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THE PHILIPPINES

By: Jacinto D. Jimenez

This monograph is updated to March 2001. TABLE OF CONTENTS

The Author List of Abbreviations Preface Selected Bibliography General Introduction 1. General Background I. II. III. IV. 2. Geography Cultural Composition Political System Population Statistics

Historical Background I. II. III. IV. Prehistory Spanish Era American Era The Philippine Republic

Intellectual Property Law

Chapter 1. COPYRIGHT AND NEIGHBOURING RIGHTS


1. 2. Sources - Legislation Subject Matter of Protection I. II. III. 3. Different Categories of Protected Works Derivative Works Works Excluded of Protection

Conditions of Protection

I. II. 4.

Formal Requirements Substantive Requirements

Ownership I. II. III. The Author Joint Works/Works created by Several Persons Works Made for Hire

5.

Transfer I. II. Assignment of Copyright Licenses

6.

Scope of Exclusive Rights I. II. Moral Rights Exploitation Rights A. Economic Rights B. Other Rights I. Droit de suite 2. Work of Architecture

7.

Limitations or Exemptions to the Scope of Copyright Protection I. II. III. IV. V. VI. Limitation of Copyright Fair Use Reproduction of Published Works Repographic Reproduction by Libraries Reproduction of Computer Programmes Importation for Personal Purposes

8.

Duration of Protection I. II. Literary, Scholarly, Scientific and Artistic Works Neighbouring Rights

9.

Neighbouring Rights I. Scope of Rights of Performers

A. Exclusive Rights B. Moral Rights C. Droit de suite II. Producers of Sound Recording A. Exclusive Rights B. Communication to the Public C. Limitations III. IV. 10. Broadcasting Organizations Limitations to the Scope of Protection

Infringement and Remedies I. II. Concept Defenses A. Ignorance and Lack of Intention B. Loss of Rights C. Statute of Limitations III. Remedies A. Civil Action B. Criminal Prosecution 1. Criminal Liability 2. Penalty C. Evidence 1. Civil Action 2. Presumptions

11.

Points of Attachment I. II. III. IV. Literary, Scholarly, Scientific and Artistic Works and Derivative Works Performances Sound Recordings Broadcasts

12.

Overlapping and Relation to Other Intellectual Property Laws

Chapter 2. 1. 2.

PATENTS Sources - Legislation Patentable Subject Matters I. II. Patentable Inventions Non-Patentable Inventions

3.

Conditions of Patentability I. II. III. Novelty Invention Industrial Applicability

4.

Formalities I. II. III. Application Publication Grant and Publication of Patent

5.

Ownership and Transfer I. II. III. Ownership Assignment Voluntary Licenses A. B. C. D. Prohibited Provisions Mandatory Provisions Exceptions Effect of Violation

6. 7.

Scope of Exclusive Rights Limitations and Exceptions to the Scope of Patent Protection I. Limitations A. Limitations of Patent Rights B. Exclusion of Prior User C. Use by the Government II. Compulsory Licensing A. Grounds

1. Specific Grounds 2. Interdependence 3. Exception B. C. D. E. 8. 9. Period for Filing Petition Requirement of Reasonable Efforts Terms and Conditions Cancellation

Duration of Protection Infringement and Remedies I. II. Concept of Infringement Civil Action A. B. C. D. E. Jurisdiction Pendency of Petition for Cancellation of Patent Institution by Foreign National Parties Liable Defenses 1. Statute of Limitations 2. Other Defenses F. Presumptions of Evidence G. Remedies 1. Award of Damages 2. Issuance of Injunction 3. Destruction of Infringing Materials III. Criminal Prosecution

10. Chapter 3. 1. 2.

Cancellation of Patent UTILITY MODELS Sources-Legislation The Protection of Utility Models I. II. III. Concept Conditions of Registration Formalities

IV. V. VI. Chapter 4. 1. 2.

Duration of Protection Infringement Cancellation of Registration

TRADEMARKS Sources-Legislation Subject Matter of Protection I. II. Signs Which May or May Not Serve as Trademarks Secondary Meaning

3.

Conditions of Protection I. II. III. Prior Use Importer or Distributor Foreign Applicant

4.

Formalities I. II. III. IV. V. Requirements of Application Priority Right Examination and Publication Opposition Issuance of Certificate and Publication

5.

Ownership and Transfer I. II. Assignment Licensing Agreements

6. 7. 8.

Scope of Exclusive Rights Limitation of the Scope of Trademark Protection Use Requirements I. II. Declaration of Use Non-Use

9.

Duration of Protection I. II. III. Duration Renewal Cancellation

A. Petitioner B. Alternative Remedy C. Period and Grounds for Filing 10. Infringement and Remedies I. Infringement of Trademark A. Concept B. Rights of Foreign Corporations C. Defenses 1. Non-Registrability of Trademark 2. Statute of Limitations 3. Equitable Principles D. Remedies 1. 2. 3. 4. II. Recovery of Damages Issuance of Injunction Destruction of Infringing Materials Limitation of Remedies

Unfair Competition 1. Protection of Goodwill 2. Concept of Unfair Competition 3. Distinction between Infringement of Trademark and Unfair Competition 4. Acts Constituting Unfair Competition 5. Procedure

III. IV. V. VI. 11.

False Declaration False Designation of Origin or Description Prohibition of Importation Criminal Prosecution

Overlapping and Relation to Other Intellectual Property Laws I. II. Containers Unfair Competition

Chapter 5. 1.

TRADE NAMES Source-Legislation

2.

The Protection of Trade Names I. II. Concept and Protection Limitation of the Scope of Trade Name Protection A. B. C. D. Generic Words Geographical Names Legal Prohibitions Confusing Similarity

3. 4. Chapter 6. 1. 2. 3.

Transfer of Ownership Infringement and Remedies INDUSTRIAL DESIGNS Sources-Legislation Subject Matter of Protection Conditions of Protection I. II. III. Novelty Ornamentation Industrial Applicability

4.

Formalities I. Application 1. Contents B. Multiple Industrial Designs C. Priority II. III. Examination Registration and Publication

5. 6. 7. 8.

Ownership and Transfer Scope of Exclusive Rights Limitations of the Scope of Protection Duration of Protection

9.

Infringement and Remedies I. II. Concept and Remedies Defense

10. Chapter 7. 1.

Cancellation of Registration TRADE SECRETS/CONFIDENTIAL INFORMATION Sources-Legislation I. II. Public Officers Private Individuals

2.

The Protection of Trade Secrets/Confidential Information I. II. Public Officers Private Individuals A. B. Criminal Liability Relation to Civil Code

Index

10

The Author

Jacinto D. Jimenez was born in Manila on 16 August 1944. He obtained his Bachelor of Arts degree from the Ateneo de Manila University in 1964 and his Bachelor of Laws degree from the same university in 1968. He was admitted to the Philippine bar in 1969. He has been a member of the faculty of the Ateneo de Manila University since 1970 and of the University of Santo Tomas since 1989. Commercial Law and Constitutional Law. He teaches

He held the Alexander Sycip

Professorial Chair from 1986 to 1988, the Chief Justice Claudio Teehankee Professorial Chair from 1989 to 1990 and from 1994 to 1997, and the Raymundo Dizon Professorial Chair from 1999 to 2000. He has been a partner in the law firm of Romulo Mabanta Buenaventura Sayoc and De los Angeles since 1988. He has written a book entitled Political Law Compendium, which was one of the books given by the Supreme Court the Centenary Book Award in 2001 as a scholarly reference in the field of law. He also wrote the monographs on

Philippine laws in the books `Intellectual Property Laws of East Asia, `Commercial Laws of East Asia, and `International Insurance Law and Regulation.

11

List of Abbreviations

ACR CAR (2s) CARA O.G. Phil. SCRA U.S.

Appellate Court Reports Court of Appeals Reports (Second Series) Court of Appeals Reports Annotated Official Gazette Philippine Reports Supreme Court Reports Annotated United States Supreme Court Reports

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PREFACE
The first law on intellectual property that was enforced in the Philippines was the Patent Law of Spain, which was promulgated by the Cortes on 27 March 1826 and which was extended to the Philippines. Since then, through the years, the Philippine laws governing intellectual property have been amended, supplemented and supplanted to cope with the challenges of the times and the changes in technology. On 20 June 1947, Republic Act 165 allowed the issuance of patents for industrial designs. On 16 June 1953, this law was amended by Republic Act 864, which authorized the grant of patents for utility models. On 14 November 1972, the Decree on Intellectual Property extended copyright protection to audio-visual recordings and computer programmes. On 5 October 1985, Presidential Decree 1988 penalized the unauthorized copying and distribution of video tapes. On 6 June 1997, the Intellectual Property Code, Republic Act 8293, overhauled the Philippine laws on copyright, patents and trademarks. It

harmonized Philippine law with the Agreement on Trade-Related Aspects of Intellectual Property Rights and the Berne Convention for the Protection of Literary and Artistic Rights. It included microorganisms and non-biological and microbiological processes among the patentable inventions. It shifted from the first-to-invent system to the first-to-file system for applications for patents. It

abolished prior use in commerce in the Philippines as a condition for the registration of trademarks and trade names.

13

The first decision of the Supreme Court on intellectual property was handed down on 26 October 1905 in the case of Baxter v. Zuazua, 5 Phil. 160. Since then, the Supreme Court and the Court of Appeals have rendered hundreds of decisions involving intellectual property. The history of the development of Philippine legislation and jurisprudence on intellectual property is the story of how the legislatures, the courts and the administrative agencies have strived under different times and conditions to strike a balance between the protection of intellectual property rights and the promotion of public interest. This they have done by defining and refining the scope and the limitations of intellectual property rights.

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Selected Bibliography
Agbayani, A., Commentaries and Jurisprudence on the Commercial Laws of the Philippines, Vol. 2, Quezon City: AFA Publications, Inc., 1991 Agpalo, R., The Law on Trademark, Infringement and Unfair Competition, Manila: Rex Book Store, 2000 Amador, V., Copyright under the Intellectual Property Code, Manila: Rex Book Store, 1998 Amador, V., Patents under the Intellectual Property Code, Manila: Rex Book Store, 2001. Amador, V. Trademarks under the Intellectual Property Code, Manila: Rex Book Store, 1999 Aquino, R., Intellectual Property Law, Quezon City: Central Professional Books, Inc., 1998 Bautista, E., (ed.), Law on Intellectual and Industrial Property; Quezon City: University of the Philippines Law Center, 1975 Madrilejos, A., Registration and Protection of Trademarks, Brandnames, Product Names, Servicemarks, Tradenames and Business Names, As Well As, Marked or Stamped Containers in the Philippines, Manila: Rex Book Store, 1999 Martin,T., Commentaries and Jurisprudence on the Philippine Commercial Laws, Vol. 2, Manila: Central Book Supply, Inc. 1986

15

Sapalo, I., Background Reading Material on the Intellectual Property System of the Philippines, Geneva: World Intellectual Property Organization, 1994 Tolentino, A., Commentaries and Jurisprudence on the Commercial Laws of the Philippines, Vol. 1, Manila: Acme Publishing Company, 1958

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GENERAL INTRODUCTION 1. General Background


I. 1. GEOGRAPHY The Philippines is an archipelago consisting of some 7,107 islands.

The Philippines lies between the southern tip of Taiwan and the northern parts of Borneo and Indonesia. It is thus located in the center of Southeast Asia.1
1.
Fund for Assistance to Private Education, The Philippine Atlas, (Manila, 1975)., Vol. 1, p. 3.

2.

The Philippines has a land area of around 300,000 square

kilometers. Its land area is about the same size as that of Italy. Luzon and Mindanao, the two largest islands, have a land area of 105,000 and 95,000 square kilometers, respectively.1 Only 462 islands are a square mile or more in area. Eleven islands account for 95 per cent of the total land area.2
1. 2. Fund for Assistance to Private Education, p. 15. Fund for Assistance to Private Education, p. 3.

3.

By and large, the Philippines is mountainous.1

The climate is

tropical. It is characterized by high temperature, high humidity and abundant rainfall.2


1. 2. Fund for Assistance to Private Education, p. 16. Fund for Assistance to Private Education, p. 15.

17

4.

Farming and fishing are the major occupations in the rural areas.

The principal agricultural products are rice, corn, sugar, coconut, and tobacco. The Philippines also has rich deposits of gold, copper, and nickel.

II.

CULTURAL COMPOSITION

5.

The Filipinos trace their origins to the Malayan stock.

Many

Filipinos have Chinese and Spanish bloods in their veins.

The Filipinos are

overwhelmingly Catholics. There are also some Protestants, because the United States introduced Protestantism in the Philippines. The Moslems, who have

preserved their way of life, constitute five per cent of the population and are concentrated in Mindanao.1 There are also clusters of indigenous tribes.
1. T.M. McKenna, Muslim Rulers and Rebels (Manila, Anvil Publishing, Inc., 1998), p. 2.

III.

POLITICAL SYSTEM

6.

The Constitution of 1987 has set up a presidential form of

government. In accordance with the principle of separation of powers, legislative power is conferred upon Congress, executive power is vested upon the President, and judicial power is lodged in the Judiciary.1
1. Constitution of 1987, Article Vi, Section 1; Article VII, Section I; Article VIII, Section 1.

7.

Congress consists of two chambers, the Senate and the House of

Representatives.1 The Senate is composed of twenty-four senators elected on a

18

nation-wide basis.2 The House of Representatives is composed of two hundred fifty congressmen. Two hundred congressmen are elected by districts, and the remaining fifty are sectoral representatives.3 The President is elected for a sixyear term and is not eligible for re-election.4
1. 2. 3. 4. Constitution of 1987, Article VI, Section 1. Constitution of 1987, Article VI, Section 2. Constitution of 1987, Article VI, Section 5 (1). Constitution of 1987, Article VII, Section 4.

8.

At the top of the Judiciary is the Supreme Court, which is

composed of a Chief Justice and fourteen Associate Justices.1 The Judiciary has the power to review the constitutionality of the acts of Congress and the President.2 The Constitution of 1987 assiduously guarantees the independence of the Judiciary. Appointments to the Judiciary are taken from a list of nominees drawn up by the Judicial and Bar Council.3 The members of the Judiciary have a fixed tenure and serve until the age of seventy years. 4 Their salaries cannot be reduced.5 The budget for the Judiciary cannot be reduced below the amount appropriated for the previous year and must be automatically released.6
1. 2. 3. 4. 5. 6. Constitution of 1987, Article VIII, Section 4 (1). Constitution of 1987, Article VIII, Sections 1 and 5 (2). Constitution of 1987, Article VIII, Sections 8 (5) and 9. Constitution of 1987, Article VIII, Section 11. Constitution of 1987, Article VIII, Section 10. Constitution of 1987, Article VIII, Section 3.

9.

The Bill of Rights contains numerous guarantees found in the

Constitution of the United States such as due process, equal protection, security

19

against unreasonable searches and seizures, privacy of communication, freedom of speech and of the press, freedom of religion, and the right to form associations.1
1. Constitution of 1987, Article VIII, Section 11.

IV. 10.

POPULATION STATISTICS As of 1 May 2000, the population of the Philippines stood at

76,498,735.1 Around 35.85 per cent of the population are between twenty and forty-four years old.2 The rate of literacy is 93.9 per cent.3
1. 2. 3. National Statistics Office, 2000 Census of Population and Housing, p. 1. National Statistical Coordination Board, 2000 Philippine Statistical Yearbook, p. 1-18. National Statistical Coordination Board, 2000 Philippine Statistical Yearbook, p. 10-4.

11.

Around 45.6 per cent of the population have completed elementary

education. Around 29.7 per cent of the population have finished high school. Around 8.1 percent have obtained a college degree.1
1. National Statistics Office, 1995 Census of Population Report No. 2: Socio-Economic and Demographic Characteristics, p. XXIV.

12.

Only 1,000 islands of the Philippines are populated. 1 Around 56 per

cent of the population reside in Luzon. Around 23.7 per cent of the population live in Mindanao. Around 20.3 per cent of the population dwell in the islands in the Visayas.2
1. 2. Fund for Assistance to Private Education, Vol. I, p. 3. National Statistics Office, 2000 Census of Population and Housing, p. 1.

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2.

Historical Background

I. 13.

PREHISTORY People inhabited the Philippines between 24,000 and 22,000 B.C.1
1.
F. Jocano, Filipino Prehistory (Quezon City, Punlad Research House, 1998), p. 49.

14.

The Chinese were among the early groups of traders who had

direct contacts with the inhabitants of the Philippines, particularly between the ninth and the fifteenth centuries. Most of them came from southern China and arrived in junks loaded with porcelain ceramics.1 15. Traders from India, Thailand, Cambodia and Vietnam also came to

do business with the inhabitants of the Philippines.2


1. 2. F. Jocano, pp. 144, 146, and 197. F. Jocano, p. 197.

16.

Between the 10th and 12th centuries, Islamism started gaining roots

as a religion in the Philippines.1 It started in Sulu in the southern Philippines. 2 Then it spread slowly to Mindanao.3
1. Jocano, p. 152. C. Majul, Muslims in the Philippines (3rd ed., Quezon City, University of the Philippines Press, 1999), p. 56. 3. C. Majul, p. 76.

2.

17.

The prehistoric socio-political units in the Philippines were the

barangays.1 The head was a leader called datu. The leadership was usually hereditary.2 The datu acted as legislator, judge, arbitrator, mediator, and war
21

leader.3 Each barangay had a system of customary laws. The customary laws were based on social and religious usage. They imposed punishments for

crimes like murder, theft, and rape. They regulated domestic relations, property, contracts, and inheritance.4
1. 2. 3. 4. F. Jocano, p. 153. F. Jocano, p. 159. F. Jocano, p. 158. F. Jocano, pp. 162 and 199.

II. 18.

SPANISH ERA It was Ferdinand Magellan, a Portuguese navigator sailing under

the Spanish flag, who discovered the Philippines for the Western world when he sighted the towering heights of Samar Island on 16 March 1521.1 arrival, he introduced Christianity in the Philippines.2
1.
E. H. Blair and J. A. Robertson, The Philippine Islands (Cleveland, A.H. Clark Company, 1903), Vol. XXXIII, p. 103. 2. E. H. Blair and J. A. Robertson, Vol. XXXIII, pp. 149-159.

With his

19.

From 1525 to 1542, Spain sent four unsuccessful expeditions to

secure its possession of the Philippines.1 It was Ruy Lopez de Villalobos who in 1542 named the archipelago Ferdinand Magellan had discovered Filipinas (Philippines) in honor of Philip II, the crown prince of Spain.2
1. 2. E. H. Blair and J. A. Robertson, Vol. II, pp. 11-13. E.H. Blair and J. A. Robertson, Vol. II, p. 47.

20.

On 24 September 1559, King Philip II wrote Luis de Velasco, the

viceroy of Mexico, instructing him to send an expedition to colonize the

22

Philippines1.

Miguel Lopez de Legaspi, a Spanish soldier, was placed in

command of the expedition. Father Andres Urdaneta, an Augustinian priest, who had accompanied the expedition headed by Garcia Jofre de Loasia in 1525, acted as the chief pilot.2 Miguel Lopez de Legaspi proceeded to lay the

foundations for Spanish rule in the Philippines.3 On 14 August 1569, King Philip II appointed Miguel Lopez de Legaspi the first governor and captain general of the Philippines.4
1. 2. 3. 4. E.H. Blair and J. A. Robertson, Vol. II, pp. 78-79. E.H. Blair and J. A. Robertson, Vol. II, pp. 83-84. E.H. Blair and J. A. Robertson, Vol. II, pp. 201-216. E.H. Blair and J. A. Robertson, Vol. III, pp. 62-66.

21.

On 21 June 1571, Miguel Lopez de Legaspi named Manila a city

and organized a city government three days later.1


1. E.H. Blair and J. A. Robertson, Vol. III, pp. 173-174.

22.

