by the intellectual Property Code for what is patentable. 2) Assuming that it is patentable, who is entitled to the patent? What, if any, is the remedy of the losing party? SUGGESTED ANSWER: Cezar is entitled to the patent because he was the real inventor. Francis, copying from the work of Cezar, cannot claim the essential criteria of an inventor, who must possess essential Page 9 of 54
elements of novelty, originality and precedence to be entitled to protection. Nevertheless, under the "first to file rule," Francis application would have to be given priority. Cezar, however, has within three months from the decision, to have it cancelled as the rightful inventor; or within one year from publication, to file an action to prove his priority to the invention, which has been taken from him and fraudulently registered by Francis. 3) Supposing Joab got wind of the inventions of his employees and also laid claim to the patents, asserting that Cezar and Francis were using his materials and company time in making the devices, will his claim prevail over those of his employees? Explain. SUGGESTED ANSWER: No, Joab's claim cannot prevail over those of his employees. In the first place, Joab did not commission any of the two employees to invent the device, and its invention did not fall within their regular duties. What prevails is the provision of the Intellectual Property Code that holds that the invention belongs to the employee, if the inventive activity is not a part of his regular duties, even if he uses the time, facilities and materials of the employer. INVENTIONS CREATED PURSUANT TO A : Person who's 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] 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] GROUNDS FOR CANCELLATION OF A 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: Page 10 of 54
(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 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] 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] 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] 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] 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 action shall be filed within one (1) year from the date of publication made in accordance with Sections 44 and 51, respectively. (Sec. 70, RA 8293) 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 Page 11 of 54
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] Patents: Infringement; Remedies & Defenses (1993) Ferdie is a patent owner of a certain invention. He discovered that his invention is being infringed by Johann. 1) What are the remedies available to Ferdie against Johann? 2) If you were the lawyer of Johann in the infringement suit, what are the defenses that your client can assert? SUGGESTED ANSWER: 1) The following remedies are available to Ferdie against Johann. a. seize and destroy b. injunction c. damages in such amount may have been obtained from the use of the invention if properly transacted which can be more than what the infringer (Johann ) received. d. Attorney’s fees and cost 2) These are the defenses that can be asserted in an infringement suit: a. Patent is invalid (Sec 45 RA 165, as amended)
b. Patent is not new or patentable c. Specification of the invention does not comply with Sec 14 d. Patent was issued not to the true and actual inventor, designer or author of the utility model or the plaintiff did not derive his rights from the true and actual inventor, designer or author of the utility model (Sec 28 RA 165 as amended) 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 Page 12 of 54
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)] Patents; Rights over the Invention (1990) Cheche invented a device that can convert rainwater into automobile fuel. She asked Macon, a lawyer, to assist in getting her invention patented. Macon suggested that they form a corporation with other friends and have the corporation apply for the patent, 80% of the shares of stock thereof to be subscribed by Cheche and 5% by Macon. The corporation was formed and the patent application was filed. However, Cheche died 3 months later of a heart attack. Franco, the estranged husband of Cheche, contested the application of the corporation and filed his own patent application as the sole surviving heir of Cheche. Decide the issue with reasons. SUGGESTED ANSWER: The estranged husband of Checke cannot successfully contest the application. The right over inventions accrue from the moment of creation and as a right it can lawfully be assigned. Once the title thereto is vested in the transferee, the latter has the right to apply for its registration. The estranged husband of Cheche, if not disqualified to inherit, merely would succeed to the interest of Cheche. LIMITATIONS OF 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 noncommercial scale or for a noncommercial 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 Page 13 of 54
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 TradeRelated 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) 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) 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] USE BY THE GOVERNMENT A Government agency or third person authorized by the
Page 14 of 54
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] 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 of the patentee. [Sec 76.1, RA 8293 as amended by RA 9502] CONTRIBUTORY INFRINGER One who actively induces the 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.] TESTS IN PATENT INFRINGEMENT 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)] Page 15 of 54
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)]
by stating 1) that the patent issued by the Patent Office was not really an invention which was patentable; 2) that he had no intent to infringe so that there was no actionable case for infringement; and 3) that there was no exact duplication of the patentee’s existing patent but only a minor improvement. With those defenses, would you exempt the alleged violator from liability? Why?
