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INTELLECTUAL PROPERTY LAW

ATTY. ALLAN B. GEPTY


Commissioner, Philippine Tariff Commission
Former Deputy Director General,
Intellectual Property Office of the Philippines
OUTLINE

I. Brief Overview of the IP System

a. IP in General
b. Various Kinds of IPRs

II. Intellectual Property Rights (Laws, principles, rules and


relevant cases)

a. Trademarks
b. Copyrights
c. Patents
- Inventions
- Utility Models
- Industrial Designs)
INTELLECTUAL PROPERTY (IP) refers to creations of
the mind: inventions, literary and artistic works, and
symbols, names, images, and designs used in commerce.

TWO (2) CATEGORIES OF IP

INDUSTRIAL PROPERTY - includes inventions (patents), trademarks,


industrial designs, and geographic indications of source; and

COPYRIGHT - includes literary and artistic works such as novels,


poems and plays, films, musical works, artistic works such as drawings,
paintings, photographs and sculptures, and architectural
designs. Rights related to copyright include those of performing artists
in their performances, producers of phonograms in their recordings,
and those of broadcasters in their radio and television programs.

- WIPO Definition
STAGES

CREATION

PROTECTION

UTILIZATION

ENFORCEMENT
fundamental principles

Principle of Non
Intangible Private Rights
Territoriality Rivalrous

Exclusive Legal Subject to


Proprietary
Rights Concept Limitations

Principle of Social
Good Faith Function
v Art. 427 of the Civil Code of the Philippines provides:

“Ownership may be exercised over things or rights”

v Art. 712 of the Civil Code of the Philippines provides:

“Ownership is acquired by occupation and by intellectual


creation.

Ownership and other real rights over property are acquired


and transmitted by law, by donation, by estate and
intestate succession, and in consequence of certain
contracts, by tradition.

They may also be acquired by means of prescription”.


IPR is distinct from the material object

The incorporeal right, however, is distinct from the property in


the material object subject to it. Ownership in one does not
necessarily vest ownership in the other.

The transfer or assignment of the intellectual property will not


necessarily constitute a conveyance of the thing it covers, nor
would a conveyance of the latter imply the transfer or
assignment of the intellectual right. (Distilleria Washington,
Inc. v. The Honorable Court of Appeals, G.R. No. 120961,
October 17, 1996.)

An infringement of intellectual rights is no less vicious and


condemnable as theft of material property, whether personal or
real. (Amigo Manufacturing vs. Cluetpeabody Co., Inc.,
G.R. No. 139300, 14 March 2001)
1987 CONSTITUTION

SEC. 13, ART. XIV

“The State shall 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 period as may be provided by law.”
Republic Act No. 8293

Section 2 of Republic Act No. 8293. Declaration of State Policy. – The


State recognizes that an effective intellectual and industrial property system is
vital to the development of domestic and creative activity, facilitates transfer of
technology, attracts foreign investments, and ensures market access for our
products. It shall 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.

The use of intellectual property bears a social function. To this end, the
State shall promote the diffusion of knowledge and information for the
promotion of national development and progress and the common good.

It is also the policy of the State 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.
Three (3) Aspects of Intellectual
Property

ASSET

INTELLECTUAL
PROPERTY

RIGHT POLICY TOOL


Kinds of Intellectual Property Rights

Section 4 of R.A. No. 8293 provides that:

The term "intellectual property rights" consists of:

1. Copyright and Related Rights;


2. Trademarks and Service Marks;
3. Geographic Indications;
4. Industrial Designs;
5. Patents;
6. Layout-Designs (Topographies) of Integrated Circuits; and
7. Protection of Undisclosed Information
— Copyright and Related Rights - exists over original and
derivative intellectual creations in the literary and artistic domain
protected from the moment of their creation.(§172, IP Code)

— Trademarks and Service 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.(§121.1, IP Code)

— Geographic Indications - indications which identify a good as


originating in the territory of a Member of the Agreement, or a
region or locality in that territory, where a given quality, reputation
or other characteristic of the good is essentially attributable to its
geographical origin. (Article 22, TRIPS Agreement)

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— Industrial Designs - any composition of lines or colors or any three-
dimensional form, whether or not associated with lines or colors,
provided that such composition or form gives a special appearance to
and can serve as pattern for an industrial product or handicraft. It must
be new or original. (§112, 113 IP Code)
— Patents - any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially
applicable. It may be, or may relate to, a product, or process, or an
improvement of any of the foregoing. (§21, IP Code)

— Integrated Circuit - means a product, in its final form, or an


intermediate form, in which the elements, at least one of which is an
active element and some or all of the interconnections are integrally
formed in and/or on a piece of material, and which is intended to perform
an electronic function;

Layout-Design is synonymous With 'Topography' and means the three-


dimensional disposition, however expressed, of the elements, at least
one of which is an active element, and of some or all of the
interconnections of an integrated circuit, or such a three-dimensional
disposition prepared for an integrated circuit intended for manufacture.
(§112.2, and 112.3 IP Code as amended by R.A. No. 9150 [August 6, 2001])

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Protection of Undisclosed Information - protection of
information lawfully held from being disclosed to,
acquired by, or used by others without their consent in a
manner contrary to honest commercial practices so long
as such information:

(a) is secret in the sense that it is not, as a body or in


the precise configuration and assembly of its
components, generally known among or readily
accessible to persons within the circles that normally deal
with the kind of information in question;
(b) has commercial value because it is secret; and
(c) has been subject to reasonable steps under the
circumstances, by the person lawfully in control of the
information, to keep it secret. (Article 39, TRIPS
Agreement)

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• Trade Secret - is a plan or process, tool, mechanism or
compound known only to its owner and those of his
employees to whom it is necessary to confide it. The
definition also extends to:

(a) a secret formula or process not patented, but known


only to certain individuals using it in compounding some article
of trade having a commercial value; or
(b) any formula, pattern, device, or compilation of
information that:

(1) is used in one's business; and


(2) gives the employer an opportunity to obtain an advantage over
competitors who do not possess the information.

(Air Philippines Corporation vs. Pennwell, Inc., G.R. No. 172835, 13 December
2007)

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INTELLECTUAL PROPERTY RIGHTS
(Laws, principles, rules and
relevant cases)
TRADEMARKS
DEFINITIONS

“Mark" means 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;

"Collective mark" means 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;

"Trade name" means the name or designation identifying or


distinguishing an enterprise.

(§121.1, 121.2, 121.3, IP Code)

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FUNCTIONS OF A TRADEMARK

A trademark is a distinctive mark of authenticity through which


the merchandise of a particular producer or manufacturer may
be distinguished from that of others, and its sole function is to
designate distinctively the origin of the products to which it is
attached. (Arce Sons and Company, G.R. No. L-14761 and
G. R. No. 171981, 28 January 1961)

A trademark is any visible sign capable of distinguishing goods.


It includes any word, name, symbol, emblem, sign or device or
any combination thereof, adopted and used by a manufacturer
or merchant to identify his goods and distinguish them from
those manufactured, sold or dealt in by others. It symbolizes
the goodwill and business reputation of the owner of the
product and is a property right protected by law. (Mirpuri v.
Court of Appeals, G.R. No. 114508, 19 November 1999)
Modern authorities on trademark law view trademarks
as performing three distinct functions: (1) they indicate
origin or ownership of the articles to which they are
attached; (2) they guarantee that those articles come
up to a certain standard of quality; and (3) they
advertise the articles they symbolize. (Mirpuri v. Court
of Appeals, G.R. No. 114508, 19 November 1999)

The protection of trademarks as intellectual property is


intended not only to preserve the goodwill and
reputation of the business established on the goods
bearing the mark through actual use over a period of
time, but also to safeguard the public as consumers
against confusion on these goods. (Berris Agricultural
Co., Inc. vs. Norvy Abyadang, G.R. No. 183404,
October 13, 2010)
REQUIREMENTS FOR PROTECTION OF TRADEMARKS

HOW MARKS ARE ACQUIRED(§122) - The rights in a mark


shall be acquired through registration made validly in
accordance with the provisions of the IP Code.

CERTIFICATE OF REGISTRATION AS PRIMA FACIE


EVIDENCE OF VALIDITY OF REGISTRATION (§138) - A
certificate of registration of a mark shall be prima facie
evidence of the validity of the registration, the registrant's
ownership of the mark, and of the registrant's exclusive right to
use the same in connection with the goods or services and
those that are related thereto specified in the certificate.

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PRINCIPLE OF SPECIFICITY
SPECIFIED
GOODS

RELATED
GOODS

ZONE OF
EXPANSION
TRADEMARK

Legal
Visible Distinctive
Compliance
• Not sound • Covered • Compliance
• Not scent Goods/services with RA No.
• Not motion • No likelihood 8293 and other
of confusion laws
• Fairness and
Equity
• Guide on the Degree of Distinctiveness

1. Fanciful - e.g. Xerox (copier)


2. Arbitrary - e.g. Apple (mobile phone)
3. Suggestive - e.g. Tough (shoes)
4. Descriptive - e.g. Fragrant (perfume)
5. Generic - e.g. Pants (pants)
NON REGISTRABLE MARKS
REGISTRABILITY (§123) – 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;

2. Consists of the flag or coat of arms or other insignia of the


Philippines or any of its political subdivisions, or of any foreign nation,
or any simulation thereof;

3. Consists of a name, portrait or signature identifying a particular living


individual except by his written consent, or the name, signature, or
portrait of a deceased President of the Philippines, during the life
of his widow, if any, except by written consent of the widow;

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NON REGISTRABLE MARKS
REGISTRABILITY (§123) – A mark cannot be registered if it:

4. Is identical with a registered mark belonging to a


different proprietor 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 – (e.g. same class,
same nature and/or characteristics )
c) If it nearly resembles such a mark as to be likely to
deceive or cause confusion

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Priority Right

An application for registration of a mark filed in the


Philippines by a person referred to in Section 3 of the
IP Code, 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.

No registration of a mark shall be granted until such


mark has been registered in the country of origin of the
applicant. (Sec. 131, IPC)
IDENTICAL = same, equal, alike, or having close similarity or
resemblance

Is mere similarity sufficient?

The law does not prohibit or enjoin every similarity. The


similarity must be such that the ordinary purchaser will be
deceived into the belief that the goods are those of another.
(The Alhambra Cigar and Cigarette Manufacturing Co. v.
Compania General de Tabacos De Filipinas, G. R. No.
11490, October 14, 1916)

LIKELIHOOD OF CONFUSION - is a relative concept; the


particular, and sometimes peculiar, circumstances of each case
being determinative of its existence. (Philip Morris, Inc. vs.
Fortune Tobacco Corporation, G.R. No. 158589, 27 June
2006; Prosource International, Inc. vs. Horphag Research
Management SA, G.R. No. 180073. November 25, 2009)
NO DEFINITE RULE

In infringement or trademark cases in the Philippines, particularly in


ascertaining whether one trademark is confusingly similar to or is a
colorable imitation of another, no set of rules can be deduced. Each
case must be decided on its own merits. The likelihood of
confusion is a relative concept; to be determined only according to
the particular, and sometimes peculiar, circumstances of each case. In
trademark cases, even more than in any other litigation, precedent must
be studied in light of the facts of the particular case. The wisdom of the
likelihood of confusion test lies in its recognition that each
trademark infringement case presents its own unique set of facts.
Indeed, the complexities attendant to an accurate assessment of
likelihood of confusion require that the entire panoply of elements
constituting the relevant factual landscape be comprehensively
examined. (Societe Des Produits Nestle, S.A. v. Court of Appeals, G.R. No.
112012, 04 April 2001; Esso Standard Eastern, Inc. vs. The Honorable
Court of Appeals, G.R. No. L-29971, 31 August 1982; Canon Kabushiki
Kaisha vs. Court of Appeals, G.R. No. 120900, 20 July 2000)
TESTS TO DETERMINE CONFUSING SIMILARITY OF MARKS

2 TYPES OF CONFUSION:

a. Confusion of Goods

The ordinarily prudent purchaser would be induced to purchase


one product in the belief that he was purchasing the other.

b. Confusion of Origin (Confusion of Business)

The goods of the parties are different, the defendant’s product is


such as might reasonably be assumed to originate with the
plaintiff, and the public would then be deceived either into that
belief or into the belief that there is some connection between the
plaintiff and defendant which, in fact, does not exist.
See: Nestle v. Dy, GR No. 172276, August 8, 2010, citing Sterling Products International,
Inc. v. Farbenfabriken Bayer Aktiengesellschaft and Callman.

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TESTS TO DETERMINE CONFUSING SIMILARITY OF
MARKS

2 TESTS TO DETERMINE COLORABLE IMITATION:

a. Dominancy Test

If the competing trademark contains the main or essential


or dominant features of another, and confusion and
deception are likely to result, infringement takes place.
Duplication or imitation is not necessary; nor is it necessary
that the infringing label should suggest an effort to imitate.
(C. Neilman Brewing Co. v. Independent Brewing Co., 191 F. 489, 495, citing
Eagle White Lead Co. vs. Pflugh [CC] 180 FED. 579) See Del Monte vs. CA,
GR No. L-78325, January 25, 1990
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TESTS TO DETERMINE CONFUSING SIMILARITY OF
MARKS

2 TESTS TO DETERMINE COLORABLE IMITATION:

b. Holistic Test

The trademarks in their entirety as they appear in their


respective labels are considered in relation to the goods to
which they are attached. The discerning eye of the observer
must focus not only on the predominant words but also on the
other features appearing in both labels in order that he may
draw his conclusion whether one is confusingly similar to the
other (Bristol Myers Co. vs. Director of Patents, 17 SCRA 131; See also Fruit of the Loom Inc. vs.
CA, GR No. L-32747, November 29, 1984.)

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Likelihood
Identical Identical of
Confusion
Sign/Mark Goods
is
presumed
RULES OF PROCEDURE
FOR INTELLECTUAL PROPERTY RIGHTS CASES

A.M. No. 10-3-10 SC, October 18, 2011

Rule 18

EVIDENCE IN TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION CASES

SEC. 3. Presumption of likelihood of confusion. – Likelihood of confusion


shall be presumed in case an identical sign or mark is used for identical
goods or services.

SEC. 4. Likelihood of confusion in other cases. – In determining whether


one trademark is confusingly similar to or is a colorable imitation of another,
the court must consider the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the
attention such purchasers usually give in buying that class of goods.

Visual, aural, connotative comparisons and overall impressions engendered


by the marks in controversy as they are encountered in the realities of the
marketplace must be taken into account. Where there are both similarities
and differences in the marks, these must be weighed against one another to
see which predominates.
In determining likelihood of confusion between marks used on non-
identical goods or services, several factors may be taken into account,
such as, but not limited to:

a) the strength of plaintiff’s mark;


b) the degree of similarity between the plaintiff’s and the
defendant’s marks;
c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or
h) the sophistication of the buyers.―

Colorable imitation denotes such a close or ingenious imitation as to be


calculated to deceive ordinary persons, or such a resemblance to the
original as to deceive an ordinary purchaser giving such attention as a
purchaser usually gives, as to cause him to purchase the one supposing
it to be the other.
RELATED GOODS
In resolving whether goods are related, several factors come into play:

(a) the business (and its location) to which the goods belong;
(b) the class of product to which the goods belong;
(c) the product’s quality, quantity, or size, including the nature of the
package, wrapper or container;
(d) the nature and cost of the article;
(e) The descriptive properties, physical attributes or essential
characteristics with reference to their form, composition, texture or
quality;
(f) the purpose of the goods;
(g) whether the article is bought for immediate consumption, that is, day-
to-day household items;
(h) fields of manufacture;
(i) the conditions under which the article is usually purchased; and,
(j) the channels of trade through which the goods flow, how they are
distributed, marketed, displayed and sold. (Mighty Corporation vs. E. J. Gallo
Winery, G.R. No. 154342, 14 July 2004)
Goods are related when they belong to the same class or have the same
descriptive properties; when they possess the same physical attributes
or essential characteristics with reference to their form, composition,
texture or quality. They may also be related because they serve the
same purpose or are sold in grocery stores. (Esso Standard Eastern,
Inc. vs. The Honorable Court of Appeals; Canon Kabushiki Kaisha
vs. Court of Appeals, G.R. No. 120900, 20 July 2000)

Non-competing goods may be those which, though they are not in actual
competition, are so related to each other that it might reasonably be
assumed that they originate from one manufacturer. Non-competing
goods may also be those which, being entirely unrelated, could not
reasonably be assumed to have a common source. In the former case of
related goods, confusion of business could arise out of the use of similar
marks; in the latter case of non-related goods, it could not. (Esso
Standard Eastern, Inc. vs. The Honorable Court of Appeals, G.R.
No. L-29971 31 August 1982)
Related Supreme Court Cases

Emerald Garment Manufacturing Corp. vs. CA,


(GR No. 100098, December 1995)

Holistic Test was applied


Pants products are not inexpensive
Consumer is knowledgeable of the product he buys
Ordinary Purchaser Rule
Related Supreme Court Cases

Societe Des Produits Nestle vs. Court of Appeals,


GR No. 112012, April 4, 2001

Flavor Master vs. Master Roast and Master


Blend

Dominancy Test was applied


Master is the dominant feature (2x size of Roast)
Master has been given in advertisements
Master is suggestive not descriptive or generic
The totality or holistic test is contrary to the
elementary postulate of the law on trademarks and
unfair competition that confusing similarity is to be
determined on the basis of visual, aural, connotative
comparisons and overall impressions engendered by the
marks in controversy as they are encountered in the
realities of the marketplace. The totality or holistic test
only relies on visual comparison between two trademarks
whereas the dominancy test relies not only on the visual
but also on the aural and con- notative comparisons and
overall impressions between the two trademarks.
(Societe Des Produits Nestle, S.A. v. Court of Appeals,
G.R. No. 112012, 04 April 2001)
Colorable imitation denotes such a close or ingenious
imitation as to be calculated to deceive ordinary persons,
or such a resemblance to the original as to deceive an
ordinary purchaser giving such attention as a purchaser
usually gives, as to cause him to purchase the one
supposing it to be the other.

The test of dominancy focuses on the similarity of the


prevalent features of the competing trademarks which
might cause confusion or deception and thus constitute
infringement. (Societe Des Produits Nestle, S.A. v.
Court of Appeals, G.R. No. 112012, 04 April 2001)
• Mighty Corp. v. E. & J. Gallo
(G.R. 154352, July 14, 2004)

GALLO and ERNEST & JULIO GALLO for wines


vs
GALLO for cigarettes
Both Holistic and Dominancy Test applied

Whether a trademark causes confusion and is likely to deceive the


public hinges on colorable imitation which has been defined as
“similarity in form, content, words, sound, meaning, special
arrangement or general appearance of the trademark or trade name in
their overall presentation or in their essential and substantive and
distinctive parts as would likely mislead or confuse persons in the
ordinary course of purchasing the genuine article.”

N.B. Tobacco and alcohol products may be considered related only in


cases involving special circumstances which exist only if a famous mark
is involved and there is a demonstrated intent to capitalize on it.
In determining the 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.

The use of an identical mark does not, by itself, lead to a


legal conclusion that there is trademark infringement.

(Mighty Corporation vs. E. J. Gallo Winery, G.R. No. 154342, 14 July


2004)
2016 BAR QUESTION

X's "MINI-ME" burgers are bestsellers in the country. Its "MINI-ME"


logo, which bears the color blue, is a registered mark and has been so
since the year 2010. Y, a competitor of X, has her own burger which
she named "ME-TOO" and her logo thereon is printed in bluish-green.
When X sued Y for trademark infringement, the trial court ruled in favor
of the plaintiff by applying the Holistic Test. The court held that Y
infringed on X's mark since the dissimilarities between the two marks
are too trifling and frivolous such that Y's "ME-TOO," when compared to
X's "MINI-ME," will likely cause confusion among consumers.

