LYCEUM OF THE PHILIPPINES UNIVERSITY CAVITE

COLLEGE OF ARTS AND SCIENCES

The Political Economy of Intellectual Property and its Implication to the Philippine
Copyrights and Economic Development

In partial fulfillment
of the midterm project for IPEN11F

Submitted by

Garcia Bianca
(AB Foreign Service 302)

Submitted to

Sir Jumel Estrañero

Introduction

Economic development of a state does not just refer to the good results of agricultural
products, services, or manufacturing. It also usually refers to the adoption of new
technologies, transition from agriculture-based to industry-based economy, and general
improvement in living standards. There are a lot of products that contributes to the
development, and sometimes people forget that it is not just tangible things but also the
intangible ones. Such as the products of minds.

Intellectual property (IP) refers to creations of the mind or the ideas that came from the
intelligence of the people. But IP is more than the ideas itself, but it is the inventions,
literary and artistic works, and symbols, names and images used in commerce. IP is
divided into two categories, namely, the Industrial Property and the Copyright. The first
one covers the patents for inventions, trademarks, industrial designs and geographical
indications. For the latter, it covers the literary works, films, music, artistic works such as
paintings, drawings, sculptures, and also the architectural designs1. This intangible
creations are owned and protected by a company from outside use or implementation
without the consent of the creator, thus rights to protect this product of intelligence were
made.

Protecting the rights for intellectual properties is like giving the owner the rightful credit
for his intelligence, thus giving him the assurance that infringement of his work will be
prevented, or if it turns out to happen, he can invoke his right considering that there are
laws that will help him. For instance, a company registered an image as their company
logo then a similar registration for the logo wouldn’t be allowed anymore. Having these
rights will promote the monopoly of the company in a specific area of business thus can
obviously help them improve the company itself. As mentioned earlier, IP is not just an
idea itself, IP is valuable considering that it is accountable for the high percentage of the
company’s value. For an instance, she bought a coffee from Starbucks and her friend
bought coffee from a small coffee shop nearby. The flavor, toppings, and maybe
somewhat the taste are just similar, yet the amount she paid for her coffee was double
of the amount her friend paid for her coffee. It was not just the matter of the taste but
also the matter of the name, the trademark, considering that she bought her coffee at
Starbucks.
.

---------------------------------------------------------------------------------------------------------------------
1 “What is Intellectual Property?”, WIPO Publication, Page 2, Accessed March 17, 2018
from http://www.wipo.int/edocs/pubdocs/en/intproperty/450/wipo_pub_450.pdf
IP was very important to the economy of developed countries such as the United
States. The economy of US and the lot of companies relies to the value of IP, and it is
undeniable that the IP intensive industries are very important to employees for them to
earn more money and revenues2

Statement of the problem

The research aims to give knowledge about how important Intellectual Property is and
how it helps the economy and also the laws that protect the intellectual products
particularly in the case of copyright infringement. In summary, there is a need for better
understanding with the basics of what IP is and the rights in the Philippines related to it.
Also, knowing the condition of the IPs in the Philippines could also help in analyzing its
implication to the economic developement. More specifically, the researcher come up
with the following questions that needs to be addressed:

1. How does Intellectual Property helps the economy, in particular the Philippine
economy?
2. What law protects the Intellectual Property of the Philippines? How effective?
3. Does Intellectual Property in the Philippines well protected and properly used?

Methodology

The primary research method for this study is literature review and analysis. Qualitative
research method was conducted which generally aims to understand the different
literatures which are related to the main subject which is the Intellectual Property, and
then came up with the analysis and conclusion that answers the problems given initially.