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)]
SUGGESTED ANSWER: I would not exempt the alleged violator from liability for the following reasons: 1) A patent once issued by the Patent Office raises a presumption that the article is patentable; it can, however be shown otherwise (Sec 45 RA 165). A mere statement or allegation is not enough to destroy that presumption. (Aquas v de Leon 30 Jan 82 L32160) 2) An intention to infringe is not necessary nor an element in a case for infringement of a patent. 3) There is no need of exact duplication of the patentee’s existing patent such as when the improvement made by another is merely minor (Frank v Benito, 51p713). To be independently patentable, an improvement of an existing patented invention must be a major improvement (Aquas v de Leon L32160 30Jan82)
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-andresult 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)] Patents; Infringement (1992) In an action for infringement of patent, the alleged infringer defended himself
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 Page 16 of 54
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)] LICENSING VOLUNTARY 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: (1) 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]
(2) 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] (3) 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 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] (4) 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] Page 17 of 54
(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 nonexclusive 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) (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 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 nonfulfillment 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 Page 18 of 54
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] Right of the Licensee. — To exploit the subject matter of the technology transfer agreement during the 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] COMPULSORY 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 Page 19 of 54
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 anticompetitive; (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] Page 20 of 54
(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 anticompetitive, the need to correct the anticompetitive practice may be taken into account in fixing the amount of remuneration. [Sec. 100.6] 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) REQUIREMENTS FOR RECORDING OF ASSIGNMENT (a) It must be in writing and accompanied by an English translation, if it is in a language other than English or 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 Page 21 of 54
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) Trademarks DEFINITION OF MARKS, COLLECTIVE MARKS, TRADE NAMES 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 adopted and used to identify the source of origin of goods, and which is capable of Any visible sign capable of distinguishing the
services of an enterprise from the distinguishing them from goods emanating from a competitor. service of other enterprises. 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
Page 22 of 54
(5) To protect the manufacturer against substitution and sale of an inferior and different article as its product [Mirpuri v. CA (1998)] ACQUISITION OF OWNERSHIP OF MARK The rights to a mark shall be acquired through registration made validly in accordance with law. [Sec. 122, 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] 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] 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] Page 23 of 54
(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] (10) Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or other characteristics of the goods or services; [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] PRIOR USE OF MARK AS A REQUIREMENT 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]
Page 24 of 54
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)]
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]
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)]
DOMINANCY TEST Infringement is determined by the test of “dominancy” rather than by differences or variations in the details of one trademark and of another. Similarity in size, form and color, while relevant is 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)]
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 though the 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]
TESTS TO DETERMINE CONFUSING SIMILARITY BETWEEN MARKS
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 Page 25 of 54
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 noncompeting but related goods may likely cause confusion. (3) Corollarily, the use of identical marks on noncompeting and unrelated goods is not likely to cause confusion. WELL-KNOWN MARKS A well-known mark is 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 wellknown, 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 WELLKNOWN MARKS If not registered in the Philippines Page 26 of 54
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] 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] RIGHTS CONFERRED BY A WELLKNOWN 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] 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 Page 27 of 54
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 (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 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 Page 28 of 54
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)] USE BY THIRD PARTIES OF NAMES, ETC. SIMILAR TO REGISTERED MARK 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] Trademark (1990) In 1988, the Food and Drug Administration approved the labels submitted by Turbo Corporation for its new drug brand name, “Axilon.” Turbo is now applying with the Bureau of Patents, Trademarks and Technology Transfer for the registration of said brand name. It was subsequently confirmed that “Accilonne” is a generic
term for a class of anti-fungal drugs and is used as such by the medical profession and the pharmaceutical industry, and that it is used as a generic chemical name in various scientific and professional publications. A competing drug manufacturer asks you to contest the registration of the brand name “Axilon” by Turbo. What will you advice be? SUGGESTED ANSWER: The application for registration by Turbo Corporation may be contested. The Trademark Law would not allow the registration of a trademark which, when applied to or used in connection with his products, is merely descriptive or deceptively misdescriptive of them. Confusion can result from the use of “Axilon” as the generic product itself. ALTERNATIVE ANSWER: Medical drugs may be procured only upon prescription made by a duly licensed physician. The possibility of deception could be rather remote. Since it cannot really be said that physicians can be so easily deceived by such trademark as “Axilon,” it may be hard to expect an opposition thereto to succeed. ANOTHER ANSWER: The application for registration of Turbo Corporation may be contested. The factual settings do not indicate that there had been prior use for at least 2 months of the trademark “Axilon.” Trademark (1994) Page 29 of 54
Laberge, Inc., manufactures and markets after-shave lotion, shaving cream, deodorant, talcum powder and toilet soap, using the trademark “PRUT”, which is registered with the Phil Patent Office. Laberge does not manufacture briefs and underwear and these items are not specified in the certificate of registration. JG who manufactures briefs and underwear, wants to know whether, under our laws, he can use and register the trademark “PRUTE” for his merchandise. What is your advice? SUGGESTED ANSWER: Yes. The trademark registered in the name of Laberge Inc covers only aftershave lotion, shaving cream, deodorant, talcum powder and toilet soap. It does not cover briefs and underwear. The limit of the trademark is stated in the certificate issued to Laberge Inc. It does not include briefs and underwear which are different products protected by Larberge’s trademark. JG can register the trademark “PRUTE” to cover its briefs and underwear (Faberge Inc v IAC 215 s 316) Trademark, Test of Dominancy (1996) What is the “test of dominancy?” SUGGESTED ANSWER: The test of dominancy requires that if the competing trademark contains the main or essential features of another and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; not is it necessary that the infringing label should suggest an effort to imitate.