Is the application of the Holistic Test correct? (5%)


MCDONALDS CORP. VS. MCJOY FASTFOOD CORP.,
G.R. No. 166115, FEBRUARY 2, 2007

MACJOY & Device vs. McDONALDS

• Dominancy Test

• By reason of the respondents implausible and insufficient


explanation as to how and why out of the many choices of words it
could have used for its trade-name and/or trademark, it chose the
word MACJOY, the only logical conclusion deducible therefrom is
that the respondent would want to ride high on the established
reputation and goodwill of the MCDONALDs marks, which, as
applied to petitioners restaurant business and food products, is
undoubtedly beyond question.
McDonald’s Corp. vs. L.C. Big Mak Burger, Inc.
GR No. 143993, August 18, 2004

Big Mac vs. Big Mak

The dominancy test focuses on the similarity of the prevalent features of


the competing trademarks that might cause confusion. The dominancy
test considers the dominant features in the competing marks in
determining whether they are confusingly similar. Under the dominancy
test, courts give greater weight to the similarity of the appearance of the
product arising from the adoption of the dominant features of the
registered mark, disregarding minor differences. Courts will consider more
the aural and visual impressions created by the marks in the public mind,
giving little weight to factors like prices, quality, sales outlets and market
segments. (McDonalds Corporation v. L. C. Big Mak Burger, Inc., G.R.
No. 143993, 18 August 2004)
It has been consistently held that the question of infringement
of a trademark is to be determined by the test of dominancy.
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 and
deception is likely to result, infringement takes place.
Duplication or imitation is not necessary; nor is it necessary
that the infringing label should suggest an effort to imitate. (G.
Heilman Brewing Co. vs.Independent Brewing Company, 191
F., 489, 495, citing Eagle White Lead, Co. vs. Pluff (CC) 180
Fed. 579).

The question at issue in cases of infringement of trademarks is


whether the use of the marks involved would be likely to cause
confusion or mistakes in the mind of the public or deceive
purchasers. (Auburn Rubber Corporation vs. Honover Rubber
Co., 107 F. 2d 588). (McDonalds Corporation v. L. C. Big
Mak Burger, Inc., G.R. No. 143993, 18 August 2004.)
Philip Morris, vs Fortune Tobacco, Inc.
(GR 158589, June 27, 2006)

“MARK VII” &“MARK TEN vs. MARK

No infringement

The Supreme Court applied the Holistic Test as it took into account
the striking dissimilarities of the entire marking system, but also
ratiocinated that even if you apply the Dominancy Test, there can be
no likelihood of confusion.

Cigarette smokers are already predisposed to a certain brand.

No actual commercial use of petitioners marks in local commerce


was proven. There can thus be no occasion for the public in this
country, unfamiliar in the first place with petitioners marks, to be
confused.
Berris Agricultural Co., Inc. v. Norvy Abyadang
(G.R. No. 183404, 13 Oct. 2010)

NS D-10- PLUS vs. D-10 80 WP

Applying the Dominancy Test, it cannot be gainsaid that Abyadang’s “NS


D-10 PLUS” is similar to Berris’ “D-10 80 WP,” that confusion or mistake
is more likely to occur. ….. Both depictions of “D-10,” as found in both
marks, are similar in size, such that this portion is what catches the eye of
the purchaser. Undeniably, the likelihood of confusion is present.

This likelihood of confusion and mistake is made more manifest when the
Holistic Test is applied, taking into consideration the packaging, for both
use the same type of material (foil type) and have identical color schemes
(red, green, and white); and the marks are both predominantly red in color,
with the same phrase “ BROAD SPECTRUM FUNGICIDE ” written
underneath. Considering these striking similarities, predominantly the “D-
10,” the buyers of both products, mainly farmers, may be misled into
thinking that “NS D-10 PLUS” could be an upgraded formulation of the “D-
10 80 WP.”
Societe Des Produits Nestle vs. Martin Dy,
GR No. 172276, August 8, 2010
NAN vs. NANNY

Applying the dominancy test in the present case, the Court finds that
“NANNY” is confusingly similar to “NAN.” “NAN” is the prevalent
feature of Nestle’s line of infant powdered milk products. It is written in
bold letters and used in all products. The line consists of PRE-NAN,
NAN-H.A., NAN-1, and NAN-2. Clearly, “ NANNY ” contains the
prevalent feature “NAN.” The first three letters of “NANNY” are
exactly the same as the letters of “NAN.” When “NAN” and “NANNY”
are pronounced, the aural effect is confusingly similar.

In determining the issue of confusing similarity, the Court takes into


account the aural effect of the letters contained in the marks.
2014 Bar Question

Skechers Corporation sued Inter-Pacific for trademark infringement, claiming


that Inter-Pacific used Skechers’ registered “S” logo mark on Inter-Pacific’s
shoe products without its consent. Skechers has registered the trademark
“SKECHERS” and the trademark “S” (with an oval design) with the
Intellectual Property Office (IPO).

In its complaint, Skechers points out the following similarities: the color
scheme of the blue, white and gray utilized by Skechers. Even the design and
“wave-like” pattern of the mid-sole and outer sole of Inter- Pacific’s shoes are
very similar to Skechers’ shoes, if not exact patterns thereof. On the side of
Inter-Pacific’s shoes, near the upper part, appears the stylized “S” placed in
the exact location as that of the stylized “S” the Skechers shoes. On top of
the “tongue” of both shoes, appears the stylized “S” in practically the same
location and size.
In its defense, Inter-Pacific claims that under the Holistic Test, the following
dissimilarities are present: the mark “S” found in Strong shoes is not enclosed
in an “oval design”; the word “Strong” is conspicuously placed at the backside
and insoles; the hang tags labels attached to the shoes bear the word
“Strong” for Inter-Pacific and “Skechers U.S.A.” for Skechers; and, Strong
shoes are modestly priced compared to the costs of Skechers shoes.
Under the foregoing circumstances, which is the proper test to be applied –
Holistic or Dominancy Test? Decide. (4%)
Skechers U.S.A., Inc. v. Inter Pacific Industrial Trading
Corp. (G.R. No. 164321, 28 March 2011)

SKECHERS vs. STRONG


Using the Dominancy Test, the Supreme Court found that the use of the
“ S ” symbol by Strong rubber shoes infringes on the registered
Skechers trademark. It is the most dominant feature of the mark -- one
that catches the buyer’s eye first. The same font and style was used in
this case. While there may be dissimilarities between the appearances
of the shoes, such dissimilarities do not outweigh the stark and blatant
dissimilarities in their general features.

On MR the Supreme Court ruled: “Based on the foregoing, this Court


is at a loss as to how the RTC and the CA, in applying the holistic
test, ruled that there was no colorable imitation, when it cannot be
any more clear and apparent to this Court that there is colorable
imitation. The dissimilarities between the shoes are too trifling and
frivolous that it is indubitable that respondent's products will cause
confusion and mistake in the eyes of the public. Respondent's shoes
may not be an exact replica of petitioner's shoes, but the features and
overall design are so similar and alike that confusion is highly likely.”
GREAT WHITE SHARK vs. CARALDE, JR
[G.R. No. 192294, November 21, 2012.]

The Holistic or Totality Test considers the entirety of the marks as applied to the
products, including the labels and packaging, and focuses not only on the
predominant words but also on the other features appearing on both labels to
determine whether one is confusingly similar to the other as to mislead the ordinary
purchaser. The “ordinary purchaser” refers to one accustomed to buy, and therefore
to some extent familiar with, the goods in question.

A trademark device is susceptible to registration if it is crafted fancifully or arbitrarily


and is capable of identifying and distinguishing the goods of one manufacturer or
seller from those of another. Apart from its commercial utility, the benchmark of
trademark registrability is distinctiveness. Thus, a generic figure as that of a shark in
this case, if employed and designed in a distinctive manner, can be a registrable
trademark device, subject to the provisions of the IP Code.

Irrespective of both tests, the Court finds no confusing similarity between the subject
marks. While both marks use the shape of a shark, the Court noted distinct visual
and aural differences between them.
Victorio P. Diaz vs. People of the Philippines and Levi
Strauss [Phils.] Inc. (G.R. No. 180677, 18 February 2013)
The Supreme Court acquitted the accused stating that maong pants or jeans
made and sold by LEVI’s, which included “501,” were very popular in the
Philippines. The consuming public knew that the original “501” jeans were
under a foreign brand and quite expensive. Such jeans could be purchased
only in malls or boutiques as ready-to-wear items, and were not available in
tailoring shops like those of Diaz’s. Neither can the “501” be acquired on a
“made-to-order” basis.

The High Court noted that Diaz used the trademark “LS JEANS TAILORING”
for the jeans he produced and sold in his tailoring shops. His trademark was
visually and aurally different from the trademark “LEVI STRAUSS & CO”
appearing on the patch of original jeans under the trademark LEVI’s 501. The
word “LS” could not be confused as a derivative from “LEVI STRAUSS” by
virtue of the “LS” being connected to the word “TAILORING”, thereby openly
suggesting that the jeans bearing the trademark “LS JEANS TAILORING”
came or were bought from the tailoring shops of Diaz, not from the malls or
boutiques selling original LEVI’S 501 jeans to the consuming public.
Victorio P. Diaz vs. People of the Philippines and Levi
Strauss [Phils.] Inc. (G.R. No. 180677, 18 February 2013)

The Court also noted that in terms of classes of customers and channels of
trade, the jeans made by LEVI’s and the accused cater to different classes of
customers and flow through the different channels of trade. The customers of
LEVI’s are mall goers belonging to class A and B market group – while those
of Diaz are those who belong to class D and E market who can only afford
Php300 for a pair of made-to-order pants.

Moreover, based on the certificate issued by the Intellectual Property Office,


“ LS JEANS TAILORING ” was a registered trademark of Diaz. He had
registered his trademark prior to the filing of the present cases. The IPOPHL
would certainly not have allowed the registration had Diaz’s trademark been
confusingly similar with the registered trademark for LEVI’s “501” jeans.
DERMALINE INC. VS. MYRA PHARMACEUTICALS, INC..
GR No. 190065, August 16, 2010

DERMALINE vs. DERMALIN

Health and beauty services vs. Skin treatment

Trademark owner may use its mark on the same or similar products, in
different segments of the market, and at different price levels depending
on variation of the products for specific segments of the market.

Trademark owner enjoys protection in product and market areas that


are the normal potential expansion of his business
TAIWAN KOLIN CORP., LTD VS. KOLIN ELECTRONICS CO. INC.
GR No. 209843, March 25, 2015

KOLIN vs. KOLIN


Identical marks may be registered for products from the same classification

Television and DVD players vs. Power Supply and Audio Equipment

Products are unrelated. The ordinary intelligent buyer is not likely to be


confused.

In trademark cases, particularly in ascertaining whether one trademark is


confusingly similar to another, no rigid set rules can plausible be formulated.
Each case must be decided on its merits, with due regard to the goods or
services involved, the usual purchaser’s character and attitude, among others.
In such cases, even more than in any other litigation, precedent must be studied
in the light of the facts of a particular case. That is the reason why in trademark
cases, jurisprudential precedents should be applied only to a case if they are
specifically in point.
TAIWAN KOLIN CORP., LTD VS. KOLIN ELECTRONICS CO. INC.
GR No. 209843, March 25, 2015

KOLIN vs. KOLIN

Taiwan Kolin’s goods are classified as home appliances as opposed


to Kolin Electronics’ goods which are power supply and audio
equipment accessories.

Taiwan Kolin’s television sets and DVD players perform distinct


function and purpose from Kolin Electronics’ power supply and audio
equipment; and

Taiwan Kolin sells and distributes its various home appliance


products on wholesale and to accredited dealers, whereas Kolin
Electronics’ goods are sold and flow through electrical and hardware
stores.
Kensonic, Inc., v. Uni-Line Multi-Resources, Inc., (Phil.), G.R. Nos.
211820-21, June 06, 2018; and Uni-Line Multi-Resources,
Inc. v. Kensonic, Inc., G.R. Nos. 211834-35, June 06, 2018

• The mark involved is “SAKURA” and according to the Supreme


Court Uni-Line's goods classified under Class 07 and Class 11 of
the Nice Classification were not related to Kensonic's goods
registered under Class 09

Goods Nice Classification


Washing machines, high pressure washers, vacuum
cleaners, floor polishers, blender, electric mixer, Class 07
electrical juicer

Television sets, stereo components, DVD/VCD


players, voltage regulators, portable generators, Class 09
switch breakers, fuse

Refrigerators, air conditioners, oven toaster, turbo


broiler, rice cooker, microwave oven, coffee maker,
sandwich/waffle maker, electric stove, electric fan, Class 11
hot & cold water dispenser, airpot, electric griller
and electric hot pot
Kensonic, Inc., v. Uni-Line Multi-Resources, Inc., (Phil.), G.R. Nos.
211820-21, June 06, 2018; and Uni-Line Multi-Resources,
Inc. v. Kensonic, Inc., G.R. Nos. 211834-35, June 06, 2018

• The prohibition under Section 123 of the Intellectual


Property Code extends to goods that are related to the
registered goods, not to goods that the registrant may
produce in the future. To allow the expansion of
coverage is to prevent future registrants of goods from
securing a trademark on the basis of mere possibilities
and conjectures that may or may not occur at all. Surely,
the right to a trademark should not be made to depend
on mere possibilities and conjectures.”
Kensonic, Inc., v. Uni-Line Multi-Resources, Inc., (Phil.), G.R. Nos.
211820-21, June 06, 2018; and Uni-Line Multi-Resources,
Inc. v. Kensonic, Inc., G.R. Nos. 211834-35, June 06, 2018

• “Kensonic's goods belonged to the information


technology and audiovisual equipment subclass, but Uni-
Line's goods pertained to the apparatus and devices for
controlling the distribution of electricity sub-class. Also,
the Class 09 goods of Kensonic were final products but
Uni-Line's Class 09 products were spare parts. In view of
these distinctions, the Court agrees with Uni-Line that its
Class 09 goods were unrelated to the Class 09 goods of
Kensonic.”
UFC PHILS. INC. v. FIESTA BARRIO MFTG. CORP.,
GR No. 198889, Jan. 20, 2016
"PAPA BOY & DEVICE" mark for lechon sauce and "PAPA KETSARAP"
and "PAPA BANANA CATSUP”

Since petitioner's product, catsup, is also a household product found on the


same grocery aisle, in similar packaging, the public could think that petitioner
had expanded its product mix to include lechon sauce, and that the "PAPA
BOY" lechon sauce is now part of the "PAPA" family of sauces, which is not
unlikely considering the nature of business that petitioner is in.

It is possible that petitioner could expand its business to include lechon


sauce, and that would be well within petitioner's rights, but the existence of a
"PAPA BOY" lechon sauce would already eliminate this possibility.

Respondent had an infinite field of words and combinations of words to


choose from to coin a mark for its lechon sauce.
SERI SOMBOONSAKDIKUL vs. ORLANE S.A.
G.R. No. 188996, February 1, 2017

Personal Care products


•There are noticeable differences in the way they are written or printed.
•There are visual differences between LOLANE and ORLANE since the mark
ORLANE is in plain block upper case letters while the mark LOLANE was
rendered in stylized word with the second letter L and the letter A co-joined.
•The aural aspect of the marks, LOLANE and ORLANE do not sound alike.
•In Etepha v. Director of Patents, et al. it was ruled that there is no confusing
similarity between PERTUSSIN and ATUSSIN.
WILTON DY and PHILITES ELECTRONIC AND LIGHTING
PRODUCTS, INC. vs. KONINKLIJKE PHILIPS ELECTORNICS .N.V.
GR No. 186088, March 22, 2017

• PHILIPS is a well known mark (citing Philips Export B.V. vs. CA)
• The same line of products
• The dominant feature is “PHILI”
• The claim coined words, i.e. Philippines and Lights, is self serving
• The confusing similarity becomes even more prominent when we examine
the entirety of the marks used by petitioner and respondent, including the
way the products are packaged. In using the holistic test, we find that
there is a confusing similarity between the registered marks PHILIPS and
PHILITES, and note that the mark petitioner seeks to register-is vastly
different from that which it actually uses in the packaging of its products.
EMERALD GARMENT MANUFACTURING CORPORATION, vs. THE
H.D. LEE COMPANY, INC., G.R. No. 210693, June 7, 2017

Double Curve Design vs. Lee vs. Ogive & Curve design
Double Reversible Wave Line
• Emerald has been using the mark "DOUBLE REVERSIBLE WAVE LINE
(Back Pocket Design)" since October 1973, with sales invoices proving
actual commercial use of the mark more than two months before the
application for its registration in 1990;
• H.D. Lee's sale of its garments in the Philippines only began in 1996; and
• H.D. Lee failed to prove that the mark "OGIVE CURVE DEVICE' was well-
known locally and internationally at the time Emerald filed its application
for the registration of the mark "DOUBLE REVERSIBLE WAVE LINE
(Back Pocket Design).
• Finality of judgment
Mang Inasal Philippines, Inc. vs. IFP Manufacturing
Corp., G.R. No. 221717, June 19, 2017
"OK Hotdog Inasal Cheese Hotdog Flavor Mark”
vs.
"Mang Inasal, Home of Real Pinoy Style Barbeque and Device”

• The dominant element "INASAL" in the OK Hotdog Inasal mark is exactly


the same as the dominant element ”INASAL" in the Mang Inasal mark. Both
elements in both marks are printed using the exact same red colored font,
against the exact same black outline and yellow background and is
arranged in the exact same staggered format.
• It is the fact that the underlying goods and services of both marks deal
with inasal and inasal-flavored products which ultimately fixes the relations
between such goods and services.
• An average buyer who comes across the curls marketed under the OK
Hotdog Inasal mark is likely to be confused as to the true source of such
curls.
• It is not unlikely that such buyer would be led into the assumption that the
curls are of petitioner and that the latter has ventured into snack
manufacturing or, if not, that the petitioner has supplied the flavorings for
respondent's product.
Mang Inasal Philippines, Inc. vs. IFP Manufacturing
Corp., G.R. No. 221717, June 19, 2017

• The word "INASAL," as stylized in the Mang Inasal mark, is the


most distinctive and recognizable feature of the said mark,
and applying the dominancy test, the “OK Hotdog Inasal”
mark is a colorable imitation of the “Mang Inasal” mark.
• The term "inasal" per se is a descriptive term that cannot be
appropriated, the dominant element "INASAL," as stylized in
the Mang Inasal mark, is not.
• Thus, the registered owner of the Mang Inasal mark, can claim
exclusive use of such element.
WHAT IF THE MARK IS NOT REGISTERED
IN THE INTELLECTUAL PROPERTY OFFICE?
OWNERSHIP OF TRADEMARKS

Intellectual property is in essence a creation of the mind,


hence, the following considerations are relevant:

q Ownership
q Prior use
q Bad faith
q Probability of using similar marks
q Motivation
2015 Bar Question

XV

CHEN, Inc., a Taiwanese company, is a manufacturer of tires with the mark


Light Year. From 2009 to 2014, Clark Enterprises, a Philippine registered
corporation, imported tires from CHEN, Inc. under several sales contracts and
sold them here in the Philippines. In 2015, CHEN, Inc. filed a trademark
application with the Intellectual Property Office (IPO) for the mark Light Year
to be used for tires. The IPO issued CHEN, Inc. a certificate of registration
(COR) for said mark. Clark Enterprises sought the cancellation of the COR
and claimed it had a better right to register the mark Light Year. CHEN, Inc.
asserted that it was the owner of the mark and Clark Enterprises was a mere
distributor. Clark Enterprises argued that there was no evidence on record
that the tires it imported from CHEN, Inc. bore the mark Light Year and Clark
Enterprises was able to prove that it was the first to use the mark here in the
Philippines. Decide the case. (4%)
2016 Bar Question

ABC Appliances Corporation (ABC) is a domestic corporation engaged


in the production and sale of televisions and other appliances. YYY
Engineers, a Taiwanese company, is the manufacturer of televisions
and other appliances from whom ABC actually purchases appliances.
From 2000, when ABC started doing business with YYY, it has been
using the mark "TTubes" in the Philippines for the television units that
were bought from YYY. In 2015, YYY filed a trademark application for
"TTubes." Later, ABC also filed its application. Both claim the right over
the trademark "TTubes" for television products. YYY relies on the
principle of "first to file" while ABC involves the "doctrine of prior use.”

a] Does the fact that YYY filed its application ahead of ABC mean that
YYY has the prior right over the trademark? Explain briefly. (2.5%)

[b] Does the prior registration also mean a conclusive assumption that
YYY Engineers is in fact the owner of the trademark "TTubes?" Briefly
explain your answer. (2.5%)
E.Y. Industrial Sales, Inc. v. Shen Dar Electricity and
Machinery Co., Ltd. (G.R. No. 184850, 20 Oct. 2010)

E.Y. Industrial Sales Inc. (EYIS) and Shen Dar Electricity and Machinery Co.
(Shen Dar) both claim to have the right to register the trademark “VESPA” for air
compressors. The Supreme Court rules that EYIS is the prior user of the mark.
The use by EYIS in the concept of owner is shown by commercial documents
and sales invoices unambiguously describing the goods as “ VESPA ” air
compressors.

