LEGAL MEMORANDUM:

Question: May XXX Company engage in importation of these products?

Answer: Yes unless the original manufacturer already entered into an exclusive
distributorship agreement.

Under RA No. 8293 (Intellectual Property Code of the Philippines), the owner of
the patented products has the exclusive economic right to choose as to who can use,
sell, or even make something similar of its products. As such, the owner may allow St.
Francis to import and sell its products in the Philippines.

However, if the original manufacturer already designated a company as its official

distributor in the Philippines through an exclusive distributorship agreement, then, St.
Francis may no longer import and distribute these products in the Philippines.

In Yu vs. Court of Appeals case (G.R. No. 86683, 1993), an exclusive distributor
of the House of Mayfair wallcovering products in the Philippines, brought a case against
Unisia Merchandising Co. because the latter purchased the merchandise from the
House of Mayfair in England through FNF Trading in West Germany and sold said
merchandise in the Philippines. The Supreme Court ruled that the rights of a sole
distributor under an exclusive distributorship agreement are property rights entitled to
protection. The importation and sale by persons, other than the exclusive distributor,
constitute unfair competition which shall be penalized under the Civil Code of the
Philippines and Intellectual Property Code (ACG Express Liner vs. Cordero, G.R.
No. 164703, 2010).