Review of Related Literatures

Intellectual property rights (IPRs) are intimately related to markets. They play a crucial
role in constituting markets in information (Drahos, 2016)3. Enactment of the IPRs is
very important to the economy, considering that economic theory of one kind or another
justifies these rights. Markets are big factors for a state’s economy to improve and help
it develop, therefore IPRs are also significant to the growth of the economy.
---------------------------------------------------------------------------------------------------------------------
2 “The US Economy Demonstrates The Value of Intellectual Property”, Simon Webter,
January 27, 2017, CPA Global, Accessed March 17, 2018 from
https://www.cpaglobal.com/cpa-global-blog/blog/us-economy-demonstrates-value-
intellectual-property

3 “A Philosophy of Intellectual Property”, Peter Drahos, December 2016, Routledge, 1

Introduction - Economic Theory
A lot of states implement IPRs as measures to protect the IPs of their state and control
the monopoly of it in every area that it will reach, but even though almost all the
countries today already have laws protecting the intellectual properties, there are still
some threats to some IPs considering that some countries have weak or no
enforcement of IP laws. The US economy gains a lot from IPs followed by the advance
economies of United Kingdom, Germany and Japan, while on the other hand China is
well known as a major source of IP theft against US companies and agencies. In the
case of countries with weak IPs protection, Valenzuela, Pakistan, India, and Algeria
made it into the list (Kelly, 2017)4.

Emerging markets, such as India, have made incremental gains and embraced
positive rhetoric with their IP policies, but they have not yet followed up with the
legislative reforms innovators need…Some developed economies, including
Canada and Australia, fared poorly as well, having recently implemented policies
that “undermine their proud traditions of IP-led innovation (Mark Elliot, 2017)5

Though implementation of these laws aims to prevent the infringement of IPs, it can’t
assure every state that they can completely be free from the stealing of IPs. When the
international piracy of intellectual property rights has emerged as one of the most
important policy issues for many industrialized countries, US suffered greatly from the
lack of uniformity of standards for intellectual property rights. As mentioned earlier, US
gains a lot from IPs and lack of implementation of laws which protects IPs of a particular
country may allow its people to infringe the intellectual property of the foreigners or the
local without the consent of the owner or company, and no strong jurisdiction would be
there to control the piracy. Just like in the late 20th century when US was complaining
about how China refused to enforce its own IP laws which results to the production of
Chinese-made duplicates of films, music, software and etc. But today, it was China who
complains about other countries not enforcing such laws, thus infringement of Chinese
IPs exist (Wexelblat, 2016)6

---------------------------------------------------------------------------------------------------------------------
4 “Here are the Best and Worst Countries for Intellectual Property Protection”, Ross
Kelly, February 9, 2017, Chief Executive, Accessed on March 17, 2018 from
https://chiefexecutive.net/best-worst-countries-intellectual-property-protection/

5 “Here are the Best and Worst Countries for Intellectual Property Protection”, Ross
Kelly, February 9, 2017, Chief Executive, Accessed on March 17, 2018 from
https://chiefexecutive.net/best-worst-countries-intellectual-property-protection/

6 “Are there countries without copyright laws?”, Alan Wexelblat, April 29, 2016, Quora,
Accessed March 17, 2018 from https://www.quora.com/Are-there-countries-without-
copyright-laws
Patents, which is an exclusive right granted for an invention, was among the most
valuable and difficult to obtain. It was giving the owner “the right to exclude others from
making, using, offering for sale, selling, or importing the invention.” Before, Patents was
only allowed inside US, but with the help of Patent Cooperation Treaty (PCT), a lot of
countries now honor patents abroad. Having patents is also one of the most expensive,
thus attaining it could be a good monopoly. In the case of Kenya, it was a problem
considering that they had issued a small total of patents than expected, but they didn’t
blame the minimal number of issued patents to the lack of innovation or
entrepreneurship in Kenya. Instead, it is due to a lack of patent expertise in the private
sector (Rutenberg, 2013)7. People in Kenya should be knowledgeable with regards to
how they could process the attainment of patent, because people idea of people that
remains as an idea must be kept secret until it was discovered to be an intellectual
property. On the other hand, in the area of copyright a prominent Egyptian IP scholar
argued:

In developing countries poor, people frequently find themselves in the dilemma of

having to choose between the expensive original and the unlawful copy. It comes
as no surprise that the less privileged would have stronger tendencies toward the
illegal. Here, the need for novel business models that balance the needs of
knowledge creators and users becomes evident, especially given the vast
development of enabling technologies. (Rizk, 2013)8

Piracy is a form of plagiarism in which people produce a product without the proper
authorization of the owner, this terminology is commonly associated with the copyright
infringements of films or digital media. This dilemma isn’t just existing here in the
Philippines but also outside the state. Piracy, and other related violations of IPR such as
illegal camera recording was witnessed in the country and measures to avoid these
were tackled in the celebration of World Intellectual Property Day in Manila last year
2017. After reviewing the condition of the Intellectual Property outside the Philippines,
it’s now time to discuss its condition inside.

