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IX.

Intellectual Property Code (Exclude Implementing Rules &


Regulations)
A. Intellectual Property Rights in General
1. Intellectual Property Rights
2. Differences between Copyrights, Trademarks and Patent
3. Technology Transfer Arrangements
B. Patents
1. Patentable Inventions
Q: Cezar works in a car manufacturing company owned by
Joab. Cezar is quite innovative and loves to tinker with things. With the
materials and part of the car, he was able to invent a gas-saving 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 Patent. Is the gas-
saving device patentable? Explain. (2005)

A: Yes, the gas-saving device is patentable. Sec. 21 of IPL


provides that in order that a machine, product, process or improvement of
them may be patented it must be new, it must involve an inventive step and
it must be industrially applicable. The invention is new because it does not
form part of prior art; involves an inventive step and unquestionably
industrially applicable for it can be produced as what Francis did though he
used scrap materials instead.

2. Non-Patentable Inventions
Q: 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 is not patentable. Is the IPO's action correct? (2006)
A: Yes. 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 non-patentable "scientific theory"(Sec. 22, IPC as amended
by R.A. 9502).
3. Ownership of a Patent
a. Right to a Patent
b. First-to-File Rule
c. Inventions Created Pursuant to a
Commission d. Right of Priority
4. Grounds for Cancellation of a Patent
5. Remedy of the True and Actual Inventor
6. Rights Conferred by a Patent
7. Limitations of Patent Rights
a. Prior User
b. Use by the Government
8. Patent Infringement
a. Tests in Patent Infringement
i. Literal Infringement
ii. Doctrine of Equivalents
b. Defenses in Action for Infringement
9. Assignment and Transmission of Rights
[EXCLUDE:
1. Licensing (voluntary and compulsory)
2. Special laws]
C. Trademarks
1. Definition of Marks, Collective Marks, Trade Names
2. Acquisition of Ownership of Mark
3. Acquisition of Ownership of Trade Name
4. Non-Registrable Marks
5. Prior Use of Mark as a Requirement
6. Tests to Determine Confusing Similarity between
Marks
a. Dominancy Test
b. Holistic Test
7. Well-Known Marks
8. Rights Conferred by Registration
Q: 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. 1. Which of the two
corporations has a better right to use the logo and the tradename? Explain.
A: S Corporation. Sec. 122 of the Intellectual Property Code
provides that the rights in a trademark are acquired through valid
registration. Actual prior use in commerce in the Philippines has been
abolished as a condition for the registration of a trademark (Record of the
Senate, Vol. II, No. 29, 8 Oct.1996; Journal of the House of Representatives,
No. 35. 12 Nov. 1996, 34).
2. How does the international affiliation of Shangrila Corporation
affect the outcome of the dispute? Explain.(2005)
A: Shangrilas international affiliation shall result in a decision
favorable to it. The Paris Convention mandates that protection should be
afforded to internationally known marks as signatory to the Paris
Convention, without regard as to whether the foreign corporation is
registered, licensed or doing business in the Philippines. Shangrilas
separate personalities from their mother corporation cannot be an obstacle
in the enforcement of their rights as part of the Kuok Group of Companies
and as official repository, manager and operator of the subject mark and
logo. Besides, R.A. No. 166 did not require the party seeking relief to be the
owner of the mark but "any person who believes that he is or will be
damaged by the registration of a mark or trade name." (Shangri-la
International Hotel Management, LTD., et.a.l v. Developers Group of
Companies, Inc. G.R. No. 159938)
9. Use by Third Parties of Names, etc. Similar to Registered Mark
10. Infringement and Remedies
Q: K-9 Corporation, a foreign corporation alleging itself to be the
registered owner of trademark K-9 and logo K, filed an Inter Partes case
with the Intellectual Property Office against Kanin Corporation for the
cancellation of the latters mark K-9 and logo K. During the pendency of
the case before the IPO, Kanin Corporation brought suit against K-9
Corporation before the RTC for infringement and damages. Could the action
before the RTC prosper? Why? (2003)
A: Yes, the action before the RTC can prosper. According to
Section 151.2 of the IPO, the filing of a suit to enforce the registered mark
with the proper court or agency shall exclude any other court or agency from
assuming jurisdiction over a subsequently filed petition to cancel the same
mark. On the other hand, the earlier filing of petition to cancel the mark with
the Bureau of Legal Affairs shall not constitute a prejudicial question that
must be resolved before an action to enforce the rights to same registered
mark may be decided. The issues raised before the different the IPO and the
RTC are different. The issue raised before the IPO is whether or not the
cancellation of the subsequent trademark is proper because of the prior
ownership of the disputed mark by K-9. While the issue raised before the RTC
pertains to infringement. Furthermore, an action for infringement or unfair
competition, as well as the remedy of injunction and relief for damages, is
explicitly and unquestionably within the competence and jurisdiction of
ordinary courts. (Shangri-la International Hotel Management, Ltd., v. Makati
Shangri-la Hotel and Resort Inc., G.R. No. 111580. June 21, 2001)
a. Trademark Infringement
Q: What is the distinction between trademark infringement and