In June 1565, the vessel San Pablo returned to Mexico under the

command of Felipe de Salcedo, the grandson of Miguel Lopez de Legaspi. It brought a shipment of cinammon. This started the galleon trade between the Philippines and Mexico.1 For two and a half centuries, Spanish galleons plied the route between Manila and Acapulco under the most difficult navigating conditions. They brought silk from China and spices from the Far East to

Mexico. It only ended when Mexico fought to wrest its independence from Spain. The last galleon cast anchor in Mexico in 1815.2
1.
2. W. L. Schwarz, The Manila Galleon (New York, E. P.Dulton and Company, 1939), p. 28. W. L. Schwarz, p. 21.

23

23.

The Philippines was evangelized as a Spanish colony under the

regime of the Patronato. This was an arrangement based on the Bull Universalis Ecclesiae of Pope Julius II. Pope Julius II granted King Ferdinand and his

successors to the Spanish throne the exclusive right to construct or to permit the construction of churches in the Spanish colonies and to present ecclesiastical candidates for bishoprics, abbacies, canonries and other ecclesiastical benefices. This concession was given in view of the undertaking of the Spanish king to promote the evangelization of his subjects and to provide for the support of the Catholic Church.1 Since the Spanish priests were the only Spaniards willing to reside outside Manila and since they depended on the Spanish crown for support, in effect they became salaried government officials.2 They became the representatives of the Spanish government outside Manila.
1.
H. V. de la Costa, S.J., The Development of the Native Clergy in the Philippines in Vol. VIII, No. 2, Theological Studies, June 1947, p. 223. 2. H. V. de la Costa, S.J., The Development of the Native Clergy in the Philippines, p. 224.

24.

King Philip II divided the Philippines among the different religious

orders. Since no territory was available for secular priests, the secular priests were reduced to being assistants of the religious parish priests.1
1. H. V. de la Costa, S.J., The Development of the Native Clergy in the Philippines, p. 225.

25.

In the 18th century, the schools established in the Philippines for

Spaniards began educating Filipinos for priesthood.1 The religious orders in charge of the parishes came to look upon them as a threat to their security, for

24

within the framework of the Patronato, the only way the secular priests could obtain parishes was to displace the priests belonging to the religious orders.2
1. 2. H. V. de la Costa, S.J., The Development of the Native Clergy in the Philippines, p. 234. H. V. de la Costa, S.J., The Development of the Native Clergy in the Philippines, p. 238239.

26.

The Seven Years War reached the shores of the Philippines on 22

September 1762, when General William Draper and Admiral Samuel Cornish appeared.1 On 5 October 1762, the English troops breached the Spanish defenses and occupied Manila.2 The English relinquished their possession of Manila when a Treaty of Paris was signed between Spain and England.3
1. 2. 3. E. H. Blair and J. A. Robertson, Vol. XLIX, pp. 109-110. E. H. Blair and J. A. Robertson, Vol. XLIX, pp. 125-127. E. H. Blair and J. A. Robertson, Vol. L, p. 23.

27.

When King Charles III ascended to the Spanish throne, he tried to Since the religious orders were less

gain control of the Catholic Church.

susceptible to control than the secular clergy because the secular priests were subject to bishops and the bishops were appointed by the Spanish crown, the government turned over the parishes to the secular clergy. However, the

majority of the secular priests were Filipinos. Recalling that it was the native priests who led the revolution against Spain in Mexico and Peru, the government looked upon the Filipino priests with suspicion.1
1.
J. N. Schumacher, S.J., Father Jose Burgos (Quezon City, Ateneo de Manila University Press, 1999), pp. 8-10.

25

28.

In 1826, a royal decree ordered that the parishes be turned over to

the religious orders. This drew protests from the Filipino secular priests.1 Father Jose Burgos, a Filipino priest, led the struggle for the repeal of the royal decree.2
1. 2.
J. N. Schumacher, S.J., Father Jose Burgos, pp. 8-10. J. N. Schumacher, S.J., Father Jose Burgos, p. 19.

29.

On 20 January 1872, Sergeant Lamadrid led a mutiny in a Spanish

garrison. Its alleged purpose was to establish a provisional government to be headed by Father Jose Burgos. The mutiny was swiftly crushed.1 A military court found Father Jose Burgos and two other Filipino priests, Fathers Jacinto Zamora and Mariano Gomez, guilty of inciting the mutiny. They were sentenced to death. 2 However, the Archbishop Gregorio Meliton Martinez of Manila refused to defrock them, as he was not convinced of their guilt.3 1. 2. 3.
J. N. Schumacher, S.J., Father Jose Burgos, p. 26. J. N. Schumacher, S.J., Father Jose Burgos, pp. 270-271. J. N. Schumacher, S.J., Father Jose Burgos, pp. 28-29.

30.

The impassioned plea of Father Jose Burgos for nationalism was

taken up by other Filipinos. The Filipinos studying in Spain were exposed to the wave of liberalism sweeping Europe. They banded together and they started publishing in Barcelona a forthnightly newspaper bearing the title La Solidaridad. The first issue appeared on 15 February 1888.1 Filipino patriots like Jose Rizal, Graciano Lopez Jaena and Marcelo del Pilar wrote a series of articles clamoring

26

for social and political reforms.2 This came to be known as the Propaganda Movement.2
1.
J. N, Schumacher, S.J., The Propaganda Movement 1880-1895, (rev. ed. Quezon City, Ateneo de Manila University Press, 1997), p. 135.

2.

J. N. Schumacher, S.J., The Propaganda Movement 1880-1895, p. 157.

31.

Jose Rizal wrote two political novels, Noli Me Tangere and El

Filibusterismo, which exposed the social and political conditions in the Philippines. Noli Me Tangere was published in Berlin in 1887.1 El Filibusterismo was published in Ghent in 1891.2 Jose Rizal dedicated El Filibusterismo to

Fathers Jose Burgos, Jacinto Zamora and Mariano Gomez.3


1.
2. 3. L. Guerrero, The First Filipino (Manila: National Historical Institute, 1963), p. 145. L. Guerrero, p. 273. L. Guerrero, p. 283.

32.

The Propaganda Movement failed to wring from Spain the reforms

it was asking for, but it awakened among the Filipinos a sense of national unity.1 It served as the prelude to the Philippine Revolution.
1. J.N. Schumacher, S.J., The Propaganda Movement 1880-1895, p. 300.

33.

On 7 July 1892, Andres Bonifacio founded the Katipunan, a secret

society founded along Masonic lines whose purpose was to revolt from Spain. 1 When the Spanish government discovered its existence, it ordered the arrest of those implicated in the conspiracy.2 Andres Bonifacio and his followers

escaped.3 On 26 August 1896, they gathered at the nearby town of Balintawak, tore up their cedulas, the tribute that recognized Spanish sovereignty over the

27

Philippines, and shouted Long live the Philippine Republic! 4 The Philippine Revolution had broken out.
1.
2. 3. 4. G. Zaide, History of the Katipunan (Manila, Loyal Press, 1939), pp. 2 and 60. G. Zaide, p. 68. G. Zaide, p. 103. G. Zaide, p. 104.

34.

The Katipunan was using the name of Jose Rizal as a rallying cry.

Jose Rizal was arrested and charged before a military court with founding illegal associations and inducing the commission of rebellion.1 Rizal was against the revolution. He believed in reforms instead.2 The military court found him guilty and sentenced him to death.3 Jose Rizal was executed by a firing squad on 30 December 1896.4 The execution of Rizal stoked the flames of the Philippine Revolution.
1.
H. V. de la Costa, S.J., The Trial of Rizal (Quezon City, Ateneo de Manila University Press, 1961), p. 170. 2. L. Guerrero, pp. 422-425. H. V. de la Costa, S.J., The Trial of Rizal p. 156. L. Guerrero, p. 490.

3.
4.

35.

The Philippine Revolution was spreading. In the nearby Province

of Cavite, Emilio Aguinaldo led the uprising and was winning a string of victories. 1 This spawned rivalry between the factions of Andres Bonifacio and Emilio Aguinaldo. A convention was called on 22 March 1897 for the sake of unity. It was decided to set up a revolutionary government. Emilio Aguinaldo was elected president.2
1. G. Zaide, p. 166.

28

2.

G. Zaide, pp. 121-123.

36.

While the Philippine Revolution was raging, war broke out between

Spain and the United States when the cruiser Maine blew up in Havana on 15 February 1898. Admiral George Dewey, who was with his squadron in Hong Kong, received on 25 April 1898 a cable instructing him to proceed to the Philippines and to attack the Spanish fleet.1 On 1 May 1898, he defeated the Spanish fleet.2
1.
G. Dewey, Autobiography of George Dewey (New York, Charles Scribners Sons, 1913), p. 195

2.

M. W Wilcox (ed.), Harpers History of the War in the Philippines (New York, Harper & Brothers Publishers, 1900) pp. 37-40

37.

Meanwhile, on 12 June 1898, President Emilio Aguinaldo

proclaimed Philippine independence.1


1.
S. Guevara (ed.), The Laws of the First Philippine Republic (Manila, National Historical Institute, 1994), pp. 203-206.

III.

American Era 38. The Spanish-American War ended when Spain and the United Spain ceded the

States signed the Treaty of Paris on 10 December 1898.1

Philippines to the United States. The Philippines protested against the treaty in vain.2
1. 2. M. Wilcox (ed.), p. 59. S. Guevara (ed.), pp. 226-230.

39.

On 20 January 1899, the Malolos Congress adopted a constitution

for the revolutionary government.1


29

1.

S. Guevara (ed.), pp. 88-103.

40. Jose Rizal had travelled in the United States in 1888.1

In the essay

Filipinas dentro de Cien Aos he wrote in La Solidaridad on 1 February 1890, he predicted that the United States would colonize the Philippines.2
1.
J. Rizal, Reminiscences and Travels of Jose Rizal (Manila, National Historical Institute, 1961), pp. 147-149.

2.

G. Fores-Ganzon (ed.), La Solidaridad (Quezon City, University of the Philippines, 1973), Vol. II, p. 49.

41.

The Filipinos took it for granted that the United States would defeat On the other hand, in

Spain and then let them have their independence.1

fulfillment of the prediction of Jose Rizal, the United States had decided to keep the Philippines as a colony to increase American foreign trade. 2 It was inevitable that war would break out between the Philippines and the United States. The first shot of the war was fired on 4 February 1899. The war practically ended when President Emilio Aguinaldo was captured on 23 March 1904.
1.
2. 3. 4. L. Wolff, Little Brown Brother (Oxford, Oxford University Press, 1991), p. 67. L. Wolff, p. 193. M. Cox (ed.), p. 106. L. Wolff, pp. 344-345.

42.

The struggle for Philippine independence shifted from the

battlefields of Luzon to the halls of the United States Congress. 43. On 24 March 1934, the United States Congress approved the It authorized the Philippine Legislature to call a

Tydings-McDuffie Law.

Constitutional Convention, provided for the establishment of a ten-year transitory

30

Commonwealth of the Philippines, and set the recognition of Philippine independence on 4 July 1946. 44. Delegates to the Constitutional Convention were elected on 10 July

1934.1 On 8 February 1935, it approved the Constitution it had drafted. 2 It was ratified in a plebiscite held on 14 May 1935.3
1.
Aruego, The Framing of the Philippine Constitution (Manila, University Publishing Company, Inc., 1936), Vol. I, pp. 14-17. 2. 3. Aruego, Vol. II, p. 689. Aruego, Vol. II, pp. 709-712.

45. On 15 November 1935, the Commonwealth of the Philippines was inaugurated, and Manuel Quezon took his oath as President. 46. With the bombing of Pearl Harbor on 7 December 1941, the flames

of the Second World War reached the Philippines.1 General Douglas MacArthur, the commander of the United States Armed Forces in the Far East, implemented War Plan Orange 3, the contingency plan which had been revised eight months earlier. Under it, instead of defending the entire Philippines, the United States Armed Forces in the Far East would withdraw to the Province of Bataan, which overlooked Manila Bay. So long as the United States Armed Forces in the Far East controlled Bataan, enemy forces would be denied access to the ports of Manila. It was expected that the Filipino-American forces would be able to hold Bataan for six months reinforcements.2
1.
D. MacArthur, Reminiscences (New York, Mc Graw-Hill Book Company, 1964), pp. 120123.

until the United States Navy could bring massive

2.

J. Whitman, Bataan: Our Last Ditch (New York, Hippocrene Books, 1990), p. 13.

31

47.

President Franklin Delano Roosevelt ordered General Douglas

MacArthur to proceed to Australia, because it would be used as a base for a counter-offensive. President Franklin Delano Roosevelt asked President Manuel Quezon to join General Douglas MacArthur.1 Upon his arrival in Australia,

General Douglas MacArthur pledged, I came through and I shall return.2


1.
2. M. L. Quezon, The Good Fight (New York, D. Appleton-Century Company, 1946), p. 200. D. MacArthur, p. 145.

48.

President Manuel Quezon decided to proceed to the United States,

where he formed a government in exile.1


1. M. L. Quezon, p. 320.

49. The United States was fighting a world war in two fronts. It was preoccupied with the war in Europe. The Pacific fleet had been destroyed in Pearl Harbor. No reinforcements were forthcoming. Hunger, disease, and the crushing enemy attacks broke the defenses of Bataan. On 9 April 1942, Bataan fell.1 It was only a matter of time before General Jonathan Wainwright surrendered on 6 May 1942 all the Filipino and American troops in the nearby Island of Corregidor. 2 The Filipinos shifted to guerrilla warfare.
1. 2.
N. Reyes, Child of Two Worlds (Manila, Anvil Publishing, Inc. 1995), p. 280. J. J. Beck, Mac Arthur and Wainwright (Albuquerque, University of New Mexico Press, 1974), p. 219.

50.

On 20 October 1944, General Douglas MacArthur redeemed his

pledge when the American liberation forces landed in the Province of Leyte. The

32

liberation forces advanced swiftly. It was the Battle of Manila which turned out to be the bloodiest. Fighting raged street by street and building by building. The bombing, shelling and burning reduced Manila into a rubble. Around 100,000 civilians perished.1
1.
A.J. Ajuit, By Sword and Fire (Manila, Bookmark, Inc. 1994), pp. 393, 398-399, and 405406.

51. restored.1

On 27 February 1945, the Commonwealth of the Philippines was

1.

D. MacArthur, p. 251.

IV.
3

The Philippine Republic 52. On 4 July 1946, President Harry Truman proclaimed the

independence of the Philippines. Manuel Roxas, who had won in the election on 23 April 1946, took his oath as the first President of the Republic of the Philippines. 53. The Philippines had a working democracy until 23 September 1972, when Ferdinand Marcos, the sixth President, took a step that changed the course of history. Invoking the Communist rebellion as an excuse, he proclaimed martial law. Under the Constitution of 1935, he could no longer remain in office beyond 1973. On 17 January 1973, he supplanted it with a new Constitution, which removed the limit on the term of the President. However, the authoritarian rule could not last forever. 54. The assassination on 21 August 1983 of Benigno Aquino, Jr., the leader of the opposition, by his military escort galvanized the nation and led to

33

massive protests. In the election held on 7 February 1986, the opposition pitted Corazon Aquino, the widow of Benigno Aquino, Jr., against Ferdinand Marcos. Ferdinand Marcos was officially proclaimed elected in an election that was marred by unprecedented fraud. Public outrage mounted. 55. Juan Ponce Enrile, the Minister of National Defense, and soldiers

who had become disillusioned decided to break away from the Marcos administration. Lieutenant General Fidel Ramos, the Vice Chief of Staff, joined them. On 22 February 1986, they holed up at Camp Crame and announced their breakaway from the Marcos administration.1 Jaime Cardinal Sin, the Archbishop of Manila, called upon the people to support the cause of Minister Juan Ponce Enrile and Lieutenant General Fidel Ramos. People from all walks of life flocked to the avenue fronting Camp Crame.2 The troops President Ferdinand Marcos sent to crush the mutiny refused to fire when they saw the mass of civilians blocking their path.3 Finding himself unable to govern any longer, President

Ferdinand Marcos fled with his family to Hawaii on 25 February 1986.4 The Marcos regime was toppled by people power.
1.
2. 3. 4. C. T. Arillo, Breakaway (Manila, CTA & Associates, 1986), pp. 147-151 and 165-173.

C. T. Arillo, p. 158. C. T. Arillo, p. 78 C. T. Arillo, pp. 119-123.

56. President.

On the same day, Corazon Aquino took her oath as the new A Constitutional Commission drafted a new Constitution. It was

ratified overwhelmingly in a plebiscite held on 2 February 1987.

34

INTELLECTUAL PROPERTY LAW CHAPTER 1.


1. 57.

COPYRIGHT AND NEIGHBOURING RIGHTS

SOURCES-LEGISLATION The Law on Intellectual Property approved by the Spanish Cortes

on 10 January 1879 was extended to the Philippines by the Royal Decree issued by Queen Regent Maria Cristina on 5 May 1887.1 This was the first copyright law in the Philippines.2 Likewise, the Civil Code of Spain, which was based on the Code of Napoleon, was extended to the Philippines by the Royal Decree issued by Queen Regent Maria Cristina on 31 July 1889.3 The Civil Code of Spain contained provisions on literary property. Article 428 provided that the author of a literary or scientific work had the right to exploit it and dispose of it according to his will. Article 429 decreed that the general provisions of the Civil Code of Spain on property would apply in a suppletory manner to the Law on Intellectual Property. 1. 2. 3.
Serrano v. Pagkalinawan [1918] 44 Phil. 855, 861-862. I. Sapalo, Background Reading Material on Intellectual Property System of the Philippines (Geneva, World Intellectual Property Organization, 1994), p. 133. J.M. Manresa, Comentarios al Codigo Civil Espaol (7th ed., Madrid, Instituto Editorial Reus, 1956), Tomo I, p. 117.

58.

With the signing of the Treaty of Paris at the end of the Spanish-

American War on 10 December 1898, Spain ceded the Philippines to the United States. Article XIII of the Treaty of Paris guaranteed continued protection for property rights granted by copyrights acquired by Spaniards in the Philippines.

35

The Law on Intellectual Property ceased to be in force and was replaced by the Copyright Law of the United States.1
1. Serrano v. Pagkalinawan, [1918], 44 Phil. 855, 863.

59.

The Philippine Legislature enacted Act 3134, the Copyright Law of

the Philippine Islands, which took effect on 26 March 1924. It was patterned after the Copyright Law of 1909 of the United States.1
1. I. Sapalo, p. 133.

60.

On 14 May 1935, the Constitution took effect. Article XIV, Section 4

secured to authors their exclusive rights to their writing for a limited period. 61. On 30 August 1950, the Civil Code took effect. Article 712

recognized intellectual creation as a mode of acquiring ownership of property. 62. Elaborating on this, Article 721 of the Civil Code provides:

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) 3) The composer, as to his musical composition; 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.1

In addition, Article 722 reads: `The author and the composer, mentioned in Nos. 1 and 2 of the preceding article, shall have the ownership of their creation even before

36

the publication of the same. Once their work are published, their rights are governed by the Copyright Law. 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. 63. On 1 August 1951, the Philippines acceded to the Berne

Convention for the Protection of Literary and Artistic Rights.1


1. Senate Resolution No. 21.

64.

On 17 January 1973, a new Constitution superseded the

Constitution of 1935. Article XV, Section 9 (3) secured to authors and artists the exclusive right to their writings and artistic creations for a limited period. 65. To keep the law abreast of the great strides in science and

technology, Presidential Decree 49 entitled the Decree on Intellectual Property replaced Act 3134 on 14 November 1972. It extended protection to works

produced by new methods like audio-visual recordings and computer programmes. It conferred protection on the rights granted by it from the moment of creation. It extended protection to neighbouring rights. It defined the rights of joint creators and employees, expanded the limitations to the scope of copyright protection, lengthened the duration of copyrights, and broadened the remedies for infringement.1 On 5 October 1985, the Decree on Intellectual Property was amended by Presidential Decree 1988, which penalized the unauthorized copying and distribution of video tapes.

