INTELLECTUAL PROPERTY RIGHTS IN THE PHILIPPINES

Brief Background

The Philippine government has made it a State policy to protect and promote intellectual
property rights. This policy was enshrined both in the 1973 Constitution which provides that
“the exclusive right to inventions, writings and artistic creations shall be secured to inventors,
authors, and artists for a limited period” and in the 1987 Constitution which explicitly mandates
that the State shall protect intellectual property.

The Philippines became a member of the World Intellectual Property Organization

[WIPO] in 1980. It was a signatory to a number of significant multilateral international
agreements and treaties for the protection and promotion of intellectual property rights.

The first laws protecting intellectual property rights were enacted in the Philippines in
1947, to wit:

Republic Act No. 165 otherwise known as “An Act Creating a Patent Office, Prescribing
its Powers and Duties, Regulating the Issuance of Patents and Appropriating Funds
Therefor”.

Republic Act No. 166 otherwise known as “An Act to Provide for the Registration and
Protection of Trade Marks, Trade Names and Service Marks, Defining Unfair
Competition and False Marking and Providing Remedies Against the Same, and for other
Purposes”.

Subsequent to the foregoing, additional laws were enacted and issuances promulgated to
further promote and protect intellectual property rights, to wit:

Republic Act No. 422 transferring the examination of copyright applications to the
Bureau of Public Libraries.

Republic Act No. 623 regulating the use of duly stamped or marked bottles, boxes, casks,
kegs, barrels, and other similar containers; providing, in the case of foreign applicants,
for reciprocity and recognition of their priority rights; establishing, in the case of
trademarks, principal and supplemental as well as interference proceedings; extending
protection of utility models and industrial designs under the patent system; and providing,
in the case of trademark registration, for reciprocity arrangement with other countries.

Republic Act No. 5434 providing for a uniform procedure for appeals from the decision
of quasi-judicial officers including the Director of Patents.

Administrative Order No. 94 [November 20, 1967] creating a committee to review the
Philippine patent system and recommend amendatory laws to further upgrade it.

Presidential Decree No. 721 creating the Legal Services Division and the Research and
Information Division in the Philippine Patent Office. Subsequently, major reorganization
of the various Divisions was made in the 1980's. The General Organic Chemistry
Division and the ChemicalTechnology Division were merged to form the Chemical
Division. The Mechanical-Electrical Divisionwas merged with the Mechanical, Design,
Utility Model Division and Electrical Division to form the Mechanical and Electrical
Examining Division.

Presidential Decree No. 1263 amending Republic Acts Nos. 165 and 166, granting
authority to the Philippine Patent Office to increase its fees and to spend a portion of its
income for priority projects; exempting indigent inventors who filed their application for
 patent through the Philippine Inventor's Commission from all fees charged by the
Philippine Patent Office; and shortening the period for thegrant of a compulsory license
from one hundred eighty [180] days to one hundred twenty [120] daysfrom the date the
petition is filed in cases where the compulsory license applied for is on a patented
product or process involving any project approved by the Board of Investments [BOI].

Executive Order No. 133 [February 27, 1987] merging the Philippine Patent Office with
the then Technology Transfer Board thereby creating the Bureau of Patents, Trademarks
and Technology Transfer [BPTTT].

Executive Order No. 60 was issued in 1993 creating the Inter-Agency Committee on
Intellectual Property Rights [IAC-IPR] under the Office of the President of the
Philippines.

Department Administrative Orders Nos. 5 and 6 introduced amendments to the Rules of

Practice in Patent and Trademark Cases and the Rules of Procedures of the Technology
Transfer Registry effective on March 15, 1993.

Republic Act No. 8293 otherwise known as the Intellectual Property Code of the
Philippines was enacted and signed into law in 1997. It took effect on January 1, 1998

OTHER SIGNIFICANT DEVELOPMENTS

On March 8, 1988, the first issue of the BPTTT Official Gazette was launched.
In 1992, the Philippine Association of Certified Patent Agents [PACPA] was incorporated
thereby recognizing and promoting the patent agent profession in the Philippines.

In the same year, the CD-ROM Version of the bibliographic data of registered Philippine
patents was introduced.

In 1993, the Kantor-Navarro Agreement was signed as a result of the negotiations

between the Philippines and the United States for the purpose of delisting the Philippines
from the Priority Watch List of Countries covered by the Super 301 List under the United
States Trade Act.
In October of the same year, the Philippine component of the EC-ASEAN Programme on
Patents and Trademarks was officially launched thereby strengthening the capability of
Industrial Property Offices in ASEAN to administer their respective patents and trademarks
systems and to further facilitate the exchange of patent information among ASEAN
members. Under this program, a Patent Documentation Center was established in Cebu in
1994.

In 1994, the patent and trademark search and examination procedures were modernized
through the assistance of the European Commission. Made available were 2 CD-ROM work
stations and a complete set of ESPACE CD-ROM containing the abstracts, first page and full
text of the applications filed from 1988 to 1994 with the European Patent Office.

In 1995, special courts were designated by the Philippine Supreme Court to hear cases
involving intellectual property rights.
IPR TREATIES

The Republic of the Philippines is a signatory to several international treaties and

conventions on intellectual property rights, to wit:

Convention Establishing the World Intellectual Property Organization [since 1980]

The WIPO Convention, the constituent instrument of the World Intellectual Property
Organization (WIPO), was signed at Stockholm on July 14, 1967, entered into force in 1970 and
was amended in 1979. WIPO is an intergovernmental organization which in 1974 became one of
the specialized agencies of the United Nations system.
The origins of WIPO go back to 1883 and 1886 when the Paris Convention for the Protection of
Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works
provided for the establishment of an "International Bureau". The two bureaus were united in
1893 and, in 1970, were replaced by the World Intellectual Property Organization, by virtue of
the WIPO Convention.

Paris Convention for the Protection of Industrial Property [since 1965]

The Paris Convention, adopted in 1883, applies to industrial property in the widest sense,
including patents, trademarks, industrial designs, utility models, service marks, trade names,
geographical indications and the repression of unfair competition. This international agreement
was the first major step taken to help creators ensure that their intellectual works were protected
in other countries.

Budapest Treaty on the International Recognition of the Deposit of Microorganisms for

Purposes of Patent Procedure [since 1981]

Adopted in 1977, the Budapest Treaty concerns a specific topic in the international patent
process: microorganisms. All states party to the Treaty are obliged to recognize microorganisms
deposited as a part of the patent procedure, irrespective of where the depository authority is
located. In practice this means that the requirement to submit microorganisms to each and every
national authority in which patent protection is sought no longer exists.

Berne Convention for the Protection of Literary and Artistic Works [since 1951]

The Berne Convention, adopted in 1886, deals with the protection of works and the rights
of their authors. It provides creators such as authors, musicians, poets, painters etc. with the
means to control how their works are used, by whom, and on what terms. It is based on three
basic principles and contains a series of provisions determining the minimum protection to be
granted, as well as special provisions available to developing countries that want to make use of
them.

International Convention for the Protection of Performers, Producers of Phonographs and

Broadcasting Organizations [since 1984]

Done at Rome on October 26, 1961. The Rome Convention secures protection in
performances for performers, in phonograms for producers of phonograms and in broadcasts for
broadcasting organizations.

(1) Performers (actors, singers, musicians, dancers and those who perform literary or artistic
works) are protected against certain acts to which they have not consented, such as the
broadcasting and communication to the public of a live performance; the fixation of the live
performance; the reproduction of the fixation if the original fixation was made without the
performer's consent or if the reproduction was made for purposes different from those for which
consent was given.
(2) Producers of phonograms have the right to authorize or prohibit the direct or indirect
reproduction of their phonograms. In the Rome Convention, “phonograms” means any
exclusively aural fixation of sounds of a performance or of other sounds. Where a phonogram
published for commercial purposes gives rise to secondary uses (such as broadcasting or
communication to the public in any form), a single equitable remuneration must be paid by the
user to the performers, to the producers of the phonograms, or to both. Contracting States are
free, however, not to apply this rule or to limit its application.

(3) Broadcasting organizations have the right to authorize or prohibit certain acts, namely the
rebroadcasting of their broadcasts; the fixation of their broadcasts; the reproduction of such
fixations; the communication to the public of their television broadcasts if such communication
is made in places accessible to the public against payment of an entrance fee.