“Ownership of a mark or trade name may be acquired not necessarily by


registration but by adoption and use in trade or commerce. As between
actual use of a mark without registration, and registration of the mark without
actual use thereof, the former prevails over the latter. For a rule widely accepted
and firmly entrenched, because it has come down through the years, is that
actual use in commerce or business is a pre-requisite to the acquisition of the
right of ownership.”
xxxx
By itself, registration is not a mode of acquiring ownership.
Superior Commercial Enterprises Inc. Kunnan
Enterprises Ltd. And Sports Concept & Distributor, Inc.
(G.R. No. 169974, 20 April 2010)

Superior Commercial Enterprises, Inc. (SUPERIOR), as the registered


owner of the trademarks, trading styles, company names and business
names “KENNEX”, “KENNEX & DEVICE”, “PRO KENNEX” and
“PRO-KENNEX” (disputed trademarks) filed a complaint for trademark
infringement and unfair competition with preliminary injunction against
Kunnan Enterprises Ltd. (KUNNAN) and Sports Concept and
Distributor, Inc. (SPORTS CONCEPT).

KUNNAN presented proof that it is the prior user and true owner of the
disputed trademarks, while SUPERIOR as the former distributor of
KUNNAN fraudulently registered said trademarks. KUNNAN also
presented proof of pending cancellation proceedings before the IPO
against the registration of the disputed marks under SUPERIOR’s
name.
Superior Commercial Enterprises Inc. Kunnan
Enterprises Ltd. And Sports Concept & Distributor,
Inc. (G.R. No. 169974, 20 April 2010)
After the IPO cancelled SUPERIOR’s registration over the disputed
marks, SUPERIOR’s case for trademark infringement lost its legal
basis and no longer presented a valid cause of action since
trademark ownership is an essential element to establish trademark
infringement.

SUPERIOR ’ s possession of the aforementioned Certificates of


Principal Registration does not conclusively establish its ownership
of the disputed trademarks as dominion over trademarks is not
acquired by the fact of registration alone. At best, registration merely
raises a presumption of ownership that can be rebutted by contrary
evidence. SUPERIOR was a mere distributor and could not have
been the owner, and was thus an invalid registrant of the disputed
trademarks.
2014 Commercial Law Bar Examination

Jinggy went to Kluwer University(KU) in Germany for his doctorate


degree (Ph.D.). He completed his degree with the highest honors in
the shortest time. When he came back, he decided to set-up his own
graduate school in his hometown in Zamboanga. After seeking free
legal advice from his high-flying lawyer-friends, he learned that the
Philippines follows the territoriality principle in trademark law, i.e.,
trademark rights are acquired through valid registration in accordance
with the law. Forthwith, Jinggy named his school the Kluwer Graduate
School of Business of Mindanao and immediately secured
registration with the Bureau of Trademarks. KU did not like the
unauthorized use of its name by its top alumnus no less. KU sought
your help. What advice can you give KU?
Ecole De Cuisine Manille (Cordon Bleu of the Philippines), Inc.
v. Renaud Cointreau & CIE and Le Condron Bleu Int’l., B.V. (G.R.
No. 185830, 05 June 2013)

Respondent Cointreau filed a trademark application for the mark "LE


CORDON BLEU & DEVICE.“ After it was published for opposition purposes,
Petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an opposition to the
subject application, averring among others, that it is the owner of the mark
"LE CORDON BLEU, ECOLE DE CUISINE MANILLE," which it has been
using since 1948 in cooking and other culinary activities, including in its
restaurant business.
Cointreau filed its answer claiming to be the true and lawful owner of the
subject mark. It averred that: (a) it has filed applications for the subject
mark’s registration in various jurisdictions, including the Philippines; (b) Le
Cordon Bleu is a culinary school of worldwide acclaim which was
established in Paris, France in 1895; (c) Le Cordon Bleu was the first
cooking school to have set the standard for the teaching of classical French
cuisine and pastry making; and (d) it has trained students from more than
eighty (80) nationalities.
Ecole De Cuisine Manille (Cordon Bleu of the Philippines), Inc.
v. Renaud Cointreau & CIE and Le Condron Bleu Int’l., B.V. (G.R.
No. 185830, 05 June 2013)

Cointreau has been using the subject mark in France since 1895,
prior to Ecole’s averred first use of the same in the Philippines in
1948, of which the latter was fully aware thereof. In fact, Ecole’s
present directress, Ms. Lourdes L. Dayrit (and even its foundress,
Pat Limjuco Dayrit), had trained in Cointreau’s Le Cordon Bleu
culinary school in Paris, France. Cointreau was likewise the first
registrant of the said mark under various classes, both abroad
and in the Philippines, having secured Home Registration No.
1,390,912 dated November 25, 1986 from its country of origin, as
well as several trademark registrations in the Philippines.
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG v. PHIL. SHOE
EXPO MKTG. CORP., G.R. No. 194307. Nov. 20, 2013

Petitioner was able to establish that it is the owner of the mark “BIRKENSTOCK.” It
submitted evidence relating to the origin and history of “BIRKENSTOCK” its use in
commerce long before respondent registered the same here in the Philippines. It
sufficiently proved that “BIRKENSTOCK” was first adopted in Europe in 1774 by its
inventor, Johann Birkenstock, a shoemaker, on his line of quality footwear and thereafter,
numerous generations of his kin continuously engaged in the manufacture and sale of
shoes and sandals bearing the mark “BIRKENSTOCK” until it became the entity now
known as the petitioner. Petitioner also submitted various certificates of registration of the
mark “BIRKENSTOCK” in various countries and that it has used such mark in different
countries worldwide, including the Philippines.

To come up with a highly distinct and uncommon mark previously appropriated by


another, for use in the same line of business, and without any plausible explanation, is
incredible. The field from which a person may select a trademark is practically unlimited.
As in all other cases of colorable imitations, the unanswered riddle is why, of the millions
of terms and combinations of letters and designs available, respondent had to come up
with a mark identical or so closely similar to the petitioner's if there was no intent to take
advantage of the goodwill generated by the petitioner's mark. Being on the same line of
business, it is highly probable that the respondent knew of the existence of
BIRKENSTOCK and its use by the petitioner, before respondent appropriated the same
mark and had it registered in its name.
WELL KNOWN MARKS

REGISTRABILITY (§123) – A mark cannot be registered if it:

5. Is identical with, or confusingly similar to, or constitutes a


translation of a mark which is considered by the competent
authority of the Philippines to be well-known internationally and in
the Philippines, whether or not it is registered here, as being
already the mark of a person other than the applicant for
registration, and used for identical or similar goods or services:
Provided, That in determining whether a mark is well-known,
account shall be taken of the knowledge of the relevant sector of
the public, rather than of the public at large, including knowledge
in the Philippines which has been obtained as a result of the
promotion of the mark;

79
WELL KNOWN MARKS

REGISTRABILITY (§123) – A mark cannot be registered if it:

6. Is identical with, or confusingly similar to, or constitutes a translation of


a mark considered well-known in accordance with the preceding
paragraph, which is registered in the Philippines with respect to goods
or services which are not similar to those with respect to which
registration is applied for: Provided, That use of the mark in relation to
those goods or services would indicate a connection between those
goods or services, and the owner of the registered mark: Provided
further, That the interests of the owner of the registered mark are likely
to be damaged by such use;

80
Fredco Manufacturing Corporation vs President and Fel-
lows of Harvard College (Harvard University), G.R. No.
185917, 01 June 2011

There is no question then, and this Court so declares, that “Harvard” is a well-
known name and mark not only in the United States but also internationally,
including the Philippines. The mark “Harvard” is rated as one of the most
famous marks in the world. It has been registered in at least 50 countries. It has
been used and promoted extensively in numerous publications worldwide. It has
established a considerable goodwill worldwide since the founding of Harvard
University more than 350 years ago. It is easily recognizable as the trade name
and mark of Harvard University of Cambridge, Massachusetts, U.S.A.,
internationally known as one of the leading educational institutions in the world.
As such, even before Harvard University applied for registration of the mark
“Harvard” in the Philippines, the mark was already protected under Article 6bis
and Article 8 of the Paris Convention. Again, even without applying the Paris
Convention, Harvard University can invoke Section 4(a) of R.A. No. 166 which
prohibits the registration of a mark “which may disparage or falsely suggest a
connection with persons, living or dead, institutions, beliefs x x x.”
Indeed, Section 123.1 (e) of R.A. No. 8293 now categorically states that
“ 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,” cannot be registered by another in
the Philippines. Section 123.1 (e) does not require that the well-known
mark be used in commerce in the Philippines but only that it be well-
known in the Philippines.

Thus, while under the territoriality principle a mark must be used in


commerce in the Philippines to be entitled to protection, internationally
well-known marks are the exceptions to this rule.

(Fredco Manufacturing Corporation vs President and Fel- lows of Harvard


College (Harvard University), G.R. No. 185917, 01 June 2011)
The scope of protection initially afforded by Article 6bis of the Paris
Convention has been expanded in the 1999 Joint Recommendation
Concerning Provisions on the Protection of Well-Known Marks, wherein
the World Intellectual Property Organization (WIPO) General Assembly
and the Paris Union agreed to a nonbinding recommendation that a well-
known mark should be protected in a country even if the mark is neither
registered nor used in that country. (Sehwani, Incorporated vs. In-N-Out
Burger, Inc., G. R. No. 171053, 15 October 2007)

The use of the well-known mark on the entirely unrelated goods or


services would indicate a connection between such unrelated goods and
services and those goods and services specified in certificate of
registration in the well known mark. This requirement refers to the
likelihood of confusion of origin or business or some business
connection or relationship between the registrant and the user of the
mark. (246 Corporation, doing business under the name and style of Rolex
Music Lounge vs. Hon. Reynaldo B. Daway, in his capacity as Presiding
Judge of RTC Branch 90, Quezon City, GR No. 157216, November 20, 2003)
NON REGISTRABLE MARKS
REGISTRABILITY (§123) – A mark cannot be registered if it:

7. Is likely to mislead the public, particularly as to the nature, quality,


characteristics or geographical origin of the goods or services;
8. Consists exclusively of signs that are generic for the goods or services that
they seek to identify;
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
bona fide and established trade practice;
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;

84
NON REGISTRABLE MARKS
REGISTRABILITY (§123) – A mark cannot be registered if it:

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;
12. Consists of color alone, unless defined by a given form; or
13. Is contrary to public order or morality.

Note: The nature of the goods to which the mark is applied


will not constitute an obstacle to registration.

85
NON REGISTRABLE MARKS

EXCEPTIONS – Descriptive marks, shapes, and color alone,


may be registered if it has become distinctive in relation to the
goods for which registration is requested as a result of the use that
have been made of it in commerce in the Philippines.

The IPO 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.

See: Section 123.2, IP Code

86
DOCTRINE OF SECONDARY MEANING

This doctrine is to the effect that a word or phrase


originally incapable of exclusive appropriation with
reference to an article on the market, because
geographically or otherwise descriptive, might
nevertheless have been used so long and so exclusively
by one producer with reference to his article that, in that
trade and to that branch of the purchasing public, the
word or phrase has come to mean that the article was his
product. (Ang v. Teodoro, G. R. No. 48226, 14 December 1942)
SHANG PROPERTIES REALTY CORP. & SHANG PROPERTIES V. ST.
FRANCIS DEVT. CORP.
G.R. No. 190706, July 21, 2014

“THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA


PLACE”

No secondary meaning. No unfair competition.

As its use of the mark is clearly limited to a certain locality, it cannot be said
that there was substantial commercial use of the same recognized all
throughout the country.

No showing of a mental recognition in buyers’ and potential buyers’ minds that


products connected with the mark “ST. FRANCIS” are associated with the
same source.

The element of fraud to be wanting; hence, there can be no unfair competition.


The geographically descriptive nature of the mark "ST. FRANCIS” bars its
exclusive appropriability, unless a secondary meaning is acquired.

A ‘geographically descriptive term’ is any noun or adjective that designates


geographical location and would tend to be regarded by buyers as descriptive
of the geographic location of origin of the goods or services.
PROTECTION OF TRADENAMES/BUSINESS NAMES

— 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.
— 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.
— In particular, 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, shall be
deemed unlawful. (§165 IP CODE)
— The remedies provided for in Sections 153 to 156 and Sections 166 and
167 shall apply mutatis mutandis. (§165.3 IP CODE)

89
The two concepts of corporate name or business name and trademark or
service mark, are not mutually exclusive. It is common, indeed likely, that the
name of a corporation or business is also a trade name, trademark or service
mark. (Shangri- La International Hotel Management, Ltd. vs. Developers
Group of Companies, Inc., G.R. No. 159938, 31 March 2006)

A trade name of a national of a State that is a party to the Paris Convention,


whether or not the trade name forms part of a trademark, is protected “without
the obligation of prior filing or registration. ” (Fredco Manufacturing
Corporation vs President and Fellows of Harvard College (Harvard
University), G.R. No. 185917, 01 June 2011)
Coffee Partners, Inc. v. San Francisco Coffee & Roastery, Inc.,
(G.R. No. 169504, 03 March 2010)

The issue in this case is whether the use of the trademark “SAN
FRANCISCO COFFEE” constitutes infringement of the tradename ‘SAN
FRANCISCO COFFEE & ROASTERY, INC.” even if the tradename is not
registered with the IPO.

The Supreme Court ruled that a trade name 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. A corporation has
the exclusive right to use its name. The right proceeds from the theory that it
is a fraud on the corporation which has acquired a right to that name and
perhaps carried on its business thereunder, that another should attempt to
use the same name, or the same name with a slight variation in such a way
as to induce persons to deal with it in the belief that they are dealing with the
corporation which has given a reputation to the name.
Coffee Partners, Inc. v. San Francisco Coffee & Roastery, Inc.,
(G.R. No. 169504, 03 March 2010)

The Supreme Court likewise upheld the ruling of the IPO Bureau
of Legal Affairs (BLA) that the right to the exclusive use of a trade
name with freedom from infringement by similarity is determined
from priority of adoption. Since SAN FRANCISCO COFFEE &
ROASTERY, INC. registered its business name with the Department
of Trade and Industry in 1995 and COFFEE PARTNERS, INC.
registered its trademark with the IPO in 2001 in the Philippines and
in 1997 in other countries, then the former must be protected from
infringement of its trade name.

The IPO-BLA also held that SAN FRANCISCO COFFEE &


ROASTERY, INC. did not abandon the use of its trade name as
substantial evidence indicated that it continuously used its trade
name in connection with the purpose for which it was organized.
LEGAL REMEDIES

q Trademark Infringement
q Unfair Competition
q Damages

93
TRADEMARK INFRINGEMENT (§155) - The commission of
the following acts by any person, without the consent of the owner of the
registered mark:

a. 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; or

b. 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, shall be liable in a civil action
for infringement by the registrant.

94
Counterfeit Goods vs. Colorable Imitation

Counterfeit Goods shall mean any goods, including packaging,


bearing without authorization a trademark which is identical to
the trademark validly registered in respect of such goods, or
which cannot be distinguished in its essential aspects from such
a trademark, and which thereby infringes the rights of the owner
of the trademark in question under the law of the country of
importation [TRIPs Agreement]

Colorable Imitation. This term has been defined as "such a


close or ingenious imitation as to be calculated to deceive
ordinary purchasers, or such resemblance of the infringing mark
to the original as to deceive an ordinary purchaser giving such
attention as a purchaser usually gives, and to cause him to
purchase the one supposing it to be the other.“ [Emerald v. CA,
G.R. No. 100098. December 29, 1995]
Infringement takes place when the competing trademark contains the
essential features of another. Imitation or an effort to imitate is unnecessary.
The question is whether the use of the marks is likely to cause confusion or
deceive purchasers. (Societe Des Produits Nestle, S. A. vs. Martin T.Dy, G.R.
No. 172276, 09 August 2010)

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 admit- tedly a relative term, to be determined
rigidly according to the particular (and some- times peculiar) circumstances
of each case. Thus, in trademark cases, more than in other kinds of
litigation, precedents must be studied in the light of each particular case.
(Mighty Corporation vs. E. J. Gallo Winery, G.R. No. 154342, 14 July 2004)

Failure to present proof of actual confusion does not negate their claim of
trademark infringement. Trademark infringement requires the less stringent
standard of “likelihood of confusion” only. While proof of actual confusion is
the best evidence of infringement, its absence is inconsequential.
(McDonalds Corporation v. L. C. Big Mak Burger, Inc., G.R. No. 143993, 18
August 2004.)

96
The mere unauthorized use of a container bearing a registered
trademark in connection with the sale, distribution or advertising of
goods or services which is likely to cause confusion, mistake or
deception among the buyers or consumers can be considered as
trademark infringement. (Republic Gas Corporation v. Petron Corporation,
G. R. No. 194062, 17 June 2013)

Unauthorized use of a container bearing a registered trademark in


connection with the sale, distribution or advertising of goodsor
services which is likely to cause confusion, mistake or deception
among the buyers/consumers can be considered as trade- mark
infringement. (Yao v. People of the Philippines, G. R. No. 168306, 19 June
2007)

97
Republic Gas Corporation v. Petron Corporation,
G. R. No. 194062, 17 June 2013

From the foregoing provision, the Court in a very similar case, made it
categorically clear that the mere unauthorized use of a container bearing a
registered trademark in connection with the sale, distribution or advertising of
goods or services which is likely to cause confusion, mistake or deception
among the buyers or consumers can be considered as trademark infringement.

Here, petitioners have actually committed trademark infringement when they


refilled, without the respondents’ consent, the LPG containers bearing the
registered marks of the respondents. As noted by respondents, petitioners’ acts
will inevitably confuse the consuming public, since they have no way of
knowing that the gas contained in the LPG tanks bearing respondents’ marks is
in reality not the latter’s LPG product after the same had been illegally refilled.
The public will then be led to believe that petitioners are authorized refillers and
distributors of respondents’ LPG products, considering that they are accepting
empty containers of respondents and refilling them for resale.

