A.

General Principles of Intellectual Property

1. Natural Rights Perspective (Labor Theory)

Similar difficulties afflict efforts to apply labor theory to intellectual property. The problems begin at the
threshold. As was true of utilitarianism, it is not altogether clear that the labor theory supports any sort of
intellectual-property law. The source of the difficulty is ambiguity in Locke's original rationale for property rights –
from which this entire theory springs. Why exactly should labor upon a resource held "in common" entitle the
laborer to a property right in the resource itself? Scattered in Chapter 5 of the Second Treatise can be found six
related but distinguishable answers to that question.
(1) “Natural reason" tells us that men have "a right to their Preservation," and the only practicable way in which they
can sustain themselves is by individually "appropriating" materials necessary to provide them food and shelter.
(2) Religious obligation reinforces the foregoing proposition. God did not merely give the Earth to man in common,
but "commanded" him to "subdue" it – that is, "improve it for the benefit of Life" – which man can do only by both
laboring upon it and appropriating the fruits of that labor.
(3) Intuitions regarding self-ownership point in the same direction. Each person plainly has "a Property in his own
Person," including the "Labour of his Body, and the Work of his Hands." It seems only natural that whatever he
mixes that Labour with should belong to him as well.
(4) The moral value of work reinforces the foregoing insight. God gave the World to "the Industrious and Rational,
not to the Fancy or Covetousness of the Quarrelsom and Contentious." It is thus fitting that the former acquire,
through their labour, title to that which they labor upon.
(5) A sense of proportionality and fairness also figures in the inquiry. Most of the value of things useful to men
derives not from the value of the raw materials from which they are made, but from the labour expended on
them. It is thus not "so Strange" that, when determining whether ownership should be assigned to the worker or
the community, the individual "Property of labour should be able to over-balance the Community of Land."
(6) Finally, Locke relies throughout the chapter on an imagery of productive transformation. By labouring upon
unclaimed land or other resources, the worker changes them from wild to domestic, from raw to cultivated, from
chaotic to ordered, from pointless to purposeful. The self-evident desirability of that transformation supports a
reward for the worker.

2. Personhood Perspective (Margaret Jane Radin, Property & Personhood)

If it makes sense to say that one owns one's body, then, on the embodiment theory of personhood, the
body is quintessentially personal property because it is literally constitutive of one's personhood. If the body is
property, then objectively it is property for personhood. This line of thinking leads to a property theory for the tort
of assault and battery: Interference with my body is interference with my personal property. Certain external
things, for example, the shirt off my back, may also be considered personal property if they are closely enough
connected with the body.

3. Economic Incentive Theory

The first and most common of the three tacks argues that the optimal doctrine is the one that maximizes
the difference between (a) the present discounted value to consumers of the intellectual products whose creation
is induced by holding out to authors and inventors the carrot of monopoly power and (b) the aggregate losses
generated by such a system of incentives (the consumer surplus sacrificed when authors and inventors price
their creations above the marginal costs of producing them, the "administrative costs" of interpreting and
enforcing intellectual-property rights, etc.) In rougher terms, incentive theory urges a lawmaker to establish or
increase intellectual-property protection when doing so would help consumers by stimulating creativity more than
it would hurt them by constricting their access to intellectual products or raising their taxes.
B. Constitutional Basis

1. US Constitution, Article 1, Sec. 8 (8 IP Clause)

Clause 8. To promote the Progress of Science and useful Arts, by securing for limited Times to Authors
and Inventors the exclusive Right to their respective Writings and Discoveries;

2. Philippine Constitution, Article XIV, Section 13

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.

C. Modes of Intellectual Property (Definitions)

1. Copyright
It is a legal concept that gives the creator of original work exclusive rights to it, usually for a limited period of time.
It is literally “the right to copy”, but also gives the copyright holder the right to be credited for work, to determine
who may adapt the work to other forms, to determine who may perform the work, to benefit financially from the
work, and other related rights.

2. Trademarks
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.

3. Patents
It is a set of exclusive rights granted by a State to an inventor or his assignee for a fixed period of time in
exchange for a disclosure of an invention.

D. Philippine Laws

1. Articles 414 and 417 of the Civil Code

Art. 414. All things which are or may be the object of appropriation are considered either:
(1) Immovable or real property; or
(2) Movable or personal property.