The Rome Convention allows for limitations and exceptions to the above-mentioned
rights in national laws as regards private use, use of short excerpts in connection with reporting
current events, ephemeral fixation by a broadcasting organization by means of its own facilities
and for its own broadcasts, use solely for the purpose of teaching or scientific research and in any
other cases where national law provides exceptions to copyright in literary and artistic works.
Furthermore, once a performer has consented to the incorporation of a performance in a visual or
audiovisual fixation, the provisions on performers' rights have no further application.

As to duration, protection must last at least until the end of a 20-year period computed
from the end of the year in which (a) the fixation was made, for phonograms and for
performances incorporated therein; (b) the performance took place, for performances not
incorporated in phonograms; (c) the broadcast took place. However, national laws increasingly
provide for a 50-year term of protection, at least for phonograms and performances.

WIPO is responsible, jointly with the International Labour Organization (ILO) and the
United Nations Educational, Scientific and Cultural Organization (UNESCO), for the
administration of the Rome Convention. These three organizations constitute the Secretariat of
the Intergovernmental Committee set up under the Convention consisting of the representatives
of 12 Contracting States.

The Convention does not provide for the institution of a Union or budget. It establishes
an Intergovernmental Committee composed of Contracting States that considers questions
concerning the Convention .

This Convention is open to States party to the Berne Convention for the Protection of
Literary and Artistic Works (1886) or to the Universal Copyright Convention. Instruments of
ratification or accession must be deposited with the Secretary-General of the United Nations.
States may make reservations with regard to the application of certain provisions.

Agreement on Trade-Related Aspects of Intellectual Property Rights [TRIPS Agreement]

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an

international legal agreement between all the member nations of the World Trade Organization
(WTO). It sets down minimum standards for the regulation by national governments of many
forms of intellectual property (IP) as applied to nationals of other WTO member nations.TRIPS
was negotiated at the end of the Uruguay Round of the General Agreement on Tariffs and Trade
(GATT) in 1994 and is administered by the WTO.

The TRIPS agreement introduced intellectual property law into the international trading
system for the first time and remains the most comprehensive international agreement on
intellectual property to date. In 2001, developing countries, concerned that developed countries
were insisting on an overly narrow reading of TRIPS, initiated a round of talks that resulted in
the Doha Declaration. The Doha declaration is a WTO statement that clarifies the scope of
TRIPS, stating for example that TRIPS can and should be interpreted in light of the goal "to
promote access to medicines for all."

Specifically, TRIPS requires WTO members to provide copyright rights, covering content
producers including performers, producers of sound recordings and broadcasting organizations;
geographical indications, including appellations of origin; industrial designs; integrated circuit
layout-designs; patents; new plant varieties; trademarks; trade dress; and undisclosed or
confidential information. TRIPS also specifies enforcement procedures, remedies, and dispute
resolution procedures. Protection and enforcement of all intellectual property rights shall meet
the objectives to contribute to the promotion of technological innovation and to the transfer and
dissemination of technology, to the mutual advantage of producers and users of technological
knowledge and in a manner conducive to social and economic welfare, and to a balance of rights
and obligations.

INTELLECTUAL PROPERTIES are those property rights which result from the physical
manifestation of an original thought.
Declaration of State Policy
1. 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
2. It shall protect and secure the exclusive rights of scientists, inventors, artists, and other
gifted citizens to their intellectual property and creations.
3. The State shall promote the diffusion of knowledge and information for the promotion of
national development and progress and the common good.
4. The State shall 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 Philippine.(Sec. 2)
PURPOSE: to strengthen the intellectual and industrial property system in the Philippines as
mandated by the country’s accession to the Agreement establishing the World Trade
Organization. (Mirpuri vs. CA GR no 114508)
COVERAGE: Intellectual property rights consist of:
1. Copyrights 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.

INTERNATIONAL CONVENTION AND RECIPROTICY

Any person who is a national or who is domiciled or has a real and effective industrial
establishment in a country which:
1. is a party to any convention, treaty, or agreement relating to intellectual property rights or
the repression of unfair competition to which the Philippines is also a party, or
2. extends reciprocal rights to nationals of the Philippines by law, shall be entitled to
benefits to the extent necessary to give effect to any provision of such convention, treaty,
or reciprocal law, in addition to the rights to which any owner of an intellectual property
rights is otherwise entitled by this Act. (Sec. 3)
NOTE: REVERSE RECIPROCITY OF FOREIGN LAWS makes reciprocally enforceable on
nationals of a foreign state within Philippine jurisdiction all conditions, restrictions, limitations,
diminutions, requirements or penalties that may be imposed by such foreign state on a Filipino
national seeking intellectual property protection in that country.(Sec. 231)
-Reciprocal application is not automatic.

Definition of Terms

 TECHNOLOGY TRANSFER ARRANGEMENTS refers to contracts or agreements

involving the transfer of systematic knowledge for the manufacture of a product, the
application of a process, or rendering of a service including management contracts; and
the transfer, assignment or licensing of all forms of intellectual property rights, including
licensing of computer software except computer software developed for mass market.
(Sec. 4)
 TRADEMARKS – any visible sign capable of distinguishing the goods or services of an
enterprise and shall include a stamped or marked container of goods.
 TRADENAME – the name or designation identifying or distinguishing an enterprise.
 COPYRIGHT- confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their creation.
 PATENTABLE INVENTION – any technical solution of a problem in any field of
human activity which is new involves an inventive step & is industrially applicable.
 PATENT – an exclusive right acquired over an invention, to sell, use, and make the same
whether for commerce or industry.
 INDUSTRIAL DESIGN -any composition of lines or colors or any three-dimensional
form, whether or not associated with lines or colors, provided that such composition or
form gives a special appearance to and can serve as pattern for an industrial product or
handicraft.

FUNCTIONS OF THE INTELLECTUAL PROPERTY OFFICE (IPO) (SEC. 5)

1. Examine applications for grant of letters patent for inventions and register utility models
and industrial designs;
2. Examine applications for the registration of marks, geographic indications, integrated
circuits;
3. Register technology transfer arrangements and settle disputes involving technology
transfer payments;
4. Promote the use of patent information as a tool for technology development;
5. Publish regularly in its own publication the patents, marks, utility models and industrial
designs, issued and approved, and the technology transfer arrangements registered;
6. Administratively adjudicate contested proceedings affecting intellectual property rights;
and
7. Coordinate with other government agencies and the private sector to strengthen the
protection of intellectual property rights in the country;
It shall also have Custody of all records, books, drawings, specifications, documents, and
other papers and things relating to the intellectual property rights applications filed with the
Office.

IPO Gazette - All matters required to be published under this Act shall be published in the
Office's own publication to be known as the IPO Gazette.

ORGANIZATIONAL STRUCTURE OF THE IPO

1. Headed by a Director General assisted by two Deputies Director General
2. Divided into 7 Bureaus:
a. Bureau of Patents
b. Bureau of Trademarks
c. Bureau of Legal Affairs
d. Documentation, Information and Technology Transfer Bureau
e. Management Information System and EDP Bureau
 f. Administrative, Financial and personnel Services Bureau; and
g. Bureau of Copyright and Other Related Rights.
- each of which shall be headed by a director and assisted by an Assistant Director.
3. The Director General, Deputies Director General, Directors and Assistant Directors shall
be appointed by the President.

Director General(DG) and Deputies Director General(DDG):

 Qualifications:
a. Natural-born citizens of the Philippines
b. At least 35 years of age on the day of their appointment
c. Holders of college degree
d. With proven competence, integrity, probity and independence.
e. Members of the Philippine bar who have engaged in the practice of law for at least 10
years. (DG and at least one DDG)
 Term Of Office
-5 years and shall be eligible for reappointment only once. Provided, that the first Director
General shall have a term of 7 years.
-appointment to any vacancy shall be only for the unexpired term of the predecessor.
 Disqualification of Officers and Employees of the Office
All officers and employees of the Office shall not apply or act as an attorney or patent
agent of an application for a grant of patent, for the registration of a utility model, industrial
design or mark nor acquire, except by hereditary succession, any patent or utility model,
design registration, or mark or any right, title or interest therein during their employment and
for one (1) year thereafter.