In sum, this Court finds that there is sufficient evidence to warrant the
prosecution of petitioners for trademark infringement and unfair competition,
considering that petitioner Republic Gas Corporation, being a corporation,
possesses a personality separate and distinct from the person of its officers,
directors and stockholders. Petitioners, being corporate officers and/or
directors, through whose act, default or omission the corporation commits a
crime, may themselves be individually held answerable for the crime.
Asia Brewery vs. Court of Appeals
G.R. No. 103543 July 5, 1993

San Miguel Pale Pilsen vs. Beer Pale Pilsen

• There is hardly any dispute that the dominant feature of SMC's trademark is the
name of the product: SAN MIGUEL PALE PILSEN, written in white Gothic letters with
elaborate serifs at the beginning and end of the letters "S" and "M" on an amber
background across the upper portion of the rectangular design.
• On the other hand, the dominant feature of ABI's trademark is the name: BEER PALE
PILSEN, with the word "Beer" written in large amber letters, larger than any of the
letters found in the SMC label.
• The trial court perceptively observed that the word "BEER" does not appear in SMC's
trademark, just as the words "SAN MIGUEL" do not appear in ABI's trademark.
Hence, there is absolutely no similarity in the dominant features of both trademarks.
• Neither in sound, spelling or appearance can BEER PALE PILSEN be said to be
confusingly similar to SAN MIGUEL PALE PILSEN. No one who purchases BEER
PALE PILSEN can possibly be deceived that it is SAN MIGUEL PALE PILSEN. No
evidence whatsoever was presented by SMC proving otherwise.
Asia Brewery vs. Court of Appeals
G.R. No. 103543 July 5, 1993

San Miguel Pale Pilsen vs. Beer Pale Pilsen

The words "pale pilsen" may not be appropriated by SMC for its exclusive use
even if they are part of its registered trademark: SAN MIGUEL PALE PILSEN,
any more than such descriptive words as "evaporated milk," "tomato ketchup,"
"cheddar cheese," "corn flakes" and "cooking oil" may be appropriated by any
single manufacturer of these food products, for no other reason than that he
was the first to use them in his registered trademark.

The petitioner's contention that bottle size, shape and color may not be the
exclusive property of any one beer manufacturer is well taken. SMC's being the
first to use the steinie bottle does not give SMC a vested right to use it to the
exclusion of everyone else. Being of functional or common use, and not the
exclusive invention of anyone, it is available to all who might need to use it
within the industry. Nobody can acquire any exclusive right to market articles
supplying simple human needs in containers or wrappers of the general form,
size and character commonly and immediately used in marketing such articles
(Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)
MANUEL ESPIRITU, JR. et. al. v. PETRON CORP et.al.
G.R. No. 170891. Nov. 24, 2009

Reloading of the liquefied petroleum gas cylinder container of one brand with
the liquefied petroleum gas of another brand.

What the law punishes is the act of giving one's goods the general appearance
of the goods of another, which would likely mislead the buyer into believing that
such goods belong to the latter.

Corporate officers or employees, through whose act, default or omission the


corporation commits a crime, may themselves be individually held answerable
for the crime.

Before a stockholder may be held criminally liable for acts committed by the
corporation, therefore, it must be shown that he had knowledge of the criminal
act committed in the name of the corporation and that he took part in the same
or gave his consent to its commission, whether by action or inaction.
Juno Batistis v. People
G.R. No. 181571, 19 December 2009

The case involves refilling of empty liquor bottles of Fundador. The


RTC convicted accused for trademark infringement and unfair
competition but on appeal he was acquitted for unfair competition
but conviction for trademark infringement was affirmed.

According to the Supreme Court: “Batistis exerted the effort to


make the counterfeit products look genuine to deceive the unwary
public into regarding the products as genuine. The buying public
would be easy to fall for the counterfeit products due to their having
been given the appearance of the genuine products, particularly
with the difficulty of detecting whether the products were fake or
real if the buyers had no experience and the tools for detection, like
black light.”

“He thereby infringed the registered Fundador trademark by the


colorable imitation of it through applying the dominant features of
the trademark on the fake products, particularly the two bottles filled
with Fundador brandy. His acts constituted infringement of
trademark…”
GEMMA ONG a.k.a. MARIA TERESA GEMMA CATACUTAN, v.
PEOPLE OF THE PHILS.
G.R. No. 169440, Nov. 23, 2011

Counterfeit Marlboro cigarettes.

The counterfeit cigarettes seized from Gemma's possession were


intended to confuse and deceive the public as to the origin of the
cigarettes intended to be sold, as they not only bore Philip Morris
Phils, Inc. (PMPI's) mark, but they were also packaged almost
exactly as PMPI's products.
LEGAL REMEDIES - UNFAIR COMPETITION (Sec. 168)

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.

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.

104
UNFAIR COMPETITION

The following shall be deemed guilty of unfair competition:

– 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;

105
UNFAIR COMPETITION

The following shall be deemed guilty of unfair competition:

– 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; or

– Any person who shall make any false statement in the course of
trade or who shall commit any other act contrary to good faith of
a nature calculated to discredit the goods, business or services
of another.

106
RULE 18, A.M. 10-3-10 SC

SEC. 6. Intent to defraud or deceive. – In an action for unfair


competition, the intent to defraud or deceive the public shall be
presumed:

a) when the defendant passes off a product as his by using


imitative devices, signs or marks on the general appearance of the
goods, which misleads prospective purchasers into buying his
merchandise under the impression that they are buying that of his
competitors;

b) when the defendant makes any false statement in the course of


trade to discredit the goods and business of another; or

c) where the similarity in the appearance of the goods as packed


and offered for sale is so striking.
Unfair competition has been defined as the passing off (palming off)
or attempting to pass off upon the public of the goods or business of
one person as the goods or business of another with the end and
probable effect of deceiving the public. The essential elements of
unfair competition are (1) confusing similarity in the general
appearance of the goods; and (2) intent to deceive the public and
defraud a competitor. (Superior Enterprises, Inc. vs. Kunnan
Enterprises Ltd., G.R. No. 169974, 20 April 2010)

The essential 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 of the appearance of the goods as offered for sale to
the public. (McDonalds Corporation v. L. C. Big Mak Burger, Inc., G.R.
No. 143993, 18 August 2004)
TM INFRINGEMENT vs. UNFAIR COMPETITION

q In infringement of trademark the prior registration of the


trademark is a prerequisite for the action; in unfair
competition registration of the trademark is not necessary.

q In infringement of trademark, fraudulent intent is not


necessary; in unfair competition fraudulent intent is
essential.

q Infringement of trademark is the unauthorized use of a


trademark, while unfair competition is the passing off of
one’s goods for the goods of another.

109
ROBERTO CO V. KENG HUAN JERRY YEUNG & EMMA YEUNG
G.R. No. 212705, Sept. 10, 2014

Greenstone Medicated Oil

"Tienchi Fong Sap Oil Greenstone" (Tienchi)

• Unfair competition is defined as the passing off (or palming off) or


attempting to pass off upon the public of the goods or business of one
person as the goods or business of another with the end and probable
effect of deceiving the public. This takes place where the defendant gives
his goods the general appearance of the goods of his competitor with the
intention of deceiving the public that the goods are those of his competitor.

• Co conspired with the Laus in the sale/distribution of counterfeit Greenstone


products to the public, which were even packaged in bottles identical to that
of the original, thereby giving rise to the presumption of fraudulent intent.

• Registration of the trademark “Greenstone”– essential in a trademark


infringement.
2016 BAR QUESTION

MS Brewery Corporation (MS) is a manufacturer and distributor of the


popular beer "MS Lite." It faces stiff competition from BA Brewery
Corporation (BA) whose sales of its own beer product, "BA Lighter," has
soared to new heights. Meanwhile, sales of the "MS Lite" decreased
considerably. The distribution and marketing personnel of MS later
discovered that BA has stored thousands of empty bottles of "MS Lite"
manufactured by MS in one of its warehouses. MS filed a suit for unfair
competition against BA before the Regional Trial Court (RTC). Finding
a connection between the dwindling sales of MS and the increased
sales of BA, the RTC ruled that BA resorted to acts of unfair
competition to the detriment of MS. Is the RTC correct? Explain. (5%)
COCA-COLA Bottlers, Phils., Inc. vs. Quintin Gomez, et al.,
G.R. No. 154491, November 14, 2008

As basis for this interpretative analysis, we note that Section 168.1 speaks of a person
who has earned goodwill with respect to his goods and services and who is entitled to
protection under the Code, with or without a registered mark. Section 168.2, as
previously discussed, refers to the general definition of unfair competition. Section
168.3, on the other hand, refers to the specific instances of unfair competition, with
Section 168.1 referring to the sale of goods given the appearance of the goods of
another; Section 168.2, to the inducement of belief that his or her goods or services
are that of another who has earned goodwill; while the disputed Section 168.3 being a
catch all clause whose coverage the parties now dispute.

Under all the above approaches, we conclude that the hoarding - as defined and
charged by the petitioner does not fall within the coverage of the IP Code and of
Section 168 in particular. It does not relate to any patent, trademark, trade name or
service mark that the respondents have invaded, intruded into or used without proper
authority from the petitioner. Nor are the respondents alleged to be fraudulently passing
off their products or services as those of the petitioner. The respondents are not also
alleged to be undertaking any representation or misrepresentation that would confuse
or tend to confuse the goods of the petitioner with those of the respondents, or vice
versa. What in fact the petitioner alleges is an act foreign to the Code, to the concepts
it embodies and to the acts it regulates; as alleged, hoarding inflicts unfairness by
seeking to limit the oppositions sales by depriving it of the bottles it can use for these
sales.
WILLAWARE PRODUCTS CORP. V. JESICHRIS MFTG. CORP.,
G.R. No. 195549, Sept. 03, 2014

Unfair Competition under Article 28 of the New Civil Code

Willaware was held to be engaged in unfair competition as shown by its act of


suddenly shifting business from manufacturing kitchenware to plastic-made
automotive parts; luring the employees of Jesichris to transfer to its employ and
discovering the trade secrets of the latter.

“Unfair competition” under Article 28 of the Civil Code, is very much broader
than that covered by intellectual property laws.

In order to qualify the competition as "unfair," it must have two characteristics:


(1) it must involve an injury to a competitor or trade rival, and (2) it must involve
acts which are characterized as "contrary to good conscience," or "shocking to
judicial sensibilities," or otherwise unlawful; in the language of our law, these
include force, intimidation, deceit, machination or any other unjust, oppressive
or high-handed method. The public injury or interest is a minor factor; the
essence of the matter appears to be a private wrong perpetrated by
unconscionable means.
SHANG PROPERTIES REALTY CORP. & SHANG PROPERTIES V. ST.
FRANCIS DEVT. CORP.
G.R. No. 190706, July 21, 2014

“THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA


PLACE”

No secondary meaning. No unfair competition.

As its use of the mark is clearly limited to a certain locality, it cannot be said
that there was substantial commercial use of the same recognized all
throughout the country.

No showing of a mental recognition in buyers’ and potential buyers’ minds that


products connected with the mark “ST. FRANCIS” are associated with the
same source.

The element of fraud to be wanting; hence, there can be no unfair competition.


The geographically descriptive nature of the mark "ST. FRANCIS” bars its
exclusive appropriability, unless a secondary meaning is acquired.

A ‘geographically descriptive term’ is any noun or adjective that designates


geographical location and would tend to be regarded by buyers as descriptive
of the geographic location of origin of the goods or services.
LEVI STRAUSS (PHILS.), INC., v. TONY LIM
G.R. No. 162311. December 4, 2008

LIVES vs. LEVI’s


• No unfair competition.

• Unfair competition consists in employing deception or any other means


contrary to good faith by which any person 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 goodwill, or committing any acts
calculated to produce such result.

• While it is true that there may be unfair competition even if the competing
mark is registered in the Intellectual Property Office, it is equally true that
the same may show prima facie good faith.

• Indeed, registration does not negate unfair competition where the goods
are packed or offered for sale and passed off as those of complainant.
However, the mark's registration, coupled with the stark differences between
the competing marks, negate the existence of actual intent to deceive, in
this particular case.
UNILEVER PHILIPPINES, INC. V. MICHAEL TAN A.K.A. PAUL D. TAN
G.R. No. 179367, Jan. 29, 2014

Unfair Competition under RA 8293

The sheer number and volume of imitation Unilever shampoo products


found in respondent’s possession belie the claim of personal use.

What is material to a finding of probable cause is the commission of


acts constituting unfair competition, the presence of all its elements and
the reasonable belief, based on evidence, that the respondent had
committed it. The CA was in error in sustaining DOJ’s finding of lack of
probable cause.
SHIRLEY F. TORRES v. IMELDA PEREZ and RODRIGO PEREZ,
G.R. No. 188225. Nov. 28, 2012

Unfair competition may not be inferred from the use of vendor codes by
product suppliers to a mall

The criminal complaint for unfair competition against respondents


cannot prosper, for the elements of the crime were not present. The key
elements of unfair competition are "deception, passing off and fraud
upon the public.”

No deception can be imagined to have been foisted on the public


through different vendor codes, which are used by SM only for the
identification of suppliers' products.
Cybercrime Prevention Act (RA No. 10175)

Section 4. Cybercrime Offenses.


xxx xxx xxx
(6) Cyber-squatting. – The acquisition of a domain name over the
internet in bad faith to profit, mislead, destroy reputation, and deprive
others from registering the same, if such a domain name is:

(i) Similar, identical, or confusingly similar to an existing trademark


registered with the appropriate government agency at the time of the
domain name registration:
(ii) Identical or in any way similar with the name of a person other than
the registrant, in case of a personal name; and
(iii) Acquired without right or with intellectual property interests in it.
2014 Bar Question

In intellectual property cases, fraudulent intent is not an


element of the cause of action except in cases involving:
(1%)

(A) trademark infringement


(B) copyright infringement
(C) patent infringement
(D) unfair competition
Counterfeit Goods vs. Colorable Imitation

Under Section 147.1 of the IP Code:

The owner of a registered mark shall have the exclusive


right to prevent all third parties not having the owner's
consent from using in the course of trade identical or
similar signs or containers for goods or services which
are identical or similar to those in respect of which the
trademark is registered where such use would result in
a likelihood of confusion. In case of the use of an
identical sign for identical goods or services, a
likelihood of confusion shall be presumed. [Also, §1
Article 16, TRIPs Agreement]
RULES OF PROCEDURE
FOR INTELLECTUAL PROPERTY RIGHTS CASES

A.M. No. 10-3-10 SC, October 18, 2011

Rule 18

EVIDENCE IN TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION CASES

SEC. 3. Presumption of likelihood of confusion. – Likelihood of confusion


shall be presumed in case an identical sign or mark is used for identical
goods or services.

SEC. 4. Likelihood of confusion in other cases. – In determining whether


one trademark is confusingly similar to or is a colorable imitation of another,
the court must consider the general impression of the ordinary purchaser,
buying under the normally prevalent conditions in trade and giving the
attention such purchasers usually give in buying that class of goods.

Visual, aural, connotative comparisons and overall impressions engendered


by the marks in controversy as they are encountered in the realities of the
marketplace must be taken into account. Where there are both similarities
and differences in the marks, these must be weighed against one another to
see which predominates.
In determining likelihood of confusion between marks used on non-
identical goods or services, several factors may be taken into account,
such as, but not limited to:

a) the strength of plaintiff’s mark;


b) the degree of similarity between the plaintiff’s and the
defendant’s marks;
c) the proximity of the products or services;
d) the likelihood that the plaintiff will bridge the gap;
e) evidence of actual confusion;
f) the defendant's good faith in adopting the mark;
g) the quality of defendant's product or service; and/or
h) the sophistication of the buyers.―

Colorable imitation denotes such a close or ingenious imitation as to be


calculated to deceive ordinary persons, or such a resemblance to the
original as to deceive an ordinary purchaser giving such attention as a
purchaser usually gives, as to cause him to purchase the one supposing
it to be the other.
TRADEMARK DILUTION

Trademark dilution is the lessening of the capacity of a


famous mark to identify and distinguish goods or services,
regardless of the presence or absence of:

(1) competition between the owner of the famous mark and


other parties; or
(2) likelihood of confusion, mistake or deception.

Subject to the principles of equity, the owner of a famous


mark is entitled to an injunction against another person’s
commercial use in commerce of a mark or trade name, if
such use begins after the mark has become famous and
causes dilution of the distinctive quality of the mark.

(Levi Strauss & Co., v. Clinton Apparelle, Inc., G.R. No. 138900, 20 September
2005)

123
Levi Strauss & Co., v. Clinton Apparelle, Inc.,
G.R. No. 138900, 20 September 2005

DOCKERS VS. PADDOCKS

Based on the foregoing, to be eligible for protection from dilution, there has to be
a finding that: (1) the trademark sought to be protected is famous and distinctive;
(2) the use by respondent of “ Paddocks and Design ” began after the
petitioners ’ mark became famous; and (3) such subsequent use defames
petitioners’ mark. In the case at bar, petitioners have yet to establish whether
“Dockers and Design” has acquired a strong degree of distinctiveness and
whether the other two elements are present for their cause to fall within the ambit
of the invoked protection. The Trends MBL Survey Report which petitioners
presented in a bid to establish that there was confusing similarity between two
marks is not sufficient proof of any dilution that the trial court must enjoin.
(
Levi Strauss & Co., v. Clinton Apparelle, Inc.,
G.R. No. 138900, 20 September 2005
Given the single registration of the trademark “Dockers and Design”
and considering that respondent only uses the assailed device but a
different word mark, the right to prevent the latter from using the
challenged “Paddocks” device is far from clear. Stated otherwise, it is
not evident whether the single registration of the trademark “Dockers
and Design” confers on the owner the right to prevent the use of a
fraction thereof in the course of trade. It is also unclear whether the use
without the owner’s consent of a portion of a trademark registered in its
entirety constitutes material or substantial invasion of the owner ’ s
right.

It is likewise not settled whether the wing-shaped logo, as opposed to


the word mark, is the dominant or central feature of petitioners ’
trademark—the feature that prevails or is retained in the minds of the
public—an imitation of which creates the likelihood of deceiving the
public and constitutes trademark infringement. In sum, there are vital
matters which have yet and may only be established through a full-blown
trial.
Tanduay Distillers, Inc. vs. Ginebra San Miguel, Inc.
G.R. NO. 164324, August 14, 2009

It is not evident whether San Miguel has the right to prevent other business entities from
using the word “Ginebra.” It is not settled (1) whether “Ginebra” is indeed the dominant
feature of the trademarks, (2) whether it is a generic word that as a matter of law cannot be
appropriated, or (3) whether it is merely a descriptive word that may be appropriated
based on the fact that it has acquired a secondary meaning.

The issue that must be resolved by the trial court is whether a word like “Ginebra” can
acquire a secondary meaning for gin products so as to prohibit the use of the word
“Ginebra” by other gin manufacturers or sellers. This boils down to whether the word
“Ginebra” is a generic mark that is incapable of appropriation by gin manufacturers.

In Asia Brewery, Inc. v. Court of Appeals,[53] the Court ruled that “pale pilsen” are generic
words, “pale” being the actual name of the color and “pilsen” being the type of beer, a light bohemian
beer with a strong hops flavor that originated in Pilsen City in Czechoslovakia and became famous in the
Middle Ages, and hence incapable of appropriation by any beer manufacturer.Moreover, Section
123.1(h) of the IP Code states that a mark cannot be registered if it “consists exclusively of signs that
are generic for the goods or services that they seek to identify.”

In this case, a cloud of doubt exists over San Miguel’s exclusive right relating to the word
“Ginebra.” San Miguel’s claim to the exclusive use of the word “Ginebra” is clearly still in
dispute because of Tanduay’s claim that it has, as others have, also registered the word
“Ginebra” for its gin products. This issue can be resolved only after a full-blown trial.
LEGAL REMEDIES

SEC. 151. Cancellation. - 151.1. A petition to cancel a registration of a mark under this Act
may be filed with the Bureau of Legal Affairs by any person who believes that he is or will
be damaged by the registration of a mark under this Act as follows:

(a) Within five (5) years from the date of the registration of the mark under this Act.

(b) At any time, if the registered mark becomes the generic name for the goods or services, or
a portion thereof, for which it is registered, or has been abandoned, or its registration was
obtained fraudulently or contrary to the provisions of this Act, or if the registered mark is
being used by, or with the permission of, the registrant so as to misrepresent the source of
the goods or services on or in connection with which the mark is used. If the registered
mark becomes the generic name for less than all of the goods or services for which it is
registered, a petition to cancel the registration for only those goods or services may be
filed. A registered mark shall not be deemed to be the generic name of goods or services
solely because such mark is also used as a name of or to identify a unique product or
service. The primary significance of the registered mark to the relevant public rather than
purchaser motivation shall be the test for determining whether the registered mark has
become the generic name of goods or services on or in connection with which it has been
used.