Similarity in size, form and color, while relevant, is not conclusive. (Asia Brewery v CA GR 103543 Jul5,93 224s437) Trademark; Infringement (1991) Sony is a registered trademark for TV, stereo, radio, cameras, betamax and other electronic products. A local company, Best Manufacturing Inc produced electric fans which it sold under the trademark Sony without the consent of Sony. Sony sued Best Manufacturing for infringement. Decide the case. SUGGESTED ANSWER: There is no infringement. In order that a case for infringement of trademark can prosper, the products on which the trademark is used must be of the same kind. The electric fans produced by Best Manufacturing cannot be said to be similar to such products as TV, stereo and radio sets or cameras or betamax products of Sony. ALTERNATIVE ANSWER: There is infringement. If the owner of a trademark which manufactures certain types of goods could reasonably be expected to engage in the manufacture of another product using the same trademark, another party who uses the trademark for that product can be held liable for using that trademark. Using this standard, infringement exists because Sony can be reasonably expected to use such trademark on electric fans. Page 30 of 54
Trademark; Test of Dominancy (1996) N Corporation manufactures rubber shoes under the trademark “Jordann” which hit the Phil market in 1985, and registered its trademark with the Bureau of Patents, Trademarks and Technology (BPTTT) in 1990. PK Company also manufactures rubber shoes with the trademark “Javorski” which it registered with BPTTT in 1978. In 1992, PK Co adopted and copied the design of N Corporation’s “Jordann” rubber shoes, both as to shape and color, but retained the trademark “Javorski” on its products. May PK Company be held liable to N Co? Explain. SUGGESTED ANSWER: PK Co may be liable for unfairly competing against N Co. By copying the design, shape and color of N Corporation’s “Jordann” rubber shoes and using the same in its rubber shoes trademarked “Javorski,” PK is obviously trying to pass off its shoes for those of N. It is of no moment that he trademark “Javorski” was registered ahead of the trademark “Jordann.” Priority in registration is not material in an action for unfair competition as distinguished from an action for infringement of trademark. The basis of an action for unfair competition is confusing and misleading similarity in general appearance, not similarity of trademarks (Converse Rubber Co v Jacinto Rubber & Plastics Co GR 27425 and 30505, Apr28,80 97s158) Tradename: (2005)
International
Affiliation
S Development Corporation sued Shangrila Corporation for using the “S” logo and the tradename “Shangrila”. The former claims that it was the first to register the logo and the tradename in the Philippines and that it had been using the same in its restaurant business. Shangrila Corporation counters that it is an affiliate of an international organization which has been using such logo and tradename “Shangrila” for over 20 years. However, Shangrila Corporation registered the tradename and logo in the Philippines only after the suit was filed. Which of the two corporations has a better right to use the logo and the tradename? Explain. SUGGESTED ANSWER: S Development Corporation has a better right to use the logo and the tradename, since the protective benefits of the law are conferred by the fact of registration and not by use. Although Shangrila Corporation's parent had used the tradename and logo long before, the protection of the laws will be for S Development Corporation because it was the first entity to register the intellectual properties. How does the international affiliation of Shangrila Corporation affect the outcome of the dispute? Explain. (5%) SUGGESTED ANSWER: The international affiliation of Shangrila Corporation may be critical in the event that its affiliates or parent company abroad had registered in a foreign jurisdiction the tradename and the logo. Page 31 of 54
A well-known mark and tradename is subject to protection under Treaty of Paris for the Protection of Intellectual Property to which the Philippines is a member. INFRINGEMENT AND REMEDIES 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 noncompeting but related enough to produce confusion or affiliation. Page 32 of 54
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 Page 33 of 54
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)] DAMAGES 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] REQUIREMENT OF NOTICE Notice of registration of trademark is necessary for an owner of a trademark to recover damages in an action for Page 34 of 54
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] 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 (4) Unfair Competition (5) False designation of origin or false description (Sec. 160. RA 8293) 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 Page 35 of 54
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] 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 identified such services in the mind of the public; [Sec. 168.3(b), RA 8293] (c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to Page 36 of 54
good faith of a nature calculated to discredit the goods, business or services of another. (Sec. 168.3(c), RA 8293) McDonald’s Corporation v. L.G. Big Mak Burger, Inc., et al. (2004): The elements of an action for unfair competition are: (1) confusing similarity in the general appearance of the goods, and (2) intent to deceive the public and defraud a competitor. The confusing similarity may or may not result from similarity in the marks, but may result from other external factors in the packaging or presentation of the goods. The intent to deceive and defraud may be inferred from the similarity in appearance of the goods as offered for sale to the public. Actual fraudulent intent need not be shown. Caterpillar, Inc v. Samson (2006): An action for unfair competition is based on the proposition that no dealer in merchandise should be allowed to dress his goods in simulation of the goods of another dealer, so that purchasers desiring to buy the goods of the latter would be induced to buy the goods of the former. The most usual devices employed in committing this crime are the simulation of labels and the reproduction of form, color and general appearance of the package used by the pioneer manufacturer or dealer. Coca-Cola v. Gomez (2008): Articles 168.1 and 168.2 provide the concept and general rule on the definition of unfair competition. The law does not thereby cover every unfair act