JURISDICTION OVER DISPUTES UNDER IPC

A. Original Jurisdiction
1) Director General (IPO)
-has original jurisdiction to resolve disputes relating to the terms of a license involving
the author’s right to public performance or other communication of his work.

2) Bureau of Legal Affairs

-has jurisdiction over the ff:
i. Opposition to applications for registration of marks;
ii. Cancellation of trademarks;
iii. Cancellation of patents, utility models and industrial designs;
iv. Petition for compulsory licensing of patents;
v. Administrative Complaints for violations of laws involving IPR where the total
damages claimed is not less than P200,000.00

3) Documentation, Information and Technology Transfer Bureau

-has jurisdiction to settle disputes involving technology transfer payments

B. Appellate Jurisdiction
1) Director General
-over all decisions rendered by the ff:
 Dir. of Legal Affairs
 Dir. of Patents
 Dir. of Trademarks
 Dir. of the Documentation, Information and Technology Transfer

2) Court of Appeals
-over decisions of the Director General in the exercise of his appellate jurisdiction over
the decisions of the:
 Dir. of Legal Affairs
 Dir. of Patents
  Dir. of Trademarks

3) Secretary of Trade and Industry

-over decisions of the Director General on the exercise of his appellate jurisdiction of the
Director of Documentation, Information and Technology Transfer; AND
-over decisions of the Director General in the exercise of his original jurisdiction relating
to the terms of license involving the author’s right.

FUNCTIONS
A. Bureau of Patents
1. Search and examination of patent applications and the grant of patents;
2. Registration of utility models, industrial designs, and integrated circuits; and
3. Conduct studies and researches in the field of patents in order to assist the Director
General in formulating policies on the administration and examination of patents.
B. Bureau of Trademarks
1. Search and examination of the applications for the registration of marks, geographic
indications and other marks of ownership and the issuance of the certificates of
registration; and
2. Conduct studies and researches in the field of trademarks in order to assist the
Director General in formulating policies on the administration and examination of
trademarks.
C. The Documentation, Information and Technology Transfer Bureau
1. Support the search and examination activities of the Office through the following
activities:
a. Maintain and upkeep classification systems whether they be national or
international such as the International Patent Classification (IPC) system;

b. Provide advisory services for the determination of search patterns;

c. Maintain search files and search rooms and reference libraries; and

d. Adapt and package industrial property information.

2. Establish networks or intermediaries or regional representatives;

3. Educate the public and build awareness on intellectual property through the conduct
of seminars and lectures, and other similar activities;

4. Establish working relations with research and development institutions as well as

with local and international intellectual property professional groups and the like;

5. Perform state-of-the-art searches;

6. Promote the use of patent information as an effective tool to facilitate the

development of technology in the country;

7. Provide technical, advisory, and other services relating to the licensing and promotion
of technology, and carry out an efficient and effective program for technology
transfer; and

8. Register technology transfer arrangements, and settle disputes involving technology

transfer payments.
D. The Management Information Services and EDP Bureau
 1. Conduct automation planning, research and development, testing of systems,
contracts with firms, contracting, purchase and maintenance of equipment, design and
maintenance of systems, user consultation, and the like; and
2. Provide management information support and service to the Office.
E. The Administrative, Financial and Human Resource Development Service Bureau
1. Provide services relative to procurement and allocation of supplies and equipment,
transportation, messengerial work, cashiering, payment of salaries and other Office's
obligations, office maintenance, proper safety and security, and other utility services;
and comply with government regulatory requirements in the areas of performance
appraisal, compensation and benefits, employment records and reports;
2. Receive all applications filed with the Office and collect fees therefor, and

3. Publish patent applications and grants, trademark applications, and registration of

marks, industrial designs, utility models, geographic indication, and lay-out-designs
of integrated circuits registrations.
F. The Patent and Trademark Administration Services
1. Maintain registers of assignments, mergings, licenses, and bibliographic on patents
and trademarks;
2. Collect maintenance fees, issue certified copies of documents in its custody and
perform similar other activities; and

3. Hold in custody all the applications filed with the office, and all patent grants,
certificate of registrations issued by the office, and the like.
G. The Financial Service
1. formulate and manage a financial program to ensure availability and proper
utilization of funds;
2. provide for an effective monitoring system of the financial operations of the Office;
H. The Human Resource Development Service
1. shall design and implement human resource development plans and programs for the
personnel of the Office;
2. provide for present and future manpower needs of the organization;
3. maintain high morale and favorable employee attitudes towards the organization
through the continuing design and implementation of employee development
programs.

ADMINISTRATIVE PENALTIES IMPOSED FOR VIOLATIONS OF LAWS

INVOLVING IPR
-The Director for Legal Affairs may impose the ff:
a) Issuance of a cease and desist order (CDO);
b) Acceptance of voluntary assurance compliance (VAC) or voluntary assurance of
discontinuance (VAD);
c) Condemnation or seizure of products subject of the offense;
d) Forfeiture of properties used in the commission of the offense;
e) Imposition of administrative fines;
f) Cancellation of permit, license, authority or registration;
g) Withholding of permit, license, authority or registration;
h) Assessment of damages;
i) Censure;
j) Analogous penalties or sanctions (Sec. 10.2 [b])

FINAL PROVISIONS
Sec. 230. Equitable Principles to Govern Proceedings. In all inter partes proceedings in the
Office under this Act, the equitable principles of laches, estoppel, and acquiescence where
applicable, may be considered and applied.

Section 9 of R.A. 165 in relation to this provision states that “an invention shall not be
considered new or capable of being patented if it was known or used by others in the Philippines
before the invention thereof by the inventor named in an application for patent for the invention;
or if it was patented or described in any printed publication in the Philippines or any foreign
country more than one year before the application for a patent therefor; or if it had been in public
use or on sale in the Philippines for more than one year before the application for a patent
therefor; or if it is the subject matter of a validly issued patent in the Philippines granted on an
application filed before the filing of the application for patent therefor.”

Sec. 231. Reverse Reciprocity of Foreign Laws. Any condition, restriction, limitation,
diminution, requirement, penalty or any similar burden imposed by the law of a foreign country
on a Philippine national seeking protection of intellectual property rights in that country, shall
reciprocally be enforceable upon nationals of said country, within Philippine jurisdiction.

Intellectual property rights have extraterritorial protection in large measure due to international
covenants entered into for their protection. They remain territorial, however, in the sense that
whatever extraterritorial protection they enjoy is dependent not on the laws of the state that
conferred their intellectual property rights but the agreements entered into between states.

The following foreigners are benefitted:

1. Those who are nationals, domiciliaries or business residents of a country that is a party to
the same treaty as the Philippines protecting intellectual property rights, including the
repression of unfair competition;
2. Those who are nationals, domiciliaries or business residents of a country that extends
reciprocal rights to nationals of the Philippines by law.

These foreigners enjoy the rights necessary to give effect to the provisions of such treaty or
reciprocal law. Further, if they comply with the requirements of the Intellectual Property
Code, they are also entitled to the very same benefits right-holders under the code enjoy.

This means that foreign nationals can sue for the enforcement of the protection accorded
them by such international covenants such as the Paris Convention, WIPO Copyright Treaty
and TRIPS. This means that causes of action may be based singularly on the support of these
international covenants although these foreigners may not be entitled to the protection under
the Intellectual Property Code and related statutes.