(c) At any time, if the registered owner of the mark without legitimate reason fails to use the
mark within the Philippines, or to cause it to be used in the Philippines by virtue of a
license during an uninterrupted period of three (3) years or longer.

127
LEGAL REMEDIES
SEC. 151. Cancellation. –
xxx
151.2. Notwithstanding the foregoing provisions, the court or the
administrative agency vested with jurisdiction to hear and
adjudicate any action to enforce the rights to a registered mark
shall likewise exercise jurisdiction to determine whether the
registration of said mark may be cancelled in accordance with this
Act. 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. (Sec. 17, R.A. No. 166a)

128
LEGAL REMEDIES –

SEC. 156. Actions, and Damages and Injunction for Infringement. -156.1. 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.

156.2. On application of the complainant, the court may impound during the
pendency of the action, sales invoices and other documents evidencing sales.

156.3. In cases where actual intent to mislead the public or to defraud the
complainant is shown, in the discretion of the court, the damages may be
doubled.

156.4. The complainant, upon proper showing, may also be granted injunction.

129
LEGAL REMEDIES - CIVIL ACTION
REQUIREMENT OF NOTICE FOR DAMAGES (§158)

– In any suit for infringement, 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.

130
LEGAL REMEDIES –

SEC. 157. Power of Court to Order Infringing Material Destroyed.

157.1. In any action arising under this Act, in which a violation of any right
of the owner of the registered mark is established, the court may order
that goods found to be infringing be, without compensation of any sort,
disposed of outside the channels of commerce in such a manner as to
avoid any harm caused to the right holder, or destroyed; and all labels,
signs, prints, packages, wrappers, receptacles and advertisements in
the possession of the defendant, bearing the registered mark or trade
name or any reproduction, counterfeit, copy or colorable imitation
thereof, all plates, molds, matrices and other means of making the
same, shall be delivered up and destroyed.
157.2. In regard to counterfeit goods, the simple removal of the trademark
affixed shall not be sufficient other than in exceptional cases which shall
be determined by the Regulations, to permit the release of the goods
into the channels of commerce.

131
A.M. No. 02-1-06-SC January 30, 2002

RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR


INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS

Section 22. Judgment. - If it appears after trial that the seized


documents and articles are found to infringe the intellectual property
right of the applicant or that they constitute the means for the
production of infringing goods, the court shall order their destruction or
donation to charitable, educational or religious institutions with the
prohibition against bringing the same into the channels of commerce.
In the latter case, infringing trademarks or trade names found on
labels, tags and other portions of the infringing materials shall be
removed or defaced before the donation. In no case shall the
infringing materials be returned to the defendant.
If the court finds no infringement, the seized materials shall be
immediately returned to the defendant.
CENTURY CHINESE MEDICINE CO.,ETC., V. PEOPLE OF THE
PHILIPPINES and LING NA LAU, G.R. No. 188526, Nov. 11, 2013

Search and seizures in civil actions vis-a-vis search warrants

Unfair competition/trademark infringement because of the sale of counterfeit


Top Gel papaya whitening soap and use of “Top Gel T.G. and Device of a Leaf”
perpetrated by respondents.

There was no prejudicial question and that the Rules on the Issuance of Search
and Seizure in Civil Actions for Infringement of IPRs were not applicable to the
case for the reason that the search warrants issued were in contemplation of
criminal actions for violation of IPRs under RA 8293.

The object of the violation of respondent's intellectual property right is the


alleged counterfeit TOP GEL T.G. & DEVICE OF A LEAF papaya whitening
soap products being sold by petitioners, so there is a need to confiscate all
these articles to protect respondent's right as the registered owner of such
trademark.
LEGAL REMEDIES - FALSE DESIGNATION OF ORIGIN,
FALSE DESCRIPTION OR REPRESENTATION (SEC. 169)

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:

– 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; or

134
LEGAL REMEDIES - FALSE DESIGNATION 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:

— 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 by any person who believes that he or she is or
is likely to be damaged by such act.

135
LEGAL REMEDIES - FALSE DESIGNATION OF ORIGIN,
FALSE DESCRIPTION OR REPRESENTATION

Any goods marked or labelled 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 the IP Code in cases involving goods refused entry or
seized.

136
LEGAL REMEDIES – CRIMINAL PENALTY

• Independent of the civil and administrative sanctions


imposed by law, a criminal penalty of imprisonment from
two (2) years to five (5) years and a fine ranging from Fifty
thousand pesos (P50,000) to Two hundred thousand
pesos(P200,000), shall be imposed on any person who is
found guilty of committing infringement (§159), unfair
competition (§168) and false designation of origin, false or
misleading description of fact, or false or misleading
representation of fact (§169.1).

• See Samson vs. Daway

137
LEGAL REMEDIES: LIMITATIONS ON ACTIONS

SEC. 159. Limitations to Actions for Infringement.

-Notwithstanding any other provision of this Act, the remedies given to the
owner of a right infringed under this Act shall be limited as follows:

159.1. Notwithstanding the provisions of Section 155 hereof, 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.

159.2. 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. 138
LEGAL REMEDIES: LIMITATIONS ON ACTIONS

159.3. 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 of this subparagraph shall apply only to innocent infringers:
Provided, That such injunctive relief shall not be available to the owner of
the right infringed with respect to an issue of a newspaper, magazine, or
other similar periodical or an electronic communication containing infringing
matter where restraining the dissemination of such infringing matter in any
particular issue of such periodical or in an electronic communication would
delay the delivery of such issue or transmission of such electronic
communication is customarily conducted in accordance with the sound
business practice, and not due to any method or device adopted to evade
this section or to prevent or delay the issuance of an injunction or
restraining order with respect to such infringing matter; and

139
LEGAL REMEDIES: LIMITATIONS ON ACTIONS

159.4. There shall be no infringement of trademarks or


tradenames of imported or sold drugs and medicines
allowed under Section 72.1 of this Act, 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
of this Code.
(As amended by Republic Act No.9502 or the Universally Accessible Cheaper and
Quality Medicines Act of 2008)

140
LEGAL REMEDIES
AUTHORITY TO DETERMINE RIGHT TO REGISTRATION
(SEC. 161)

In any action involving a registered mark, the court may


determine the right to registration, order the cancellation of a
registration, in whole or in part, and otherwise rectify the
register with respect to the registration of any party to the
action in the exercise of this.

141
2010 BAR EXAMINATION QUESTION:

1. Can an article of commerce serve as a trademark and at the


same time enjoy patent and copyright protection? Explain
and give an example.

2. For years, Y has been engaged in the parallel importation of


famous brands, including shoes carrying the foreign brand
MAGIC. Exclusive distributor X demands that Y cease
importation because of his appointment as exclusive
distributor of MAGIC shoes in the Philippines.
Y counters that the trademark MAGIC is not registered with
the Intellectual Property Office as a trademark and therefore
no one has the right to prevent its parallel importation. Who
is correct? Why?

142
2009 BAR EXAMINATION QUESTION:

After disposing of his last opponent in only two rounds in


Las Vegas, the renowned Filipino boxer Sonny Bachao
arrived at the Ninoy Aquino International Airport met by
thousands of hero-worshipping fans and hundreds of media
photographers. The following day, a colored photograph of
Sonny wearing a black polo shirt embroidered with the 2-
inch Lacoste crocodile logo appeared on the front page of
every Philippine newspaper.

143
2009 BAR EXAMINATION QUESTION:

Lacoste International, the French firm that manufactures


Lacoste apparel and owns the Lacoste trademark, decided
to cash in on the universal popularity of the boxing icon. It
reprinted the photographs, with the permission of the
newspaper publishers, and went on a world-wide blitz of
print commercials in which Sonny is shown wearing a
Lacoste shirt alongside the phrase “ Sonny Bachao just
loves Lacoste.”

When Sonny sees the Lacoste advertisements, he hires you


as lawyer and asks you to sue Lacoste International before
a Philippine court:

144
2009 BAR EXAMINATION QUESTION:

1. For trademark infringement in the Philippines because


Lacoste International used his image without his
permission;
2. For injunction in order to stop Lacoste International
from featuring him in their commercials.
3. Can Lacoste International validly invoke the defense
that it is not a Philippine company and, therefore,
Philippine courts have no jurisdiction? Explain.

145
2005 BAR EXAMINATION QUESTION:

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.

146
2005 BAR EXAMINATION QUESTION:

1. Which of the two corporations has a better right to use the


logo and the tradename? Explain.

2. How does the international affiliation of Shangrila


Corporation affect the outcome of the dispute? Explain.

147
Declaration of Actual Use

W LAND HOLDINGS, INC., v. STARWOOD HOTELS AND RESORTS


WORLDWIDE, INC., G.R. No. 222366, December 04, 2017

The use of a registered mark representing the owner's goods or services by


means of an interactive website may constitute proof of actual use that is
sufficient to maintain the registration of the same.

N.B.
•Mere exhibition of a trademark in a website is not sufficient.
•There must be an actual commercial transaction through the website or at the
very least, the website must show that it intends to target local consumers by
containing specific details geared towards a commercial activity or interaction.
These details may constitute a local contact phone number for local consumers
to call for information or other local concerns, a specific local webpage, whether
domestic language and currency is used on the website, and/or whether
domestic payment methods are accepted.
COPYRIGHT
GENERAL PRINCIPLES

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 only cover the works falling within the
statutory enumeration or description. (Pearl & Dean (Phil.),
Incorporated v. Shoemart, Incorporated, G.R. No. 148222, 15 August
2003; Joaquin, Jr. vs. Drilon, G.R. No. 108946, 28 January 1999; Ching
vs. Salinas, G.R. No. 161295, 29 June 2005)

The subject of copyright refers to finished works. The copyright does


not extend to an idea, procedure, process, system, method of
operation, concept, principle, or discovery, regardless of the form in
which it is described, explained, illustrated, or embodied in such work.
(Joaquin, Jr. vs. Drilon, G.R. No. 108946, 28 January 1999)
Trademark, copyright and patents are different intellectual property
rights that cannot be interchanged with one another. The scope of
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. (Ching vs. Salinas, G.R. No. 161295,
29 June 2005).

The copyright protection extended to the creator should ensure his


attainment of some form of personal satisfaction and economic
reward from the work he produced. (Habana vs. Robles, G.R. No.
131522, 19 July 1999)

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.
(Kian Chuan v. Hon. Court of Appeals, G.R. No. 130360, 15
August 2001; Sambar v. Levi Strauss & Co., G.R. No. 132604, 06
March 2002)
Requirement of Originality

“X X X the Constitution mandates originality as a pre-


requisite for copyright protection. The constitutional
requirement necessitates independent creation plus a
modicum of creativity. X X X Rural ’ s selection of
listings – subscribers ’ names, towns and telephone
numbers – could not be more obvious and lacks the
modicum of creativity necessary to transform mere
selection into copyrightable expression. X X X Moreover,
there is nothing remotely creative about arranging names
alphabetically in a white pages directory. It is an age-old
practice, firmly rooted in tradition and is so commonplace
that it has come to be expected as a matter of course.””
Feist Publications vs. Rural Telephone (499 U.S. 340, 111 S. Ct. 1282, 1991)
BASIC PRINCIPLES

PROTECTED FROM THE MOMENT OF CREATION (§172.2) -


Works are protected by the sole fact of their creation, irrespective
of their mode or form of expression, as well as of their content,
quality and purpose.

DEPOSIT AND NOTICE IN NATIONAL LIBRARY OF THE


PHILIPPINES - After the first public dissemination of performance
by authority of the copyright owner of an original work, there shall,
for the purpose of completing the records of the National Library
and the Supreme Court Library, within three (3) weeks, be
registered and deposited with it, by personal delivery or by
registered mail two (2) complete copies or reproductions of the
work in suchform as the directors of said libraries may prescribe.

153
BASIC PRINCIPLES

UNPROTECTED SUBJECT MATTER (§175) - No


protection shall extend to:

1. 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;

2. news of the day and other miscellaneous facts having


the character of mere items of press information; or

3. any official text of a legislative, administrative or legal


nature, as well as any official translation thereof.

154
BASIC PRINCIPLES

UNPROTECTED SUBJECT MATTER (§176)

4. WORKS OF THE GOVERNMENT. - No copyright shall


subsist in any work of the Government of the Philippines.

• However, prior approval of the government agency or office


wherein the work is created shall be necessary for
exploitation of such work for profit. Such agency or office
may, among other things, impose as a condition the
payment of royalties.
• No prior approval or conditions shall be required for the use
of any purpose of statutes, rules and regulations, and
speeches, lectures, sermons, addresses, and dissertations,
pronounced, read or rendered in courts of justice, before
administrative agencies, in deliberative assemblies and in
meetings of public character.
155
UNPROTECTED SUBJECT MATTER (§176)

4. WORKS OF THE GOVERNMENT. - No copyright shall subsist in


any work of the Government of the Philippines.
• 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.

N.B. The Government is not precluded from receiving and holding


copyrights transferred to it by assignment, bequest or otherwise.

The publication or republication by the Government in a public


document of any work in which copyright is subsisting should not
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.

156
BASIC PRINCIPLES

COPYRIGHT AS DISTINCT FROM MATERIAL OBJECT

• General Rule – The copyright is distinct from the property in the


material object subject to it. Consequently, the transfer or assignment of
the copyright shall not itself constitute a transfer of the material object.
Nor shall a transfer or assignment of the sole copy or of one or several
copies of the work imply transfer or assignment of the copyright.

• EXCEPTION: WORK OF ARCHITECTURE - Copyright in a work of


architecture shall include the right to control the erection of any building
which reproduces the whole or a substantial part of the work either in its
original form or in any form recognizably derived from the original:
Provided, That the copyright in any such work shall not include the right
to control the reconstruction or rehabilitation in the same style as the
original of a building to which that copyright relates. (Sec. 186, IP Code)

157
ORIGINAL WORKS

SEC. 172. Literary and Artistic Works. –

172.1 Literary and artistic works, hereinafter referred to as


"works", are original intellectual creations in the literary
and artistic domain protected from the moment of their
creation and shall include in particular

(a) Books, pamphlets, articles and other writings;


(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared
for oral delivery, whether or not reduced in writing or other
material form;
(d) Letters;

(e) Dramatic or dramatico-musical compositions; choreographic works


or entertainment in dumb shows;

(f) Musical compositions, with or without words;

(g) Works of drawing, painting, architecture, sculpture, engraving,


lithography or other works of art; models or designs for works of art;

(h) Original ornamental designs or models for articles of manufacture,


whether or not registrable as an industrial design, and other works of
applied art;

(i) Illustrations, maps, plans, sketches, charts and three-dimensional


works relative to geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical
character;

(k) Photographic works including works produced by a


process analogous to photography; lantern slides;

(l) Audiovisual works and cinematographic works and


works produced by a process analogous to
cinematography or any process for making audio-visual
recordings;

(m) Pictorial illustrations and advertisements;

(n) Computer programs; and

(o) Other literary, scholarly, scientific and artistic works.


Only the expression of an idea is protected by copyright, not the idea
itself. (Pearl & Dean (Phil.), Incorporated v. Shoemart,
Incorporated, G.R. No. 148222, 15 August 2003)

While works of applied art, original intellectual, literary and artistic


works are copyrightable, useful articles and works of industrial design
are not. A useful article may be copyrightable only if and only to the
extent that such design incorporates pictorial, graphic, and sculptural
features that can be identified separately from and are capable of
existing independently of the utilitarian aspects of the article. (Ching
vs. Salinas, G.R. No. 161295, 29 June 2005).

Functional components of useful articles, no matter how artistically


designed, have generally been denied copyright protection unless
they are separable from the useful article. (Ching vs. Salinas, G.R.
No. 161295, 29 June 2005).
Ching vs. Salinas
G.R. No. 161295, 29 June 2005

• Leaf spring eye bushing / vehicle bearing cushion


• Not artistic, hence not covered by copyright protection
• Functional
• Solutions to technical problems
• A useful article may be copyrightable only if and only to the extent
that such design incorporates pictorial, graphic, or sculptural
features that can be identified separately from, and are capable of
existing independently of the utilitarian aspects of the article.
Pearl and Dean, Inc. vs. Shoemart
G.R. No. 148222, 15 August 2003

• The light box was not a literary or artistic piece;


• Copyright is purely a statutory right.
• Protection extended only to the technical drawings & not to the
light box itself
• Image: http://hclightbox.en.made-in-china.c om/product/mownMtZjEeGb/C hina-Shoppi ng-Mall-Advertising-Display-Light-Box-and-Store-Background-Light-Box .html
Sison Olaño, et al. vs. Lim Eng Co
G.R. No. 195835, March 14, 2016
Sometime in 2002, LEC was invited by the architects of the Manansala
Project (Project) to submit design/drawings and specifications for
interior and exterior hatch doors. LEC complied by submitting on July
16, 2002, shop plans/drawings.

LEC was thereafter subcontracted by SKI-FB, to manufacture and


install interior and exterior hatch doors for the 7th to 22nd floors of the
Project based on the final shop plans/drawings.

Sometime thereafter, LEC learned that Metrotech was also


subcontracted to install interior and exterior hatch doors for the
Project’s 23rd to 41st floors.
Sison Olaño, et al. vs. Lim Eng Co
G.R. No. 195835, March 14, 2016

Since the hatch doors cannot be considered as either illustrations, maps,


plans, sketches, charts and three-dimensional works relative to geography,
topography, architecture or science, to be properly classified as a
copyrightable class “I” work, what was copyrighted were their
sketches/drawings only, and not the actual hatch doors themselves. To
constitute infringement, the usurper must have copied or appropriated the
original work of an author or copyright proprietor, absent copying, there can
be no infringement of copyright.

A hatch door, by its nature is an object of utility. It is defined as a small door,


small gate or an opening that resembles a window equipped with an escape
for use in case of fire or emergency. It is thus by nature, functional and
utilitarian serving as egress access during emergency. It is not primarily an
artistic creation but rather an object of utility designed to have aesthetic
appeal. It is intrinsically a useful article, which, as a whole, is not eligible for
copyright.

A “useful article” defined as an article “having an intrinsic utilitarian function


that is not merely to portray the appearance of the article or to convey
information” is excluded from copyright eligibility.
DERIVATIVE WORKS (Sec. 173)

The following derivative works shall also be protected by


copyright as new works:

1. Dramatizations, translations, adaptations,


abridgments, arrangements, and other alterations of
literary or artistic works; and
2. 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.

166
SCOPE OF PROTECTION

SEC. 177. Copy or Economic Rights. - Subject to the provisions of


Chapter VIII, copyright or economic rights shall consist of the
exclusive right to carry out, authorize or prevent the following acts:

177.1 Reproduction of the work or substantial portion of the work;

177.2 Dramatization, translation, adaptation, abridgment,


arrangement or other transformation of the work;

177.3 The first public distribution of the original and each copy of
the work by sale or other forms of transfer of ownership;
177.4. 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;

177.5. Public display of the original or a copy of the work;

177.6. Public performance of the work; and

177.7. Other communication to the public of the work


EXHAUSTION OF RIGHTS

§ National Exhaustion: does not allow the IP owner to control the


commercial exploitation of works put on the domestic market by the IP
owner or with his consent.

§ Regional Exhaustion: the first sale of the protected work by the IP


owner or with his consent exhausts any IP rights over these works
within the whole region, and parallel imports within the region can no
longer be opposed based on the IP right.

§ International Exhaustion: the IP rights are exhausted once the work


has been sold by the IP owner or with his consent in any part of the
world.