Art. 417. The following are also considered as personal property:

(1) Obligations and actions which have for their object movables or demandable sums; and
(2) Shares of stock of agricultural, commercial and industrial entities, although they may have real estate.

2. Article 721 and 722 of the Civil Code

Art. 721. By intellectual creation, the following persons acquire ownership:

(1) The author with regard to his literary, dramatic, historical, legal, philosophical, scientific or other
work;

(2) The composer; as to his musical composition;

(3) The painter, sculptor, or other artist, with respect to the product of his art;

(4) The scientist or technologist or any other person with regard to his discovery or invention. (n)
Art. 722. The author and the composer, mentioned in Nos. 1 and 2 of the preceding article, shall have the
ownership of their creations even before the publication of the same. Once their works are published, their rights
are governed by the Copyright laws.

The painter, sculptor or other artist shall have dominion over the product of his art even before it is copyrighted.

The scientist or technologist has the ownership of his discovery or invention even before it is patented. (n)

3. Article 1624 and 1625 of the Civil Code

Art. 1624. An assignment of creditors and other incorporeal rights shall be perfected in accordance with the
provisions of Article 1475.

Art. 1625. An assignment of a credit, right or action shall produce no effect as against third person, unless it
appears in a public instrument, or the instrument is recorded in the Registry of Property in case the assignment
involves real property.

RA 8293

Section 1. Title. - This Act shall be known as the "Intellectual Property Code of the Philippines."

Section 2. 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. (n)

Section 3. International Conventions and Reciprocity. - Any person who is a national or who is domiciled or has a
real and effective industrial establishment in a country which 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 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 right is otherwise entitled by this Act. (n)

Section 4. Definitions. - 4.1. The term "intellectual property rights" consists of:
a) Copyright and Related Rights;
b) Trademarks and Service Marks;
c) Geographic Indications;
d) Industrial Designs;
e) Patents;
f) Layout-Designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information (n, TRIPS).
4.2. The term "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.
4.3. The term "Office" refers to the Intellectual Property Office created by this Act.
4.4. The term "IPO Gazette" refers to the gazette published by the Office under this Act. (n)

Section 5. Functions of the Intellectual Property Office (IPO). - 5.1. To administer and implement the State
policies declared in this Act, there is hereby created the Intellectual Property Office (IPO) which shall have the
following functions:
a) Examine applications for grant of letters patent for inventions and register utility models and industrial designs;
b) Examine applications for the registration of marks, geographic indication, integrated circuits;
c) Register technology transfer arrangements and settle disputes involving technology transfer payments covered
by the provisions of Part II, Chapter IX on Voluntary Licensing and develop and implement strategies to promote
and facilitate technology transfer;
d) Promote the use of patent information as a tool for technology development;
e) Publish regularly in its own publication the patents, marks, utility models and industrial designs, issued and
approved, and the technology transfer arrangements registered;
f) Administratively adjudicate contested proceedings affecting intellectual property rights; and
g) Coordinate with other government agencies and the private sector efforts to formulate and implement plans
and policies to strengthen the protection of intellectual property rights in the country.
5.2. The Office shall have custody of all records, books, drawings, specifications, documents, and other papers
and things relating to intellectual property rights applications filed with the Office. (n)

Section 171. Definitions. - For the purpose of this Act, the following terms have the following meaning:
171.1. "Author" is the natural person who has created the work;
171.2. A "collective work" is a work which has been created by two (2) or more natural persons at the initiative
and under the direction of another with the understanding that it will be disclosed by the latter under his own
name and that contributing natural persons will not be identified;
171.3. "Communication to the public" or "communicate to the public" means 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;
171.4. A "computer" is an electronic or similar device having information-processing capabilities, and a "computer
program" is a set of instructions expressed in words, codes, schemes or in any other form, which is capable when
incorporated in a medium that the computer can read, of causing the computer to perform or achieve a particular
task or result;
171.5. "Public lending" is the transfer of possession of the original or a copy of a work or sound recording for a
limited period, for non-profit purposes, by an institution the services of which are available to the public, such as
public library or archive;
171.6. "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;
171.7. "Published works" means works, which, with the consent of the authors, are made 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: Provided, That availability of such copies has been such, as to satisfy the
reasonable requirements of the public, having regard to the nature of the work;
171.8. "Rental" is the transfer of the possession of the original or a copy of a work or a sound recording for a
limited period of time, for profit-making purposes;
171.9. "Reproduction" is the making of one (1) or more copies of a work or a sound recording in any manner or
form (Sec. 41 (E), P.D. No. 49 a);
 171.10. A "work of applied art" is an artistic creation with utilitarian functions or incorporated in a useful article,
whether made by hand or produced on an industrial scale;
171.11. A "work of the Government of the Philippines" is a work created by an officer or employee of the
Philippine Government or any of its subdivisions and instrumentalities, including government-owned or controlled
corporations as a part of his regularly prescribed official duties.