When a plaintiff rests his cause of action on an international covenant or treaty the court is
obligated to know the provisions of such covenant or treaty. Treaties when concurred in by
Senate in accordance with constitutional requirements, become part of the Philippine legal
system. As such courts are charged with knowledge of such covenants and treaties

Conventions on Intellectual Property and Protection Accorded to Works of Foreign

Nationals

I. Berne Convention for the Protection of Literary and Artistic Works (1971)
Category: Literary and Artistic Works (Copyright)
Protection Accorded:
A. Protection of the terms of the convention extended to authors who are not nationals of
the countries of the Union (of State-Parties) but whose works are published in at least
one country of the Union
 B. Protection is likewise extended to authors habitually residing in one of the countries
of the Union (Article 3, a and b)
C. To authors of cinematographic works, the maker of which has his headquarters or
habitual residence in one of the countries of the Union (Article 4, a)

D. To authors of works of architecture erected in a country or the Union, or other artistic

works incorporated in a building or structure located in a country of the Union
(Article 4, b)

E. Rights enjoyed by a foreigner in any member state of the Union:

1. The rights enjoyed by the national of such member-state under its laws;
2. The rights guaranteed by the Convention;
3. Protection in the country of origin of work;
4. Apart from the provisions of the Convention, redress in a member-state shall be
subject exclusively to laws of that state. (Article 5, 1and 2)

II. Rome Convention (1961)

Category: Performers, Sound Recordings, Broadcast Organizations
Protection Accorded:
A. The national treatment extended to foreigner performers:
1. for performances in another Contracting State;
2. if the performance as recorded is subject to the protection of the Rome
Convention;
3. the unfixed performance is carried by broadcast protected under the Rome
Conventions (Article 4, a, b and c)

B. Protection extended to foreigners producing sound recordings:

1. producers who are nationals of another Contracting State;
2. first fixation of the sound was another Contracting State;
3. the recording was first published in one Contracting State;
4. if first published in a non-contracting State but within 30 days published also in a
Contracting State (Article 5, 1, a, b and c, Article 5,2)

C. National treatment to foreign broadcasting organizations if

1. headquarters is in another Contracting State;
2. transmitter in another Contracting State (Article 6,1, a and b)

III. Paris Convention for the Protection of Industrial Property (1967)

Category: Industrial Property: Patents, Utility Models. Industrial Designs, Trademarks,
Service marks and Trade names
Protection Accorded:
A. Nationals of the States of the Union enjoy the protection provided by the convention
in all States of the Union. (Article 2, 1)

B. No requirement of domicile or establishment shall be made of members of the Union

for protection of industrial property rights. (Article 2,2)

C. Priority date as regards filing of application for patent registration shall be enjoyed by
one who has filed in any member State, as of the date of such filing. (Article 4, A, 1
and 2)

IV. Patent Cooperation Treaty

Category: Patents
 Protection Accorded:
A. An application may be made for the protection of a patent in any of the Contracting
States. This is treated an international application. (Article 3, 1)

B. Such an application may be filed by a resident or a national of a Contracting State.

(Article 9,1)

Rights enjoyed by foreign persons under the IP Code and related statutes

Provision of
Category Right
Law
1. Determination of priority of application: Section 31
The date of application of a foreigner for a
Philippine patent who previously applied for a
patent in his country or another country which by
treaty, convention or law recognizes a similar
privilege for Filipinos shall be deemed the date of
the filing of his foreign application.

Conditions:
a. Express claim to priority
Patents b. Philippine filing within 12 months of foreign
filing
c. Certified copy of foreign application with
English translation filed within six months of
Philippine filing

Rule 306.1, IRR

Inventions
Prior act that bars Philippine patent: Section 24.1

a. Includes anything that has been made available

to the public anywhere in the world
Patents
Third-parties, including patentees from foreign
jurisdiction, may file their observations with the
IPO following the publication of the patent
application. Section 47
Foreigners meeting the requirements of Section 3 of the Section 77
IP Code have standing to sue for infringement, when
Patents
awarded a Philippine patent, whether or not licensed to
do business here
Non-registrability of a mark considered by IPO, courts, Section 123.1,e
Trademarks DTI to be well-known internationally and in the
Philippines, although not registered here.
Priority as to application: Section 131.1

Trademarks Date of the application of a foreign national is deemed

to be that of the date of foreign filing, provided filed in
a country that accords the same privilege to Filipinos
 Standing of foreign persons, natural or juridical, to Section 160
bring suit for opposition, cancellation, infringement,
Trademarks unfair competition or false designation of origin,
whether or not licensed to do business in the
Philippines
Since copyrights vests by virtue solely of creation, then
Copyright it vests also in works produced by foreigners, even if
produced abroad.
The filing of an application for the protection of a plant Section 7,
variety even in a foreign country renders the variety a
Plant Varieties R.A. 9168
matter of public knowledge, and therefore renders the
application ineligible for protection
Priority date: Section 21,

Plant Varieties Filing by foreign national is reckoned from the date of R.A. 9168
his filing in a country according the same privilege to
Fiipino nationals

Sec. 232. Appeals.

232.1 Appeals from decisions of regular courts shall be governed by the Rules of Court. Unless
restrained by a higher court, the judgment of the trial court shall be executory even pending
appeal under such terms and conditions as the court may prescribe.

232.2. Unless expressly provided in this Act or other statutes, appeals from decisions of
administrative officials shall be provided in the Regulations.

As provided by A.M. No. 10-3-10-SC or the Rules of Procedure for Intellectual Property Rights
Cases, appeals are taken in the manner laid down in the Rules of Court, particularly Rule 122
thereof.

Sec. 233. Organization of the Office; Exemption from the Salary Standardization Law and
Attrition Law.

233.1. The Office shall be organized within one (1) year after the approval of this Act. It shall
not be subject to the provisions of Republic Act. No. 7430.

233.2. The Office shall institute its own compensation structure: Provided, That the Office shall
make its own system conform as closely as possible with the principles provided for under
Republic Act No. 6758.

Sec. 234. Abolition of the Bureau of Patents, Trademarks, and Technology Transfer. - The
Bureau of Patents, Trademarks, and Technology Transfer under the Department of Trade and
Industry is hereby abolished. All unexpended funds and fees, fines, royalties and other charges
collected for the calendar year, properties, equipment and records of the Bureau of Patents,
Trademarks and Technology Transfer, and such personnel as may be necessary are hereby
transferred to the Office. Personnel not absorbed or transferred to the Office shall enjoy the
retirement benefits granted under existing law, otherwise, they shall be paid the equivalent of
one month basic salary for every year of service, or the equivalent nearest fractions thereof
favorable to them on the basis of the highest salary received.

Sec. 235. Applications Pending on Effective Date of Act. -

235.1. All applications for patents pending in the Bureau of Patents, Trademarks and Technology
Transfer shall be proceeded with and patents thereon granted in accordance with the Acts under
which said applications were filed, and said Acts are hereby continued to be enforced, to this
extent and for this purpose only, notwithstanding the foregoing general repeal thereof: Provided,
That applications for utility models or industrial designs pending at the effective date of this Act,
shall be proceeded with in accordance with the provisions of this Act, unless the applicants elect
to prosecute said applications in accordance with the Acts under which they were filed.

235.2. All applications for registration of marks or trade names pending in the Bureau of
Patents, Trademarks and Technology Transfer at the effective date of this Act may be amended, if
practicable to bring them under the provisions of this Act. The prosecution of such applications
so amended and the grant of registrations thereon shall be proceeded with in accordance with
the provisions of this Act. If such amendments are not made, the prosecution of said applications
shall be proceeded with and registrations thereon granted in accordance with the Acts under
which said applications were filed, and said Acts hereby continued in force to this extent for this
purpose only, notwithstanding the foregoing general repeal thereof.

Sec. 236. Preservation of Existing Rights. - Nothing herein shall adversely affect the rights on
the enforcement of rights in patents, utility models, industrial designs, marks and works,
acquired in good faith prior to the effective date of this Act.

Sec. 237. Notification on Berne Appendix. The Philippines shall by proper compliance with
the requirements set forth under the Appendix of the Berne Convention (Paris Act, 1971) avail
itself of the special provisions regarding developing countries, including provisions for licenses
grantable by competent authority under the Appendix.

Sec. 238. Appropriations. - The funds needed to carry out the provisions of this Act shall be
charged to the appropriations of the Bureau of Patents, Trademarks, and Technology Transfer
under the current General Appropriations Act and the fees, fines, royalties and other charges
collected by the Bureau for the calendar year pursuant to Sections 14.1 and 234 of this Act.
Thereafter such sums as may be necessary for its continued implementations shall be included in
the annual General Appropriations Act.

Sec. 239. Repeals. -

239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic Act No. 165,
as amended; Republic Act no. 166, as amended; and Articles 188 and 189 of the Revised Penal
Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are
hereby repealed.

239.2. Marks registered under Republic Act No. 166 shall remain in force but shall be deemed to
have been granted under this Act and shall be due for renewal within the period provided for
under this Act and, upon renewal, shall be reclassified in accordance with the International
Classification. Trade names and marks registered in the Supplemental Register under Republic
Act No. 166 shall remain in force but shall no longer be subject to renewal.