Source: http://www.wipo.int/sme/en/ip_business/export/international_exhaustion.htm
Kirtsaeng v. John Wiley & Sons, Inc., Docket No. 11–697.Argued
October 29, 2012—Decided March 19, 2013

The “first sale” doctrine is a defense to copyright infringement

US Copyright Act

Section 109(a) sets forth the “ first sale ” doctrine as follows:


“Notwithstanding the provisions of section 106(3) [the section that
grants the owner exclusive distribution rights], the owner of a particular
copy or phonorecord lawfully made under this title . . . is entitled, without
the authority of the copyright owner, to sell or otherwise dispose of the
possession of that copy or phono record.”
2014 Commercial Law Bar Examination

KK is from Bangkok, Thailand. She studies medicine in


the Pontifical University of Santo Tomas (UST). She
learned that the same foreign books prescribed in UST
are 40-50% cheaper in Bangkok. So she ordered 50
copies of each book for herself and her classmates and
sold the books at 20% less than the price in the
Philippines. XX, the exclusive licensed publisher of the
books in the Philippines, sued KK for copyright
infringement. Decide.
"Communication to the public" or "communicate to the public" means
any communication to the public, including broadcasting, rebroadcasting,
retransmitting by cable, broadcasting and retransmitting by satellite, and
includes the making of a work available to the public by wire or wireless
means in such a way that members of the public may access these
works from a place and time individually chosen by them;

"Public performance," in the case of a work other than an audiovisual


work, is the recitation, playing, dancing, acting or otherwise performing
the work, either directly or by means of any device or process; in the
case of an audiovisual work, the showing of its images in sequence and
the making of the sounds accompanying it audible; and, in the case of a
sound recording, making the recorded sounds audible at a place or at
places where persons outside the normal circle of a family and that
family’s closest social acquaintances are or can be present, irrespective
of whether they are or can be present at the same place and at the same
time, or at different places and/or at different times, and where the
performance can be perceived without the need for communication within
the meaning of Subsection 171.3;

"Reproduction" is the making of one (1) or more copies, temporary or


permanent, in whole or in part, of a work or a sound recording in any
manner or form without prejudice to the provisions of Section 185 of this
Act
SCOPE OF PROTECTION
MORAL RIGHTS (Sec. 193)

The author of a work shall, independently of the economic rights 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;

2.To make any alterations of his work prior to, or to withhold it from
publication;

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; and

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.

173
Waiver of Moral Rights

• Section 195. Waiver of Moral Rights. - An author may waive


his rights mentioned in Section 193 by a written instrument,
but no such waiver shall be valid where its effects is to permit
another:

195.1. To use the name of the author, or the title of his work,
or otherwise to make use of his reputation with respect to any
version or adaptation of his work which, because of
alterations therein, would substantially tend to injure the
literary or artistic reputation of another author; or

195.2. To use the name of the author with respect to a work


he did not create.
SCOPE OF PROTECTION
MORAL RIGHTS (§194)

Breach of Contract - An author cannot be compelled to


perform his contract to create a work or for the
publication of his work already in existence. However, he
may be held liable for damages for breach of such
contract.

175
SCOPE OF PROTECTION
MORAL RIGHTS (§ 196 -197)

Contribution to Collective Work

When an author contributes to a collective work, his right to have his


contribution attributed to him is deemed waived unless he expressly
reserves it.

Editing, Arranging and Adaptation of Work


In the absence of a contrary stipulation, at the time an author licenses or
permits another to use his work, the necessary editing, arranging or
adaptation of such work, for publication, broadcast, use in a motion picture,
dramatization, or mechanical or electrical reproduction in accordance with
the reasonable and customary standards or requirements of the medium in
which the work is to be used, shall not be deemed to contravene the
author's moral rights. Nor shall complete destruction of a work
unconditionally transferred by the author be deemed to violate such rights.
176
SCOPE OF PROTECTION

SUBSEQUENT TRANSFERS (§200-201)

Sale or Lease of Work. 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. [“Droit De Suite”]

Works Not Covered - This shall not apply to prints, etchings,


engravings, works of applied art, or works of similar kind wherein the
author primarily derives gain from the proceeds of reproductions.

177
DROITE DE SUITE – or “art proceeds right” is the
artist’s resale right, which requires that a percentage
of the resale price of an artistic work is paid to the
author. The right is exercisable even after the
author’s death, provided the work is still in copyright.
(David Bainbridge, Intellectual Property, 3rd Ed., p. 220 1996, also cited in Copyright Law of the Philippines
by D. Funa)

178
Berne Convention
Article 14ter
“Droit de suite” in Works of Art and Manuscripts:
1.
Right to an interest in resales; 2. Applicable law; 3. Procedure

(1)The author, or after his death the persons or institutions authorized


by national legislation, shall, with respect to original works of art and
original manuscripts of writers and composers, enjoy the inalienable
right to an interest in any sale of the work subsequent to the first
transfer by the author of the work.

(2)The protection provided by the preceding paragraph may be


claimed in a country of the Union only if legislation in the country to
which the author belongs so permits, and to the extent permitted by
the country where this protection is claimed.

(3)The procedure for collection and the amounts shall be matters for
determination by national legislation.
OWNERSHIP & PRESUMPTION OF AUTHORSHIP
(Sec. 178)

1.In the case of original literary and artistic works,


copyright shall belong to the author of the work;

2. Works of joint authorship, the co-authors shall be the


original owners of the copyright and in the absence of
agreement, their rights shall be governed by the rules
on co-ownership. If, however, a work of joint authorship
consists of parts that can be used separately and the
author of each part can be identified, the author of each
part shall be the original owner of the copyright in the
part that he has created;

180
OWNERSHIP & PRESUMPTION OF AUTHORSHIP

3. Work created by an author during and in the course


of his employment, the copyright shall belong to:

a) The employee, if the creation of the object of


copyright is not a part of his regular duties even if the
employee uses the time, facilities and materials of the
employer.

a) The employer, if the work is the result of the


performance of his regularly-assigned duties, unless
there is an agreement, express or implied, to the
contrary.

181
OWNERSHIP & PRESUMPTION OF AUTHORSHIP

4. 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 the work, but the copyright thereto
shall remain with the creator, unless there is a
written stipulation to the contrary.

182
OWNERSHIP & PRESUMPTION OF AUTHORSHIP (Sec.
178.5)

5. Audiovisual work, the copyright shall belong to the


producer, the author of the scenario, the composer of
the music, the film director, and the author of the work
so adapted. However, subject to contrary or other
stipulations among the creators, the producer shall
exercise the copyright to an extent required for the
exhibition of the work in any manner, except for the right
to collect performing license fees for the performance of
musical compositions, with or without words, which are
incorporated into the work;

183
OWNERSHIP & PRESUMPTION OF AUTHORSHIP

6. In respect of letters, the copyright shall belong to the writer


subject to the provisions of Article 723 of the Civil Code.

Civil Code of the Philippines

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.

1987 Constitution, Article 3

Section 3. (1) The privacy of communication and


correspondence shall be inviolable except upon lawful order of
the court, or when public safety or order requires otherwise, as
prescribed by law.

184
OWNERSHIP & PRESUMPTION OF AUTHORSHIP
(Sec. 179)

Anonymous and Pseudonymous Works - the


publishers shall be deemed to represent the authors of
articles and other writings published without the names
of the authors or under pseudonyms, unless the
contrary appears, or the pseudonyms or adopted name
leaves no doubt as to the author's identity, or if the
author of the anonymous works discloses his identity.

185
OWNERSHIP & PRESUMPTION OF AUTHORSHIP
(Sec. 219)
Presumption of Authorship

1.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.

2.The person or body corporate whose name appears on


a 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.

186
NEIGHBOURING or RELATED RIGHTS

1. Performers Rights
2. Producers Of Sound Recordings
3. Broadcasting Organizations
SEC. 203. Scope of Performers' Rights.

Subject to the provisions of Section 212, performers shall enjoy the following
exclusive rights:

203.1. 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.

203.2. The right of authorizing the direct or indirect reproduction of their


performances fixed in sound recordings or audiovisual works or fixations in
any manner or form;

203.3. 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 recordings or audiovisual works or fixations through sale or
rental or other forms of transfer of ownership;
203.4. The right of authorizing the commercial rental to the public of
the original and copies of their performances fixed in sound
recordings or audiovisual works or fixations, even after distribution of
them by, or pursuant to the authorization by the performer; and

203.5. The right of authorizing the making available to the public of


their performances fixed in sound recordings or audiovisual works or
fixations, by wire or wireless means, in such a way that members of
the public may access them from a place and time individually chosen
by them.
(Sec. 42, P.D. No. 49a)(As amended by Republic Act No.10372 or an Act Amending Certain Provisions of Republic Act 8293 otherwise
known as the Intellectual Property Code of the Philippines)

SEC. 204. Moral Rights of Performers. - 204.1. Independently of a


performer's economic rights, the performer, shall, as regards his live
aural performances or performances fixed in sound recordings or in
audiovisual works or fixations, 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.
(As amended by Republic Act No.10372 or an Act Amending Certain Provisions of Republic Act 8293 otherwise known as the Intellectual
Property Code of the Philippines)
SEC. 205. Limitation on Right. - 205.1. Subject to the
provisions of Section 206, once the performer has authorized
the broadcasting or fixation of his performance, the provisions
of Sections 203 shall have no further application.205.2. The
provisions of Section 184 and Section 185 shall apply mutatis
mutandis to performers.

SEC. 206. Additional Remuneration for Subsequent


Communications or Broadcasts. - 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.
PRODUCERS OF SOUND RECORDINGS

SEC. 208. Scope of Right. - Subject to the provisions of Section 212,


producers of sound recordings shall enjoy the following exclusive
rights:
208.1. The right to authorize the direct or indirect reproduction of
their sound recordings, in any manner or form; the placing of these
reproductions in the market and the right of rental or lending;
208.2. 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; and
208.3. 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.
208.4. The right to authorize the making available to the public of
their sound recordings in such a way that members of the public may
access the sound recording from a place and at a time individually
chosen or selected by them, as well as other transmissions of a
sound recording with like effect. (As amended by Republic Act No.10372 or an Act Amending Certain
Provisions of Republic Act 8293 otherwise known as the Intellectual Property Code of the Philippines)
BROADCASTING ORGANIZATIONS

SEC. 211. Scope of Right. - Subject to the provisions of Section 212,


broadcasting organizations shall enjoy the exclusive right to carry
out, authorize or prevent any of the following acts:

211.1. The rebroadcasting of their broadcasts;

211.2. 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;
and

211.3. The use of such records for fresh transmissions or for fresh
recording.
ABS-CBN Broadcasting Corporation vs. Philippine
Multimedia System, Inc., G.R. Nos. 175769-70, 19 January 2009

Retransmission is not rebroadcasting

Under the Rome Convention, rebroadcasting is “the simultaneous


broadcasting by one broadcasting organization of the broadcast of
another broadcasting organization.” xxx

ABS-CBN creates and transmits its own signals; PMSI merely carries
such signals which the viewers receive in its unaltered form. PMSI
does not produce, select, or determine the programs to be shown in
Channels 2 and 23. Likewise, it does not pass itself off as the origin
or author of such programs. Insofar as Channels 2 and 23 are
concerned, PMSI merely retransmits the same in accordance with
Memorandum Circular 04-08-88. With regard to its premium
channels, it buys the channels from content providers and transmits
on an as-is basis to its viewers. Clearly, PMSI does not perform the
functions of a broadcasting organization; thus, it cannot be said that it
is engaged in rebroadcasting Channels 2 and 23.
TERMS OF PROTECTION (§213-214)

Copyrighted Works Terms of Protection


Original and derivative During the life of the author and for
works, as well as fifty (50) years after his death
posthumous works.

Works of joint authorship Economic rights shall be protected


during the life of the last surviving
author and for fifty (50) years after
his death

194
TERMS OF PROTECTION (§213-214)
Copyrighted Works Terms of Protection
Published Anonymous or • fifty (50) years from the date on which the
pseudonymous works work was first lawfully published
• If the author's identity is revealed or is no
longer in doubt before the 50-year period,
the provisions on original and derivative
works , as well as works of joint
authorship, shall apply.

Unpublished Anonymous or fifty (50) years counted from the making of


pseudonymous works the work

195
TERMS OF PROTECTION (§213-214)
Copyrighted Works Terms of Protection
works of applied art twenty-five (25) years from the date of making.

photographic works fifty (50) years from publication of the work and,
if unpublished, fifty (50) years from the making

audio-visual works including those fifty (50) years from date of publication and, if
produced by process analogous to unpublished, from the date of making
photography or any process for
making audio-visual recordings

196
TERM OF MORAL RIGHTS

Sec. 198. Term of Moral Rights. – 198.1. The right[s] of an author


under [this chapter] SECTION 193.1 shall last during the lifetime
of the author and [for fifty (50) years] IN PERPETUITY after his
death [and shall not be assignable or subject to license.] WHILE
THE RIGHTS UNDER SECTIONS 193.2, 193.3 AND 193.4
SHALL BE COTERMINOUS WITH THE ECONOMIC RIGHTS,
THE MORAL RIGHTS SHALL NOT BE ASSIGNABLE OR
SUBJECT TO LICENSE. The person or persons to be charged
with the posthumous enforcement of these rights shall be named
in [writing to] A WRITTEN INSTRUMENT WHICH SHALL be filed
with the National Library. In default of such person or persons,
such enforcement shall devolve upon either the author’s heirs,
and in default of the heirs, the Director of the National Library.

RA No. 10372, Sec. 17 (amend Sec. 198)


LIMITATIONS

SEC. 184. Limitations on Copyright. - 184.1. Notwithstanding the


provisions of Chapter V, the following acts shall not constitute
infringement of copyright:

(a) the recitation or performance of a work, once it has been lawfully made
accessible to the public, if done privately and free of charge or if
made strictly for a charitable or religious institution or society; (Sec.
10(1), P.D. No.49)

(b) The making of quotations from a published work if they are


compatible with fair use and only to the extent justified for the purpose,
including quotations from newspaper articles and periodicals in the form
of press summaries: Provided, That the source and the name of the
author, if appearing on the work, are mentioned; (Sec. 11, third par.,
P.D. No. 49)

198
LIMITATIONS

(c) The 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 of the same nature, which are
delivered in public if such use is for information purposes and has not
been expressly reserved: Provided, That the source is clearly
indicated; (Sec. 11, P.D. No. 49)

d) The 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. 12, P.D. No. 49)

(e) The inclusion of a work in a publication, broadcast, or other


communication to the public, sound recording or film, if such inclusion is
made by way of illustration for teaching purposes and is compatible
with fair use: Provided, That the source and of the name of the
author, if appearing in the work, are mentioned;
199
Rappler Inc. vs. Andres Baustista
G.R. No. 222702, April 5, 2016

The Supreme Court recognized the right of Rappler to live stream the
2016 Philippine Presidential Debate covered by broadcasting
companies subject to certain clarifications.

According to the Supreme Court: “[T]hus, petitioner may live stream the
debate in its entirety by complying with the ‘copyright conditions,’
including the condition that ‘the source is clearly indicated’ and that
there will be no alteration, which means that the streaming will include
the proprietary graphics used by the Lead Networks. If petitioner opts
for a clean feed without the proprietary graphics used by the Lead
Networks, in order for petitioner to layer its own proprietary graphics
and text on the same, then petitioner will have to negotiate separately
with the Lead Networks. Similarly, if petitioner wants to alter the debate
audio by deleting the advertisements, petitioner will also have to
negotiate with the Lead Networks.”
LIMITATIONS

(f) The recording made in schools, universities, or educational institutions


of a work included in a broadcast for the use of such schools,
universities or educational institutions: Provided, That such recording
must be deleted within a reasonable period after they were first
broadcast: Provided, further, That such recording may not be made
from audiovisual works which are part of the general cinema repertoire
of feature films except for brief excerpts of the work;

(g) The making of ephemeral recordings by a broadcasting organization


by means of its own facilities and for use in its own broadcast;

(h) The use made of a work by or under the direction or control of the
Government, by the National Library or by educational, scientific or
professional institutions where such use is in the public interest and is
compatible with fair use;

201
ABS-CBN Broadcasting Corporation vs. Philippine
Multimedia System, Inc., G.R. Nos. 175769-70, 19 January 2009

Sec. 184. Limitations on Copyright. - 184.1. Notwithstanding the provisions of


Chapter V, the following acts shall not constitute infringement of copyright: x x x x
(h) The use made of a work by or under the direction or control of the
Government, by the National Library or by educational, scientific or professional
institutions where such use is in the public interest and is compatible with fair use;
The carriage of ABS-CBN ’ s signals by virtue of the must-carry rule in
Memorandum Circular No. 04-08-88 is under the direction and control of the
government though the NTC which is vested with exclusive jurisdiction to
supervise, regulate and control telecommunications and broadcast
services/facilities in the Philippines. The imposition of the must-carry rule is within
the NTC’s power to promulgate rules and regulations, as public safety and
interest may require, to encourage a larger and more effective use of
communications, radio and television broadcasting facilities, and to maintain
effective competition among private entities in these activities whenever the
Commission finds it reasonably feasible
Must Carry Rule

Obligates operators to carry the signals of local channels within


their respective systems. This is to give the people wider
access to more sources of news, information, education, sports
event and entertainment programs other than those provided
for by mass media and afforded television programs to attain a
well informed well-versed and culturally refined citizenry and
enhance their socio-economic growth (ABS-CBN Broadcasting
Corporation v. Philippine Multimedia System, G.R. No. 175769-
70, Jan. 19, 2009).
LIMITATIONS

(i) The public performance or the communication to the public of a work, in


a place where no admission fee is charged in respect of such public
performance or communication, by a club or institution for charitable or
educational purpose only, whose aim is not profit making, subject to
such other limitations as may be provided in the Regulations; (n)

(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: Provided, That either the work has been
published, or, that original or the copy displayed has been sold, given
away or otherwise transferred to another person by the author or his
successor in title;

204
LIMITATIONS

k) Any use made of a work for the purpose of any judicial proceedings or
for the giving of professional advice by a legal practitioner. And

(l) The reproduction or distribution of published articles or materials in a


specialized format exclusively for the use of the blind, visually-
and reading-impaired persons: Provided, That such copies and
distribution shall be made on a nonprofit basis and shall indicate the
copyright owner and the date of the original publication.

(As amended by Republic Act No.10372 or an Act Amending Certain Provisions of


Republic Act 8293 otherwise known as the Intellectual Property Code of the
Philippines)

205
PLAGIARISM

Plagiarism means the theft of another person ’ s


language, thoughts, or ideas. To plagiarize, is to take
(ideas, writings, etc.) from (another) and pass them
off as one’s own. The passing off of the work of
another as one ’ s own is thus an indispensable
element of plagiarism. (In the matter of the charges of plagiarism
against Associate Justice Mariano C. Del Castillo, A.M. No. 10-7-17-SC,
12 October 2010)

Plagiarism presupposes intent and a deliberate,


conscious effort to steal another’s work and pass it off as
one’s own. (In the matter of the charges of plagiarism against As-
sociate Justice Mariano C. Del Castillo, A.M. No. 10-7-17-SC, 12 October
2010)
EXHAUSTION OF RIGHTS

§ Concept: One of the limits of intellectual property rights


whereby once a protected work has been marketed by the
rights holder or with his consent, the IP rights of commercial
exploitation over the work can no longer be exercised by the
right holder, as they are already exhausted.

§ Also called the “ first sale doctrine ” : the rights of


commercial exploitation for a given work ends with its first
sale.