committed in the course of business; it covers only acts characterized by “deception or any other means contrary to good faith” in the passing off of goods and services as those of another who has established goodwill in relation with these goods or services, or any other act calculated to produce the same result. What unfair competition is, is further particularized under Section 168.3 when it provides specifics of what unfair competition is “without in any way limiting the scope of protection against unfair competition.” Part of these particulars is provided under Section 168.3(c) which provides the general “catch-all” phrase that the petitioner cites. Under this phrase, a person shall be guilty of unfair competition “who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.” From jurisprudence, unfair competition has been defined as the passing off (or palming off) or attempting to pass off upon the public the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. It formulated the “true test” of unfair competition: whether the acts of defendant are such as are calculated to deceive the ordinary buyer making his purchases under the ordinary conditions which prevail in the particular trade to which the controversy relates. One of the essential requisites in an action to restrain unfair competition is proof of fraud; the intent to deceive must be shown before the Page 37 of 54
right to recover can exist. The advent of the IP Code has not significantly these rulings as they are fully in accord with what Section 168 of the Code in its entirety provides. Deception, passing off and fraud upon the public are still the key elements that must be present for unfair competition to exist. Infringement of Trademark Unfair Competition Unauthorized use of a trademark Passing off of one’s goods as those of another Fraudulent intent is unnecessary Fraudulent intent is essential Prior registration of the trademark is a prerequisite to the action Registration is not necessary [Del Monte Corporation, et al. v. CA (1990)] The law on unfair competition is broader and more inclusive than the law on trademark infringement. The latter is more limited but it recognizes a more exclusive right derived from the trademark adoption and registration by the person whose goods or business is first associated with it. Hence, even if one fails to establish his exclusive property right to a trademark, he may still obtain relief on the ground of his competitor’s unfairness or fraud. Conduct constitutes unfair competition if the effect is to pass off on the public the goods of one man as the goods of another. [Mighty Corporation v. E. & J. Gallo Winery (2004)]
TRADE NAMES OR BUSINESS NAMES It is 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)] WHAT MAY NOT BE USED AS TRADE NAME (1) If by its nature or the use to which the name or designation may be put, it is contrary to public order or morals. (2) If it is liable to deceive trade circles or the public as to the nature of the enterprise identified by the name (3) If the trade name is similar to a mark or a trade name owned by another person and its use would likely mislead the public. [Sec.165.1, RA 8293] Acquisition of ownership: Trade names are protected even prior to or without registration. The ownership 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]
Page 38 of 54
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)] COLLECTIVE MARKS A Collective mark is 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] 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] Copyrights DEFINITION Is that system of legal protection an author enjoys of the form of expression of ideas. [Aquino, Intellectual Property Law] BASIC PRINCIPLES, SECTIONS 172.2, 175 AND 181 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 Page 39 of 54
the work cannot be conceptually separable from the utilitarian aspects; thus, the article cannot be copyrighted. 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] THE COPYRIGHT IS DISTINCT FROM THE PROPERTY IN THE MATERIAL OBJECT SUBJECT TO IT. [Sec 181, RA 8293] 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)] COPYRIGHTABLE WORKS 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 threedimensional 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 Page 40 of 54
(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 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 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. 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]
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] NON-COPYRIGHTABLE WORKS 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 Page 41 of 54
volumes since these are protected under derivative works under Sec 173.1) [Sec. 175, RA 8293] 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)] 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 Page 42 of 54
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. 10-717-SC (2011)] WORKS OF THE PUBLIC DOMAIN These include works whose term of copyright has expired. 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. RIGHTS OF COPYRIGHT OWNER 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 Page 43 of 54