239.3. The provisions of this Act shall apply to works in which copyright protection obtained
prior to the effectivity of this Act is subsisting: Provided, That the application of this Act shall
not result in the diminution of such protection. (n)

Sec. 240. Separability. - If any provision of this Act or the application of such provision to any
circumstances is held invalid, the remainder of the Act shall not be affected thereby.

Sec. 241. Effectivity. - This Act shall take effect on 1 January 1998.
 INTELLECTUAL PROPERTY CASES

G.R. No. 154342

MIGHTY Corporation and LA CAMPANA Fabrica De Tabaco, Inc. vs. E & J. GALLO
Winery and The ANDRESONS GROUP, INC.

FACTS:

Respondents E. & J. Gallo Winery and The Andresons Group, Inc. filed a complaint
before the Makati Regional Trial Court for trademark and tradename infringement and unfair
competition, with a prayer for damages and preliminary injunction against petitioners Mighty
Corporation and La Campana Fabrica de Tabaco, Inc. Respondents claimed that petitioners
adopted the "GALLO" trademark on their cigarette product to ride on Gallo Winery's GALLO
and ERNEST & JULIO GALLO trademarks' established reputation and popularity, thus causing
confusion, deception and mistake on the part of the purchasing public who had always associated
GALLO and ERNEST & JULIO GALLO trademarks with Gallo Winery's wines.

After trial on the merits, the Makati RTC held petitioners liable for, and permanently
enjoined them from, committing trademark infringement and unfair competition with respect to
the GALLO trademark. On appeal, the CA affirmed the Makati RTC decision and subsequently
denied petitioner's motion for reconsideration. Hence, the present petition.

ISSUES & HELD:

1. Whether the Intellectual Property Code will apply;

No, the Trademark Law and the Paris Convention are the applicable laws not the Intellectual
Property Code. The Courts a quo erred in retroactively applying the IP code in this case.

The respondents sued petitioner on March 12, 1993 for trademark infringement and unfair
competition committed during the effectivity of the Paris Convention and the Trademark Law.

It is fundamental principle that the validity and obligatory force of a law proceed from the
fact that it has first been promulgated. A law that is not yet effective cannot be considered as
conclusively known by the populace. To make a law binding even before it takes effect may lead
to arbitrary exercise of the legislative power.

Nova constitution futuris formam imponere debet non praeteritis. A new state of the law
ought to affect the future, not the past. Any doubt must generally be resolved against the
retroactive operations of laws, whether these are original enactments, amendments or repeals.
There are only a few instances when laws may be given retroactive effect, none of which is
present in this case.

The IP Code, repealing the Trademark Law, was approved on June 6, 1997. Section 241
thereof expressly decreed that it was to take effect only January 1, 1998, without any provision
for retroactive application. Thus, Makati RTC and the CA should have limited the consideration
of the present case within the parameters of the Trademark Law and the Paris Convention, the
laws in force at the time of the filing of the complaint.

2. Whether GALLO cigarettes and GALLO wines were identical, similar or related goods for
the reason alone that they were purportedly forms of vice;

No, the petitioners' use of the GALLO cigarette trademark is not likely to cause confusion or
mistake, or to deceive the "ordinarily intelligent buyer" of either wines or cigarettes or both as to
the identity of the goods, their source and origin, or identity of the business of petitioners and
respondents.

Wines and cigarettes are not identical or competing products. Neither do they belong to the
same class of goods. Respondents' GALLO wines belong to Class 33 under Rule 84[a] Chapter
III, Part II of the Rules of Practice in Trademark Cases, while petitioners' GALLO cigarettes fall
under Class 34.

The Court further ruled that wines and cigarettes are non-competing and are totally
unrelated products not likely to cause confusion vis-a-vis the goods or the business of the
petitioners and respondents. Wines are bottled and consumed by drinking, while cigarettes are
packed in cartons or packages and smoked.

There is a whale of a difference between their descriptive properties, physical attributes or

essential characteristics like form, composition, texture and quality. GALLO cigarettes are
inexpensive items while GALLO wines are not. GALLO wines are patronized by middle-to-
high-income earners, while GALLO cigarettes appeal only to simple folks like farmers,
fishermen, laborers and other low-income workers. The big price difference of these two
products is an important factor in proving that they are in fact unrelated and that they travel in
different channels of trade. There is a distinct price segmentation based on vastly different social
classes of purchasers.

3. Whether GALLO cigarettes and GALLO wines were identical, similar or related goods for
the reason alone that they were purportedly forms of vice;

No, the Court reversed and set aside the assailed decision of the Court of Appeals and
dismissed the complaint for tradename infringement and unfair competition against petitioners.

Unfair Competition

Under Section 29 of the Trademark Law, any person who employs deception or any other
means contrary to good faith by which he passes 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 commits any acts calculated to produce said result, is guilty of unfair competition. It
includes the following acts:

(a) Any person, who in selling his goods shall give 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;

(b) Any person who by any artifice, or device, or who employs any other means
calculated to induce the false belief that such person is offering the services of another who has
identified such services in the mind of the public;

(c) 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.

The universal test question is whether the public is likely to be deceived. Nothing less
than conduct tending to pass off one man’s goods or business as that of another constitutes unfair
competition. Actual or probable deception and confusion on the part of customers by reason of
defendant’s practices must always appear.
 On this score, we find that petitioners never attempted to pass off their cigarettes as those
of respondents. There is no evidence of bad faith or fraud imputable to petitioners in using their
GALLO cigarette mark.

All told, after applying all the tests provided by the governing laws as well as those
recognized by jurisprudence, the court concludes that petitioners are not liable for trademark
infringement, unfair competition or damages.

Trademark Infringement

Under both Paris Convention and the Trademark Law, the protection of a registered
trademark is limited only to goods identical or similar to those in respect of which such
trademark is registered and only when there is likelihood of confusion. Under both laws, the
time element in commencing infringement cases is material in ascertaining the registrant’s
express or implied consent to another’s use of its trademark or a colorable imitation thereof. This
is why acquiescence estoppel or laches may defeat the registrant’s otherwise valid cause of
action. Proof of all the elements of trademark infringement is a condition precedent to any
finding of liability.

Actual use in commerce in the Philippines is an essential prerequisite for the acquisition
of ownership over a trademark. – In Emerald Garment Manufacturing Corporation vs. CA, we
reiterated our rulings in Pagasa Industrial Corporation vs. Court of Appeals, Converse Rubber
Corporation vs. Universal Rubber Products, Inc., Sterling Products International Inc. vs.
Farbenfabriken Bayer Astienesellschaft, Kabushi Kaisha Isetan vs. IAC and Philip Morris vs.
Ca, giving utmost importance to the actual commercial use of a trademark in the Philippines
prior to its registration, notwithstanding the provisions of the Paris Convention: xxx In addition
to the foregoing, we are constrained to agree with petitioner’s contention that private respondent
failed to prove prior actual commercial use of its “LEE” trademark in the Philippines before
filing its application for registration with the BPTTT and hence, has not acquired ownership over
said mark. Actual use in commerce in the Philippines is an essential prerequisite for the
acquisition of ownership over a trademark pursuant to Sec. 2 and 2-A for the acquisition of
ownership over a trademark pursuant to Sec. 2 and 2-A of the Philippines Trademark Law (RA
166)

By strict application of Section 20 of the Trademark Law, Gallo Winery’s exclusive right to
use the GALLO trademark should be limited to wines, the only product indicated in its
registration certificates. – We also note that the GALLO trademark registration certificates in the
Philippines and in other countries expressly state that the cover wines only, without any evidence
or indication that registrant Gallo Winery expanded or intended to expand its business to
cigarettes. This by strict application of Section 20 of the Trademark Law, Gallo Winer’s
exclusive right to use the GALLO trademark should be limited to wines, the only product
indicated in its registration certificates. This strict statutory limitation on the exclusive right to
use trademarks was simply clarified in our ruling in Faberge vs. IAC.

---------------------------------------------------------------------------------------

There are two types of confusion in trademark infringement, confusion of goods and
confusion of business; Circumstances to Determine the Likelihood of Confusion. – There are two
types of confusion in trademark infringement. The first is “Confusion of goods” when an
otherwise prudent purchaser is induced to purchase one product in the belief that he is
purchasing another, in which case defendant’s goods are then bought as the plaintiff’s and its
poor quality reflects badly on the plaintiff’s reputation. The other is “confusion of business”
wherein the goods of the parties are different but the defendant’s product can reasonably
(through mistakenly) be assumed to originate from the plaintiff, thus deceiving the public into
believing that there is some connection between the plaintiff and defendant which, in fact, does
not exist. 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.