Source: http://www.wipo.int/sme/en/ip_business/export/international_exhaustion.htm
FAIR USE DOCTRINE

SEC. 185. Fair Use of a Copyrighted Work. - 185.1. The fair use of
a copyrighted work for criticism, comment, news reporting,
teaching including limited number of copies for classroom use,
scholarship, research, and similar purposes is not an
infringement of copyright. Decompilation, which is understood here
to be the reproduction of the code and translation of the forms of a
computer program to achieve the interoperability of an independently
created computer program with other programs may also constitute
fair use under the criteria established by this section, to the extent
that such decompilation is done for the purpose of obtaining the
information necessary to achieve such interoperability.
In determining whether the use made of a work in any
particular case is fair use, the factors to be considered
shall include:

(a) The purpose and character of the use, including


whether such use is of a commercial nature or is for
non-profit educational purposes;

(b) The nature of the copyrighted work;

(c) The amount and substantiality of the portion used


in relation to the copyrighted work as a whole; and

(d) The effect of the use upon the potential market for
or value of the copyrighted work.
Fair use has been defined as a privilege to use the
copyright material in a reasonable manner without
the consent of the copyright owner or as copying the
theme or ideas rather than their expression. No
question of fair or unfair use arises however, if no
copying is proved to begin with. This is in
consonance with the principle that there can be no
infringement if there was no copying. It is only where
some form of copying has been shown that it
becomes necessary to determine whether it has been
carried to an “unfair,” that is, illegal, extent. (Habana
vs. Robles, G.R. No. 131522, 19 July 1999)
ABS CBN Corp. vs. Gozon, et al.
G.R. No. 195956, March 11, 2015
q Infringement under the Intellectual Property Code is malum
prohibitum. The Intellectual Property Code is a special law.
Copyright is a statutory creation.

q The general rule is that acts punished under a special law are
malum prohibitum. "An act which is declared malum prohibitum,
malice or criminal intent is completely immaterial.”

q In its current form, the Intellectual Property Code is malum


prohibitum and prescribes a strict liability for copyright infringement.
Good faith, lack of knowledge of the copyright, or lack of intent to
infringe is not a defense against copyright infringement. Copyright,
however, is subject to the rules of fair use and will be judged on a
case-to-case basis.
COPYRIGHT INFRINGEMENT

“SEC. 216. Infringement. – A person infringes a right protected


under this Act when one:

(a) Directly commits an infringement;


(b) Benefits from the infringing activity of another person who
commits an infringement if the person benefiting has been given
notice of the infringing activity and has the right and ability to
control the activities of the other person;
(c) With knowledge of infringing activity, induces, causes or
materially contributes to the infringing conduct of another.
As amended by Sec. 22 of RA 10372

SEC. 217. Criminal Penalties. - 217.1. Any person infringing any right
secured by provisions of Part IV of this Act or aiding or abetting
such infringement shall be guilty of a crime punishable by:
Habana vs. Robles, G.R. No. 131522, 19 July 1999

In cases of infringement, copying alone is not what is prohibited. The copying


must produce an “ injurious effect ” . Here, the injury consists in that
respondent Robles lifted from petitioners’ book materials that were the result
of the latter’s research work and compilation and misrepresented them as
her own. She circulated the book DEP for commercial use and did not
acknowledge petitioners as her source.
Hence, there is a clear case of appropriation of copyrighted work for her
benefit that respondent Robles committed. xxx xxx Quotations from a
published work if they are compatible with fair use and only to the extent
justified by the purpose, including quotations from newspaper articles and
periodicals in the form of press summaries are allowed provided that the
source and the name of the author, if appearing on the work, are mentioned.
In the case at bar, the least that respondent Robles could have done was to
acknowledge petitioners Habana et. al. as the source of the portions of
DEP. The final product of an author’s toil is her book. To allow another to
copy the book without appropriate acknowledgment is injury enough.
“171.12 ‘ Technological measure ’ means any
technology, device or component that, in the normal
course of its operation, restricts acts in respect of a
work, performance or sound recording, which are not
authorized by the authors, performers or producers of
sound recordings concerned or permitted by law.”

RA No. 10372, Sec. 6 (amend Sec. 171)

Example: crytography, password, digital signature,


scrambling system for DVD and serial copy
management system
“171.13 ‘Rights management information’ means
information which identifies the work, sound recording or
performance; the author of the work, producer of the
sound recording or performer of the performance; the
owner of any right in the work, sound recording or
performance; or information about the terms and
conditions of the use of the work, sound recording or
performance; and any number or code that represent
such information, when any of these items is attached to
a copy of the work, sound recording or fixation of
performance or appears in conjunction with the
communication to the public of a work, sound recording or
performance.”

Sec. 6 (amend Sec. 171)

Example: Watermark, digital signature


216.1 Remedies for Infringement. - Any person infringing a right
protected under this law shall be liable:
x x x
(b) TO [P]pay to the copyright proprietor or his assigns or heirs such
actual damages, including legal costs and other expenses, as he
may have incurred due to the infringement as well as the profits the
infringer may have made due to such infringement, and in proving
profits the plaintiff shall be required to prove sales only and the
defendant shall be required to prove every element of cost which he
claims, or, in lieu of actual damages and profits, such damages
which to the court shall appear to be just and shall not be regarded
as penalty: PROVIDED, THAT THE AMOUNT OF DAMAGES TO
BE AWARDED SHALL BE DOUBLED AGAINST ANY PERSON
WHO:

Sec. 22 (amend Sec. 216)


(i) CIRCUMVENTS EFFECTIVE TECHNOLOGICAL
MEASURES; OR

(ii) HAVING REASONABLE GROUNDS TO KNOW THAT IT


WILL INDUCE, ENABLE, FACILITATE OR CONCEAL THE
INFRINGEMENT, REMOVE OR ALTER ANY ELECTRONIC
RIGHTS MANAGEMENT INFORMATION FROM A COPY
OF A WORK, SOUND RECORDING, OR FIXATION OF A
PERFORMANCE, OR DISTRIBUTE, IMPORT FOR
DISTRIBUTION, BROADCAST, OR COMMUNICATE TO
THE PUBLIC WORKS OR COPIES OF WORKS WITHOUT
AUTHORITY, KNOWING THAT ELECTRONIC RIGHTS
MANAGEMENT INFORMATION HAS BEEN REMOVED OR
ALTERED WITHOUT AUTHORITY.
x x x

Sec. 22 (amend Sec. 216)


AFFIDAVIT EVIDENCE

SEC. 218. Affidavit Evidence. - 218.1.In an action under this


Chapter, an affidavit made before a notary public by or on behalf of
the owner of the copyright in any work or other subject matter and
stating that:

(a) At the time specified therein, copyright subsisted in the work or


other subject matter;
(b) He or the person named therein is the owner of the copyright; and
(c) The copy of the work or other subject matter annexed thereto is a
true copy thereof. The affidavit shall be admitted in evidence in any
proceedings under this Chapter and shall be prima facie proof of the
matters therein stated until the contrary is proved, and the court
before which such affidavit is produced shall assume that the affidavit
was made by or on behalf of the owner of the copyright.
2007 BAR EXAMINATION
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 another’s 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.

2012 BAR EXAMINATION

The Fair Use Doctrine allows others to utilize copyrighted works


under certain conditions. The factors to consider whether use is fair or
not would be the purpose and character of the use, nature of the
copyrighted work, amount and substantiality of the portions used, and
what else? A) effect of the use upon the creator of the work; B) effect
of the use upon the potential market of the work. C) effect of the use
upon the public in general; D) effect of the use upon the class in
which the creator belongs.
2011 BAR EXAMINATION

T, an associate attorney in XYZ Law Office, wrote a newspaper


publisher a letter disputing a columnist’s claim about an incident in
the attorney ’s family. T used the law firm ’s letterhead and its
computer in preparing the letter. T also requested the firm ’ s
messenger to deliver the letter to the publisher. Who owns the
copyright to the letter?

A.T, since he is the original creator of the contents of the letter.


B. Both T and the publisher, one wrote the letter to the other who has
possession of it.
C. The law office since T was an employee and he wrote it on the
firm’s letterhead.
D. The publisher to whom the letter was sent.
2011 BAR EXAMINATION

X came up with a new way of presenting a telephone directory in a


mobile phone, which he dubbed as the “iTel” and which uses lesser
time for locating names and telephone numbers. May X have his
“iTel” copyrighted in his name?

A. No, because it is a mere system or method.


B. Yes, because it is an original creation.
C. Yes, because it entailed the application of X’s intellect.
D. No, because it did not entail any application of X’s intellect.
2012 BAR EXAMINATION

X's painting of Madonna and Child was used by her mother to print
some personalized gift wrapper. As part of her mother's efforts to
raise funds for Bantay Bata, the mother of X sold the wrapper to
friends. Y, an entrepeneur, liked the painting in the wrapper and made
many copies and sold the same through National Bookstore. Which
statement is most accurate?

a) Y can use the painting for his use because this is not a
copyrightable material.
b) X can sue Y for infringement because artistic works are protected
from moment of creation.
c) Works of art need to be copyrighted also to get protection under
the law.
d) Y can use the drawing even though not copyrighted because it is
already a public property having been published already.
2013 BAR EXAMINATION

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. (8%)
2015 Bar Question

XIV

A. Differentiate trademark, copyright, and patent from each other.


(6%)

B. What is the Doctrine of Equivalents? (2%)

C. In what ways would an infringement of trademark be different from


a case for unfair competition? (3%)
2017 Bar Question

Virtucio was a composer of llocano songs who has been


quite popular in the llocos Region. Pascuala is a professor
of music in a local university with special focus on
indigenous music. When she heard the musical works of
Virtucio, she purchased a CD of his works. She copied the
CD and sent the second copy to her Music instructions for
the class to listen to the CD and analyze the works of
Virtucio.

•Did Pascuala thereby infringe Virtucio's copyright? Explain


your answer. (4%)
PATENTS
GENERAL PRINCIPLES

The primary purpose of the patent system is not the reward of the individual
but the advancement of the arts and sciences. The function of a patent is to
add to the sum of useful knowledge and one of the purposes of the patent
system is to encourage dissemination of information concerning discoveries
and inventions. (Manzano v. Court of Appeals, G.R. No. 113388, 05
September 1997)

The patent law has a three fold purpose:

1.patent law seeks to foster and reward invention;

2. it promotes disclosures of inventions to stimulate further innovation and to


permit the public to practice the invention once the patent expires; and

3. the stringent requirements for patent protection seek to ensure that ideas
in the public domain remain there for the free use of the public. (Pearl & Dean
(Phil.), Incorporated v. Shoemart, Incorporated, G.R. No. 148222, 15 August 2003)
GENERAL PRINCIPLES

1. TERRITORIAL – patent should be registered in the jurisdiction to


be protected
2. EXCLUSIVE – patents grants the holder the right to exclude others
from making, using, selling, offering for sale or importing products or
process. This is a monopoly but no obligation to commercialize
invention.
3. DISCLOSURE – the need for publication and disclosure. It must be
sufficient so that it can be carried out by the person skilled in the art
4. LIMITED RIGHTS – rights granted are subject to limitations,
e.g.public policy, public health
5. CONDITIONAL – patent rights subject to compliance with criteria
and conditions both prior to and subsequent to grant
6. FIRST TO FILE RULE – priority in right is the first person/applicant
who filed an application subject to principle of bad faith
PATENTABLE INVENTIONS
(§21, IP Code)

Any technical solution of a problem in any field of human


activity which is:

1. NEW - Novel, no prior art, or disclosure


2. INVENTIVE STEP - Not obvious to the person skilled in the
art
3. INDUSTRIALLY APPLICABLE – Useful, beneficial, and
that it can be produced and used

229
PATENTABLE INVENTIONS
(§21, IP Code)

PRODUCT - e.g. machine, a device, an article of


manufacture, a composition of matter, a
microorganism

PROCESS - e.g. a method of use, a method of


manufacturing, a non-biological process, a
microbiological process

IMPROVEMENT – enhancement or modification of


any of the foregoing subject to patentability criteria

230
REQUIREMENTS FOR PROTECTION (§23 to 27, IP
Code)

1. NOVELTY – An invention shall not be considered new if it


forms part of a prior art.

Prior art is:


(a) 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; and

(b) The whole contents of an earlier published Philippine application or


application with earlier priority date of a different inventor.

N.B. Novelty is not something which can be proved or


established; only its absence can be proved. Prior
disclosure must not be confidential or restricted.

231
NON-PREJUDICIAL DISCLOSURE

Not Prejudicial to the filing of an Application:

1.Disclosure by the Inventor (Patent) or Maker (Utility


Model) or one with the right to the patent

(N.B. must be filed within one (1) year from the time of
disclosure)

2. Disclosure by the Designer (Industrial Design)

(N.B. must be filed within six (6) months from the time
of disclosure)
2. INVENTIVE STEP – 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.

• For drugs and medicines, there is no inventive step if the invention


results from the mere discovery of:
(a) a new form or property of a known substance if it does not enhance
the efficacy of the substance;
(b) any new property or new use for a known substance; or
(c) the mere use of a known process unless such process results in a
new product that employs at least one new reactant.
(§6, Cheaper Medicines Act)

3. INDUSTRIALLY APPLICABLE - If the invention can be


produced and used in any industry

233
NON PATENTABLE INVENTIONS (Sec. 22 IP Code)
1. Discoveries, scientific theories and mathematical
methods; (N.B. Drugs and medicines per RA No. 9502)

2. Schemes, rules and methods of performing mental


acts, playing games or doing business, and programs for
computers;

3. Methods for treatment of the human or animal body by


surgery or therapy and diagnostic methods practiced on the
human or animal body;

4. Plant varieties or animal breeds or essentially biological


process for the production of plants or animals. This provision
shall not apply to micro- organisms and non-biological and
microbiological processes. (N.B. see Plant Variety Act)

5. Aesthetic creations; and

6. Anything which is contrary to public order or morality.


NON PATENTABLE DRUGS AND MEDICINES

1. New form or new property of a known substance which


does not result in the enhancement of the known efficacy
of that substance.

2. New property or new use for a known substance◦


e.g. second medical use.

3. The mere use of a known process unless such known


process results in a new product that employs at least one
new reactant.
e.g. use of a process for manufacturing drug A in the
manufacture of drug B
RIGHT TO A PATENT

SEC. 28. Right to a Patent. -The right to a 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. 10, R.A. No.
165a)

SEC. 30. Inventions Created Pursuant to a Commission. -30.1. The


person who commissions the work shall own the patent, unless otherwise
provided in the contract.

30.2. In case the employee made the invention in the course of his
employment contract, the patent shall belong to:

(a) 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.
(b) 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.
FIRST TO FILE RULE

SEC. 29. 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.
PRIORITY DATE

RIGHT OF PRIORITY FOR INVENTIONS ALREADY APPLIED FOR IN


OTHER COUNTRIES (§31, IP Code)

(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

238
THREE (3) MAIN AREAS OF ACTVITY IN THE GRANT
OF PATENT

• examination as to form or formality examination;

• classification, search and first publication; and

• examination as to substance or substantive


examination
CLAIMS

The application for invention must contain claims which determine the
scope of the protection. The patent application must conclude with a
claim, particularly pointing out and distinctly claiming the part,
improvement, or combination which the applicant regards as his
invention. The claims must be clear and concise and fully supported
by the description. This third basic requirement is important since the
claims are the basis of interpretation of patent protection. It is from
the claims that third parties are able to know what they may do
and what they may not do. The claims may not be significantly
broader or different from that which has been described.

The claims are the center or the heart of any granted patent
because they define the protection which is the purpose of the
patent, that is to say, they define clearly the scope of the
exclusive right provided by the patent.

WIPO Handbook, Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No. 489 (E), 2nd Edition, page 22.
RIGHTS CONFERRED BY A PATENT (Sec. 71)

A patent shall confer on its owner the following exclusive rights:

(a) 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;

(a) 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.

71.2. Patent owners shall also have the right to assign, or transfer by
succession the patent, and to conclude licensing contracts for the
same.
RIGHTS CONFERRED AFTER PUBLICATION OF
APPLICATION, BUT BEFORE GRANT OF PATENT
(§46, IP Code)

All the rights of a patentee against any person who infringes his rights, as if
a patent had been granted for that invention:

— Actual knowledge of infringer that the invention that he was using


was the subject matter of a published application; or

— Received written notice that the invention that he was using was the
subject matter of a published application being identified in the said
notice by its serial number.

N.B. The action may not be filed until after the grant of a patent on
the published application and within four (4) years from the
commission of the acts complained of.

242
LEGAL REMEDIES

TESTS OF PATENT INFRINGEMENT (§75)

• LITERAL INFRINGEMENT - The extent of protection conferred by


the patent shall be determined by the claims, which are to be
interpreted in the light of the description and drawings.

• DOCTRINE OF EQUIVALENTS - Account shall be taken of elements


which are equivalent to the elements expressed in the claims, so that
a claim shall be considered to cover not only all the elements as
expressed therein, but also equivalents.

243
LITERAL INFRINGEMENT – In using literal
infringement, resort must be had, in the first instance,
to the words of the claim. If accused matter clearly
falls within the claim, infringement is made out and
that is the end of it. 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 exactly identity of all material
elements. (Godines v. The Honorable Court of Appeals, G.R. No. 97343,
13 September 1993)

244
DOCTRINE OF EQUIVALENTS - According to the
doctrine of equivalents, an infringement also occurs
when a device appropriates a prior invention by
incorporating its innovative concept and, despite
some modification and change, performs substantially
the same function in substantially the same way to
achieve substantially the same result. (Godines v. The
Honorable Court of Appeals, G.R. No. 97343, 13 September 1993)

The doctrine of equivalents thus requires satisfaction


of the function means and-result test, the patentee
having the burden to show that all three components
of such equivalency test are met. (Smithkline Beckman
Corporation vs. The Honorable Court of Appeals, G.R. No. 126627, 14 August 2003)

245
GROUNDS FOR CANCELLATION OF PATENT
(§61 and 82)

Any interested person may file a petition for cancellation of the


Patent or any claim included therein, on the following grounds:

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.

246
REMEDIES OF THE TRUE & ACTUAL INVENTOR
AGAINST PATENT APPLICATION BY PERSONS NOT HAVING THE
RIGHT TO A PATENT (§67, IP CODE)

If a court by final order or decision declares that the first filer of the
application (under the first to file system) is not the true inventor and
does not have the right to the patent, within three (3) months after the
court decision has become final, the person declared by the court as
having the right to the patent may:

a) Prosecute the application as his own application in place of the


applicant;

b) File a new patent application in respect of the same invention;

c)Request that the application be refused; or

d) Seek cancellation of the patent, if one has already been issued.

247
REMEDIES OF THE TRUE & 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. (§68,
IP CODE)

248
LIMITATIONS ON PATENT RIGHTS (§72 AS
AMENDED BY CHEAPER MEDICINES ACT) - The
owner of a patent has no right to prevent third parties
from making, using, offering for sale, selling or importing
a patented product in the following circumstances:

1.Using a patented product after it has been put on the


market in the Philippines by the owner of the product,
or with his express consent:

Except: Drugs or medicines. We apply international


exhaustion. Right to import the drugs and medicines
under this provision shall be available to any government
agency or any private third party.

249
PARALLEL IMPORTATION - Unauthorized importation of a patented
drug or medicine; and drugs or medicines obtained from a patented
process.

GENERAL RULE – under Section 71 (a) and (b) of the IP Code, the
patentee of drugs and medicines has the exclusive right to prevent any
unauthorized person from importing a patented product or one that is
obtained from a patented process.

EXCEPTION – under the Cheaper Medicines Act, the patent owner of


drugs and medicines can no longer prevent an unauthorized person from
using that product once it has been 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. Any government agency or any
private third party may also import such products.

250
LIMITATIONS ON PATENT RIGHTS (§72 AS AMENDED
BY CHEAPER MEDICINES ACT)

2. Where the act is done privately and on a non-


commercial scale or for a non-commercial purpose:
Provided, That it does not significantly prejudice the
economic interests of the owner of the patent;

3. Where the act consists of making or using exclusively


for experimental use of the invention for scientific
purposes or educational purposes and such other
activities directly related to such scientific or educational
experimental use;

251
LIMITATIONS ON PATENT RIGHTS (§72 AS
AMENDED BY CHEAPER MEDICINES ACT)

4. 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:

The data submitted by the original patent holder may be protected


from unfair commercial use provided in Article 39.3 of the TRIPS
Agreement.