---------------------------------------------------------------------------------------------------------------------
7 “Faking it: time to rethink intellectual property in developing countries?”, Isaac
Rutenberg, October 29, 2013, The Guardian, Accessed March 17, 2018 from
https://www.theguardian.com/global-development-professionals-
network/2013/oct/29/intellectual-property-rights-google

8 “Faking it: time to rethink intellectual property in developing countries?”, Isaac

Rutenberg, October 29, 2013, The Guardian, Accessed March 17, 2018 from
https://www.theguardian.com/global-development-professionals-
network/2013/oct/29/intellectual-property-rights-google
According to a news article, the Philippines continues to experience a fast growing
digital landscape and high mobile engagement among users, with digital trade and e-
commerce on the rise, online piracy continues to threaten the entire ecosystem.
Criminals and organized cartels have also sought to capitalize on digital-related crime
(Adobo Mag, 2017)9. Just like what Rizk stated, in developing countries just like the
Philippines we could find people who chooses to get something by cheapest way
possible. It’s undeniable that Filipinos are fond of piracy films because it is cheaper than
the originals, but what the other Filipinos didn’t know is that they are going against the
law. Analyzing the situation, if the people watch movies in the cinema, the money they
pay have a part which was given to the government as taxes, but if people choose to
watch pirated films, then the taxes given to the government will definitely decrease and
it will certainly affect the economy of the country.

Criminals, operating individually or in groups, bait visitors by the prospect of

gaining access to creative content. When baited, they use spywares and bots to
access and/or control their victims’ devices remotely and steal their data, which
may be used for identity theft and other malicious scams. These criminals make
millions of dollars this way. (Tieng, 2017)10

It turns out that some Filipinos who steal intellectual properties do it not just in order for
them to have it cheaper but also to gain something from it too. You can see this
infringement of intellectual ideas in every little markets here in the Philippines. If the US
was leading the IP-intensive countries, it is China who leads with high piracy levels and
being piracy hotspots in the Asia Pacific region. China, being a growing economic
superpower who challenges the hegemonic power of US, was leading the current global
piracy and the overall symbol of resistance of the non-IP-exporting (Ballano, 2015)11
along with the consistent piracy here in the Philippines and also in Vietnam. It is very
alarming considering that the Philippines have an existing law that prevents this
copyright known as the Republic Act No. 8293.
---------------------------------------------------------------------------------------------------------------------
9 “As World Intellectual Property Day Approaches, Philippine Community Proposes
Additional Measures To Tackle IP Crime”, April 24, 2017, Adobo Magazine, Accessed
March 17, 2018 from http://adobomagazine.com/philippine-news/world-intellectual-
property-day-approaches-philippine-community-proposes-additional

10 “As World Intellectual Property Day Approaches, Philippine Community Proposes

Additional Measures To Tackle IP Crime”, April 24, 2017, Adobo Magazine, Accessed
March 17, 2018 from http://adobomagazine.com/philippine-news/world-intellectual-
property-day-approaches-philippine-community-proposes-additional

11 “Sociological Perspectives on Media Piracy in the Philippines and Vietnam”,

Vivencio O. Ballano, December 26, 2015, page 66
An excerpt from an article of brief history in the intellectual property rights follows. 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: (Crawlaw, 2018)12

[1] 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”.

[2] 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”.

Republic Act 8392 known as the Intellectual Property Code of the Philippines is an act
prescribing the intellectual property code and establishing the intellectual property
office, providing for its powers and functions, and for other purposes. Chapter 17
section 217 provides the penalties that shall be given to the person who will violate the
Intellectual Property code of the Philippine (Law Phil Project, n.a.)13

(1)First offense - imprisonment of one year to three years plus a fine ranging from
50,000php to 150,000php.