Two Tests in Determining Similarity and Likelihood of Confusion in trademark

Resemblance. – Jurisprudence has developed two tests in determining similarity and likelihood
of confusion in trademark resemblance: a) the Dominancy Test applied in Asia Brewery, Inc. vs.
Court of Appeals and other cases, and (b) the Holistic or Totality Test used in Del Monte
Corporation vs. Court of Appeals and its preceding cases.

G.R. No. 143193

Melbarose R. Sasot and Allandale R. Sasot vs. People of the Philippines, the Honorable
Court of Appeals, and Rebecca G. Salvador, Presiding Judge, RTC, Branch 1, Manila

FACTS:

The National Bureau of Investigation conducted an investigation pursuant to a complaint by

the NBA Properties, Inc. against petitioners for possible violation of Article 189 of the Revised
Penal Code on unfair Competition. Based on the report from the NBI, it was discovered that the
petitioners are engaged in the manufacturing, printing, selling and distributing the counterfeit
NBA garment products, which results to the prosecution for unfair competition.

Before arraignment, petitioners filed a Motion to Quash the Information on the grounds that
the facts charged do not constitute an offense and that the court had no jurisdiction over the
offense charged of the person of the accused. Petitioners contend that since the complainant is a
foreign corporation not doing business in the Philippines, and cannot be protected by Philippine
patent laws since it is not a registered patentee. Petitioner claims that they have been using the
business name “ALLANDALE SPORTSLINE, INC.” since 1972, and their designs are
original and do not appear to be similar to complainant’s. And they do not use complainant’s
logo or design.

The trial prosecutor stated that the State is entitled to prosecute the offense even without the
participation of the private offended party, as the crime charged is a public crime, as provided for
in the Revised Penal Code.

The trial court sustained the prosecution’s arguments and denied petitioners’ motion to quash
which led to the filing of a special civil action for Certiorari with the Court of Appeals.

The Court of Appeals ruled that the petition is not the proper remedy in assailing the denial
of the quashal motion, and that the grounds raised therein should be raised during the trial of the
case on the merits. Petitioners sought for the reconsideration of the Decision, but were denied.

ISSUE:

Whether a foreign corporation not engaged and licensed to do business on the Philippines
may maintain an action for unfair competition.

HELD:

Yes.

The crime of Unfair Competition punishable under Article 189 of the Revised Penal Code
is a public crime. It is essentially an act against the State and it is the latter which principally
stands as the injured party. The complainant's capacity to sue in such case becomes immaterial.

In La Chemise Lacoste, S.A. vs. Fernandez, a case akin to the present dispute, as it
involved the crime of Unfair Competition under Article 189 of the Revised Penal Code, and the
quashal of search warrants issued against manufacturers of garments bearing the same trademark
as that of the petitioner, the Court succinctly ruled that:

“More important is the nature of the case which led to this petition. What preceded this
petition for certiorari was a letter-complaint filed before the NBI charging Hemandas with a
criminal offense, i.e., violation of Article 189 of the Revised Penal Code. If prosecution follows
after the completion of the preliminary investigation being conducted by the Special Prosecutor
the information shall be in the name of the People of the Philippines and no longer the petitioner
which is only an aggrieved party since a criminal offense is essentially an act against the State. It
is the latter which is principally the injured party although there is a private right violated.
Petitioner's capacity to sue would become, therefore, of not much significance in the main case.
We cannot allow a possible violator of our criminal statutes to escape prosecution upon a far-
fetched contention that the aggrieved party or victim of a crime has no standing to sue.

In upholding the right of the petitioner to maintain the present suit before our courts for
unfair competition or infringement of trademarks of a foreign corporation, we are moreover
recognizing our duties and the rights of foreign states under the Paris Convention for the
Protection of Industrial Property to which the Philippines and France are parties. We are simply
interpreting and enforcing a solemn international commitment of the Philippines embodied in a
multilateral treaty to which we are a party and which we entered into because it is in our national
interest to do so.

Lastly, with regard to petitioners' arguments that the NBA Properties, Inc., is not entitled
to protection under Philippine patent laws since it is not a registered patentee, that they have not
committed acts amounting to unfair competition for the reason that their designs are original and
do not appear to be similar to complainant's, and they do not use complainant's logo or design,
the Court finds that these are matters of defense that are better ventilated and resolved during
trial on the merits of the case.

G.R. No. 148222

Pearl & Dean (Phil.), Incorporated vs. Shoemart. Incorporated, and North EDSA
Marketing, Incorporated

FACTS:

Pearl & Dean (Phil.), Inc. is a corporation engaged in the manufacture of advertising
display units called light boxes. In January 1981, Pearl & Dean was able to acquire copyrights
over the designs of the display units. In 1988, their trademark application for “Poster Ads” was
approved; they used the same trademark to advertise their light boxes.

In 1985, Pearl & Dean negotiated with Shoemart, Inc. (SMI) so that the former may be
contracted to install light boxes in the ad space of SM. Eventually, SMI rejected Pearl & Dean’s
proposal.
 Two years later, Pearl & Dean received report that light boxes, exactly the same as theirs,
were being used by SMI in their ad spaces. They demanded SM to stop using the light boxes and
at the same time asked for damages amounting to P20 Million. SMI refused to pay damages
though they removed the light boxes.

Shoemart Inc.’s arguments are the following:

1. It did not infringe on Pear & Dean’s trademark because Pearl & Dean’s trademark is only
applicable to envelopes and stationaries and not to the types of ad spaces owned by
Shoemart.

2. It claimed that “Poster Ads” is a generic term hence, it is not subject to trademark
registration.

3. It claimed that the actual light boxes are not copyrightable.

The Trial Court ruled in favor of Pearl & Dean but the Court of Appeals reversed it and argued:

“Since the light boxes cannot, by any stretch of the imagination, be considered as either
prints, pictorial illustrations, advertising copies, labels, tags or box warps, to be properly
classified as a copyrightable class ‘O’ work, we have to agree with SMI when it posted that what
was copyrighted were the technical drawings only, and not the light boxes themselves”

“The records show that on June 20, 1983, Pearl & Dean applied for the registration of the
trademark ‘Poster Ads’ with the Bureau of Patents, Trademarks, and Technology Transfer. Said
trademark was recorded in the Principal Register on September 12, 1988 under Registration No.
41165 covering the following products: stationeries such as letterheads, envelopes and calling
cards and newsletters.”

“We are constrained to adopt the view of defendant-appellants that the words ‘Poster
Ads” are a simple contraction of the generic term poster advertising. In the absence of any
convincing proof that “Poster Ads” has acquired secondary meaning in this jurisdiction, we find
that Pearl & Dean’s exclusive right to the use of “Poster Ads” is limited to what is written in its
certificate of registration, namely, stationaries.”

ISSUE:

Whether the Court of Appeals erred in their decision.

HELD:

No.

On the Issue of Copyright

Copyright in the strict sense of the term, is purely a statutory right. Being a mere statutory
grant, the rights are limited to what the statute confers. It may be obtained and enjoyed only with
respect to the subjects and by the persons, and on terms and conditions specified in the statute.
Accordingly, it can cover only works falling within the statutory enumeration or description.

During the trial, the president of P&D himself admitted that the light box was neither
literary nor an artistic work but an “engineering or marketing invention.” Obviously, there
appeared to be some confusion regarding what ought or ought not to be the proper subjects of
copyrights, patents, and trademarks. In the leading case of Kho vs. CA, the court ruled that these
three legal rights are completely distinct and separate from one another, and the protection
afforded by one cannot be used interchangeably to cover items or works that exclusive pertain to
the others.

The light boxes cannot, by any stretch of the imagination, be considered as either prints,
pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly classified as a
copyrightable; what was copyrighted were technical drawings only and not the light boxes
themselves. In other cases, it was held that there is no copyright infringement when one who,
without, being authorized, uses a copyrighted architectural plan to construct a structure. This is
because the copyright does not extend to the structure themselves.

Differences between Trademark, Copyrights, and Patents

A trademark is 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; a trade name refers to the name or designation of identifying or distinguishing an
enterprise.

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.