37

1.

E. Bautista, Salient Features of the Decree on Intellectual Property in E. Bautista (ed.), Law on Intellectual and Industrial Property (Quezon City, University of the Philippines Law Center, 1975), pp. 2-6.

66.

Meanwhile, on 25 September 1984, the Philippines acceded to the

International Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations, which was adopted in Rome on 26 October 1961.1
1. I. Sapalo, p. 137.

67.

On 2 February 1987, a new Constitution supplanted the 1973

Constitution. Article XIV, Section 13, provides: 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.

68.

On 6 June 1997, Republic Act 8293 entitled the Intellectual

Property Code superseded the Decree on Intellectual Property. It harmonized the law with the provisions of the Berne Convention for the Protection of Literary and Artistic Rights.1 It included rental in the economic rights pertaining to a copyrighted work, abolished the provision on translations in the Decree on Intellectual Property, expanded the limitations to the scope of copyright protection, and allowed the reproduction of computer programmes under certain conditions.

38

1.

Explanatory Note of House Bill 6130; Record of the Senate, Vol. II, No. 29, 8 October 1996, p. 133.

2.

SUBJECT MATTER OF PROTECTION I. 69. Different Categories of Protected Works Literary and artistic works which are protected include the following:

a) b) c)

Books, pamphlets, articles and other writings; Periodicals and newspapers; Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other material form;

d) e)

Letters; Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows;

f) g)

Musical compositions, with or without words; 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) k)

Drawings or plastic works of a scientific or technical character; Photographic works including works produced by a process analogous to photography; lantern slides;

39

l)

Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or any process for making audiovisual recordings;

m) n) o)

Pictorial illustrations and advertisements; Computer programmes; and Other literary, scholarly, scientific and artistic works.1
1. Intellectual Property Code, Subsection 172.1.

70. appearance.1

Ornamentation

signifies

beauty,

the

giving

of

pleasing

1.

I. Sapalo, p. 140.

71.

A dictionary can be copyrighted.

Although words are not the

property of anyone, their definitions, the examples given to explain their meanings, and the manner of expressing their meaning constitute an original work.1
1. Serrano v. Paglinawan, [1918] 44 Phil. 855, 862.

72.

The combination of the Chinese words chin, sun, and si, which

constitute the trademark of a face cream and which mean youth, beautiful, and cream, cannot be copyrighted. The combination of such common words is not a literary scholarly, scientific or artistic work.1 information cannot be copyrighted. 2
1.
Kho v. Summerville General Merchandising & Company, CA-G.R. No. 48043, November 22, 1999.

Blank forms used for recording

40

2.

R. Aquino, Intellectual Property Law (Quezon City, Central Professional Books, Inc., 1998), p. 42.

I. 73. a)

DERIVATIVE WORKS The following derivative works are also protected by copyright:

Dramatizations, translations, adaptations, abridgements, 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.1
1. Intellectual Property Code,, Subsection 173.1.

74.

These works are protected as new works, but the new works do not

affect the force of any subsisting copyright upon the original works employed. Neither do they imply the right to use the original works without the authority of their authors or the extension of the copyright in the original works.1
1. Intellectual Property Code, Subsection 173.2.

75.

In addition, the publisher can have a copyright consisting of the

right of reproduction of the typographical arrangement of the published edition of the work.1 Thus, the publisher is granted a copyright distinct from that of the author upon the printing configuration, e.g., fonts, characters, format and lay-out.2
1. 2. Intellectual Property Code, Section 174. R. Aquino, p. 12.

41

II. 76.

WORKS EXCLUDED OF PROTECTION No protection is extended to any idea, procedure, system, method

or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other miscellaneous facts having the character of mere items of press information; or any official text of a legislative, administrative or legal nature, as well as any official translation of them.1
1. Intellectual Property Code, Section 175.

77.

The format of a television show which consists of matching the

male and the female participants for a date by asking them a series of questions to find out who among them are most compatible cannot be copyrighted. It is just a concept.1 Likewise, a racing programme with tips prepared by the publisher cannot be copyrighted.2 One who printed Christmas cards depicting scenic spots in the Philippines cannot prevent somebody else from making similar Christmas cards provided that the scenic spots are photographed in a different way. It is only his treatment of the subject and the expression of the idea that are protected by his copyrights.3
1. 2. 3.
Joaquin v. Drilon [1999] 302 SCRA 225, 239. Guidotti v. Inciong CA-G.R. No. 6268, July 10, 1951. Abiva v. Weinbrenner [1964] 6 CAR (2s) 1023, 1027-1029.

78.

No copyright shall subsist in any work of the Government of the

Philippines. However, prior approval of the government office which created the work is required for the exploitation of the work for profit, and the government

42

office may require the payment of royalties. No prior approval or payment of royalties shall be required for the use for any purpose of law, rules and regulations, and speeches, lectures, sermons, addresses and dissertations, pronounced, read or rendered in courts of justice, administrative agencies, deliberative assemblies, and meetings of public character.1 However, the author of the speeches, lectures, sermons, addresses and dissertations has the exclusive right to make a collection of his works.2
1. 2. Intellectual Property Code, Subsection 176.1. Intellectual Property Code, Subsection 176.2.

3.

CONDITIONS OF PROTECTION
I. 79. FORMAL REQUIREMENTS The works are protected from the moment of their creation.1 They

are protected by the sole fact of their creation.2


1. 2. Intellectual Property Code, Subsection 172.1. Intellectual Property Code, Subsection 172.2.

80

Within three weeks after the first public dissemination or

performance of a work by authority of the owner of the copyright, two complete copies or reproduction of the work shall be registered and deposited with the National Library and the Supreme Court Library merely for the purpose of completing their records.1 If the work is on law, two copies must also be

deposited with the University of the Philippines Law Center.2


1. 2. Intellectual Property Code, Section 191. Republic Act 3870, Section 3.

43

81.

Each copy of a work published or offered for sale may contain a

notice bearing the name of the owner of the copyright and the year of its first publication and, in copies produced after the death of the author, the year of his death.1
1. Intellectual Property Code, Section 192.

II. 82.

SUBSTANTIVE REQUIREMENTS For a work to be protected, it must be original. 1 Originality is

required for the composition of the contents and the form of their expression but not in relation to ideas, information or methods embodied in the work. Originality means the work is the creation of the author and is not copied totally or substantially from another work.2 uniqueness , or creativity. creation of the author.3
1. 2. 3. Intellectual Property Code, Subsection 172.1. I. Sapalo, p. 140. R. Aquino, p. 13.

Originality does not mean novelty, ingenuity,

It simply means that the work is an independent

44

4.

OWNERSHIP
I. 83. THE AUTHOR The copyright belongs to the author of the work.1 The copyright in

letters belongs to the writer.2 The letters themselves are owned by the persons to whom they were addressed and delivered, but they cannot be published or disseminated without the consent of the writer unless the court authorizes their publication or dissemination for the public good or in the interest of justice.3
1. 2. 3. Intellectual Property Code, Subsection 178.1. Intellectual Property Code, Subsection 178.6. Civil Code, Article 723.

84.

In the case of works published without the name of the author or

under a pseudonym, the publisher shall be deemed to represent the author, unless the contrary appears, the pseudonym leaves no doubt as to the identity of the author, or the author of the anonymous work discloses his identity.1
1. Intellectual Property Code, Section 179.

II. 85.

JOINT WORKS/ WORKS CREATED BY SEVERAL PERSONS In the case of works of joint authorship, the co-authors are the

owners of the copyright. If the work consists of parts that can be used separately and the author of each part can be identified, the author of each part is the original owner of the copyright in the part that he created.1
1. Intellectual Property code, Subsection 178.2.

45

86.

In the case of an audiovisual work, the copyright belongs to the

producer, the author of the scenario, the composer of the music, the film director, and the author of the work adapted. Unless the creators stipulate to the

contrary, the producer shall exercise the copyright to the extent required for the exhibition of the work, except for the right to collect royalties for the performance of musical composition, with or without words, which are incorporated into the work.1
1. Intellectual Property Code, Subsection 178.5.

III. 87.

WORKS MADE FOR HIRE In the case of a work created by an author during and in the course

of his employment, the copyright belongs to his employer, if the work is the result of his regular duties, unless they have an express or implied agreement to the contrary. If the creation of the work is not a part of the regular duties of the employee, the copyright belongs to him, even if he used the time, facilities and materials of the employer.1 The phrase course of employment means that the employee was doing what a man so employed may reasonably do within the time during which he is employed and at a place where he may reasonably be during that time to create the work. If the creation of the work is not part of the regular duties of the employee, the employee and the employer are barred from agreeing that the copyright will belong to the employer.2
1. 2. Intellectual Property Code, Subsection 178.3. Bautista, p. 8.

46

88.

If the work was commissioned by someone other than the employer

of the author, the person who commissioned the work owns the work. However, the copyright belongs to the author, unless they have a written agreement to the contrary.1 Thus, the owner of a building who commissioned an architect to

prepare the architectural plan for the building may not use it again for another project without the consent of the architect.2
1. Intellectual Property Code, Subsection 178.4. Gan v. Ramon S. Licup Design Group, Inc. C.A.-G.R. CV No. 17618, August 28, 1970.

2.

5.

TRANSFER
I. 89. ASSIGNMENT OF COPYRIGHT The copyright is distinct from the property in the material object

subject to it. The assignment of the copyright does not of itself transfer the material object. An assignment of the copyrighted work does not transfer the copyright.1
1. Intellectual Property Code, Section 181.

90.

The copyright may be assigned in whole or in part. Within the

scope of the assignment, the assignee is entitled to all the rights and remedies of the assignor with respect to the copyright.1 Assignment includes conveyance, hypothecation, and mortgage.2 The copyright is not deemed assigned inter vivos in whole or in part unless there is a written indication of such intention.3
1. 2. 3. Intellectual Property Code, Subsection 180.1. R. Aquino, p. 68. Intellectual Property Code, Subsection 180.2.

47

91.

An assignment may be filed with the National Library for

registration.1 The failure to register an assignment does not affect its validity and does not preclude the assignee from suing for infringement of the copyright. The purpose of the assignment is to protect subsequent purchasers and mortgagees who have no knowledge of the assignment.2
1. Intellectual Property Code, Section 182. Isle Originals, Inc. v. Sosan Industries, Inc. [1995] 95 O.G. 3479, 3487.

2.

II. 92.

LICENSES The submission of a literary, photographic, or artistic work to a

newspaper, magazine or periodical for publication is a license to make a single publication only unless a greater right is expressly granted. If two or more

persons jointly own a copyright or a part of it, none of them may grant a license without the prior written consent of the other owner or owners.1
1. Intellectual Property Code, Subsection 180.3.

93. registration.1
1.

An exclusive license may be filed with the National Library for

Intellectual Property Code, Subsection 182.

6.

SCOPE OF EXCLUSIVE RIGHTS


I. 94. MORAL RIGHTS The author of a work has the following moral rights:

a)

To require that the authorship of the work be attributed to him, in particular, the right that his name, as far as practicable, be indicated in a

48

prominent way on the copies, and in connection with the public use of his work; b) To make any alterations of his work prior to, or to withhold it from publication; c) To object to any distortion, mutilation or other modification of, or other derogatory action in relation to, his work which will be prejudicial to his honor or reputation; and d) To restrain the use of his name with respect to any work not of his own creation or in a distorted version of his work.1 95. Thus, the author can destroy his work.2
1. 2. Intellectual Property Code, Section 193. R. Aquino, p. 50.

96.

An author may waive his moral rights by a written instrument, but

the waiver is not valid if its effect is to permit another: a) To use the name of the author, or the title of his work, or otherwise to make use of his reputation with respect to any version or adaptation of his work which, because of alterations in it, would substantially tend to injure the literary or artistic reputation of another author; or b) To use the name of the author with respect to a work he did not create.1
1. Intellectual Property Code, Section 195.

97.

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

his contribution attributed to him is deemed waived unless he expressly reserved it.1

49

1.

Intellectual Property Code, Section 196.

98.

In the absence of a contrary stipulation at the time an author

licenses or permits another to use his work, the necessary editing, arranging or adaptation of such work for publication, broadcast, use in a motion picture, dramatization, or mechanical or electrical reproduction in accordance with the reasonable and customary standards or requirements of the medium in which the work is to be used, will not be deemed to contravene his moral rights. The complete destruction of a work which the author unconditionally transferred will not be deemed to violate his moral rights.1
1. Intellectual Property Code, Section 197.

99.

The moral rights of an author last during his lifetime and for fifty The

years after his death and are not assignable or subject to license.

persons to be charged with the posthumous enforcement of these rights should be named in writing to be filed with the National Library. In default of such persons, the heirs of the author, and in default of the heirs, the Director of the National Library will enforce his moral rights.1
1. Intellectual Property Code, Subsection 198.1.

100.

The rights and remedies for the violation of the moral rights of an

author are the same as those for the infringement of a copyright. Damages under the Civil Code may also be recovered. Damages recovered after the death of the author shall be held in trust for and remitted to his heirs. If he has no heirs, the damages will belong to the Government of the Philippines.1
1. Intellectual Property Code, Section 199.

50

II.

EXPLOITATION RIGHTS A. Economic Rights

101.

The author of a work has the exclusive right to carry out, authorize

or prevent the following acts: a) b) Reproduction of the work or substantial portion of the work; Dramatization, translation, adaptation, abridgement, arrangement or other transformation of the work; c) The first public distribution of the original and each copy of the work by sale or other forms of transfer of ownership; d) Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound recording, a computer programme, a compilation of data and other materials or a musical work in graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental; e) f) g) Public display of the original or a copy of the work; Public performance of the work; and Other communication to the public of the work.1
1. Intellectual Property Code, Section 177.

102.

The term reproduction means the making of one or more copies of

a work or a sound recording in any manner or form. 1 A work is reproduced when it is fixed in tangible form in a manner sufficiently permanent to allow its retrieval. Thus, if work is scanned and stored in the hard disk of a computer

51

or a compact disk, it is being reproduced. The same holds true if a book is recorded on a cassette tape.2 The unauthorized reproduction of an article in a newspaper which contained a notice that all rights are reserved constitutes an infringement. Similarly, the manufacture of a wicker flower shop basket

similar to the one copyrighted is an infringement of the copyright.4


1. 2. Intellectual Property Code, Subsection 171.9. R. Aquino, pp. 42-43. Philippine Education Company, Inc. v. Sotto [1929] 55 Phil. 680, 688. Isle Originals, Inc. v. Sosan Industries, Inc. {1995] 95 O.G. 7479, 3488.

3. 4.

103.

The translation of a work without the knowledge and consent of the

author is an infringement of the copyright.1


1. Villanueva v. Enriquez, CA-G.R. No. 3657-R, June 9, 1950.

104.

The term public performance means, in the case of a work other

than an audiovisual work, 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, it is the showing of its images in sequence and the making of the sounds accompanying it audible. In the case of a sound recording, it signifies making the recorded sounds audible at a place or at places where persons outside the normal circle of a family and its 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 or different times, and where the performance can be perceived without the need for communication, making the work available to the public

52

by wire or wireless means in such a way that the public may access the work from a place and time individually chosen by them.1 Public performance includes reading a literary work aloud, singing or playing a musical composition, dancing a ballet or other choreographic works, and acting out a dramatic work or pantomine.2
1. 2. Intellectual Property Code, Subsections 171.3 and 171.6. R. Aquino, p. 46.

105.

Since the copyright in the character Charlie Brown in the comic

strip Peanuts and its pictorial illustration granted the owner of the copyright exclusive rights, somebody else cannot use the character Charlie Brown as a trademark.1 Similarly, since the character Cookie Monster in the television show Sesame Street has been copyrighted, the owner of a bakery and restaurant cannot use the trademark Kookie Monster, which resembled the character Cookie Monster and wore a similar chefs hat.2 1. 2.
United Feature Syndicate, Inc. v. Munsingwear Creation Manufacturing Company [1989] 179 SCRA 260, 267. Childrens Television Workshop v. Touch of Class, Inc., A.G.-G.R. SP No. 03423, May 15, 1985.

B.

OTHER RIGHTS 1. DROIT DE SUITE 106. In every sale or lease of an original work of painting or sculpture or

of the original manuscript of a writer or composer, subsequent to its first disposition by the author, the author or his heirs have an inalienable right to

53

participate in the proceeds of the sale or lease to the extent of five per cent. The right exists during the lifetime of the author and for fifty years after his death.1
1. Intellectual Property Code, Section 2001.

107.

This right does not apply to prints, etchings, engraving, works of

applied art, or works of similar kind in which the author principally derives gains from the proceeds of reproduction.1
1. Intellectual Property Code, Section 201.

2. 108.

WORK OF ARCHITECTURE The copyright in a work of architecture includes the right to control

the erection of any building which reproduces the whole or a substantial part of the work in original form or in any form recognizably derived from the original. This copyright does not include the right to control the reconstruction or rehabilitation in the same style as the original of the building to which the copyright relates.1
1. Intellectual Property Code, Section186.

7.

LIMITATIONS OR EXEMPTIONS TO THE SCOPE OF COPYRIGHT PROTECTION


I. 109. LIMITATIONS OF COPYRIGHT The following acts do not constitute infringement of a copyright:

a)

The recitation or performance of a work, once it has been lawfully made accessible to the public, if done privately and free of charge or if made strictly for a charitable or religious institution or society;

54

b)

The making of quotations from a published work if they are compatible with fair use and only to the extent justified for the purpose, including quotations from newspaper articles and periodicals in the form of press summaries; but the source and the name of the author, if appearing on the work, should be mentioned;

c)

The reproduction or communication to the public by mass media of articles on current political, social, economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are delivered in public if such use is for information purposes and has not been expressly reserved; but the source should be clearly indicated;

d)

The reproduction and communication to the public of literary, scientific or artistic works as part of reports of current events by means of photography, cinematography or broadcasting to the extent necessary for the purpose;

e)

The inclusion of a work in a publication, broadcast, or other communication to the public, sound recording or film, if such inclusion is made by way of illustration for teaching purposes and is compatible with fair use; but the source and the name of the author, if appearing in the work, should be mentioned;

f)

The recording made in schools, universities, or educational institutions of a work included in a broadcast for the use of such schools, universities or educational institutions; but such recording must be deleted within a reasonable period after they were first broadcast; and such recording may

55

not be made from audiovisual works which are part of the general cinema repertoire of feature films except for brief excerpts of the work; g) The making of ephemeral recordings by a broadcasting organization by means of its own facilities and for use in its own broadcast; h) The use made of a work by or under the direction or control of the Government of the Philippines, by the National Library or by educational, scientific or professional institutions if the use is in the public interest and is compatible with fair use; i) The public performance or the communication to the public of a work, in a place where no admission fee is charged for the public performance or communication, by a club or institution for charitable or educational purpose only, whose aim is not profit making, subject to such other limitations as may be provided in the regulations; j) Public display of the original or a copy of the work not made by means of a film, slide, television image or otherwise on screen or by means of any other device or process; but either the work has been published, or the original or the copy displayed has been sold, given away or otherwise transferred to another person by the author or his successor in title; and k) Any use made of a work for the purpose of any judicial proceedings or for the giving of professional advice by a legal practitioner.1
1. Intellectual Property Code, Subsection 184.1.

II.

FAIR USE

56

110.

The fair use of a copyrighted work for criticism, comment, news

reporting, teaching including multiple copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright.

Decompilation, which is the reproduction of the code and translation of the forms of the computer programme to achieve the inter-operability of an independently created computer programme with other programmes, may also constitute fair use. In determining whether the use made of a work in any particular case is fair use, the factors to be considered include: a) The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes; b) c) The nature of the copyrighted work; The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and d) The effect of the use upon the potential market for or value of the copyrighted work.1
1. Intellectual Property Code, Section 185.