(2)Second offense - imprisonment of three years and one day to six years plus a fine
ranging from 150,000php to 500,000php

(3)Third and subsequent offense -imprisonment of six years and one day to nine years
plus a fine ranging from 500,000php to 1,500,000php

---------------------------------------------------------------------------------------------------------------------
12 “Brief Background on Philippine Intellectual Property Rights”, Chan Robles, NA,
Cralaw, Accessed on March 17, 2018 from
http://www.chanrobles.com/legal7history.htm#.WrYsK4huZhE

13 "Republic Act 8392 or the Intellectual Property Code of the Philippines" (n.a.) (n.d.)
Law Phil Project, Accessed on March 17, 2018 from
https://www.lawphil.net/statutes/repacts/ra1997/ra_8293_1997.html
Considering this existing laws, we can say that the Philippines put value to intellectual
properties yet this laws was not that effective and well implemented. But even though
we are along China in having piracy films, the Philippines is not listed on the United
States Trade Representative’s (USTR) 2017 Special 301 Watch List, nor is it mentioned
in the 2016 Notorious Markets Report. The country has a solid intellectual property
rights (IPR) regime in place, although implementation and enforcement are inconsistent
(SDOIA, 2015)14

According to further research, the Philippine economy I not intensively an IP driven

state considering that the media piracy and copyright infringement are still a common
and known case here in the country. For an instance, the case regarding the liability for
copyright infringement of La Concepcion College, a private school based in San Jose
del Monte City in Bulacan on 2014 November 8. According to the an article, author and
publisher Raymund Sta. Maria Catabijan filed a complaint saying that the school copied
his work books and sold reproductions to its students. The Intellectual Property Office of
the Philippines (IPOPHL), through the Bureau of Legal Affairs (BLA) gave penalties to
the school and told them to pay Catabijan 608,450php as damages. (Newsbytes PH,
2014)15

This is a victory for the rule of law as far as intellectual property (IP) in the
country is concerned (Ricardo R. Blancaflor, IPOPHL Director-General, 2014)16

Presentation, Analysis, and Interpretation of Data

According to the data gathered, Intellectual Property is also a good source of economic
growth considering that a hegemonic state like the United States developed and takes
care of their IPs and it helps a lot to their economy. IP creates monopoly that will help
the state receive its rightful credit and share with the IPs regardless of the place it will
reach considering that profit from the authorized production of these IPs will put back to
the country of origin. The Philippines was one of the country which does not gain
benefits as lot as possible from the magic powers of IPs, particularly with the issue of
copyright infringement which the Philippines is facing Philippines, it affects the economy
because if IPs are less protected, there is a chance that the benefits would decrease
considering that money gained from these IPs could be taken by the unauthorized
producers.
---------------------------------------------------------------------------------------------------------------------
14 “Philippines- 5-Protection of Property Rights” February 12, 2018, International Trade
Administration, Accessed on March 17, 2018 from
https://www.export.gov/article?id=Philippines-Protection-of-Property-Rights
15 "Bulacan school ordered to pay P608,450 for copyright infringement" (n.a.)
November 8, 2014, Newsbytes PH, Accessed March 17, 2018 from
http://newsbytes.ph/2014/11/08/bulacan-school-ordered-to-pay-p608450-for-copyright-
infringement/
The creation of intellectual property rights aimed to avoid the unauthorized producing of
intellectual products. States have IP laws yet not all states strongly implement them. In
the Philippines we have the Republic Act 8392 known as the Intellectual Property Code
of the Philippines. The act stated the penalties of those who will be caught breaking the
rules, but then digital piracy, which is a form of copyright infringement, is still a problem
in the Philippines. In terms of other forms of intellectual properties, the law effectively
help the owners and the government agency in charge acts quickly in accordance to the
law.

The intensity of implementation of IP laws varies in different states, some strictly

implements some wasn't. In the case of the media piracy in the Philippines, people tend
to be complacent. The implementation of the IP laws is not fully effective considering
that we could still observe violation of copyrights with regards to digital piracy in a lot of
places here in the Philippines. People wants cheaper way to enjoy these products of
mind thus they do it even though it's against the law.