Patentable inventions refer to any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially applicable.

Issue of Patent Infringement

For some reason or another, petitioner never secured a patent for the light boxes. It
therefore acquired no patent rights which could have protected its invention, if in fact it really
was. And because it had no patent, petitioner could not legally prevent anyone from
manufacturing or commercially using the contraption.

In Creser Precision Systems, Inc. vs. Court of Appeals, the Court held that there can be
no infringement of a patent until a patent has been issued, since whatever right one has to the
invention covered by the patent arises alone from the grant of patent. x x x

An inventor has no common law right to a monopoly of his invention. He has the right to
make use of and vend his invention, but if he voluntarily discloses it, such as by offering it for
sale, the world is free to copy and use it with impunity. A patent, however, gives the inventor the
right to exclude all others. As a patentee, he has the exclusive right of making, selling or using
the invention.

To be able to effectively and legally preclude others from copying and profiting from
the invention, a patent is a primordial requirement. No patent, no protection. The ultimate goal of
a patent system is to bring new designs and technologies into the public domain through
disclosure. Ideas, once disclosed to the public without the protection of a valid patent, are subject
to appropriation without significant restraint.

The patent law has a three-fold purpose:

First, patent law seeks to foster and reward invention;

Second, it promotes disclosures of inventions to stimulate further innovation and to permit the
public to practice the invention once the patent expires;

Third, the stringent requirements for patent protection seek to ensure that ideas in the public
domain remain there for the free use of the public
Issue of Trademark Infringement

Under the circumstances, the Court of Appeals correctly cited Faberge Inc. vs.
Intermediate Appellate Court, where the court, invoking Section 20 of the old Trademark Law,
ruled that the certificate of registration issued by the Director of Patents can confer (upon
petitioner) the exclusive right to use its own symbol only to those goods specified in the
certificate, subject to any conditions and limitations specified in the certificate x x x. One who
has adopted and used a trademark on his goods does not prevent the adoption and use of the
same trademark by others for products which are of a different description. Faberge, Inc. was
correct and was in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.

On the trademark infringement, the words ‘Poster Ads’ has acquired a secondary meaning in this
jurisdiction, Pearl & Dean’s exclusive right to the use of ‘Poster Ads’ has acquired is limited to
what is written in its certificate of registration, namely, stationaries.

Issue of Unfair Competition

By the nature of things, there can be no unfair competition under the law on copyrights although
it is applicable to disputes over the use of trademarks. Even a name or phrase incapable of
appropriation as a trademark or tradename may, by long and exclusive use by a business (such
that the name or phrase becomes associated with the business or product in the mind of the
purchasing public), be entitled to protection against unfair competition.

In this case, there was no evidence that P & Ds use of Poster Ads was distinctive or well-known.
As noted by the Court of Appeals, petitioners expert witnesses himself had testified that Poster
Ads was too generic a name. So it was difficult to identify it with any company, honestly
speaking.

This crucial admission by its own expert witness that Poster Ads could not be associated with P
& D showed that, in the mind of the public, the goods and services carrying the trademark Poster
Ads could not be distinguished from the goods and services of other entities.

G.R. No. 115758

ELIDAD C. KHO vs. HON. COURT OF APPEALS, SUMMERVILLE GENERAL

MERCHANDISING and COMPANY, and ANG TIAM CHAY

FACTS:

Elidad Kho (Petitioner) filed a complaint against Summerville General Merchandising

and Company and Ang Tiam Chay (Respondents). Kho claims that she, under the name of KEC
Cosmetics Laboratory, is the registered owner of the copyrights Chin Chun Su and Oval Facial
Cream Container/Case; that she also has patent rights on ChinChun Su & Device and Chin Chun
Su for medicated cream after purchasing the same from the registered owner, Quintin Cheng; that
respondents advertised and sold petitioner's cream products under the brand name Chin Chun Su,
in similar containers that petitioner uses, thereby misleading the public, and resulting in the
decline in the petitioner's business sales and income; and, that the respondents should be
enjoined from allegedly infringing on the copyrights and patents of the petitioner.

On the other hand, the respondents claimed that they are the exclusive and authorized
importer, re-packer, and distributor of Chin Chun Su products manufactured by Shun Yi Factory
in Taiwan; that the said Taiwanese manufacturing company authorized Summerville to register
its trade name Chin Chun Su Medicated Cream with the Philippine Patent Office and other
appropriate governmental agencies; that KEC Cosmetics Laboratory of the petitioner obtained
the copyrights through misrepresentation and falsification; and, that the authority of Quintin
Cheng, assignee of the patent registration certificate, to distribute and market Chin Chun Su
products in the Philippines had already been terminated by the said Taiwanese Manufacturing
Company.

The trial court granted the petition of Kho and denied the respondents’ motion for
reconsideration. Then, respondents filed a petition for certiorari with the CA for nullification of
the writ of preliminary injunction issued by the TC. The CA reversed the decision of the RTC
stating that the registration of the trademark or brand name Chin Chun Su by KEC cannot be
equated with registration in the principal register.

ISSUE:
WON petitioner is entitled to the exclusive use of the trademark Chin Chun Su based on
her copyright and patent registration over the product.

HELD:

Trademark, copyright, and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing the
goods or services of an enterprise and shall include a stamped or marked container of goods. In
relation thereto, a trade name means the name or designation identifying or distinguishing an
enterprise. Meanwhile, the scope of a 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. Patentable inventions, on the other hand, refer to any technical solution of a
problem in any field of human activity which is new, involves an inventive step an inventive step
and is industrially applicable.

Petitioner has no right to support her claim for the exclusive use of the subject trade name
and its container. The name and container of a beauty cream product are proper subjects of a
trademark inasmuch as the same falls squarely within its definition. In order to be entitled to
exclusively use the same in the sale of the beauty cream product, the user must sufficiently prove
that she registered or used it before anybody else did. The petitioner's copyright and patent
registration of the name and container would not guarantee her the right to the exclusive use of
the same for the reason that they are not appropriate subjects of the said intellectual rights.
Consequently, a preliminary injunction order cannot be issued for the reason that the petitioner
has not proven that she has a clear right over the said name and container to the exclusion of
others, not having proven that she has registered a trademark thereto or used the same before
anyone did.
G.R. No. 167715

PHIL PHARMAWEALTH, INC., vs. PFIZER, INC. and PFIZER (PHIL. ) INC.

FACTS:

Pfizer, Inc. and Pfizer (Phil.), Inc. filed a complaint for patent infringement against Phil
Pharmawealth, Inc. (Petitioner). The complaint alleged that Pfizer is the registered owner of
Philippine Letters Patent No. 21116 which was valid until July 16, 2004. The patent covers
ampicillin sodium/sulbactam sodium and was marketed by Pfizer under the brand name
“Unasyn” and was solely and exclusively distributed in the Philippines by Zuellig Pharma
Corporation. In January and February 2003, Pfizer discovered that Pharmawealth submitted bids
for the supply of Sulbactam Ampicillin to several hospitals without the Pfizer’s consent. Pfizer
then demanded that the hospitals cease and desist from accepting such bids. Pfizer also
demanded that Pharmawealth immediately withdraw its bids to supply Sulbactam Ampicillin.
Pharmawealth and the hospitals ignored the demands.
 A preliminary injunction effective for 90 days was granted by the IPO’s Bureau of Legal
Affairs. Upon expiration, a motion for extension filed by Pfizer was denied. Pfizer filed a Special
Civil Action for Certiorari in the Court of Appeals CA assailing the denial.

While the case was pending in the CA, Pfizer filed with the Regional Trial Court of
Makati RTC a complaint for infringement and unfair competition, with a prayer for injunction.
The RTC issued a temporary restraining order, and then a preliminary injunction.

Pharmawealth filed a motion to dismiss the case in the CA, on the ground of forum
shopping. Nevertheless, the CA issued a temporary restraining order. Pharmawealth again filed a
motion to dismiss, alleging that the patent, the main basis of the case, had already lapsed, thus
making the case moot, and that the CA had no jurisdiction to review the order of the IPO-BLA
because this was granted to the Director General. The CA denied all the motions. Pharmawealth
filed a petition for review on Certiorari with the Supreme Court.

ISSUES & HELD:

a) Can an injunctive relief be issued based on an action of patent infringement despite the fact
that the patent allegedly infringed has already lapsed?