III. 111.

REPRODUCTION OF PUBLISHED WORKS The private reproduction of a published work in a single copy, if the

reproduction is made by a natural person exclusively for research and private study, without the authorization of the owner of a copyright in the work, is permitted. The permission does not extend to the reproduction of the following: a) A work of architecture in the form of building or other construction;

57

b)

An entire book, or a substantial part thereof, or of a musical work in graphic form by reprographic means;

c) d) e)

A compilation of data and other materials; A computer programme except as provided in Section 189; and Any work in cases where reproduction will unreasonably conflict with a normal exploitation of the work or will otherwise unreasonably prejudice the legitimate interests of the author.1
1. Intellectual Property Code, Subsections 187.1 and 187.2.

IV. 112.

REPOGRAPHIC REPRODUCTION BY LIBRARIES Any library or archive whose activities are not for profit may, without

the authorization of the author or copyright owner, make a single copy of the work by reprographic reproduction in the following case: a) The work by reason of its fragile character or rarity cannot be lent to users in its original form; b) The works are isolated articles contained in composite works or brief portions of other published works and the reproduction is necessary to supply them, when this is considered expedient, to persons requesting their loan for purposes of research or study instead of lending the volumes or booklets which contain them; and c) The making of such a copy is to preserve and, if necessary in the event that it is lost, destroyed or rendered unusable, replace a copy, or to replace, in the permanent collection of another similar library or archive, a

58

copy which has been lost, destroyed or rendered unusable and copies are not available with the publisher.1 113. The permission does not extend to the reproduction of compact

disks or video tapes. The mode of copying authorized is limited to reprographic reproduction. The reproduction must be limited to the purposes of the library. A library is not authorized to produce numerous copies of the work for the purpose of sale or donation.2
1 2 Intellectual Property Code, Subsection 188.1. R. Aquino, pp. 60-61.

114.

However, it is not permitted to reproduce a volume of a work

consisting of several volumes or to produce missing tomes or pages of magazines or similar works, unless the volume, tome or part is out of stock. Every library which is by law entitled to receive copies of a printed work is entitled to reproduce a copy of a published work if it is necessary for the collection of the library but is out of stock.1
1. Intellectual Property Code, Subsection 188.2.

V. 115.

REPRODUCTION OF COMPUTER PROGRAMMES The reproduction in one back-up copy or adaptation of a computer

programme is permitted, without the authorization of the author of, or other owner of copyright in, a computer programme, by the lawful owner of the computer programme if the copy or adaptation is necessary for the following purposes:

59

a)

The use of the computer programme in conjunction with a computer for the purpose, and to the extent, for which the computer programme has been obtained; and

b)

Archival purposes, and, for the replacement of the lawfully owned copy of the computer programme in case the lawfully obtained copy of the computer programme is lost, destroyed or rendered unusable.1
1. Intellectual Property Code, Subsection 189.1.

VI. 116.

IMPORTATION FOR PERSONAL PURPOSES An individual may import a copy of a work for his personal purpose

without the authorization of the author or other owner of the copyright in the following cases: a) If copies of the work are not available in the Philippines and: i) Not more than one copy at one time is imported for strictly individual use only ; or ii) The importation is by authority of and for the use of the Government of the Philippines, or iii) The importation, consisting of not more than three copies or likenesses in any one invoice, is not for sale but for the use only of any religious, charitable, or educational society or institution duly incorporated or registered, or is for the encouragement of the fine arts, or for any state school, college, university, or free public library in the Philippines.

60

b)

If such copies form parts of libraries and personal baggage belonging to persons or families arriving from foreign countries and are not intended for sale, but the copies should not be more than three.1
1. Intellectual Property Code, Subsection 190.1.

8.
I.
10

DURATION OF PROTECTION
LITERARY, SCHOLARLY, SCIENTIFIC AND ARTISTIC WORKS The duration of copyrights may be tabulated as follows: Nature of Work Term a) The life of the author and 50 years after his death b) 50 years after the death of the author

117.

a) Literary, scholarly, scientific and artistic works b) Posthumous works

c) Joint authorship

c) The life of the last surviving author and 50 years after his death

d) Anonymous or pseudonymous works e) Anonymous or pseudonymous works where the identity of the author is revealed f) Unpublished anonymous or pseudonymous works g) Photographic works

d) 50 years from the date of first publication e) The life of the author and 50 years after his death

f) 50 years from the date of the making g) 50 years from the date of publication

61

h) Unpublished photographic works i) Published audio-visual works

h) 50 years from the date of making i) 50 years from the date of publication j) 50 years from the date of making k) 25 years from the date of making1

j) Unpublished audio-visual works k) Works of applied art 118.

The term of protection subsequent to the death of the author is

counted from the date of his death or of publication, but the term shall always be deemed to begin on the first day of January of the year following the event which gave rise to it.2
1. 2. Intellectual Property Code, Section 213. Intellectual Property Code, Section 214.

II. 119.

NEIGHBOURING RIGHTS The duration of the neighbouring rights granted the performers and

producers of sound recording may be tabulated as follows: NATURE OF NEIGHBOURING RIGHTS a) Performance not incorporated in recordings DURATION a) 50 years from the end of the year in which the performance took place b) Sound or image recording and performance incorporated in them b) 50 years from the end of the year in which the recording took place1 c) Broadcast c) 20 years from the date the broadcast took place2
1. 2. Intellectual Property Code, Subsection 215.1. Intellectual Property Code, Subsection 215.2.

62

9.
I.

NEIGHBOURING RIGHTS
SCOPE OF RIGHTS OF PERFORMERS A. EXCLUSIVE RIGHTS

120. (a)

Performers have the following exclusive rights:

The right of authorizing: i) The broadcasting and other communication to the public of their performance; and ii) The fixation of their unfixed performance.

b)

The right of authorizing the direct or indirect reproduction of their performances fixed in sound recordings, in any manner or form:

c)

The right of authorizing the first public distribution of the original and copies of their performance fixed in the sound recording through sale or rental or other forms of transfer of ownership;

d)

The right of authorizing the commercial rental to the public of the original and copies of their performances fixed in sound recordings, even after distribution of them by, or pursuant to the authorization by the performer; and

e)

The right of authorizing the making available to the public of their performances fixed in sound recordings, by wire or wireless means, in such a way that members of the public may access them from a place and time individually chosen by them.1
1. Intellectual Property Code, Section 203.

63

121.

Once the performer has authorized the broadcasting or fixation of

his performance, he has no more exclusive rights.1


1. Intellectual Property Code, Section 205.

122.

The limitations on copyright protection and the provisions on fair

use are applicable to the exclusive rights of performers.1


1. Intellectual Property Code, Subsection 205.2.

B. 123.

MORAL RIGHTS

The performer has, as regards his live aural performances or

performances fixed in sound recordings, the right to claim to be identified as the performer of his performances, except where the omission is dictated by the manner of the use of the performance, and to object to any distortion, mutilation or other modification of his performances that would be prejudicial to his reputation.1
1. Intellectual Property Code, Section 204.

C.
11

DROIT DE SUITE

124.

Unless otherwise provided in the contract, in every communication

to the public or broadcast of a performance subsequent to the first communication or broadcast of it by the broadcasting organization, the performer is entitled to an additional remuneration equivalent to at least five per cent of the original compensation he or she received for the first communication or broadcast.1
1. Intellectual Property Code, Section 206.

64

II.

PRODUCERS OF SOUND RECORDINGS A. EXCLUSIVE RIGHTS

12

125.

Producers of sound recordings have the following exclusive rights:

a)

The right to authorize the direct or indirect reproduction of their sound recordings, in any manner or form, the placing of these reproductions in the market and the right of rental or lending;

b)

The right to authorize the first public distribution of the original and copies of their sound recordings through sale or rental or other forms of transferring ownership; and

c)

The right to authorize the commercial rental to the public of the original and copies of their sound recordings, even after distribution by them by or pursuant to authorization by the producer.1
1. Intellectual Property Code, Section 208.

B. 126.

COMMUNICATION TO THE PUBLIC

If a sound recording published for commercial purposes, or a

reproduction of such recording, is used directly for broadcasting or for other communication to the public, or is publicly performed with the intention of making and enhancing profit, a single equitable remuneration for the performer or performers, and the producers of the sound recording shall be paid by the user to both the performers and the producer, who, in the absence of any agreement, shall share equally.1 Thus, the playing of music in a restaurant for the

entertainment of the customers is performance for profit, even if the customers do not pay for the music, because the music is furnished to attract the public to

65

patronize the restaurant. restaurant.2


1.

This increases the volume of business of the

Intellectual Property Code, Section 209. Filipino Society of Composer, Authors and Publishers, Inc. v. Tan [1987] 148 SCRA 461, 465-467.

2.

C. 127.

LIMITATIONS

The limitations on copyright protection and the provision on fair use

are applicable to the rights of producers of sound recordings.1


1. Intellectual Property Code, Section210.

66

III. 128.

BROADCASTING ORGANIZATIONS Broadcasting organizations have the exclusive right to carry out,

authorize or prevent any of the following acts: a) The rebroadcasting of their broadcasts; b) The recording in any manner, including the making of films or the use of video tape, of their broadcasts for the purpose of communication to the public of television broadcasts of the same; and c) The use of such records for fresh transmissions or for fresh recording.1
1. Intellectual Property Code, Section 211.

IV. 129. a) b) c) d)

LIMITATIONS TO THE SCOPE OF PROTECTION The neighbouring rights do not apply in the following cases:

The use by a natural person exclusively for his own personal purposes; The use of short excerpts for reporting current events; The use solely for the purpose of teaching or for scientific research; and Fair use of the broadcast.1
1. Intellectual Property Code, Section 212.

10.

INFRINGEMENT AND REMEDIES


I. 130. CONCEPT Infringement of a copyright consists in the doing by any person,

without the consent of the owner of the copyright, of anything the sole right to do which is conferred by statute on the owner of the copyright.1 To constitute

infringement, there must be a copying of a substantial portion of the copyrighted

67

work so that it appears that the work of another was copied. 2

Thus, mere

similarity in the titles of two novels does not constitute infringement of a copyright, if they have different plots.3 However, inconsequential differences

between the original work and the imitation do not detract from the existence of infringement of the copyright.4 To constitute infringement, it is not necessary that the whole or even a large portion of the original work be copied. If so much is taken that the value of the original work is sensibly diminished, or the labours of the original author are substantially and to an injurious extent appropriated by another, that is sufficient to constitute infringement of the copyright.5 The test of infringement of a copyright is whether an ordinary observer comparing the works can readily see that one was copied from the other.6 Thus, where eighty-eight per cent of the words in a dictionary were copied by another author, there is an infringement.7 Similarly, where a second book on English grammar had the

same style and manner of presentation and used the same examples as an earlier work, there is an infringement.8 Where someone photographed the same scenic views shown in copyrighted Christmas cards and used the same design, arrangement, combination and composition, there is infringement.9 1. 2.
Columbia Pictures, Inc. v. Court of Appeals [1996] 261 SCRA 144, 183-184. Abiva v. Weinbrenner, [1964] 6 CAR (2s) 1023; 1030; Arceo v. Philippine Racing Club, Inc., CA-G.R. SP No. 09166, August 15, 1988; Gan v. Ramon S. Licup Design Group, Inc. CA-G.R. CV No. 17618, August 28, 1990.

3. 4.

Cristobal v. Santos [1963] 4 CAR (2s) 21, 30. Serrano v. Paglinawan {1914) 44 Phil. 855, 861; Robles v. Castillo [1964] 5 CAR (2s) 195, 208-209; Gan v. Ramon S. Licup Designs Group, Inc., CA-G.R. CV No. 17618, August 28, 1990.

68

5. 6. 7. 8. 9.

Columbia Pictures, Inc. v. Court of Appeals. [1996] 261 SCRA 144, 184; Robles, [1999] 310 SCRA 511, 525. Abiva v. Weinbrenner [1964] 6 CAR (2s) 1023, 1028. Serrano v. Paglinawan [1918] 44 Phil. 855, 860. Habana v. Robles {1964] 6 CAR (2s) 2023, 1028. Abiva v. Weinbrenner [1964] 6 CAR (2s) 1023, 1028.

Habana v.

131.

Mere similarity between two works does not constitute infringement.

The similarity must be due to copying.1 If the author of the similar work produced it by his own independent labour, there is no infringement. Hence, the author of the copyrighted work must prove that the author of the identical work had access to his work.2 1. 2.
Arceo v. Philippine Racing Club, Inc., CA-G,R, SP No. 09166, August 15, 1988; Parungao v. Bathala Films, Inc. [1991] 90 O.G. 6181, 6183. Estella v. Santiago [1942] 1 O.G. 788, 792; Parungao v. Bathala Films, Inc. [1991] 90 O.G. 6181, 6183

II.

DEFENSES A. IGNORANCE AND LACK OF INTENTION

132.

It is not a defense to an action for infringement of a copyright that

the defendant did not know that the work he was copying was copyrighted. He should know that the work he was copying did not belong to him. 1 Neither is it a valid defense that the defendant had no intention to infringe the copyright.2 1.
Columbia Pictures, Inc. v. Court of Appeals [1996] 261 SCRA 144, 184; Habana v. Robles [1999] 310 SCRA 511, 526; People v. De la Cruz, CA-G.R. No. 17533-R, July 22, 1957.

69

2.

Icasiano v. Pasicolan, CA-G.R. No. 28748-R, October 21, 1971; Gan v. Ramon S. Licup Design Group, Inc., CA-G.R. CV No. 17618, August 28, 1990.

B. 133.

LOSS OF RIGHTS

An author who sold to a motion picture company the right to make a

film out of his novel cannot sue the motion picture company for infringement of his copyright.1
1. Angeles v. Premier Productions, Inc. [1964] 6 CAR (2s) 159, 165.

134.

The composer of a musical composition who allowed it to become

property of the public domain waives his right to the protection of his intellectual creation.1 1.
Filipino Society of Composers, Authors and Publishers, Inc. v. Tan [1987] 148 SCRA 461, 467; Estella v. Santiago [1992] 1 O.G. 788, 791.

C. 135.

STATUTE OF LIMITATIONS

No damages may be recovered for infringement of a copyright after

four years from the time the infringement occurred.1


1. Intellectual Property Code, Section 226.

III.

REMEDIES A. CIVIL ACTION

136.

Any person infringing a right protected under the Intellectual

Property Code is liable for the following: a) An injunction restraining such infringement. The court may also order the defendant to desist from an infringement to prevent the entry into the

70

channels of commerce of imported goods that involve an infringement, immediately after customs clearance of such goods. b) Payment to the copyright proprietor or his assigns or heirs of such actual damages, including legal costs and other expenses, as they may have incurred due to the infringement as well as the profits the infringer may have made due to such infringement, and in proving profits the plaintiff is required to prove sales only and the defendant is required to prove every element of cost which he claims, or, in lieu of actual damages and profits, such damages which to the court appear to be just and shall not be regarded as penalty. c) Delivery under oath, for impounding during the pendency of the action, upon such terms and conditions as the court may prescribe, sales invoices and other documents evidencing sales, all articles and their packaging alleged to infringe a copyright and implements for making them. d) Delivery under oath for destruction without any compensation all infringing copies or devices, as well as all plates, molds, or other means for making such infringing copies as the court may order. e) Such other terms and conditions, including the payment of moral and exemplary damages, which the court may deem proper, wise and equitable and the destruction of infringing copies of the work even in the event of acquittal in a criminal case.1
1. Intellectual Property Code, Subsection 216.1.

71

137.

Thus, the author of a copyrighted book can recover the profits he

failed to realize from the copies of his books which remain unsold because of the distribution of the infringing copies.1 If there is no satisfactory proof of the actual damages, the court should award damages in accordance with the formula in the law.2 1. 2.
Ruiz v. M. Corpuz Enterprises, Inc., CA-G.R. No. 48512-R, September 29, 1976. Abiva v. Weinbrenner [1964] 6 CAR (2s) 1023, 1031; Isle Originals, Inc. v. Sosan Industries, Inc. (1995) 95 O.G. 3479, 3491.

B.

CRIMINAL PROSECUTION

1. CRIMINAL LIABILITY 138. Any person who, at the time when a copyright subsists in a work,

has in his possession an article which he knows, or ought to know, to be an infringing copy of the work for the purpose of: a) Selling, letting for hire, or by way of trade offering or exposing for sale, or hire, the article; b) Distributing the article for purpose of trade, or for any other purpose to an extent that will prejudice the rights of the copyright owner in the work; or c) Trade exhibit of the article in public, shall be guilty of an offense and is liable on conviction to imprisonment and fine.1
1. Intellectual Property Code, Subsection 217.3.

139.

Thus, a person who sells fake cassette tapes is criminally liable

even if he was not the one who manufactured it.1


1. People v. Chan, [1989] 4 CARA 29, 38.

72

2. PENALTY 140. Any person infringing a copyright or aiding or abetting such

infringement is guilty of a crime punishable by: a) Imprisonment of one year to three years plus a fine ranging from 50,000 pesos to 150,000 pesos for the first offense; b) Imprisonment of three years and one day to six years plus a fine ranging from 150,000 pesos to 500,000 pesos for the second offense; c) Imprisonment of six years and one day to nine years plus a fine ranging from 500,000 pesos to 1,500,000 pesos for the third and subsequent offenses; d) In all cases, subsidiary imprisonment in cases of insolvency.1
1. Intellectual Property Code, Subsection 271.1.

141.

In determining the number of years of imprisonment and the

amount of fine, the court should consider the value of the infringing materials that the defendant has produced or manufactured and the damage that the copyright owner has suffered by reason of the infringement.1
1. Intellectual Property Code, Subsections 217.1 and 217.2.

C. 1. 142.

EVIDENCE

CIVIL ACTION The court can order the seizure and impounding of any article

which may serve as evidence in an action for infringement.1


1. Intellectual Property Code, Subsection 216.2.

73

2. 143.

PRESUMPTIONS An affidavit made before a notary public by or on behalf of the

owner of the copyright in any work or other subject matter and stating that: a) At the time specified in it, copyright subsisted in the work or other subject matter; b) c) He or the person named in it is the owner of the copyright; and The copy of the work or other subject matter annexed to it is a true copy of it, should be admitted in evidence in any proceedings for an offense and is prima facie proof of the matters stated in it until the contrary is proved, and the court before which such affidavit is produced should assume that the affidavit was made by or on behalf of the owner of the copyright.1
1. Intellectual Property Code, Subsection 218.1.

144. a)

In an action for infringement, the following matters are presumed:

Copyright is presumed to subsist in the work or other subject matter to which the action related if the defendant does not put in issue the question whether copyright subsists in the work or other subject matter; and

b)

If the subsistence of the copyright is established, the plaintiff will be presumed to be the owner of the copyright if he claims to be the owner of the copyright and the defendant does not put in issue the question of his ownership.1
1. Intellectual Property Code, Subsection 218.2.

145.

The natural person whose name is indicated on a work in the usual

manner as the author should, in the absence of proof to the contrary, be

74

presumed to be the author of the work. This is applicable even if the name is a pseudonym, if the pseudonym leaves no doubt as to the identity of the author.1
1. Intellectual Property Code, Subsection 219.1.

146.

The person or body corporate whose name appears on an audio-

visual work in the usual manner is, in the absence of proof of the contrary, presumed to be the maker of the work.1
1. Intellectual Property Code, Subsection 219.1.

147.

A statement concerning a work, recorded in an international

register in accordance with an international treaty to which the Philippines is or may become a party, should be construed as true until the contrary is proved except: a) If the statement cannot be valid under the Intellectual Property Code or any other law concerning intellectual property. b) If the statement is contradicted by another statement recorded in the international register.1
1. Intellectual Property Code, Section 220.