CHAPTER II
ORIGINAL WORKS

Section 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.
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. (Sec. 2, P.D. No. 49a)

E. Copyright Act of 1976 [17 US 102 (a)]

Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any
tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or
otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the
following categories:
(1) literary works;
(2) musical works, including any accompanying words;
(3) dramatic works, including any accompanying music;
(4) pantomimes and choreographic works;
(5) pictorial, graphic, and sculptural works;
(6) motion pictures and other audiovisual works;
(7) sound recordings; and
(8) architectural works.
E. Cases

1. Santos vs McCullough Printing Company

Facts:
This is an action for damages based on the provisions of Articles 721 and 722 of the Civil Code of the
Philippines, allegedly on the unauthorized use, adoption and appropriation by the defendant company of plaintiff's
intellectual creation or artistic design for a Christmas Card. The design depicts "a Philippine rural Christmas time
scene consisting of a woman and a child in a nipa hut adorned with a star-shaped lantern and a man astride a
carabao, beside a tree, underneath which appears the plaintiff's pen name, Malang."
The complaint alleges that plaintiff Mauro Malang Santos designed for former Ambassador Felino Neri,
for his personal Christmas Card greetings for the year 1959, the artistic motif in question. The following year the
defendant McCullough Printing Company, without the knowledge and authority of plaintiff, displayed the very
design in its album of Christmas cards and offered it for sale, for a price. For such unauthorized act of defendant,
plaintiff suffered moral damages to the tune of P16,000.00, because it has placed plaintiff's professional integrity
and ethics under serious question and caused him grave embarrassment before Ambassador Neri. He further
prayed for the additional sum of P3,000.00 by way of attorney's fee.

Issue:
Whether Santos is entitled for protection, notwithstanding the fact that he has not copyrighted his design.

Ruling:
No.
The lower court dismisses the complaint which the Supreme Court affirmed.
Santos did not choose to protect his intellectual creation by a copyright. The fact that the design was used
in the Christmas card of Ambassador Neri who distributed 800 copies thereof among his friends during the
Christmas season of 1959, shows the same was published.
Unless satisfactory explained a delay in applying for a copyright, of more than 30 days from the date of its
publication, converts the property to one of public domain.
Since the name of the author appears in each of the alleged infringing copies of intellectual creation, the
defendant may not be said to have pirated the work nor guilty of plagiarism. Consequently, the complaint does
not state a cause of action against the defendant.
The Supreme Court held that Santos is not entitled to a protection.
Rules of Practice in the Philippine Patent Office relating to the Registration of Copyright Claims.
“An intellectual creation should be copyrighted 30 days after its publication, if made in Manila, or within 60
days if made elsewhere, failure of which renders such creation public property.”
When the purpose is limited publication, but the effect is general publication, irrevocable rights thereupon
become vested in the public, in consequence of which enforcement of the restriction becomes impossible.

2. Filipino Society of composers, authors and publishers, Inc. vs Tan

Facts:
Filipino Society is the owner of certain musical compositions among which are the songs entitled: Dahil
Sa’yo, Sapagkat Ikaw ay Akin, Sapagkat Kami ay Tao lamang and the Nearness of You.
Tan is the operator of a restaurant where a combo with professional singers, hired to play and sing
musical compositions to entertain and amuse customers therein, were playing and singing the above mentioned
compositions without any license or permission from the appellant to play or sing the same.
FS demanded payment of necessary license fee but the demand was ignored, hence, they filed a
complaint for infringement of copyright against Tan.