unfair competition? (1996)
A: The distinctions between infringement and unfair competition
are the following: (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) In infringement of trademark fraudulent intent is
unnecessary whereas in unfair competition fraudulent intent is essential. (3)
In infringement of trademark the prior registration of the trademark is a
prerequisite to the action, whereas in unfair competition registration is not
necessary (Del Monte Corp. vs. CA, G.R. No. L-78325, January 25, 1990)
Q: In what way is an infringement of a trademark similar to that
which pertains to unfair competition? (2003)
A: The similarity lies in both their ability to disrupt fair
competition amongst business enterprises and other businesses. They can
also create confusion, mistake, and deception as to the minds of the
consumers with regard to the source or identity of their products or services
due to its similarity in appearance or packaging.
b. Damages
c. Requirement of Notice
11. Unfair Competition
12. Trade Names or Business Names
13. Collective Marks
D. Copyrights
1. Basic Principles, Sections 172.2, 175 and 181
2. Copyrightable Works
Q: What intellectual property rights are protected by the
copyright? (1995)
A: Copyright protects copyright or economic rights which consist
of the exclusive right to carry out, authorize, or prevent the following: a)
reproduction of the work or substantial portion of the work; b) dramatization,
translation, adaptation, bridgment, arrangement or other transformation of
the work; c) the first public distribution of the original and each copy of the
work by sale or other forms of transfer of ownership; 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; e) public display of
the original or a copy of the work; f) public performance of the work; and g)
other communication to the public of the work. (Sec. 177, Intellectual
Property Code).
a. Original Works
b. Derivative Works
3. Non-Copyrightable Works
4. Rights of Copyright Owner
5. Rules on Ownership of Copyright
Q: 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.
A: a) The mural is owned by Solid. It commissioned the work and
paid Mon and Steve Blanco P2M for the mural.
b) Who owns the copyright of the mural? Explain. (1995)
A: Even though Solid owns the mural, the copyright of the mural
is jointly owned by Mon and Steve, unless there is a written stipulation to the
contrary. (Sec. 178.4, IPC)
Q: Rudy is a fine arts student in a university. He stays in a
boarding house with Bernie as his roommate. During his free time, Rudy would
paint and leave his finished works lying around the boarding house. One day,
Rudy saw one of his works -an abstract painting entitled Manila Traffic Jam - on
display at the university cafeteria. The cafeteria operator said he purchased the
painting from Bernie who represented himself as its painter and owner.
Rudy and the cafeteria operator immediately confronted Bernie.
While admitting that he did not do the painting, Bernie claimed ownership of its
copyright since he had already registered it in his name with the National
Library as provided in the Intellectual Property Code. Who owns the copyright to
the painting? Explain. (2013)
A: Rudy owns the copyright to the painting because he was one
who actually created it (Section 178.1 of the Intellectual Property Code). His
rights existed from the moment of its creation (Section 172 of the
Intellectual Property Code; Unilever Philippines (PRC) v. Court of Appeals,
498 SCRA 334, 2006). The registration of the painting by Bernie with the
National Library did not confer copyright upon him. The registration is
merely for the purpose of completing the records of the National Library
(Section 191 of the Intellectual Property Code).
Q: 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 hospital for children. Both agreed to collaborate on the project for
a total fee of 2 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. (2004)
A: According to Section 178.4 of the IPC, when the work is
commissioned by a person other than an employer of the author, the owner
of the work shall be the one who commissioned the work, but the copyright
of the work shall be owned by the person who is responsible for its creation,
unless there is a written stipulation to the contrary. Hence, DL owns the
mural while both BR and CT jointly own the copyright thereto. This is so
because the mural was commissioned by DL and a consideration was paid to
BR and CT in exchange thereof.
Q: Eloise, an accomplished writer, was hired by Petong to write a
bimonthly newspaper column for Diario de Manila, a newly-established
newspaper of which Petong was the Editor-in-chief. Eloise was to be paid
P1,000.00 for each column that was published. In the course of two months,
Eloise submitted three columns which, after some slight editing, were
printed in the newspaper. However, Diario de Manila proved unprofitable and
closed only after two months. Due to the minimal amounts involved, Eloise
chose not to pursue any claim for payment from the newspaper, which was
owned by New Media Enterprises, Three years later, Eloise was planning to
publish an anthology of her works, and wanted to include the three columns
that appeared in the Diario de Manila in her anthology. She asks for your
legal advice: 1. Does Eloise have to secure authorization from New Media
Enterprises to be able to publish Diario de Manila columns in her own
anthology. Explain fully.
A: No. In the case of a work commissioned by a person other
than an employer of the author and who pays for it and the work is made in
pursuance of the commission, the person who so commissioned the work