75

11.

POINTS OF ATTACHMENT
I. LITERARY, SCHOLARLY, SCIENTIFIC AND ARTISTIC WORKS AND DERIVATIVE WORKS 148. The protection afforded by the Intellectual Property Code to

copyrightable works apply to the following: a) Works of authors who are nationals of or have their habitual residence in the Philippines; b) Audio-visual works the producer of which has his headquarters or habitual residence in the Philippines; c) Works of architecture erected in the Philippines or other artistic works incorporated in a building or other structure located in the Philippines; d) e) Works first published in the Philippines; and Works first published in another country but also published in the Philippines within thirty days, irrespective of the nationality or residence of the authors. f) Works that are to be protected by virtue of and in accordance with any international convention or other international agreement to which the Philippines is a party.1
1. Intellectual Property Code, Subsections 221.1 and 221.2.

II. 149.

PERFORMERS

The provisions of the Intellectual Property Code on the protection of

performers apply to the following:

76

a) Performers who are nationals of the Philippines; b) Performers who are not nationals of the Philippines but whose performances: i) ii) Take place in the Philippines; or Are incorporated in sound recordings that are protected under the Intellectual Property Code; or iii) Which have not been fixed in sound recording but are carried by broadcast qualifying for protection under the Intellectual Property Code.1 iv) Who are to be protected by virtue of any international convention or international agreement to which the Philippines is a party.2
1. 2. Intellectual Property Code, Subsections 222.1 and 222.2. Intellectual Property Code, Subsection 224.2.

III. 150.

SOUND RECORDINGS

The provisions of the Intellectual Property Code on the protection of

sound recordings apply to the following: a) Sound recordings the producers of which are nationals of the Philippines; and b) c) Sound recordings that were first published in the Philippines.1 Sound recordings which are to be protected by virtue of any international convention or international agreement to which the Philippines is a party.2
1. 2. Intellectual Property Code, Subsections 223.1 and 223.2 Intellectual Property Code, Subsection 224.2.

IV.

BROADCASTS

77

151. following: a)

The provisions of the Intellectual Property Code apply to the

Broadcasts of broadcasting organizations whose headquarters are situated in the Philippines;

b) c)

Broadcasts transmitted from transmitters situated in the Philippines;1 Broadcasts by organizations which are to be protected by virtue of any international convention or international agreement to which the Philippines is a party.2
1. 2. Intellectual Property Code, Subsection 224.1. Intellectual Property Code, Subsection 224.2

12.

OVERLAPPING

AND

RELATION

TO

OTHER

INTELLECTUAL PROPERTY LAWS


152. An ornamental design may be copyrighted and registered as an There are advantages in having an

industrial design at the same time.1

ornamental design copyrighted. First, the duration of a copyright lasts longer than the registration of an industrial design. Second, the owner of the copyright in an ornamental design obtains protection immediately from the moment of its creation. On the other hand, the application for the registration of an industrial design is subject to examination by the Intellectual Property Office to determine whether or not it is new or original.2
1. 2. Intellectual Property Code, Subsection 172.1 (h). I. Sapalo, p. 140.

78

153.

There are advantages in having an ornamental design registered

also as an industrial design. First, its registration after examination gives the owner a tangible basis for defending his rights. Second, under the Paris

Convention for the Protection of Industrial Property, the owner may claim the date of his filing in the Philippines as the filing date for his application in another Member State.1
1. I. Sapalo, pp. 139-140.

79

CHAPTER 2.
I. 154.

PATENTS

SOURCES-LEGISLATION The first Patent Law of Spain was promulgated on 27 March 1826.

It resembled French law. It is unknown when and how this law was adopted in the Philippines. However, records show that a system of regulation of patents existed in the Philippines before 1862.1
1. I. Sapalo, p. 2.

155.

The Patent Law of Spain was revised on 30 July 1878. The new

law extended the term of patents for invention to twenty years.1


1. I. Sapalo, p. 2.

156.

The Patent Law of 1888 granted inventors the exclusive right to

exploit their inventions, including the fabrication, the sale, the use or consumption of the invention. Patents for inventions were issued for terms of five, ten or twenty years depending on the wishes of the inventor. Patents granted for terms of five or ten years could be renewed for a similar period. However, no patent was valid for more than twenty years unless it was granted by a special law.1
1. I. Sapalo, p. 2.

157.

Article XIII of the Treaty of Paris guaranteed that patents granted to

Spaniards in the Philippines would continue to be respected. 158. On 10 February 1913, the Philippine Legislature approved Act

2235, which extended the patent laws of the United States to the Philippines.

80

159.

On 20 February 1919, the Philippine Legislature approved Act 2793

entitled the Patent Law. 160. Act 2793 was superseded on 20 June 1947 by Republic Act 165. It It also

was essentially patterned after the Patent Law of the United States.

contained a compulsory licensing system similar to the one in Great Britain.1


1. Explanatory Note of House Bill 1156.

161.

Article XIV, Section 4, of the Constitution of 1935 secured to

inventors the exclusive right to their inventions for a limited period. 162. On 9 June 1951, Republic Act 637 amended Republic Act 165 by

streamlining the procedure for the grant of patents. 163. On 16 June 1953, Republic Act 864 amended Republic Act 165 by

authorizing the grant of patents for utility models as in German law.1


1. Explanatory Note of House Bill 2758.

164.

On 27 September 1965, the Philippines acceded to the Paris

Convention for the Protection of Industrial Property.1 It also acceded on 14 July 1980 to the revision adopted in Stockholm.2
1. Senate Resolution, No. 69. Mirpuri v. Court of Appeals [1999] 318 SCRA 516, 542.

2.

165.

Article XV, Section 9 (3) of the Constitution of 1973 secured to

inventors the exclusive right to their inventions.

81

166.

On 14 December 1977, Presidential Decree 1263 amended

Republic Act 165 by expanding the grounds for compulsory licensing and regulating voluntary licensing. 167. On 21 October 1981, the Philippines acceded to the Budapest

Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure. 168. Aside from securing to inventors the exclusive rights to their

inventions in Article XIV, Section 13, the Constitution of 1987 required the government to regulate licensing agreements. Article XII, Section 14 provides: The State shall encourage appropriate technology and regulate its transfer for the national benefit. Likewise, Article XIV, Section 12 reads: The State shall regulate the transfer and adaptation of technology from all sources for the national benefit. 169. On 14 December 1994, the Senate ratified the accession by the

Philippines to the Agreement Establishing the World Trade Organization. 1 As a result, the Philippines became bound to apply the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights.
1. Senate Resolution No. 97.

170.

The Intellectual Property Code, which was approved on 6 June, It introduced changes to adhere to the

1997, repealed Republic Act 165.

provisions of the Agreement on Trade-Related Aspects of Intellectual Property

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Rights.1 It shifted from the first-to-invent system to the first-to-file system for applications for patents.2 It also lengthened the terms of patents for inventions to twenty years.
1. Record of the Senate, Vol. II, No. 29, 8 October 1996, pp. 1030-131 and 134; Journal of the House of Representatives, No. 35, 12 November 1996, pp. 14 and 34; Explanatory Note of House Bill 5648. 2. Record of the Senate, Vol. II, No. 29, 8 October 1996; Journal of the House of Representatives, No. 45, 12 November 1996, pp. 13, 15, 34-36, and 38; Journal of the House of Representatives, No. 45, 10 December 1996, p. 34; Explanatory Note of House Bill 5648.

2.

PATENTABLE SUBJECT MATTER


I. 171. PATENTABLE INVENTIONS The following inventions can be patented:

a) A machine b) A product c) A process d) An improvement of a machine, product or process e) Micro-organisms; f) Non-biological and microbiological processes1
1. Intellectual Property Code, Section 21 and Subsection 22.4; Rules and Regulations on Inventions, Rule 201.

172.

Thus, an improved process for making mosaic pre-cast tiles which

resulted in an improvement of the lip width of the tiles, ensured the durability of the tiles, and prevented the flaking off of the edges of the tiles in the process of making tiles may be patented.1 Likewise, an improvement in the mascots being used by fast food restaurants to attract customers by the use of an actuator

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device to move the facial parts of the mascots is patentable, where the earlier contraption did not allow such movements. 1. 2.
Aguas v. de Leon [1982] 111 SCRA 238, 248. Joaquin v. Nepomuceno [1996] 95 O.G. 7931, 7935.

II. 173.

NON-PATENTABLE INVENTIONS The following inventions cannot be patented:

a) Discoveries, scientific theories and mathematical methods; b) Schemes, rules and methods of performing mental acts, playing games or doing business, and computer programmes; c) Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body; d) Plant varieties or animal breeds or essentially biological process for the production of plants or animals; e) Aesthetic creations; and f) Anything which is contrary to public order or morality.1
1. Intellectual Property Code, Section 22.

3.

CONDITIONS OF PATENTABILITY
174. In order that a machine, product, process or improvement of them

may be patented, it must be new, it must involve an inventive step, and it must be industrially applicable.1
1. Intellectual Property Code, Section 21.

I.

NOVELTY

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175.

An invention is not new if it forms part of a prior art. 1

Prior art

consists of the following: a) Everything which has been made public anywhere in the world before the filing date or the priority date of the application claiming the invention; and b) The whole contents of an application for a patent, utility model, or industrial design registration, published in accordance with the Intellectual Property Code, filed or effective in the Philippines, with a filing or priority date that is earlier than the filing or priority date of the application. An application which has validly claimed the filing date of an earlier application in another country which grants Filipino citizens the same privilege is considered prior art as of the filing date of the earlier application in the other country.2
1. 2. Intellectual Property Code, Section 23. Intellectual Property Code, Section 24.

176.

The public use of an improved, adjustable plow for more than two

years before the filing of an application for a patent for it destroyed its novelty. 1 A hemp stripping machine with a tapering spindle around which the hemp to be stripped was wound was not an invention, since it had been publicly used for months before an application for a patent for it was filed. 2 An orhydrate

formulation which was published before the filing of an application for a patent for it lacked novelty.3 An improved feed mixer was declared not patentable, because most its major integral parts had been previously published and used.4 1.
Vargas v. F.M. Yaptico and Company, Ltd. [1919] 40 Phil. 195, 203; Vargas v. Chua [1933] 57 Phil. 784, 790.

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2. 3. 4.

Frank v. Kosuyama [1933] 59 Phil, 206, 211. Abbott Laboratories (Phils.) v. Salvador [1989] 7 CARA 799, 810. Dimaano v. Vercide [1991] 91 O.G. 2195, 2198.

177.

Public knowledge means knowledge by others. The knowledge of

the inventor is not public knowledge. Thus, the fact that the inventor has a working model of his invention does not mean it has been exposed to public knowledge.1
1. Bajado v. Director of Patents, AC-G.R. No. SP-03628, April 5, 1985.

II. 178.

INVENTION

An invention involves an inventive step if, having regard to prior art,

it is not obvious to a person skilled in the art at the time of the filing date or priority date of the application claiming the invention.1 A person skilled in the art is an ordinary practitioner aware of what was common general knowledge in the art at the relevant date. He is presumed to have knowledge of all references that are sufficiently related to one another and to the pertinent art and to have knowledge of all arts reasonably pertinent to the particular problems with which the inventor was involved. He is presumed to have at his disposal the normal means and capacity for routine work and experimentation.2
1. 2. Intellectual Property Code, Section 26. Rules and Regulations on Invention, Rule 107.

179.

Changing the properties of an abrasive and its fineness in scouring

cleanser is not an invention, because it is merely a mechanical operation.1 The

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improvements in an existing feed mixer consisting of the use of a more compact and simplified structure and consistent production of homogenous feed mix

involve merely the use of mechanical skills, because it merely combined existing devices.2 1. 2.
Vitale v. Director of Patents, CA-G.R. No. SP-10952-R, July 23, 1975. Dimaano v. Vercide [1991] 91 O.G. 2195, 2199.

III. 180.

INDUSTRIAL APPLICABILITY

An invention is industrially applicable if it can be produced and used

in any industry.1
1. Intellectual Property Code, Section 27.

4.

FORMALITIES
I. 181. APPLICATION

An application should contain the following:

a) b) c) d) e)

A request for the grant of a patent; A description of the invention; Drawings necessary for the understanding of the invention; One or more claims; and An abstract.1
1. Intellectual Property Code, Section 32.1.

182.

An applicant who is not a resident of the Philippines must appoint

and maintain a resident agent or representative in the Philippines upon whom

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notice or process for judicial or administrative procedure relating to the application for patent or the patent may be served.1
1. Intellectual Property Code, Section 33.

183.

The request should contain a petition for the grant of the patent, the

name and other data of the applicant, the inventor and the agent and the title of the invention.1
1. Intellectual Property Code, Section 34.

184.

The application should disclose the invention in a manner

sufficiently clear and complete for it to be carried out by a person skilled in the art. If the application concerns a microbiological process or the product of it and involves the use of a micro-organism which cannot be sufficiently disclosed in the application in such a way as to enable the invention to be carried out by a person skilled in the art, and such material is not available to the public, the application should be supplemented by a deposit of such material with an international depository institution.1
1. Intellectual Property Code, Subsection 35.1.

185.

The application should contain one or more claims which should

define the matter for which protection is sought. Each claim should be clear and concise, and should be supported by the description.1
1. Intellectual Property Code, Subsection 36.1.

186.

The abstract should consist of a concise summary of the disclosure

of the inventions as contained in the description, claims and drawings in

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preferably not more than one hundred fifty words. It must be drafted in a way which allows the clear understanding of the technical problem, the gist of the solution of that problem through the invention, and the principal use or uses of the invention. The abstract should merely serve for technical information.1
1. Intellectual Property Code, Section 37.

187.

An application for a patent filed by a person who has previously

applied for the same invention in another country which by treaty, convention or law affords similar privileges to Filipino citizens, will be considered as filed as of the date of filing of the foreign application subject to the following conditions:1 a) b) The local application expressly claims priority; It is filed within twelve months from the date the earliest foreign application was filed; and c) A certified true copy of the foreign application together with an English translation is filed within six months from the date of filing in the Philippines. The six-month period may be extended for a maximum of six months upon showing of good cause or in compliance with treaty to which the Philippines is a party.2
1. 2. Intellectual Property Code, Section 31. Rules and Regulations of Inventions, Rule 304.

188.

An applicant from a foreign country is not entitled to priority if his

country does not grant a similar right to Filipino citizens.1


1. Abbot Laboratories v. Agrava [1952] 91 Phil. 328, 332.

II.

PUBLICATION

89

189.

The application shall be published in the Intellectual Property Office

Gazette together with a search document established by the Intellectual Property Office citing any documents that reflect prior art, after eighteen months from the filing date or priority date.1
1. Intellectual Property Code, Subsection 44.1.

III. 190.

GRANT AND PUBLICATION OF PATENT

If the application meets the requirements of the Intellectual Property

Code, it shall be granted.1 The patent will take effect on the date of its publication in the Intellectual Property Office Gazette. 2
1. 2. Intellectual Property Code, Subsection 50.1. Intellectual Property Code, Subsection 50.3

5.

OWNERSHIP AND TRANSFER


I. 191. OWNERSHIP

The right to a patent belongs to the inventor, his heirs, or assigns.

When two or more persons have jointly made an invention, the right to a patent belongs to them jointly.1
1. Intellectual Property Code, Section 28.

192.

The person who commissioned the work will own the patent, unless

otherwise provided in the contract. 193. In case the employee made the invention in the course of his

employment contract, the patent belongs to:

90

a)

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

b)

The employer, if the invention is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary.1
1. Intellectual Property Code, Section 30.

194.

Thus, an employee of an office trading in rice who invented a

machine to salvage the rotten or infected rice on his own is the owner and not as part of his duties is the owner of the invention.1
1. Pajalla v. National Food Authority [1992] 92 O.G. 3285, 3288.

195.

If two or more persons made the invention separately and

independently of each other, the right to the patent belongs to the person who filed an application for the invention. If two or more applications were filed for the same invention, the patent belongs to the applicant who has the earliest filing date or the earliest priority date.1 If two or more applications for the same

invention have the same filing date or priority date, the patent will be issued jointly to all the applicants.2
1. 2. Intellectual Property Code, Section 29. Rules and Regulations on Inventions, Rule 304.

196.

If a person who was deprived of the patent without his consent or

through fraud is declared by final court decision to be the true and actual

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inventor, the court shall order his substitution as owner of the patent or cancel the patent, at his option, and award damages in his favor.1
1. Intellectual Property Code, Section 68.

II. 197.

ASSIGNMENT

Patents or applications for patents and invention to which they

relate shall be protected in the same way as the rights of other property under the Civil Code. 1
1. Intellectual Property Code, Subsection 103.2.

198.

Inventions and any right, title or interest in and to patents and

inventions covered by them, may be assigned or transmitted by inheritance or bequest or may be the subject of a licensing agreement.1
1. Intellectual Property Code, Subsections 103.2.

199.

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

the patent and the invention covered by it, or of an undivided share of the entire patent and invention. In such a case, the parties become joint owners of it. An assignment may be limited to a specified territory.1
1. Intellectual Property Code, Section 104.

200.

If two or more persons jointly own a patent and the invention

covered by it, either by the issuance of the patent in their joint favor or by reason of the assignment of an undivided share in the patent and invention or by reason of the succession in title to such share, each of the joint owners is entitled to

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personally make, use, sell, or import the invention for his own profit, but none of the joint owners is entitled to grant licenses or to assign his right, title or interest or part of it without the consent of the other owner or owners, or without proportionally dividing the proceeds with such other owner or owners.1
1. Intellectual Property Code, Section 107.

201.

To be acceptable for recording, an assignment must comply with

the following requirements: a) It must be in writing and accompanied by an English translation, if it is in a language other than English or Filipino; b) c) It must be notarized; It must be accompanied by an appointment of a resident agent, if the assignee is not residing in the Philippines; d) It must identify the letters patent involved by number and date and give the name of the owner of the patent and the title of the invention. In the case of an application for a patent, it should state the application number and the filing date of the application and give the name of the applicant and the title of the invention. If the assignment was executed concurrently with or subsequent to the execution of the application but before the application is filed or before its application number is ascertained, it should adequately identify the application by its date of execution, the name of the applicant, and the title of the invention. e) It must be accompanied by the required fees.1
1. Intellectual Property Code, Section 105; Rules and Regulations on Inventions, Rule 1200.

93

202.

The assignment of a patent is void as against any subsequent

purchaser or mortgagee for valuable consideration and without notice unless it is recorded in the Intellectual Property Office within three months from the date of the assignment or prior to the subsequent purchase or mortgage.1 Notice of the recording will be published in the Intellectual Property Office Gazette.2
1. 2. Intellectual Property Code, Section 106. Rules on Regulations on Inventions, Rule 1205.

III.