Issue:
Whether Tan is liable for infringement of copyright.

Ruling:
No.
 The composers of the contested musical compositions waived their rights in favor of the general public
when they allowed their intellectual creations to become property of the public domain before applying or the
corresponding copyrights for the same.

3. Bayanihan Music vs BMG

Facts:
Jose Mari Chan entered into a contract with petitioner Bayanihan, whereunder Chan assigned Bayanihan
all his rights. Interests and participation over his musical composition “Can We Just Stop and Talk a While” and
other musical composition “Afraid for Love to Fade”. Bayanihan applied for and was granted a certificate of
Copyright Registration.
Without knowledge and consent of Bayanihan, Chan authorized his co-respondent BMG records to record
and distribute the aforementioned musical compositions in a then recently released album of singer Lea Salonga.
Bayanihan filed with RTC QC complaint against Chan and BMG for violation of 216 RA 8293.

Issue:
Whether Chan and BMG liable.

Ruling:
No.
Chan, the composer and author of the lyrics of the two songs, is protected by the mere fact alone that he
is the creator thereof.
IP CODE. 172. 2. Works are protected by the sole fact of their creation, irrespective of their mode or form
of expression, as well as their content, quality and purpose.

4. Kho vs Court of Appeals

Facts:
Kho of KEC Cosmetics Laboratory is the registered owner of the Copyrights Chin Chun Sua / Oral Facial
Cream / Case and Patent rights of Chin Chun Su and Device and Chin Chun Su for medicated cream.
Summerville is the exclusive and authorized importer, re-packer and distributor of Chin Chun Su products.
Respondent Summerville 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.
Trial Court granted preliminary injunction by KEC.
Court of Appeals set aside and declare null and void.

Issue:
Whether the copyright and patent over the name and container of a beauty cream product would entitle
the registrant to use and ownership over the same to the exclusion of others.

Ruling:
No.
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.
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.
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 industrially applicable.
5. Unilever vs P&G
Facts:
P & G filed a complaint for injunction with damages. A P & G subsidiary in Italy used a key visual in the
advertisement of its laundry detergent and bleaching products. This key visual known as the “Double Tug” or “tac
tac” demonstration.
Unilever, started airing its “Breeze PowerWhite” laundry product called “Porky”. The said TVC included a
stretching visual presentation and sound effects almost identical or substantially identical or substantially similar
to P&G’s “tac tac” key visual.

Issue:
Whether P&G is entitled for the relief which is to enjoin the petitioner from airing said TVC.
(Petitioner has copyright Registration for advertisement while P&G has none.

Ruling:
Yes.
Section 2. PD 49 stipulates that the copyright for a work or intellectual creation subsists from the moment
of its creation. Accordingly, the creator acquires copyright for his work right upon its creation.

Section 173. Derivative Works. - 173.1. The following derivative works shall also be protected by copyright:
(a) Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary or
artistic works; and
(b) Collections of literary, scholarly or artistic works, and compilations of data and other materials which are
original by reason of the selection or coordination or arrangement of their contents. (Sec. 2, [P] and [Q], P.D. No.
49)
173.2. The works referred to in paragraphs (a) and (b) of Subsection 173.1 shall be protected as new works:
Provided however, That such new work shall not affect the force of any subsisting copyright upon the original
works employed or any part thereof, or be construed to imply any right to such use of the original works, or to
secure or extend copyright in such original works. (Sec. 8, P.D. 49; Art. 10, TRIPS)
Article 10 (Agreement on Trade-Related Aspects of Intellectual Property Rights)
Computer Programs and Compilations of Data
1. Computer programs, whether in source or object code, shall be protected as literary works under the Berne
Convention (1971).
2. Compilations of data or other material, whether in machine readable or other form, which by reason of the
selection or arrangement of their contents constitute intellectual creations shall be protected as such. Such
protection, which shall not extend to the data or material itself, shall be without prejudice to any copyright
subsisting in the data or material itself.

Section 174. Published Edition of Work. - In addition to the right to publish granted by the author, his heirs, or
assigns, the publisher shall have a copyright consisting merely of the right of reproduction of the typographical
arrangement of the published edition of the work. (n)