(BOLAR Exception/Provision)

252
LIMITATIONS ON PATENT RIGHTS (§72 AS AMENDED
BY CHEAPER MEDICINES ACT)

5.Where the act consists of the preparation for individual


cases, in a pharmacy or by a medical professional, of a
medicine in accordance with a medical prescription or acts
concerning the medicine so prepared.

6.Where the invention is used in any ship, vessel, aircraft, or


land vehicle of any other country entering the territory of
the Philippines temporarily or accidentally: Provided, That
such invention is used exclusively for the needs of the ship,
vessel, aircraft, or land vehicle and not used for the
manufacturing of anything to be sold within the Philippines.

253
PRIOR USER IN GOOD FAITH (§73, IP CODE)

• 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.

• 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.

254
USE BY GOVERNMENT (§74)

SEC. 74. Use of Invention by Government. - 74.1. A Government


agency or third person authorized by the Government may exploit the
invention even without agreement of the patent owner where:

(a) The public interest, in particular, national security, nutrition, health or


the development of other sectors, as determined by the appropriate
agency of the government, so requires; or
(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; or
(c) In the case of drugs and medicines, there is a national emergency or
other circumstance of extreme urgency requiring the use of the
invention; or
(d) In the case of drugs and medicines, there is a public non- commercial
use of the patent by the patentee, without satisfactory reason; or
(e) In the case of drugs and medicines, the demand for the patented
article 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.
255
USE BY GOVERNMENT (§74)

74.2. Unless otherwise provided herein, the use by the Government, or


third person authorized by the Government shall be subject, where
applicable, to the following provisions:

(a) In situations of national emergency or other circumstances of


extreme urgency as provided under Section 74.1 (c), the right holder
shall be notified as soon as reasonably practicable;
(b) In the case of public non-commercial use of the patent by the
patentee, without satisfactory reason, as provided under Section 74.1
(d), the right holder shall be informed promptly: Provided, That, the
Government or third person authorized by the Government, without
making a patent search, knows or has demonstrable ground to know
that a valid patent is or will be used by or for the Government;
(c) If the demand for the patented article in the Philippines is not being
met to an adequate extent and on reasonable terms as provided under
Section 74.1 (e), the right holder shall be informed promptly;

256
USE BY GOVERNMENT (§74)

74.2. Unless otherwise provided herein, the use by the Government, or


third person authorized by the Government shall be subject, where
applicable, to the following provisions:

(d) The scope and duration of such use shall be limited to the purpose
for which it was authorized;
(e) Such use shall be non-exclusive;
(f) The right holder shall be paid adequate remuneration in the
circumstances of each case, taking into account the economic value of
the authorization; and
(g) The existence of a national emergency or other circumstances of
extreme urgency, referred to under Section 74.1 (c), shall be subject to
the determination of the President of the Philippines for the purpose of
determining the need for such use or other exploitation, which shall be
immediately executory.

257
USE BY GOVERNMENT (§74)

74.3. 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.

74.4. The Intellectual Property Office (IPO), in consultation with the


appropriate government agencies, shall issue the appropriate
implementing rules and regulations for the use or exploitation of
patented inventions as contemplated in this section within one
hundred twenty (120) days after the effectivity of this law.
(As amended by Republic Act No.9502 or the Universally Accessible Cheaper and Quality Medicines Act of 2008)

258
LEGAL REMEDIES
SEC. 76. Civil Action for Infringement. -76.1. 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 constitutes patent infringement. Provided,
That, this shall not apply to instances covered by Sections 72.1 and 72.4
(Limitations of Patent Rights); Section 74 (Use of Invention by Government);
Section 93.6 (Compulsory Licensing); and Section 93-A (Procedures on
Issuance of a Special Compulsory License under the TRIPS Agreement) of
this Code. (As amended by Republic Act No.9502 or the Universally Accessible Cheaper and Quality Medicines Act of 2008)
76.2. Any patentee, or anyone possessing any right, title or interest in and to
the patented invention, whose rights have been infringed, may bring a civil
action before a court of competent jurisdiction, to recover from the infringer
such damages sustained thereby, plus attorney’s fees and other expenses
of litigation, and to secure an injunction for the protection of his rights.

76.3. If the damages are inadequate or cannot be readily ascertained with


reasonable certainty, the court may award by way of damages a sum
equivalent to reasonable royalty.

259
LEGAL REMEDIES

76.4. The court may, according to the circumstances of the case,


award damages in a sum above the amount found as actual
damages sustained: Provided, That the award does not exceed
three (3) times the amount of such actual damages.

76.5. The court may, in its discretion, order that the infringing goods,
materials and implements predominantly used in the infringement
be disposed of outside the channels of commerce or destroyed,
without compensation; and

76.6. Anyone 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 the patented invention and not
suitable for substantial non-infringing use shall be liable as a
contributory infringer and shall be jointly and severally liable with
the infringer.
260
LEGAL REMEDIES

NOTICE REQUIREMENT FOR DAMAGES (§80)

Damages cannot be recovered for acts of infringement


committed before the infringer had known, or had reasonable
grounds to know of the patent. It is presumed that the
infringer had known of the patent if on the patented product,
or on the container or package in which the article is supplied
to the public, or on the advertising material relating to the
patented product or process, are placed the words
"Philippine Patent" with the number of the patent.

261
262
UNFAIR COMPETITION INVOLVING PATENTS ?

• In the case of Savage, et al. vs. Judge Aproniano B. Taypin* the


Supreme Court observed that there is no mention of any crime of
unfair competition involving design patents in the controlling
provisions of unfair competition under the Intellectual Property Code.
• According to the High Court, it is unclear whether the crime exists,
and if there is ambiguity, the statue must be strictly construe against
the State and liberally in favor of the accused. This is because
penal statutes cannot be enlarged or extended by intendment,
implication or any equitable consideration.

* GR No. 134217, May 11, 2000 citing People v. Subido, G.R. No. 21734, 5 September 1975, 66
SCRA 545 and People v. Garcia, 85 Phil. 651 (1950)
LEGAL REMEDIES

PRESCRIPTIVE PERIOD FOR CIVIL ACTION (§79)

No damages can be recovered for acts of infringement


committed more than four (4) years before the institution
of the action for infringement.

PRESCRIPTIVE PERIOD FOR CRIMINAL ACTION (§84)


The criminal action shall prescribe in three (3) years from
date of the commission of the crime.

264
Technology Transfer Agreements

Provides requirements to prevent practices that may


constitute an abuse of intellectual property rights having an
adverse effect on competition and trade:

(1) No prohibited clauses that are deemed prima facie to


have an adverse effect on competition (Section 87,
Intellectual Property Code)
(2) Should contain certain mandatory clauses (Section
88, Intellectual Property Code)
LICENSING OF PATENTS: VOLUNTARY LICENSING
PROHIBITED CLAUSES (§87) - The following provisions shall
be deemed prima facie to have an adverse effect on
competition and trade:
1. 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;
2. 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;
3. Those that contain restrictions regarding the volume
and structure of production;

266
LICENSING OF PATENTS: VOLUNTARY LICENSING

PROHIBITED CLAUSES (§87) - The following provisions shall be


deemed prima facie to have an adverse effect on competition
and trade:

4. Those that prohibit the use of competitive technologies in


a non-exclusive technology transfer agreement;
5. Those that establish a full or partial purchase option in
favor of the licensor;
6. 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;
7. Those that require payment of royalties to the owners of
patents for patents which are not used;

267
LICENSING OF PATENTS: VOLUNTARY LICENSING

PROHIBITED CLAUSES (§87) - The following provisions shall be


deemed prima facie to have an adverse effect on competition and
trade:

(8) 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;

(9) 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;

268
LICENSING OF PATENTS: VOLUNTARY LICENSING

PROHIBITED CLAUSES (§87) - The following provisions shall be deemed


prima facie to have an adverse effect on competition and trade:

10. Require payments for patents and other industrial property


rights after their expiration, termination [of the] arrangement;

11. Require that the technology recipient shall not contest the
validity of any of the patents of the technology supplier;

12. 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;

269
LICENSING OF PATENTS: VOLUNTARY LICENSING
PROHIBITED CLAUSES (§87) - The following provisions shall be
deemed prima facie to have an adverse effect on competition
and trade:

13. 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;

14. Exempt the licensor for liability for non-fulfillment of his


responsibilities under the technology transfer arrangement and/or
liability arising from third party suits brought about by the use of the
licensed product or the licensed technology; and

15. Other clauses with equivalent effects.

270
LICENSING OF PATENTS: VOLUNTARY LICENSING
MANDATORY PROVISIONS (§88) - 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;

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;

271
LICENSING OF PATENTS: VOLUNTARY LICENSING

MANDATORY PROVISIONS (§88) - The following provisions shall be included


in voluntary license contracts:

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
Commission on International Trade Law (UNCITRAL) or the Rules
of Conciliation and Arbitration of the International Chamber of
Commerce (ICC) shall apply and the venue of arbitration shall be
the Philippines or any neutral country; and

3. The Philippine taxes on all payments relating to the technology


transfer arrangement shall be borne by the licensor.

272
Prohibited Clauses (Sec. 87, RA No. 8293)

(1) tying arrangements;


(2) price restraints;
(3) restrictions on volume and production;
(4) Prohibition to use competitive technologies in a non-exclusive TTA;
(5) purchase option in favor of licensor;
(6) exclusive grantback conditions;
(7) royalty payments for unused patents;
(8) export restrictions;
(9) restriction on technology use upon expiry of agreement;
(10) royalty payments for expired intellectual property rights;
(11) non-challenges to patent validity;
(12) restrictions to adaptations of the technology;
(13) non-liability clause or exemption from liability arising from non-
fulfillment of obligations; and
(14) other clauses with similar effects.
Mandatory Clauses (Sec. 88, RA No. 8293)

1. Philippine laws shall govern the interpretation of


TTAs
2. Access to improvements in techniques and
processes for the duration of the TTA
3. Arbitration rules shall follow Philippine law or
UNCITRAL or ICC
4. Licensor pays all local taxes relating to the TTA
Legal Implications
(on failure to comply with Sections 87 and 88 of the IP Code)

General Rule: TTA shall be rendered unenforceable.

Exception: When TTA is registered with IPOPHL pursuant to the


provisions of Section 91 on exceptional or meritorious cases:

(1) high technology content


(2) increase in foreign exchange earnings
(3) employment generation
(4) regional dispersal of industries
(5) substitution with or use of local raw materials
(6) investment companies with pioneer status TTAs that contain any
of the prohibited clauses may be allowed and registered where any
of the exceptional or meritorious cases are present.
Compulsory Licensing
Compulsory licensing is also one of the mechanisms
that address anti-competitive behavior. Several types
of compulsory licenses may be issued under the
Intellectual Property Code:

i. government-use and government contractor-use


compulsory license (Section 74, IP Code)
ii. third party-use compulsory license (Section 93, IP Code)
iii. a special compulsory license (Section 93-A, IP Code)
iv. compulsory licensing based on interdependence of
patents (Section 97, IP Code)
LICENSING OF PATENTS: COMPULSORY LICENSING
GROUNDS FOR COMPULSORY LICENSING –

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:

1. National emergency or other circumstances of extreme


urgency;
2. 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;
• May be applied for at any time after grant of patent.
277
LICENSING OF PATENTS: COMPULSORY LICENSING

GROUNDS FOR COMPULSORY LICENSING

4. 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;

— May be applied for at any time after the grant of


the patent.

5. In case of public non-commercial use of the patent by


the patentee, without satisfactory reason;

— May be applied for at any time after the grant of


the patent.
278
LICENSING OF PATENTS: COMPULSORY LICENSING

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.

EXCEPTIONS– the requirement shall not apply in the following


cases:
a) Where the petition for compulsory license seeks to
remedy a practice determined after judicial or
administrative process to be anti-competitive;
b) In situations of national emergency or other
circumstances of extreme urgency;
c) In cases of public non-commercial use.

279
LICENSING OF PATENTS: COMPULSORY LICENSING

— In situations of national emergency or other circumstances of


extreme urgency, the right holder shall be notified as soon as
reasonably practicable.
— In the case of public non-commercial use, where the
government or contractor, without making a patent search,
knows or has demonstrable grounds to know that a valid patent
is or will be used by or for the government, the right holder shall
be informed promptly.

N.B. Compulsory Licensing of Patents Involving Semi-


Conductor Technology. - the license may only be granted in case
of public non-commercial use or to remedy a practice determined
after judicial or administrative process to be anti-competitive.

280
LICENSING OF PATENTS: COMPULSORY LICENSING

Compulsory License Based on Interdependence of Patents. - If the


invention protected by a patent ("second patent“) within the country
cannot be worked without infringing another patent ("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 the
following conditions:

1. The invention claimed in the second patent involves an important


technical advance of considerable economic significance in relation to
the first patent;

2. Owner of the first patent shall be entitled to a cross-license on


reasonable terms to use the invention claimed in the second patent;

281
LICENSING OF PATENTS: COMPULSORY LICENSING

Compulsory License Based on Interdependence of Patents. - If


the invention protected by a patent ("second patent“) within the
country cannot be worked without infringing another patent
("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 the following conditions:

3. The use authorized in respect of the first patent shall be non-


assignable except with the assignment of the second patent;
and

4. The terms and conditions applicable to compulsory licenses in


general.

282
ASSIGNMENT AND TRANSMISSION OF RIGHTS

TRANSMISSION OF RIGHTS (§103, IP Code)

— 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.

— 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.

283
ASSIGNMENT AND TRANSMISSION OF RIGHTS

ASSIGNMENT OF INVENTIONS (§104, IP CODE)

— An assignment may be of the entire right, title or interest in and to the


patent and the invention covered thereby, or of an undivided share of
the entire patent and invention, in which event the parties become joint
owners thereof. An assignment may be limited to a specified territory.

— Form of Assignment (§105 and 106, IP Code)


1. Must be in writing;
2. Notarized;
3. Recorded in the IPO, otherwise void as against any subsequent
purchaser or mortgagee for valuable consideration and without
notice, unless recorded in the Office within three (3) months from
date of instrument or prior to subsequent purchase or mortgage.

284
ASSIGNMENT AND TRANSMISSION OF RIGHTS

RIGHTS OF JOINT OWNERS (§107, IP CODE)

— If two (2) or more persons jointly own a patent and the invention
covered thereby, each of the joint owners shall be entitled to
personally make, use, sell, or import the invention for his own
profit

— Provided, however, That neither of the joint owners shall be


entitled to grant licenses or to assign his right, title or interest or
part thereof without the consent of the other owner or owners, or
without proportionally dividing the proceeds with such other owner
or owners.

285
UTILITY MODEL - An invention qualifies for registration as a
utility model if it is new and industrially applicable. (§109, IP Code)

Utility models differ from inventions for which patents for invention
are available mainly in two respects. First, the technological
progress required is smaller than the technological progress
(“inventive step”) required in the case of an invention for which a
patent for invention is available. Second, the maximum term of
protection provided in the law for a utility model is generally much
shorter than the maximum term of protection provided in the law
for an invention for which a patent for invention is available. (WIPO
Handbook, Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No.
489 (E), 2nd Edition, p. 40.)

The provisions regarding non-patentable subject-matter, industrial


applicability, novelty and sufficiency of disclosure under invention
patent will apply, mutatis mutandis, to utility models. (Revised
Implementing Rules & Regulations for RA 8293, pp. 36-38.)

286
— Industrial Designs - any composition of lines or colors
or any three-dimensional form, whether or not
associated with lines or colors, provided that such
composition or form gives a special appearance to and
can serve as pattern for an industrial product or
handicraft. It must be new or original. (§112, 113 IP Code)
— An industrial design is not considered new if it differs from
prior designs only in minor respects that can be mistaken as
such prior designs by an ordinary observer. (WIPO Handbook,
Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No. 489 (E), 2nd
Edition, pp. 98-106.)

— Industrial products include articles of manufacture that


belong to the useful or practical art, or any part including
thereof, which can be made and sold separately. WIPO Handbook,
Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No. 489 (E), 2nd Edition, pp.
98-106.

287
Industrial Designs
The following industrial designs are excluded from
registration:

— Industrial designs that are dictated essentially by


technical or functional considerations to obtain a
technical result;
— Industrial designs which are mere schemes of surface
ornamentations existing separately from the industrial
product or handicraft; and
— Industrial designs which are contrary to public order,
health, or morals.
(WIPO Handbook, Chapter 2, “Fields of Intellectual Property Protection”, WIPO
Publication No. 489 (E), 2nd Edition, pp. 98-106.)

288
Basic Differences between Patent, Utility Model and
Industrial Design

Categories Patent (Invention) Utility Model Industrial Design

Subject Matter of Protection Apparatus (Product) & Apparatus (Product) & Article of manufacture (Over-all
Method (Process) Method (Process) aesthetic and pleasing
appearance of the article of
manufacture.)

Novelty YES YES YES

Inventive Step YES NO NO

Industrial Applicability YES YES YES

More than one (1) Only one (1) generic


Claim generic claim is allowed claim is allowed. No Omnibus type of claim
and dependent claims limit on the number of
dependent claims.

Ornamental Features of
shape, configuration, form, NO NO YES
or a combination thereof

Term of Protection Twenty (20) years from Seven (7) years from Five (5) years from the date of
the date of filing with the date of filing filing with 2 five year term
payment of annuities without renewal renewals upon payment of fees
2010 BAR QUESTION:
Dr. Nobel discovered a new method of treating Alzheimer ’ s
involving a special method of diagnosing the disease, treating it
with a new medicine that has been discovered after long
experimentation and field testing, and novel mental isometric
exercises. He comes to you for advice on how he can have his
discoveries protected. Can he legally protect his new method of
diagnosis, the new medicine, and the new method of treatment?
If no, why? If yes, how?
2006 BAR QUESTION:
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?

290
2010 BAR EXAMINATION

For years, Y has been engaged in the parallel importation of famous


brands including shoes carrying the foreign brand MAGIC. Exclusive
distributor X demands that Y cease importation because of his
appointment as exclusive distributor of MAGIC shoes in the Philippines.

Y counters that the trademark MAGIC is not registered with the


Intellectual Property Office as a trademark, and therefore no one has the
right to prevent its parallel importation.

Suppose the shoes are covered by a Philippine patent issued to the


brand owner, what would your answer be? Explain.

291
2010 BAR QUESTION

A. What contractual stipulations are required in all technology


transfer agreements? (2%)
[Refer to Section 88 of IP Code on Mandatory Provisions.]

B. Enumerate three (3) stipulations that are prohibited in


technology transfer agreements. (3%)
[Refer to Section 87 of IP Code on Prohibited Provisions.]

292
2005 BAR EXAMINATION

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 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 Patents. Eighteen months later, Cezar filed his application for the
registration of his device with the Bureau of Patents.

(a) Is the gas-saving device patentable? Explain.


(b) Assuming that it is patentable, who is entitled to the patent? What, if any, is the
remedy of the losing party?
(c) Supposing Joab got wind of the inventions of his employees and also laid claim
to the patents, asserting that Cezar & Francis were using his materials and
company time in making the devices, will his claim prevail over those of his
employees? Explain
293
2017 Bar Question
Super Biology Corporation (Super Biology) invented and
patented a miracle medicine for the cure of AIDS. Being the
sole manufacturer, Super Biology sold the medicine at an
exorbitant price. Because of the sudden prevalence of
AIDS cases in Metro Manila and other urban areas, the
Department of Health (DOH) asked Super Biology for a
license to produce and sell the AIDS medicine to the public
at a substantially lower price. Super Biology, citing the huge
costs and expenses incurred for research and
development, refused.

Assuming you are asked your opinion as the legal


consultant of the DOH, discuss how you will resolve the
matter. (4%)
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