VOLUNTARY LICENSES

The Intellectual Property Code Regulates Voluntary Licenses. A. PROHIBITED PROVISIONS 203. a) The following provisions are prohibited in licensing agreements:

Those which impose upon the licensee the obligation to acquire from a specific source capital goods, intermediate products, raw materials, and other technologies, or of permanently employing personnel indicated by the licensor;

b)

Those pursuant to which the licensor reserves the right to fix the sale or resale prices of the product manufactured on the basis of the license;

c)

Those that contain restrictions regarding the volume and structure of production;

d)

Those that prohibit the use of competitive technologies in a non-exclusive licensing agreement;

e)

Those that establish a full or partial purchase option in favor of the licensor;

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f)

Those that obligate the licensee to transfer for free to the licensor the inventions or improvements that may be obtained through the use of the licensed technology;

g)

Those that require payment of royalties to the owners of patents for patents which are not used;

h)

Those that prohibit the licensee to export the licensed product unless justified for the protection of the legitimate interest of the licensor such as exports to countries where exclusive licenses to manufacture or distribute the licensed product have already been granted;

i)

Those which restrict the use of the technology supplied after the expiration of the licensing agreement, except in cases of early termination of the licensing agreement due to a reason attributable to the licensee;

j)

Those which require payments for patents and other industrial property rights after their expiration or termination of the licensing agreement;

k)

Those which require that the licensee will not contest the validity of any of the patents of the licensor;

l)

Those which restrict the research and development activities of the licensee designed to absorb and adapt the transferred technology to local conditions or to initiate research and development programs in connection with new products, processes or equipment;

m)

Those which prevent the licensee from adapting the imported technology to local conditions, or introducing innovation to it, as long as it does not impair the quality standard prescribed by the licensor;

95

n)

Those which exempt the licensor from liability for non-fulfillment of his responsibilities under the licensing agreement or liability arising from third party suits brought about by the use of the licensed product or the licensed technology; and

o)

Other clauses with equivalent effects.1


1. Intellectual Property Code, Section 87.

B. 204. a)

MANDATORY PROVISIONS The following provisions must be included in licensing agreements:

The laws of the Philippines will govern their interpretation of the same and in the event of litigation, the venue will be the proper court in the place where the licensee has its principal office;

b)

Continued access to improvements in techniques and processes related to the technology will be made available during the period of the licensing agreement;

c)

In case the licensing agreement provides for arbitration, the Procedure of Arbitration of the Arbitration Law of the Philippines or the Arbitration Rules of the United Nationals Commission on International Trade Law or the Rules of Conciliation and Arbitration of the International Chamber of Commerce will apply and the venue of arbitration will be the Philippines or any neutral country; and

d)

The Philippine taxes on all payments relating to the licensing agreement will be borne by the licensor.1
1. Intellectual Property Code, Section 88.

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C. 205.

EXCEPTIONS The Intellectual Property Office may allow an exception from the

prohibited or mandatory provisions in cases where substantial benefits will accrue to the economy, such as high technology content, increase in foreign exchange earnings, employment generation, regional dispersal of industries, substitution with or use of local materials, or registration with the Board of Investments as a pioneer industry.1
1. Intellectual Property Code, Section 91.

D. 206.

EFFECT OF VIOLATION Failure to comply with the requirements of the Intellectual Property

Code regarding prohibited and mandatory provisions will automatically render a licensing agreement unenforceable unless an exception was allowed.1
1. Intellectual Property Code, Section 92.

6.

SCOPE OF EXCLUSIVE RIGHTS


207. A patent confers on its owner the following exclusive rights:

a)

To restrain, prohibit and prevent any unauthorized person or entity from making, using, offering for sale, selling or importing that product, if the subject matter of the patent is a product;

b)

To restrain, prevent or prohibit any unauthorized person or entity from using the process, and from manufacturing, dealing in, using, selling or offering for sale, or importing any product obtained directly or indirectly from such process, if the subject matter of the patent is process;

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c)

To assign or transfer by succession the patent and to conclude licensing agreements for it.1
1. Intellectual Property Code, Subsections 71.1 and 71.2.

7.

LIMITATIONS AND EXCEPTIONS TO THE SCOPE OF PATENT PROTECTION


I. LIMITATIONS

A.

LIMITATIONS OF PATENT RIGHTS 208. The owner of patent cannot prevent third parties from performing

without his authorization the acts pertaining to him because of his exclusive rights in the following cases: a) The owner of a patented product which has been put on the market in the Philippines uses the products or expressly consents to its use insofar as the use is performed after the product has been on the market; b) The act is done privately and on a non-commercial scale or for a noncommercial purpose, and it does not significantly prejudice the economic interests of the owner of the patent; c) The act consists of making or using exclusively for the purpose of experiments that relate to the subject matter of the patented invention; d) A pharmacy or a medical professional prepares for individual cases a medicine in accordance with a medical prescription; e) The invention is used in any ship, vessel, aircraft, or land vehicle of any other country entering the territory of the Philippines temporarily or accidentally: but the invention should be used exclusively for the needs of

98

the ship, vessel, aircraft, or land vehicle and not for the manufacture of anything to be sold within the Philippines.1
1. Intellectual Property Code, Section 72.

B. 209.

EXCLUSION OF PRIOR USER Any prior user who in good faith was using the invention or has

undertaken serious preparations to use the invention in his enterprise or business, before the filing date or priority date of the application on which a patent is granted, has the right to continue its use as envisaged in such preparations within the territory where the patent produces its effect.1
1. Intellectual Property Code, Section 73.1.

C. 210.

USE BY THE GOVERNMENT A government agency or third person authorized by the

Government of the Philippines may exploit the invention even without agreement of the owner of the patent in the following cases: a) The public interest, in particular, national security, nutrition, health or the development of other sectors, as determined by the appropriate agency of the government, so requires; or b) A judicial or administrative body has determined that the manner of exploitation, by the owner of the patent or his licensee, is anti-competitive. 211. The use by the Government of the Philippines or third persons

authorized by the Government of the Philippines is subject to the conditions for the grant of compulsory licenses.1

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1. Intellectual Property Code, Subsections 74.1 and 74.2..

II. A.

COMPULSORY LICENSING GROUNDS 1. SPECIFIC GROUNDS

212.

A license to exploit a patented invention even without the

agreement of the owner of the patent may be granted to any person who has shown his capability to exploit the invention under any of the following circumstances: a) b) A national emergency or other circumstances of extreme urgency exist; The public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the government, so requires; c) A judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive; d) The owner of the patent has not devoted the invention to public commercial use without satisfactory reason; or e) The patented invention is not being worked in the Philippines on a commercial scale, although capable of being worked, without satisfactory reason. However, the importation of the patented article constitutes

working or using the patent.1


1. Intellectual Property Code, Section 93.

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213.

Each of these circumstances stands alone and is sufficient to

support the grant of a compulsory license.1 1.


Parke, Davis & Company v. Doctors Pharmaceuticals, Inc. [1965] 14 SCRA 1053, 1058.

214.

Compulsory licenses have usually been granted for medicines,

since they relate to public health. Thus, compulsory licenses have granted for chloramphenicol, a medicine for gastro-enteritis;1 aminoakylfuran derivative, a component of an anti-ulcer medicine;2 cimetidine, a component of an anti-ulcer medicine;3 ampicillin, an antibiotic;4 and alphaaminobenzypenicillin, an antibiotic.5 1. 2. 3. 4. 5.
Parke, Davis & Company v. Doctors Pharmaceuticals, Inc. [1965] 14 SCRA 1053, 1058. Price v. United Laboratories, Inc. [1988] 166 SCRA 133, 139. Smith, Kline & French Laboratories, Ltd. v. Court of Appeals [1997] 276 SCRA 224, 239. Rachelle Laboratories (Phills.), Inc. v. Bristol Myers Company, [1974] 19 CAR (2s) 1090, 1094. Beecham Research Laboratories, Inc. v. Doctors Pharmaceuticals, Inc., CA-G.R. No. SP03651, November 23, 1975.

2. 215.

INTERDEPENDENCE

If the invention protected by a later patent cannot be worked

without infringing a prior patent, a compulsory license may be granted to the owner of the later patent to the extent necessary for the working of his invention, subject to the following conditions: a) The invention claimed in the later patent involves an important technical advance of considerable economic significance in relation to the prior patent;

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b) The owner of the prior patent will be entitled to a cross-license on reasonable terms to use the invention claimed in the later patent; c) The use authorized in respect of the prior patent will not be assignable except with the assignment of the later patent; and d) The licensee tried to obtain authorization from the owner of the patent on reasonable commercial terms and conditions but failed to do so within a reasonable period of time, unless this requirement is not applicable.1
1. Intellectual Property Code, Section 87.

216.

Where the process for preparation of 6-amino penicillin acids is

needed for the production of ampicillin, the manufacturer of ampicillin may ask that it be granted a compulsory license.1 1.
Chemfields, Inc. v. Knonkljke Nederlandsche Giat-en Spirutusfabriek N.V. [1980] 1 CARA 729, 735,

3. 217.

EXCEPTION

A compulsory license for semi-conductor technology may be

granted only if it is not being devoted to public commercial use or it is needed to remedy a practice determined after judicial or administrative process to be anticompetitive.1
1. Intellectual Property Code, Section 96.

B. 218.

PERIOD FOR FILING PETITION A petition for a compulsory license on the ground that the patented

invention is not being worked in the Philippines on a commercial scale without

102

satisfactory reason, although capable of being worked, may not be filed within four years from the date of filing of the application for the patent or three years from the date of the patent, whichever period expires later.1
1. Intellectual Property Code, Subsection 94.1.

219.

A petition for a compulsory license on any other ground may be

filed at any time.1


1. Intellectual Property Code, Subsection 94.2.

C. 220.

REQUIREMENT OF REASONABLE EFFORTS A compulsory license may be granted only after the petitioner has

exerted efforts to obtain a license from the owner of the patent on reasonable commercial terms and conditions but such efforts have not been successful within a reasonable period of time.1
1. Intellectual Property Code, Subsection 95.1.

221. a)

This requirement will not apply in the following cases:

The petition for a compulsory license seeks to remedy a practice determined after judicial or administrative process to be anti-competitive;

b)

There is a national emergency or other circumstances of extreme urgency; and

c)

The patented invention has not been devoted to public commercial use.1
1. Intellectual Property Code, Subsection 95.2.

D.

TERMS AND CONDITIONS

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222.

The Director of Legal Affairs will fix the basic terms and conditions

of a compulsory license, including the rate of royalty, subject to the following conditions: a) The scope and duration of the license will be limited to the purpose for which it was authorized; b) c) The license will not be exclusive; The license will not be assignable, except with that part of the enterprise or business with which the invention is being exploited; d) Use of the subject matter of the license will be devoted predominantly for the supply of the Philippine market, except when the grant of the license is based on the ground that the manner of the owner of the patent of exploiting the patent has been determined by judicial or administrative process to be anti-competitive; e) The license may be terminated upon proper showing that the circumstances which led to its grant have ceased to exist and are unlikely to recur, but adequate protection should be afforded to the legitimate interest of the licensee; and f) The owner of the patent will be paid adequate remuneration taking into account the economic value of the grant or license, but in cases where the license was granted to remedy a practice which was determined after judicial or administrative process to be anti-competitive, the need to correct the anti-competitive practice may be taken into account in fixing the amount of remuneration.1

104

1.

Intellectual Property Code, Section 100; Parke, Davis & Company v. Doctors Pharmaceuticals, Inc., [1983] 124 SCRA 115, 118; Price v. United Laboratories, Inc. [1985] 166 SCRA 133, 136.

E. 223.

CANCELLATION The Director of Legal Affairs may cancel a compulsory license in

the following cases: a) b) The ground for its grant no longer exists and is unlikely to recur; The license has not begun to supply the domestic market or made a serious preparation for it; or c) The licensee has not complied with the prescribed terms of the license.1
1. Intellectual Property Code, Subsection 101.1.

8.

DURATION OF PROTECTION
224. The term of a patent is twenty years from the date of filing of the

application.1
1. Intellectual Property Code, Section 54.

9.

INFRINGEMENT AND REMEDIES


I. 225. CONCEPT OF INFRINGEMENT The making, using, offering for sale, selling, or importing of a

patented product or a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorization of the owner of the patent constitutes infringement of a patent.1
1. Intellectual Property Code, Subsection 76.1.

105

226.

There can be no infringement of a patent if the application is still

pending and the patent has not yet been granted.1 1.


Creser Precision Systems, Inc. v. Court of Appeals, [1998] 286 SCRA 13, 21; Castillo v. Mungcal [1990] 90 O.G. 4194, 4198.

227.

There are two tests to determine the existence of infringement of a

patent: (a) literal infringement, and (b) the doctrine of equivalents. 1 In using literal infringement as a test, resort must be made to the words of the claim. If the challenged matter clearly falls within the claim, literal infringement exists. To determine whether the challenged matter falls within the literal meaning of the patent claim, the claims of the patent and the challenged matter should be compared within the overall context of the claims and specifications, to determine whether there is exact identity of all material elements. Thus, imitating a

patented process for curving walking sticks and umbrella handles by exposing canes to flames coming from a lamp or blowpipe fueled by oil is infringement of the patent.2 1. 2.
Godines v. Court of Appeals, [1997] 286 SCRA 338, 343. Gsell v. Yap-Jue [1906] 6 Phil. 143, 149.

228.

According to the doctrine of equivalents, an infringement also

occurs when a device appropriates a prior invention by incorporating its innovative concept and, despite some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result.1 Thus, the use of a patented process for curving walking sticks and umbrella handles by exposing canes to the flames from a
106

lamp or blowpipe fueled by oil, by substituting alcohol for the oil is still infringement.2 A later model of an audio equipment known as a sing-along

system infringes the patent for a prior sing-along system if the later model uses the same modes of operation and produces the same result. Both are equipped with two cassette tape decks so that one can be used to play back a song while the other is being used to record the voice of a singer. Both can be used with more than one microphone.3 1. 2. 3.
Godines v. Court of Appeals [1993] 226 SCRA 338, 344; Del Rosario v. Court of

Appeals, [1996] 255 SCRA 152, 165. Gsell v. Yap-Jue [1909] 12 Phil. 519, 526. Del Rosario v. Court of Appeals [1996] 255 SCRA 152, 166.

229.

On the other hand, even if a device serves the same function as

another device, there is no infringement if it lacks the features, methods or arrangements of the other device.1
1. Castillo v. Mungcal [1990] 90 O.G. 4194, 4198.

230.

Infringement is not limited to the unauthorized manufacture of a If includes the importation, marketing and use of the

patented invention.

patented invention without authorization of the patent owner.1 An improver of a patented invention is an infringes if he appropriates the basic invention of another without the consent of the owner of the patent.2 1. 2.
Parke, Davis & Company v. Lukas Pharmaceuticals, Inc., CA-G.R. No. 53162-R, September 23, 1981. Frank v. Benito, [1928] 51 Phil. 712, 716-718.

107

II. A.

CIVIL ACTION

JURISDICTION 231. An action for infringement of patent falls within the jurisdiction of the

regular courts rather than the Intellectual Property Office.1 1.


Intellectual Property Code, Subsection 76.2; Amancor, Inc. v. Salas, AC-G.R. SP No. 06049, October 10, 1985.

B. 232.

PENDENCY OF PETITION FOR CANCELLATION OF PATENT A civil action for infringement of a patent may be filed despite the

pendency of a petition in the Intellectual Property Office for cancellation of the patent.1 1.
Luchan v. Honrado, CA-G.R. No. 04706-SP, July 6, 1976; Abbot Laboratories (Phils.) v. Salvador [1989] 7 CARA 799, 808.

C. 233.

INSTITUTION BY FOREIGN NATIONAL A foreign national or juridical entity may bring a civil action for

infringement of a patent, whether or not it is licensed to do business in the Philippines, if it is a national or is residing or has a real and effective establishment in a country which is a party to any convention, treaty or agreement relating to intellectual property rights to which the Philippines is also a party or which by law extends similar rights to Filipino citizens.
1. Intellectual Property Code, Section 77.

D.

PARTIES LIABLE

108

234.

Aside from the infringer, anyone who actively induces the

infringement of a patent or provides the infringer with a component of a patented product or of a product produced because of a patented process knowing it to be especially adopted for infringing the patented invention and not suitable for substantial non-infringing use is liable jointly and severally with the infringer as a contributory infringer.1
1. Intellectual Property Code, Subsection 76.6.

235.

However, a licensee is exempt from liability for infringement unless

what he has is a voluntary license and he colluded with the licensor.1


1. Intellectual Property Code, Subsection 102.

E.

DEFENSES 1. STATUTE OF LIMITATIONS

236.

No damages can be recovered for acts of infringement committed

more than four years before the filing of the civil actions for infringement.1
1. Intellectual Property Code, Section 225.

2. 237.

OTHER DEFENSES

In addition to other defenses, the defendant may show that the

patent or any claim is not valid on any of the following grounds: a) b) What is claimed as the invention is not new or patentable; The patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by any person skilled in the art; or c) The patent is contrary to public order or morality.1

109

1.

Intellectual Property Code, Sections 61 and 81; Vargas v. F. M. Yaptico & Company, Ltd., [1919] 40 Phil. 195, 199; Vargas v. Chua [1933] 57 Phil. 784, 790; Frank v. Kosuyama [1933] 59 Phil. 206, 212; Maguan v. Court of Appeals, [1986] 146 SCRA 107, 116.

F. 238.

PRESUMPTIONS OF EVIDENCE It is presumed that a patent is valid.1 1.


Frank v. Benito [1928] 51 Phil. 712, 716; Del Rosario v. Court of Appeals [1996] 255 SCRA 152, 160; Manzano v. Court of Appeals [1997] 278 SCRA 688, 697; Creser

Precision Systems, Inc. v. Court of Appeals [1998] 286 SCRA 17, 22; Lo Ho Men v. Quan, CA-G.R. 44731-R, November 18, 1972; Castillo v. Mungcal [1990] 90 O.G. 4194, 4198; Joaquin v. Nepomuceno, [1996] 95 O.G. 7931, 7933.

239.

If the subject matter of a patent is a process for obtaining a product,

any identical product shall be presumed to have been obtained through the use of the patented process if the product is new or there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable despite reasonable efforts, to determine the process actually used.1
1. Intellectual Property Code, Section 78.

G.

REMEDIES 1. AWARD OF DAMAGES

240

The owner of the patent or anyone possessing any right in the

patented invention may recover from the infringer the damages he suffered because of the infringement, as well as attorneys fee and expenses of litigation.1
1. Intellectual Property Code, 76.2.

110

241.

If the damages are inadequate or cannot be readily ascertained

with reasonable certainty, the court may award by way of damages a sum equivalent to a reasonable royalty.1
1. Intellectual Property Code, Subsection 76.3.

242.

The court may, according to the circumstances of the case, award

damages in a sum above the amount found as actual damages suffered, but the award should not exceed three times the amount of the actual damages.1
1. Intellectual Property Code, Subsection 76.4.

243.

Damages cannot be recovered for infringement committed before

the infringer had known or had reasonable grounds to know of the patent. It is presumed that the infringer had known of the patent if on the patented product or on the container or package in which the article is supplied to the public or on the advertising material relating to the patented product or process, the words Philippine Patent with the number of the patent are placed.1
1. Intellectual Property Code, Section 80.

2. 244.

ISSUANCE OF INJUNCTION

The owner of the patent or anyone possessing any right in the

patented invention can secure an injunction for the protection of his rights.1 1.
Intellectual Property Code, Subsection 75.2; Del Rosario v. Court of Appeals [1996] 255 SCRA 153,156.

3.

DESTRUCTION OF INFRINGING MATERIALS

111

245.

The court may, in its discretion, order that the infringing goods,

materials and implements predominantly used in the infringement be disposed of outside the channels of commerce or destroyed, without compensation.
1. Intellectual Property Code, Subsection 76.5.

III. 246.

CRIMINAL PROSECUTION If infringement is repeated by the infringer or by anyone in

connivance with him after finality of the judgment of the court against the infringer, the offender is criminally liable and, upon conviction, shall be sentenced to suffer imprisonment for the period of not less than six months but not more than three years or to pay a fine of not less than 100,000 pesos but not more than 300,000 pesos or both imprisonment and payment of a fine at the discretion of the court. The criminal action prescribes in three years from the date of the commission of the crime.
1. Intellectual Property Code, Section 84.

10.

CANCELLATION OF PATENT
247. Any interested party may petition to cancel any patent or any claim

or parts of a claim on any of the following grounds: a) b) What is claimed as the invention is not new or patentable; The patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by any person skilled in the art; c) The patent is contrary to law and morality; and

112

d)

The patent includes matters outside the scope of the disclosure contained in the application.1
1. Intellectual Property Code, Section 61; Regulations on Inter Partes Proceedings, Rule 3, Section 1.

113

CHAPTER 3. 1.
248.