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 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 justice so requires. 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: (1) 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]
Page 44 of 54
(2) To make any alterations of his work prior to, or to withhold it from publication; [Sec. 193.2, RA 8293] (3) 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] (4) 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] (b) It uses the name of the author in a work that he did not create. [Sec. 195.1, RA 8293] Moral rights are not assignable or subject to license. [Sec. 198, RA 8293] 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 Page 45 of 54
exhausts the author’s right to control distribution of copies. 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 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 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] Page 46 of 54
(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 farflung 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 incorporated in recordings Fifty (50) years from the end of the year in which the performance took place [Sec. 215.1(a), RA 8293] For sound or image and sound recordings and for performances incorporated therein Fifty (50) years from the end of the year in which the recording took place. [Sec. 215.1(b), RA 8293] Broadcasts Twenty (20) years from the date the broadcast took place [Sec. 215.2, RA 8293] RULES ON OWNERSHIP OF COPYRIGHT OWNERSHIP OF COPYRIGHT Work Ownership Single Creator of an Original Work Belongs to the author of the work [Sec. 178.1, RA 8293] Page 47 of 54
Works of Joint Authorship Belongs of the co-authors; in the absence of agreement, their rights shall be governed by the rules on coownership. However, if the work consists of parts that can be used separately and identified, the author of each part owns the copyright of the part he has created. [Sec. 178.2, RA 8293; Asked in ‘95, ‘04] Work created during the course of employment 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. However, belongs to the employer if the work is in the performance of the employee’s regular duties unless there is an agreement to the contrary. [Sec. 178.3, RA 8293; Asked in ‘08] Worked by a person other than the employer The person who ed the work holds ownership of the work per se, but copyright remains with the creator unless there was a stipulation to the contrary. [Sec. 178.4, RA 8293; Asked in ‘95, ‘04] Audio visual works 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 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]
Letters Belongs to the writer, but the court may authorize their publication or dissemination of the public good or interest of justice requires, pursuant to Art. 723, New Civil Code. [Sec. 178.6, RA 8293] Anonymous and pseudonymous works Publishers are deemed to represent the authors, unless the contrary appears, the pseudonyms or adopted names leave no doubt as to the author’s identity or if the author discloses his identity. [Sec. 179, RA 8293] Collective works A contributor is deemed to have waived his right unless he expressly reserves it. [Sec. 196, RA 8293] DURATION OF COPYRIGHT Works Term Original Literary and Artistic Works including Posthumous Works Lifetime of author and for fifty (50) years after his death (Sec 213.1, RA 8293) Derivative Works including Posthumous Works Lifetime of author and 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 Pseudonymous Works Fifty (50) years from date of first lawful publication [Sec. 213.3, RA 8293] Page 48 of 54
Applied Art Twenty-five (25) years from date of making [Sec. 213.4, RA 8293] Published Photographic Works Fifty (50) years from publication [Sec. 213.5, RA 8293] Unpublished Photographic Works Fifty (50) years from the making [Sec. 213.5, RA 8293] Published Audio-visual Works Fifty (50) years from publication [Sec. 213.6, RA 8293] Unpublished Audio-visual Works Fifty (50) years from the making [Sec. 213.6, RA 8293] 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] TRANSFER OR COPYRIGHT
ASSIGNMENT
OF
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. [Sec. 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. [Sec. 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. [Sec. 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 theseveral 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] Page 49 of 54
LIMITATIONS ON COPYRIGHT 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 INTEROPERABILITY 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] 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 know, to be an infringing copy of the work f or the purpose of: (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 Page 50 of 54
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 an “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 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] Page 51 of 54
(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 institution for
charitable or educational 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; Page 52 of 54
(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 s of magazines or similar works, unless the volume, tome or part is out of stock: Provided, That every library which, by law, is 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 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. [Sec. 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. [Sec. 189.2, RA Page 53 of 54
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: (1) Not more than one (1) copy at one time is imported for strictly individual use only; or (2) The importation is by authority of and for the use of the Philippine Government; or (3) 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] Copies imported as allowed by this Section may not lawfully be used in any way to violate the rights of 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]
Page 54 of 54