shall have ownership of work, but the copyright thereto shall remain with the
creator, unless there is a written statement to the contrary. (Sec 178.4, IPL)
Thus, though Diario de Manila commissioned the work, it cannot be
considered as its owner because it did not pay Eloise. Ownership and
copyright still belong to Eloise. Authorization is no longer needed to publish
Diario de Manila in her anthology because Eloise has moral and economic
rights over her works.
2. Assume that New Media Enterprises plans to publish Eloises
columns in its own anthology entitled, The best of Diario de Manila.Eloise
wants to prevent the publication of her columns in that anthology since she
was never paid by the newspaper. Name one irrefutable legal argument
Eloise could cite to enjoin New Media Enterprises from including her columns
in its anthology.(2008)
A: The fact that Eloise was not paid, ownership over her work,
published in the newspaper, did not vest upon the latter. She retains full
moral and economic rights over it.
6. Limitations on Copyright
a. Doctrine of Fair Use
Q: 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." Can the labor law expert hold Liza liable for infringement of copyright for
quoting a portion of his book without his permission? (2006)
A: No. One of the limitations on copyright is the making of
quotations from a published work if they are compatible with fair use, provided
that the source and the name of the author, if appearing on the work, are
mentioned. The legal opinion made by Liza is consistent with fair use since the
quoted part is merely used to explain a concept of law for the benefit of the
client and not to defeat the rights of the author over his copyright (Sec. 184.1
(b), Intellectual Property Code).
Q: May a person have photocopies of some pages of the book of
Professor Rosario made without violating the copyright law? (1998)
A: Yes, a person may photocopy some of pages of Professor
Rosarios book for as long as it is not for public use or distribution and it does
not copy the substantial text or heart of the book. It is considered as fair use
of the copyrighted work.
b. Copyright Infringement
Q: Diana and Piolo are famous personalities in showbusiness
who kept their love affair secret. They use a special instant messaging service
which allows them to see one anothers typing on their own screen as each
letter key is pressed. When Greg, the controller of the service facility, found out
their identities, he kept a copy of all the messages Diana and Piolo sent each
other and published them. Is Greg liable for copyright infringement? Reason
briefly. (2007)
A: Yes. The messages which Diana and Pablo sent each other fall
under the category of letters as provided in Sec. 172.1.d which provides that
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, among others , letters.
Infringement of such consist in the doing by any person, without the consent of
the owner of the copyright, of anything the sole right to do which is conferred
by statute on the owner of the copyright . Reproduction and first public
distribution of the work are economic rights of the authors of the work. Such
cannot be done by the person not the author of the work. In this instance, Greg
is not the owner of the messages. He merely copied it without the consent of
the authors thereof and subsequently published the same in violation of the
latters economic rights.
Q: The Victoria Hotel chain reproduces videotapes, distributes
the copies thereof to its hotels and makes them available to hotel guests for
viewing in the hotel guest rooms. It charges a separate nominal fee for the use
of the videotape player. a) Can the Victoria Hotel be enjoined for infringing
copyrights and held liable for damages?
A: Yes. Victoria Hotel may be held liable for infringing copyrights
of the said videotapes because the reproduction and distribution thereof are not
merely for private viewing. Instead, it was used as a means to gain extra profit
by making it as an extra amenity for its hotel services. However, if such
performances contained in the videotapes became available to the public even
prior to its registration, then there is no copyright infringement because the
videotapes are already considered as public property.
b) Would it make any difference if Victoria Hotel does not charge
any fee for the use of the videotape? (1994)
A: No. Notwithstanding the non-charging of fee for the use of the
videotapes, Victoria Hotel still uses the videotapes for business purposes,
serving as an attraction to prospective and current guests, unless the
performances in the videotapes had been long before available to the public
prior to registration; hence, it is already public property (Filipino Society of
Composers, Authors, Publishers, Inc. v. Benjamin Tan, G.R. No. L36402, March
16, 1987).
Q: In an action for damages on account of an infringement of a
copyright, the defendant (the allegedpirate) raised the defense that he was
unaware that what he had copied was a copyright material. Would this defense
be valid? (1997)
A: No. In copyright infringement, intent is irrelevant. A person
may consciously or unconsciously copy or infringe a copyrighted material and
still be held liable for such act.
Q: 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? (1998)
A: No. Although intent is irrelevant in cases of copyright
infringement, Juan had no access to Manolings copyrighted story because it is
unpublished. Hence, he can put up independent creation as a defense being
that he has no reasonable access to the unpublished copyrighted story of
Manoling.
E. Rules of Procedure for Intellectual Property Rights Cases (A.M. No. 10-3-10-SC)