No. The provision of R.A. 165, from which the Pfizer’s patent was based, clearly states
that the patentee shall have the exclusive right to make, use and sell the patented machine, article
or product, and to use the patented process for the purpose of industry or commerce, throughout
the territory of the Philippines for the term of the patent; and such making, using, or selling by
any person without the authorization of the patentee constitutes infringement of the patent.

Clearly, the patentee’s exclusive rights exist only during the term of the patent. Since the
patent was registered on 16 July 1987, it expired, in accordance with the provisions of R.A. 165,
after 17 years, or 16 July 2004. Thus, after 16 July 2004, Pfizer no longer possessed the
exclusive right to make, use, and sell the products covered by their patent. The CA was wrong in
issuing a temporary restraining order after the cut-off date.

b) What tribunal has jurisdiction to review the decisions of the Director of Legal Affairs of the
Intellectual Property Office?

According to IP Code, the Director General of the IPO exercises exclusive jurisdiction
over decisions of the IPO-BLA. The question in the CA concerns an interlocutory order, and not
a decision. Since the IP Code and the Rules and Regulations are bereft of any remedy regarding
interlocutory orders of the IPO-BLA, the only remedy available to Pfizer is to apply the Rules
and Regulations suppletorily. Under the Rules, a petition for certiorari to the CA is the proper
remedy. This is consistent with the Rules of Court. Thus, the CA had jurisdiction.

c) Is there forum shopping when a party files two actions with two seemingly different causes of
action and yet pray for the same relief?

Yes. Forum shopping is defined as the act of a party against whom an adverse judgment
has been rendered in one forum, of seeking another (and possibly favorable) opinion in another
forum (other than by appeal or the special civil action of certiorari), or the institution of two (2)
or more actions or proceedings grounded on the same cause on the supposition that one or the
other court would make a favorable disposition.

The elements of forum shopping are: (a) identity of parties, or at least such parties that
represent the same interests in both actions; (b) identity of rights asserted and reliefs prayed for,
the reliefs being founded on the same facts; (c) identity of the two preceding particulars, such
that any judgment rendered in the other action will, regardless of which party is successful,
amount to res judicata in the action under consideration. This instance meets these elements.
 The parties are clearly identical. In both the complaints in the BLA-IPO and RTC, the
rights allegedly violated and the acts allegedly violative of such rights are identical, regardless of
whether the patents on which the complaints were based are different. In both cases, the ultimate
objective of Pfizer was to ask for damages and to permanently prevent Pharmawealth from
selling the contested products. Relevantly, the Supreme Court has decided that the filing of two
actions with the same objective, as in this instance, constitutes forum shopping.

Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a
decision in one case will necessarily amount to res judicata in the other action.

G.R. No. 179127

IN-N-OUT BURGER, INC., vs. SEHWANI, INCORPORATED and/or BENITA’S FRITES,

INC.

FACTS:

IN-N-OUT BURGER, INC., a business entity incorporated under the laws of California,
which is a signatory to the Convention of Paris on Protection of Industrial Property and the
Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Petitioner is
engaged mainly in the restaurant business, but it has never engaged in business in the
Philippines. Respondents Sehwani, Incorporated and Benita Frites, Inc. are corporations
organized in the Philippines.

Sometime in 1991, Sehwani filed with the BPTTT an application for the registration of
the mark “IN N OUT (the inside of the letter “O” formed like a star). Its application was
approved and a certificate of registration was issued in its name on 1993. In 2000, Sehwani,
Incorporated and Benita Frites, Inc. entered into a Licensing Agreement, wherein the former
entitled the latter to use its registered mark, “IN N OUT.”

Sometime in 1997, In-N-Out Burger filed trademark and service mark applications with
the Bureau of Trademarks for the “IN-N-OUT” and “IN-N-OUT Burger & Arrow Design. In
2000, In-N-Out Burger found out that Sehwani, Incorporated had already obtained Trademark
Registration for the mark “IN N OUT (the inside of the letter “O” formed like a star).” Also in
2000, In-N-Out Burger sent a demand letter directing Sehwani, Inc. to cease and desist from
claiming ownership of the mark “IN-N-OUT” and to voluntarily cancel its trademark
registration. Sehwani Inc. did not accede to In-N-Out Burger’s demand but it expressed its
willingness to surrender its registration for a consideration.

In 2001 In-N-Out Burger filed before the Bureau of Legal Affairs an administrative
complaint against the Sehwani, Inc. and Benita Frites, Inc. for unfair competition and
cancellation of trademark registration.

ISSUES & HELD:

a) WON the Intellectual Property Office have jurisdiction of cases involving provisions of the
IPC

Yes, the IPO has jurisdiction in cases involving provisions of the IPC (due to the
following reasons:

Section 10 of the Intellectual Property Code specifically identifies the functions of

the Bureau of Legal Affairs, thus:

Section 10. The Bureau of Legal Affairs shall have the following functions:

10.1 Hear and decide opposition to the application for registration of

marks; cancellation of trademarks; subject to the provisions of Section 64,
cancellation of patents and utility models, and industrial designs; and
petitions for compulsory licensing of patents;

10.2 (a) Exercise original jurisdiction in administrative complaints for

violations of laws involving intellectual property rights; Provided, That its
jurisdiction is limited to complaints where the total damages claimed are
not less than Two hundred thousand pesos (P200,000): Provided, further,
That availment of the provisional remedies may be granted in accordance
with the Rules of Court. Xxx

Xxx

(vi) The cancellation of any permit, license, authority, or registration

which may have been granted by the Office, or the suspension of the
validity thereof for such period of time as the Director of Legal Affairs may
deem reasonable which shall not exceed one (1) year;

Xxx

(viii) The assessment of damages;

Unquestionably, petitioner’s complaint, which seeks the cancellation of the disputed

mark in the name of respondent Sehwani, Incorporated, and damages for violation of
petitioner’s intellectual property rights, falls within the jurisdiction of the IPO Director of
Legal Affairs.

While Section 163 thereof vests in civil courts jurisdiction over cases of unfair
competition, nothing in the said section states that the regular courts have sole jurisdiction
over unfair competition cases, to the exclusion of administrative bodies.

Sections 160 and 170, which are also found under Part III of the Intellectual Property
Code, recognize the concurrent jurisdiction of civil courts and the IPO over unfair
competition cases.

These two provisions read:

Section 160. Right of Foreign Corporation to Sue in Trademark or Service

Mark Enforcement Action. Any foreign national or juridical person who
meets the requirements of Section 3 of this Act and does not engage in
business in the Philippines may bring a civil or administrative
action hereunder for opposition, cancellation, infringement, unfair
competition, or false designation of origin and false description, whether or
not it is licensed to do business in the Philippines under existing laws.

Section 170. Penalties. Independent of the civil and administrative

sanctions imposed by law, a criminal penalty of imprisonment from two (2)
years to five (5) years and a fine ranging from Fifty thousand pesos (P50,
000) to Two hundred thousand pesos (P200, 000), shall be imposed on any
person who is found guilty of committing any of the acts mentioned in
Section 155, Section168, and Subsection169.1.

Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction
to decide the petitioner’s administrative case against respondents and the IPO Director
General had exclusive jurisdiction over the appeal of the judgment of the IPO Director of
Legal Affairs.

b) WON there was unfair competition.

Yes. The evidence on record shows that Sehwani Inc. and Benita Frites were not using
their registered trademark but that of In-n-Out Burger. Sehwani and Benita Frites are also giving
their products the general appearance that would likely influence the purchasers to believe that
their products are that of In-N-Out Burger. The intention to deceive may be inferred from the
similarity of the goods as packed and offered for sale, and, thus, an action will lie to restrain
unfair competition. The respondents’ fraudulent intention to deceive purchasers is also apparent
in their use of the In-N-Out Burger in business signages.

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. Actual fraudulent intent need not be shown.
REFERENCES

www.chanrobles.com/legal7history.

www.chanrobles.com/legal7iprtreaties

www. wipo.int

http://www.wipo.int/treaties/en/ip/berne/summary_berne.html

http://www.dlsu.edu.ph/research/centers/cberd/conferences/ipr.pdf

http://www.lawphil.net/statutes/repacts/ra1947/ra_165_1947.html

http://www.wipo.int/wipolex/en/text.jsp?file_id=278415