UTILITY MODELS

SOURCES LEGISLATION
Republic Act 165, which governed patents, was amended by

Republic Act 864 on 16 June 1953 by authorizing the issuance of patents for utility models. This was patterned after the law of Germany. 1 This has been retained in the Intellectual Property Code.
1. Explanatory Note of House Bill 2758.

2.
I. 249.

THE PROTECTION OF UTILITY MODELS


CONCEPT A utility model is a new model of implement or tools or of any

industrial product or of part of it which does not possess the quality of invention but which is of practical utility by reason of its form, configuration, construction or composition.1
1. Republic Act 165, Section 55, as amended by Republic Act 864, Section 1.

II. 250.

CONDITIONS OF REGISTRATION To qualify for registration, a utility model must be new and

industrially applicable.1
1. Intellectual Property Code, Subsection 109.1.

251.

A wheelbarrow with a tray which could be tilted 170 degrees to the

left or to the right to dump its contents by pulling a handle is a utility model, because it is of practical utility.1 Similarly, a television antenna with novel

variations from other antennas is a utility model.2

114

1. 2.

Samson v. Tarroza, [1969] 28 SCRA 792, 794. Chin v. De Leon, CA-G.R. No. 022348-SP, June 3, 1975.

252.

On the other hand, a powder puff for use in the cosmetics industry

cannot be considered new if identical power puffs had been sold more than a year before the application for its registration.1 Similarly, a folding door which is like an accordion and which is used as a divider between the living room and the dining room cannot be considered new, if identical folding doors were sold more than a year before the application for its registration.2 1. 2.
Maguan v. Court of Appeals [1986] 146 SCRA 107, 117. Hercules Metal Products, Inc. v. Ong Kim Sin [1972] 17 CAR (2s) 260, 266.

III. 253.

FORMALITIES An application for a utility model will be registered without

substantive examination.1 It will be examined merely as to the completeness of the formal requirements.2 Substantive examination has been abolished because of the practical impossibility of determining whether a utility model is new or industrially applicable on account of the volume of applications.3
1. 2. Rules and Regulations on Utility Models and Industrial Design,Rule 205. Rules and Regulations on Utility Models and Industrial Design,Rule 206. Record of the Senate, Vol. II, No. 29, 28 October 1998, p. 131.

3.

254.

The following are the requirements for an application for registration

of a utility model: a) Request for registration;

115

b) Description of the utility model; c) Claim or claims; d) Drawings or pictorial representation disclosing completely the utility model; and e) Payment of the filing fee.1
1. Rules and Regulations on Utility Models and Industrial Design, Rule 203

IV. 255.

DURATION OF PROTECTION A utility model registration shall expire at the end of the seventh

year after the date of the filing of the application without any renewal.
1. Intellectual Property Code, Subsection 109.3.

V. 256.

INFRINGEMENT Where a challenged hand tiller is similar in form, configuration,

design, appearance and components to a registered tiller, there is infringement.1


1. Godines v. Court of Appeals, [1993] 226 SCRA 338, 343-344.

VI. 257.

CANCELLATION OF REGISTRATION The registration of a utility model will be cancelled on any of the

following grounds: a) The claimed invention does not qualify for registration as a utility model and is among the inventions which are not patentable; b) The description and the claims do not comply with the prescribed requirements;

116

c)

No drawing which is necessary for the understanding of the invention was furnished; and

d)

The owner of the registration of the utility model is not the inventor or his successor in title.1
1. Intellectual Property Code, Subsection 109.4.

117

CHAPTER 4. 1.

TRADEMARKS

SOURCES-LEGISLATION
258. The Spanish Penal Code of 1870 was extended to the Philippines

by the Royal Decree promulgated by King Alfonso XII on 4 September 1884 and the Royal Order issued by Queen Regent Maria Cristina on 17 December 1886 directing the enforcement of the decree.1 Article 292 of the Spanish Penal Code penalized the substitution of the trademark or trade name of the manufacturer of an article of commerce with the trademark or trade name of another manufacturer.2 1. 2.
United States v. Tamparong [1915] 31 Phil. 321, 323. S. Viada, Codigo Penal (5th ed. 1926, Madrid Librerias Editorial Reus), Tomo IV, p. 17.

259.

On 26 October 1888, Queen Regent Maria Cristina promulgated a

trademark law for the Philippines. The law based protection on registration.1
1. I. Sapalo, p. 65.

260. On 6 March 1903, the Philippine Commission enacted Act 666, which served as the new trademark law of the Philippines. It defined the property rights in trademarks and trade names. It abandoned the registration system under the Spanish law of 1888 and required actual use as the basis for the acquisition of exclusive rights in trademarks and trade names. It also penalized unfair competition.1 On 7 December 1926, Act 3332 amended Act 666 by

requiring registration of a trademark or trade name as condition for the recovery of damages for its infringement.

118

1.

I. Sapalo, p. 65.

261.

Article 188 of the Revised Penal Code, which was enacted by the

Philippine Legislature and which took effect on 1 January 1932, penalized the substitution and alteration of trademarks and trade names. Article 189 of the Revised Penal Code punished unfair competition. These provisions were taken from the Spanish Penal Code of 1870 and Act 666.1 1.
R. Aquino and C. Grio-Aquino, The Revised Penal Code, (1997, Quezon City, Central Professional Books, Inc.), Vol. III, pp. 336-338.

262.

Act 666 was superseded on 20 June 1947 by Republic Act 166.

Republic Act 166 was patterned after the United States Trademark Act of 1946.1 On 11 June 1951, Republic Act 638 amended Republic Act 166 by requiring actual use of trademarks and trade names as a condition for their registration and protection. On 16 June 1953, Republic Act 853 amended Republic Act 166 further by requiring actual use in commerce in the Philippines for at least two years as a condition for the registration of a trademark or a trade name and by granting foreigners the privilege to register their trademarks and trade names if their country granted Filipino citizens the same privilege.
1. Explanatory Note of House Bill 1157.

263.

Article 520 of the Civil Code provides:

A trade-mark or trade-name duly registered in the proper government bureau or office is owned by and pertains to the person, corporation, or firm registering the same, subject to the provisions of special laws.

119

264.

On 27 September 1965, the Philippines acceded to the Lisbon Act

of the Paris Convention for the Protection of Industrial Property.1


1. Senate Resolution No. 69.

265.

The Intellectual Property Code supplanted Republic Act 166 on 6

June 1997. It abolished prior use in commerce in the Philippines as a condition for the registration of trademarks and trade names.1 It repealed Articles 188 and 189 of the Revised Penal Code and incorporated them instead in the Intellectual Property Code. 2 1.
2. Record of the Senate, Vol. II, No. 29, October 8, 1996, p. 132. Intellectual Property Code, Sections 1555 and 168, Subsection 169.1, Section 170 and Subsection 239.1.

2.
I. 266.

SUBJECT MATTER OF PROTECTION


SIGNS WHICH MAY OR MAY NOT SERVE AS TRADE MARKS Any visible sign capable of distinguishing the goods or services of

an enterprise, including a stamped or marked container of goods, can be registered as a trademark.1 Thus, selecta, the Spanish translation of the English word selected can be adopted as a trademark for food products, as it is a fanciful word.2 Likewise, the word adagio, which means a musical composition with a slow and easy manner, may be used as a trademark for a certain type of brassieres, because it is being used as a trademark in an arbitrary and fanciful manner.3 The word cosmopolite may be adopted as a trademark for canned fish.4
1. Intellectual Property Code, Subsection 121.1.

120

2. 3. 4.

Arce Sons & Company v. Selecta Biscuit Company, Inc. [1961] 110 Phil. 858, 869. Romero v. Maiden Form Brassiere Company, Inc. [1964] 10 SCRA 556, 558. Masso Hermanos, S.A. v. Director of Patents [1953] 94 Phil. 136, 138-139.

267. a)

However, the following trademarks cannot be registered:

It consists of an immoral, deceptive or scandalous matter or a matter which may disparage or falsely suggest a connection with persons living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;

b)

It consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any simulation of them;

c)

It consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines during the lifetime of his widow except by written consent of the widow;

d)

It is identical with a registered trademark belonging to a different proprietor or a trademark with an earlier filing or priority date under any of the following circumstances: i) ii) iii) They refer to the same goods or services; They refer to closely related goods or services; or It nearly resembles such a trademark as to be likely to deceive or cause confusion;

121

e)

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

f)

It is identical with or confusingly similar to or is a translation of a

trademark considered well-known which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for, the use of the trademark in relation to those goods or services indicates a connection between those goods and services and the owner of the registered trademark, and the interests of the owner of the registered trademarks are likely to be damaged by such use;

g)

It is likely to mislead the public, particularly as to the nature, quality,

characteristics or geographical origin of the goods or services.;

h)

It consists exclusively of signs that are generic for the goods or services they seek to identify;

122

i)

It consists exclusively of signs or of indications that have became customary or usual to designate the goods or services, in everyday language or in bona fide and established trade practice;

j)

It consists exclusively of signs or of indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value,

geographical origin, time or production of the goods or rendering of the services or other characteristics of the goods or service;

k)

It consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or factors that affect their intrinsic value;

l)

It consists of colour alone, unless defined by a given form;

m)

It is contrary to public order or morality;1


1. Intellectual Property Code, Subsection 123.1.

n)

It is the emblem, official seal, or name of the United Nations, whether in its full or abbreviated form.1
1. Republic Act 226, Section 1.

A. 268.

Names of Deceased President The prohibition in this provision covers only the names of deceased

Presidents. Since it does not extend to the names of the deceased wives of former Presidents, a shipping company may name its vessels after them.1

123

1.

De la Rama Steamship Company v. National Development Company [1970] 35 SCRA 567, 583.

B. 269.

Identical or Confusingly Similar Trademarks The letters YKK cannot be registered as a trademark for zippers,

since it has been previously registered in the name of a foreign corporation as a trademark for zippers.1 The word apple cannot be registered as a trademark for pad paper, bond paper, mimeographing paper, carbon paper and notebooks, since there is a prior application for registration of it as a trademark for computer paper and stationeries.2 1. 2.
Pagasa Industrial Corporation v. Court of Appeals, [1984] 131 SCRA 565, 568. Apple Computer, Inc. v. Uy, [1990] 90 O.G. 709, 713,

270.

Goods are closely related when they belong to the same class or

have the same descriptive properties or when they possess the same physical attributes or essential characteristics with reference to their form, composition, texture or quality.1 1.
Esso Standard Eastern, Inc. v. Court of Appeals [1982] 116 SCRA 336, 342; Canon Kabushiki Kaisha v. Court of Appeals, G.R. No. 120900, July 20, 2000.

271.

Court decisions have held the following goods are closely related

and should not bear the same trademarks since they were produced by different manufacturers:

Prior User

Later User

124

i) Shoes and slippers ii) Health soap iii) Perfume, lipstick and nail polish iv) Haberdashery goods v) Beauty soap vi) Laundry soap vii) Zippers 1. 2. 3. 4. 5.
6. Ang v. Toribio [1942] 74 Phil. 50, 54.

i) Pants and shirts1 ii) Hair pomade2 iii) Health soap3 iv) Shoes4 v) Laundry soap5 vi) Laundry starch6 vii) Thread7

Ng Khee v. Lever Brothers Company [1941] 83 Phil. 947, 962. Chua Che v. Philippines Patent Office [1965] 13 SCRA 67, 72. Sta. Ana v. Maliwat [1968] 24 SCRA 1018, 1027. Heirs of Crisanta Y. Gabriel-Almoradie v. Court of Appeals, [1990] 229 SCRA 115, 32. Procter & Gamble Philippine Manufacturing Corporation v. CPC International, Inc., [1979] 24 CAR (2s) 440, 446.

7.

International Textile Mills v. Yoshida Kogyo K.K. [1987] 85 O.G. 8215, 8218.

272.

On the other hand, court decisions have held that the following

goods are not closely related and may bear the same trademarks: Prior User i) Medicines ii) Edible oil iii) Petroleum products iv) Toilet articles v) Paints, chemical products, Later User i) Chemicals1 ii) Soy sauce2 iii) Cigarettes3 iv) Briefs4 v) Sandals5

125

toner and dyestuffs vi) Shoes vii) Motor vehicles vi) Socks6 vii) Shoes, sandals, and slippers7 1. 2. 3. 4. 5. 6. 7.
Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft,

[1968] 27 SCRA 1214, 1226. Acoje Mining Company, Inc. v. Director of Patents [1971] 38 SCRA 480, 482. Shell Company of the Philippines, Ltd. v. Court of Appeals, G.R. No. 49145, June

29, 1979; Esso Standard Eastern, Inc. v. Court of Appeals [1982] 116 SCRA 336, 342, Faberge, Inc. v. Intermediate Appellate Court [1992] 215 SCRA 316, 330. Canon Kobushiki Kaisha v. Court of Appeals, G.R. No. 120900, July 20, 2000. Bally Shuhfabricken A.G. v. Mil-Oro Manufacturing Corporation, CA-G.R. SP No.

10265, January 25, 1988. Aktiebolaget Volvo v. Sapalo [1994] 94 O.G. 3792, 3794.

273.

In determining whether goods are closely related, the purposes

they serve and the channels of commerce through which they are sold should also be considered.1 Thus, it was held that the word camia, the name of a flower, could be used as a trademark for ham although it was being used by another manufacturer as a trademark for cooking oil. Although cooking oil and ham both fall under the classification of foods and food ingredients, they do not move through the same channels of commerce. Cooking oil is a daily household item which is usually purchased by domestic helpers from retail establishments. Ham is not a daily food fare for the average household.2 It is usually served on special occasions.

126

1. 2.

Esso Standard Eastern, Inc. v. Court of Appeals [1982] 916 SCRA 336, 342;

Canon Kabushiki Kaisha v. Court of Appeals, G.R. No. 120900, July 20, 2000. Philippine Refining Company, Inc. v. Ng Sam [1982] 115 SCRA 472, 478.

274.

There are two types of confusion, confusion of goods and confusion

of origin. In confusion of goods, the ordinarily prudent purchaser is induced to purchase one product in the belief that he is purchasing the other product. In confusion of origin, the goods are different, but the challenged product might reasonably be assumed to originate from another manufacturer and the public would then be deceived to believe that there is some connection between the manufacturers of the two products.1 1.
Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft General Motors Corporation v. Delco Wire & Cable

[1969] 27 SCRA 1214, 1227;

Corporation, CA-G.R. No. SP-04860-R, October 29, 1976.; Procter & Gamble Philippine Manufacturing Corporation v. CPC International, Inc. [1979] 24 CAR (2s) 440, 447.

275.

In determining if two trademarks are confusingly similar, it is

sufficient if one is a colourable imitation of the other. 1 Colourable imitation means such a close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, and to cause to purchase the one supposing it to be the other.2 Colourable imitation does not mean identity. It does not require that all the details be copied literally. It means such similarity in form, content, words, sound, meaning, special arrangement, or general appearance of the trademark with that of another trademark in their overall presentation or in their essential, substantive and distinctive parts as would

127

likely mislead or confuse the purchaser in the ordinary course of purchasing the genuine article.3 1. 2.
Clark v. Manila Candy Company [1917] 36 Phil. 100, 113; Sapolin Company, Inc.

v. Balmaceda [1939] 67 Phil. 709, 716. Etepha, A.G. v. Director of Patents, [1966] 16 SCRA 495, 497-498; Societe des

Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, 4 April 4, 2001; Fruit of the Loom, Inc. v. Dargani [1972] 17 CAR (2s) 1133, 1135.

3.

Emerald Garment Manufacturing Corporation v. Court of Appeals [1995] 251

SCRA 600, 614

276.

In determining whether or not a colourable imitation exists,

Philippine courts have alternatively applied two tests, the dominancy test and the holistic test.1 Under the dominancy test, if the competing trademark contains the main or essential or dominant features of another trademark by reason of which confusion and deception are likely to result, infringement takes place. Duplication or imitation is not necessary. The dominancy test focuses on the similarity of the prevalent features of the competing trademarks. 2 On the other hand, under the holistic test, in determining whether or not two trademarks are confusingly similar, a comparison of the words is not the only determining factor. The trademarks in their entirety as they appear in their respective labels are considered in relation to the goods to which they are attached. The holistic test does not focus only on the predominant words but considers also the other features appearing in the labels.3 However, the holistic test should not be applied to competing products which are common and inexpensive household products, because the ordinary purchase is not inclined to notice their specific features, similarities or dissimilarities.4
128

1.

Emerald Garment Manufacturing Corporation v. Court of Appeals [1995] 251

SCRA 600, 615. Societe des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, April 4, 2001.

2.

Jonas Brooks Brothers v. Froelich & Kuttner [1907] 8 Phil. 580, 585; Findlay

Fleming & Company v. Ong Tan Chuan [1914] 26 Phil. 214, 227; Rueda Hermanos & Company v. Felix Paglinawan & Company [1916] 33 Phil. 196, 199; E. Spinner &

Company v. Neus Hesslein Corporation [1930] 54 Phil. 224, 234; Co Tiong Sa v. Director of Patents [1954] 95 Phil. 1, 4; Lim Hoa v. Director of Patents [1955] 100 Phil. 214, 216217; Operators, Inc. v. Director of Patents [1965] 15 SCRA 147, 150; American Wire & Cable Company v. Director of Patents [1970] 31 SCRA 544, 456; Asia Brewery, Inc. v. Court of Appeals [1993] 224 SCRA 437, 446; Emerald Garment Manufacturing

Corporation v. Court of Appeals [1995] 251 SCRA 600, 615; Amigo Manufacturing, Inc. v. Cluett Peabody, Inc., G.R. No. 139300, March 14, 2001; Societe des Produits Neslte, S.A. v. Court of Appeals, April 4, 2001; Cheng U v. Villafania [1966] 9 CAR (2s) 42, 45;

Lorenzana v. Jocson & Sons, [1968] 65 O.G. 13802, 13807; Alhambra Cigar & Cigarette Manufacturing Company v. Insular Yebana Tobacco Corporation, CA-G.R. No. 19187-R, February 9, 1969; Tanduay Distillery, Inc. v. Director of Patents [1970] 67 O.G. 6700, 6702; Primunal v. Sehwani, CA G.R. No. SP-06298-R, March 30, 1973; Ovete, Prabody & Company v. Consolidated Mills, CA- G.R. No. SP-01616-R, September 25, 1975; Alimentaires v. Silver Swan Manufacturing Company, Inc., CA-G.R. No. SP-03385-R, October 21, 1975; Edward J. Nell Company v. Remington Industrial Sales Corporation, CA-G.R. No. 43417-R, January 26, 1977; Farbenfabriken Bayer Aktiengesellschaft v.

American Cyanamid Company, CA - G.R. No.SP 02806-R, May 31, 1977; Societes des Produits Nestle, S.A. v. CFC Corporation [1996] 93 O.G. 4791, 4793.

3.

Yebana Company v. Francisco Chua Seco & Company [1909] 14 Phil. 534, 539; Mead

Ynchausti & Company v. Song Fo & Company [1912] 21 Phil. 278, 282-283;

Johnson & Company v. N.V. J. Van Dorp, Ltd. [1963] 7 SCRA 768, 771; Bristol Myers Company v. Director of Patents [1966] 17 SCRA 128, 131; Acoje Mining Company, Inc. v. Directors of Patents [1971] 38 SCRA 480, 482; Fruit of the Loom, Inc. v. Court of Appeals [1984] 133 SCRA 405, 410; Del Monte Corporation v. Court of Appeals [1990] 181 SCRA 410, 415; Emerald Garment Manufacturing Corporation v. Court of Appeals [1995] 251 SCRA 600, 615; Amigo Manufacturing Inc. v. Cluett Peabody, Company, Inc., G.R. No. 139300, March 14, 2001; Societe des Produits Neslte, S.A. v. Court of Appeals, April 4, 2001; Yu Hun & Company v. Palting [1955] 51 O.G. 5730, 5732; Eli Lilly & Company v.