Conclusion and Recommendation

In conclusion to the research done, Philippines benefits less and haven't yet used the
intellectual property as much as it is possible. Average Filipinos lack knowledge with
how important these intellectual properties are and how it helps the economy a lot in
terms of having the monopoly. There is an existing law in the Philippines which prevent
the infringement of the intellectual property, yet the current culture of the Philippines are
already complacent with the form of intellectual property violation which is media piracy
considering that this is widespread in the country. This deed which is against the
Intellectual Property Code of the Philippines Republic Act 8392 could affect the
economy of not just the Philippines but also the other countries because their
intellectual properties have the chance to be infringed here considering that the law is
not that strictly implemented.

And with this research, I recommend three things, first to the government of the
Philippines to put additional attention to the Intellectual Properties of the Philippines and
more intensity with regards to the implementation of the law protecting the IPs because
it could be a good source of economic growth as proven by some developed countries
such as the United States. Second, to the capable and knowledgeable citizens to raise
awareness not only with regards to how bad copyright infringement is but also how will
the intellectual property could help the economy which could also result to a better
lifestyle. And lastly, I recommend to the teachers and people capable of inspiring the
youth to teach them how to enhance their abilities and skills that could lead their
intellectual ideas be discovered and soon be an intellectual property that could help the
economy of the Philippines.
References

● “A Philosophy of Intellectual Property”, Peter Drahos, December 2016,

Routledge, 1 Introduction - Economic Theory, Accessed March 17, 2018
● “As World Intellectual Property Day Approaches, Philippine Community Proposes
Additional Measures To Tackle IP Crime”, April 24, 2017, Adobo Magazine,
Accessed March 17, 2018 from http://adobomagazine.com/philippine-
news/world-intellectual-property-day-approaches-philippine-community-
proposes-additional
● “Are there countries without copyright laws?”, Alan Wexelblat, April 29, 2016,
Quora, Accessed March 17, 2018 from https://www.quora.com/Are-there-
countries-without-copyright-laws
● “Brief Background on Philippine Intellectual Property Rights”, Chan Robles, NA,
Cralaw, Accessed on March 17, 2018 from
http://www.chanrobles.com/legal7history.htm#.WrYsK4huZhE
● "Bulacan school ordered to pay P608,450 for copyright infringement" (n.a.)
November 8, 2014, Newsbytes PH, Accessed March 17, 2018 from
http://newsbytes.ph/2014/11/08/bulacan-school-ordered-to-pay-p608450-for-
copyright-infringement/
● “Faking it: time to rethink intellectual property in developing countries?”, Isaac
Rutenberg, October 29, 2013, The Guardian, Accessed March 17, 2018 from
https://www.theguardian.com/global-development-professionals-
network/2013/oct/29/intellectual-property-rights-google
● “Here are the Best and Worst Countries for Intellectual Property Protection”,
Ross Kelly, February 9, 2017, Chief Executive, Accessed on March 17, 2018
from https://chiefexecutive.net/best-worst-countries-intellectual-property-
protection/
● “Philippines- 5-Protection of Property Rights” February 12, 2018, International
Trade Administration, Accessed on March 17, 2018 from
https://www.export.gov/article?id=Philippines-Protection-of-Property-Rights
● "Republic Act 8392 or the Intellectual Property Code of the Philippines" (n.a.)
(n.d.) Law Phil Project, Accessed on March 17, 2018 from
https://www.lawphil.net/statutes/repacts/ra1997/ra_8293_1997.html
● “Sociological Perspectives on Media Piracy in the Philippines and Vietnam”,
Vivencio O. Ballano, December 26, 2015, page 66
Accessed March 17, 2018
● “The US Economy Demonstrates The Value of Intellectual Property”, Simon
Webter, January 27, 2017, CPA Global, Accessed March 17, 2018 from
https://www.cpaglobal.com/cpa-global-blog/blog/us-economy-demonstrates-
value-intellectual-property
● “What is Intellectual Property?”, WIPO Publication, Page 2, Accessed March 17,
2018 from
http://www.wipo.int/edocs/pubdocs/en/intproperty/450/wipo_pub_450.pdf