129

United

Drug

Company,

CA-G.R.

No.

32079-R,

February

5,

1969;

Doctors Colgate

Pharmaceuticals, Inc. v. Director of Patents [1974] 19 CAR (2s) 1147, 1153;

Palmolive Company v. Cheng Ban Yek & Company [1975] 20 CAR (2s) 510, 515; Roche International, Ltd. v. Medichem Pharmaceuticals, Inc., [1975] 73 O.G. 1717, 1719; Roche International, Ltd. v. Industrial Pharmaceuticals, Inc. CA-G.R. No. SP-03975, July 28, 1976; Procter & Gamble Philippine Manufacturing Corporation v. Cheng Ban Yek & Company, Inc., CA-G.R. No. 56241-R, October 28, 1977; Jordache Enterprises, Inc. v. Davila [1989] 6 CARA 341, 348; Sanrio Company, Ltd. v. Chua Lian Kiat [1996] 96 O.G. 7508, 7510.

4. 277.

Societe des Produits Neslte, S.A. v. Court of Appeals, April 4, 2001;

In approaching the problem of similarity of two trademarks as a

whole, some factors such as sound, appearance; form, style, shape, size or format; colour; ideas connoted by the trademarks, the meaning, spelling and pronunciation of the words used; and the setting in which the words appear may be considered.1 Other factors which may also be considered are the class of products; the quality of the products, quantity, designs and emblems used, nature of the package, wrapper or container; the character of the purchaser; and location of the business.2 1.
Etepha, A.G. v. Director of Patents [1966] 16 SCRA 495, 479; Bristol Myers

Company v. Director of Patents [1966] 17 SCRA 128, 131; Philippine Nut Industry, Inc. v. Standard Brands, Inc. [1975] 65 SCRA 575, 582; Eli Lilly & Company v. United Drug Company, Inc., CA-G.R. No. 33079-R, February 5, 1969; Doctors Pharmaceuticals, Inc. v. Director of Patents [1974] 19 CAR (2s) 1147, 1154; Jordache Enterprises, Inc. v. Davila [1989] 6 CARA 341, 348.

2.

Emerald Garment Manufacturing Corporation v. Court of Appeals, [1995] 251

SCRA 600, 614.

278.

If the differences between two trademarks outweigh their

similarities and the differences are distinctive, it is not likely that the purchasers will be confused.1

130

1.

Mead Johnson & Company v. N,V.J. Van Dorp, Ltd. [1963] 7 SCRA 768, 772;

American Cyanamid Company v. Court of Appeals [1977] 76 SCRA 568, 576; Fruit of the Loom, Inc. v. Court of Appeals, [1984] 133 SCRA 405, 411; Continental Manufacturing Corporation v. Qui [1982] 59 O.G. 1093, 1097; Westmont Manufacturing, Inc. v. Marvex Commercial & Manufacturing Corporation, CA-G.R. No. 44268-R, April 30, 1976; Procter & Gamble Philippine Manufacturing Corporation v. Cheng Ban Yek & Company, Inc., CAG.R. No. 56241-R, October 28, 1977; MacDonalds Corporation v. L.C. Big Mak Burger, Inc., CA-G.R. CV No. 53722, November 26, 1999.

279.

For a challenged trademark to be considered confusingly similar to

another, it is not necessary that the challenged trademark actually cause confusion or deception of the purchasers. It is sufficient that the use will likely cause confusion or mistake on the part of the purchaser.1 Neither is it necessary that the two competing products be placed alongside each other and compared by viewing them together. The purchaser does not usually make such scrutiny. He often just relies on his recollection of the product he intends to purchase.2 1.
Alhambra Cigar & Cigarette Company v. Mojica [1914] 27 Phil.

266, 272; Forbes Munn & Company v. Ang San To [1919] 40 Phil. 272, 275; American Wire & Cable Company v. Director of Patents [1970] 31 SCRA 574, 547; Acoje Mining Company, Inc. v. Director of Patents, [1971] 38 SCRA 480, 482; Converse Rubber

Corporation v. Universal Rubber Products, Inc. [1997] 147 SCRA 154, 163; Societe des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, April 4, 2001; American Sweets, Inc. v. ORacca Confectionery Company, Inc. [1937] 2 ACR 592, 599; Cheng U v. Villafania [1968] 9 CAR (2s) 42, 49; Fruit of the Loom, Inc. v. Dargani [1972] 17 CAR (2s) 1133, 1135; Alhambra Industries, Inc. v. New La Flor de la Isabela, Inc., CA-G.R. No. 55276-R, May 3, 1977.

2.
836;

Chuanchow Soy & Canning Company v. Director of Patents [1960] 108 Phil. 833, Etepha, A.G. v. Director of Patents [1966] 16 SCRA 495, 499; Del Monte

Corporation v. Court of Appeals [1990] 181 SCRA 410, 917; American Sweets, Inc. v. ORacca Confectionery Company, Inc. [1937] 2 ACR 590, 599. Tan Chai v. Chiong [1965] 7 CAR (2s) 325, 329; Lorenzana v. Jocson & Sons [1968] 65 O.G. 13862, 13867.

131

280.

The standard for determining whether or not deception of the

purchasing public is likely is the average person exercising the care that is ordinary under the circumstances to whom the product is sold in the normally prevailing conditions of trade.1 Thus, the standard is not a purchaser who has special knowledge which is not possessed by the ordinary purchaser of the product and who can avoid any mistake by the use of his special knowledge. In this regard, the age, training and education of the average buyer, the nature and cost of the product, the immediacy of the consumption of the article, and the conditions under which the product is usually purchased should be considered.3 The class of the ordinary purchaser of the product, i.e., children, domestic helpers, and skilled persons, should also be considered. 1.
American Trading Company v. H. E. Heacock Company [1932] 285 U.S. 247,

255; Spinner & Company v. Neuss Hesslein Corporation [1930] 54 Phil. 229, 232-233, R. F. & J. Alexander & Company, Ltd. v. Ang, [1955] 97 Phil. 157, 166; Converse Rubber Corporation v. Jacinto Rubber & Plastics Company, Inc. [1980] 97 SCRA 158, 169; Converse Rubber Corporation v. Universal Rubber Products, Inc. [1987] 147 SCRA 154, 163; Societe des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, April 4, 2001; Tanduay Distillery, Inc. v. Director of Patents [1970] 67 O.G. 6700, 6702.

2.

United States v. Manuel [1906] 7 Phil. 221, 225; Song Fo & Company v. Tiu Ca

Siong [1909] 13 Phil. 143, 146; Inchausti & Company v. Song Fo & Company [1915] 21 Phil. 278, 285; Rueda Hermanos & Company v. Felix Paglinawan & Company [1916] 33 Phil. 196, 198.

3. 4.

Del Monte Corporation v. Court of Appeals [1990] 181 SCRA 410, 418- 419. Alhambra Cigar & Cigarette Company v. Mojica [1914] 27 Phil. 266, 272.

132

281.

The test of confusing similarity is the likelihood of the deception of

the ordinary purchaser who has some measure of acquaintance with the trademarks of the product he wishes to purchase. If he knows nothing about the trademark which was imitated, it cannot be said that he was deceived.1
1. Dy Buncio v. Tan Tiao Bok [1921] 42 Phil. 190, 197.

282.

If the ordinary purchaser is especially familiar with the product he is

buying, the likelihood of deception is remote. This is true in the case of drinkers who order beer,1 shoppers who buy blue jeans,2 sewers who purchase threads3, and loggers who acquire wire rope.4 1. 2. 3. 4.
Asia Brewery, Inc. v. Court of Appeals, [1993] 224 SCRA 432, 454. Emerald Garment Manufactures Corporation v. Court of Appeals, [1995] 251

SCRA 600, 617. Kerr & Company, Ltd. v. Go Gee, CA-G.R. No. 7034-R, December 20, 1951. Edward J. Nell Company v. Remington Industrial Sales Corporation, CA-G.R.

No. 43417-R, January 15, 1976.

283.

The likelihood of confusion among the purchasing public is great

when the goods with similar trademarks are low-priced commodities which are consumed every day, since they are purchased without great care. Examples of these are food seasoning,1 soy sauce,2 salted peanuts, 3 candies, catsup,4 soap,5 coffee6 and chocolate bars7. On the other hand, the likelihood of deception is remote in the case of valuable and expensive articles like radios, television sets, air-conditioning units, and watches, because they are usually purchased only after a thorough, deliberate, comparative and analytical investigation. 8

133

1. 2.
836.

Lim Hoa v. Director of Patents [1956] 100 Phil. 215, 217. Chuanchow Soy & Canning Company v. Director of Patents [1960] 108 Phil. 833,

3. 4. 5. 6.
2001.

Philippine Nut Industry, Inc. v. Standard Brands, Inc. [1975] 65 SCRA 575, 584. Del Monte Corporation v. Court of Appeals [1990] 181 SCRA 410, 419. Emerald Garment Manufacturing Corporation v. Court of Appeals [1995] 251

SCRA 600, 616. Societe des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, April 4,

7.
4794.

Societe des Produits Nestle, S.A. v. CFC Corporation [1996] 93 O.G. 4791,

8.

Lim Hoa v. Director of Patents [1956] 100 Phil. 215, 217; Del Monte Corporation

v. Court of Appeals [1995] 181 SCRA 410, 419.

284.

The danger of confusion is remote in the case of medicines which

are dispensed only upon prescription or sold with the intervention of a pharmacist.1
1. Etepha, A.G. v. Director of Patents [1966] 16 SCRA 495, 501-502; Bristol Myers Companv. Director of Patents [1966] 17 SCRA 128, 132; Yu Hun & Company v. Palting [1955] 51 O.G. 5730, 5735; Eli Lilly & Company v. United Drug Company, Inc., CA-G.R. No. 33079R, February 5, 1969; Doctors Pharmaceuticals, Inc. v. Director of Patents [1974] 19 CAR (2S) 1147, 1156; Roche International, Ltd. V. Medichem Pharmaceuticals, Inc., [1975] 73 O.G. 1717, 1719. Roche International, Ltd.. v. International Pharmaceuticals, Inc., CA-G.R. SP No. 13975, July 28, 1976.

285.

On the basis of the dominancy test, the following trademarks have

been held to be confusingly similar:

Prior Trademark

Later Trademark

Product or Service

134

i) Ginebra de la Campana

i) Ginebra de Dos Campanas and Ginebra Tres Campanas

i) Gin1

ii) Illustration of a rooster in a fighting stance iii) Illustration of three British soldiers with two kneeling and one standing iv) Palatol

ii) Illustration of two roosters in a fighting stance iii) Illustration of five British soldiers with three kneeling and two standing iv) Pai Li To

ii) Candy2

iii) Khaki cloth3

iv) Pharmaceutical product4

v) Sapolin vi) Freeman vii) Illustration of a hen

v) Lusolin vi) Freedom vii) Illustration of two roosters

v) Paint5 vi) Shirts6 vii) Food seasoning7

viii) Illustration of a carp

viii) Illustration of a milkfish

viii) Native sauce8

ix) Big 5 x) Nabisco xi) Salonpas

ix) Big 3 x) Ambisco xi) Lionpas

ix) Vegetable lard9 x) Bakery products10 xi) Medicated plaster11

xii) Flormann

xii) Flormen

xii) Shoes12

135

xiii) Duraflex xiv) Race xv) Planters Cocktail Peanuts

xiii) Dynaflex xiv) Sun Rays xv) Philippine Planters Cordial Peanuts

xiii) Electrical wires13 xiv) Undershirts14 xv) Salted peanuts15

xvi) Gold Toe xvii) Master Roast and Master Blend xviii) Alexander xix) Vino Anti-Kabuki

xvi) Gold Top xvii) Flavor Master

xvi) Socks16 xvii) Coffee17

xviii) Advancer xix) Anti-Kabuki

xviii) Thread18 xix) Medicine for stomach

ailment19 xx) Illustration of black cat walking upright, dressed in white, and holding a steaming cup xx) Illustration of black dog walking upright, dressed in white, and holding a steaming cup xxi) xxii) Lorenzana Fruit of the Loom xxi) Loring xxii) Beauty in the Bloom xxiii) FAS xxiv) Diphenex xxi) Native sauce21 xxii) Lingerie22 xxiii) Detergent23 xxiv) Agricultural chemical xx) Tea20

xxiii). FAB xxiv) Dipterex

136

products24 xxv) Hotel Esperanza 1.


18-19.

xxv) Hotel Esperana

xxv) Hotel 25

Ubeda v. Zialcita, [1913] 226 U.S. 452, 453; Ubeda v. Zialcita [1909] 13 Phil. 11,

2. 3. 4. 5. 6. 7. 8.
836.

Clarke v. Manila Candy Company [1917] 36 Phil. 100, 115. Forbes, Murin & Company v. Ang San To [1919] 40 Phil. 272, 276. Parke, Davis & Company v. Kiu Foo & Company, Ltd. [1934] 60 Phil. 928, 932. Sapolin, Inc. v. Balmaceda [1939] 67 Phil. 705, 716.. Co Tiong Sa v. Director of Patents [1954] 95 Phil. 1, 7. Lim Hoa v. Director of Patents [1956] 100 Phil. 215, 217. Chuanchow Soy & Canning Company v. Director of Patents [1960] 108 Phil. 833,

9. 10. 11. 12. 13.


551.

Recaro v. Embisan [1961] 2 SCRA 544, 551. Operators, Inc. v. Director of Patents [1965] 15 SCRA 147, 149. Marvex Commercial Company, Inc. v. Petra Hawpia & Company [1966] 18 SCRA

1178, 1183. Sta. Ana v. Maliwat [1968] 24 SCRA 1018, 1027. American Wire & Cable Company v. Director of Patents [1970] 31 SCRA 544,

14. 15. 16. 17.


2001.

Kee Boc v. Director of Patents [1970] 34 SCRA 570, 572. Philippine Nut Industry, Inc. v. Standard Brands, Inc. [1975] 65 SCRA 575, 580. Amigo Manufacturing, Inc. v. Cluett Peabody Company, Inc., G.R. No. 139300,

March 14, 2001. Societe des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, April 4,

18.

Kerr & Company, Ltd. v. Cong Kong, CA-G.R. No. 5603-R, May 10, 1951.

137

19. 20. 21. 22. 23.


510, 517.

Tan Chai v. Chiong [1965] 7 CAR (2s) 325, 330. Cheng U v. Villafania [1966] 9 CAR (2s) 42, 49. Lorenzana v. Jocson & Son [1968] 65 O.G. 13862, 13866. Fruit of the Loom, Inc. v. Dargani [1972] 17 CAR (2s) 1133, 1335. Colgate Palmolive Company v. Cheng Ban Yek & Company [1975] 20 CAR (2s)

24.
6881.

Bayer Aktiengesellschaft v. Nikon Nohyaku Company, Ltd. [1988] 87 O.G. 6879,

25.

Rize Holdings, Inc. v. Po [1994] 94 O.G. 7358, 7362.

286. dissimilar:

On the other hand, the following trademarks were held to be

Prior Trademark i) Victorias ii) Alexander iii) Coconut iv) Green Dragon

Later Trademark i) Valentino ii) Aloha iii) Co Co Co iv) Double Peacock

Product i) Refined sugar1 ii) Thread2 iii) Thread3 iv) Canned salmon4

v) Lipton vi) Campbells vii) Transpulmin viii) Jordache ix) Dacron and Lycro x) Pediamox

v) Calton vi) Capitols vii) Pulmin viii) Rawhide ix) Licron

v) Tea5 vi) Soup6 vii) Cough syrup7 viii) Jeans8 ix) Textile fibers9

x) Diamox

x) Medicines10

138

1. 2. 3. 4.
1969.

Victorias Milling Company, Inc. v. Ong Siu [1977] 79 SCRA 207, 216. Kerr & Company, Ltd. v. Go Gee, CA-G.R. No. 7034-R, December 20, 1951. Continental Manufacturing Corporation v. Qui [1962] 59 O.G. 1093, 1095. Alaska Packers Association v. Kaw Ching Tiah, CA-G.R. No. 35359-R, June 26,

5. 6. 7.
1155.

Lipton, Ltd. v. Shu, CA-G.R. No. 37534-R, October 23, 1969. People v. Chua Be Sing, CA-G.R. No. 66405-Cr, August 6, 1971. Doctors Pharmaceuticals, Inc. v. Director of Patents [1974] 19 CAR (7s) 1147,

8. 9. 10.
9497.

Jordache Enterprises, Inc. v. Davila [1989] 6 CARA 341, 352. E.I Du Pont de Nemours & Company v. Lakeview Industrial Corporation [1989] 7

CAR (2s), 665, 671. American Cyanamid Company v. Pediatrica, Inc. [1987] 96 O.G. 9494, 9496-

287.

On the basis of the holistic test, various trademarks have been

adjudged dissimilar. Thus, although the label of an imported gin and the label of a local gin were almost similar, there was no confusing similarity between the two because the imported gin came in a long, stone cylindrical bottle, while the local gin came in a black quadrangular bottle and was smaller at the bottom than at the top. 1
1. Song Fo & Company v. Tiu Ca Siong [1909] 13 Phil. 143, 151.

288.

The trademark Fruit of Eve was considered different from the

trademark Fruit of the Loom although they both dealt with lingerie because of numerous striking dissimilarites. The label of Fruit of the Loom was circular and

139

had a base, while the label of Fruit of Eve was rectangular. The trademark of Fruit of Eve was written in a straight line, while the trademark of Fruit of the Loom was written in a semi-circle. The trademark of Fruit of Eve had an apple only, while the trademark of Fruit of the Loom showed an apple surrounded by a cluster of grapes. The colours of the labels were different.1
1. Fruit of the Loom, Inc. v. Court of Appeals [1984] 133 SCRA 405, 411.

289.

The trademark Don Carlos for local gin was considered different

from the trademarks Carlos I, Carlos II, Carlos III, Carlos IV and Carlos V for Spanish brandy. The purchasers of brandy are discriminating customers who order the brandy in exclusive restaurants and wine stores. The buyers of local gin are ordinary wine lovers who buy it from retail stores at a much lower price. 1 1.
10, 1985. Pedro Domecq, S.A. v. Destileria Limtuaco, Inc., AC-G.R. SP No. 03446, April

290.

Likewise, the trademark Big Mak has been adjudged different from

Big Mac although they both dealt with hamburger sandwiches. The Big Mac hamburger sandwiches are sold in plushy restaurants, while Big Mak hamburger sandwiches are sold from parked snack vans to the low-income group at a much lower price.1 1.
McDonalds Corporation v. L.C. Big Mak Burger, Inc., CA-G.R. No. 53722,

November 28,1999.

C. 291.

Well-Known Trademarks In determining whether a trademark is well-known, the following

factors or a combination of them may be considered:

140

i)

the duration, extent and geographical area of any use of the trademark, in particular, the duration, extent and geographical area of any promotion of the trademark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods or services to which the trademark applies;

ii)

the market share, in the Philippines and in other countries, of the goods or services to which the trademark applies;

iii)

the degree of the inherent or acquired distinction of the trademark; iv) v) vi) vii) viii) ix) x) xi) the quality-image or reputation acquired by the trademark; the extent to which the trademark has been registered in the world; the exclusivity of registration attained by the trademark in the world; the extent to which the trademark has been used in the world; the exclusivity of use attained by the trademark in the world; the commercial value attributed to the trademark in the world; the record of successful protection of the rights in the trademark; the outcome of litigations dealing with the issue of whether the

trademark is a well-known trademark; and xii) the presence or absence of identical or similar trademarks validly registered for or used on identical or similar goods or services and owned by persons other than the person claiming that his trademark is a wellknown trademark.1
1. Rules and Regulation on Trademarks, Service Marks, Trade Names and Marked

or Stamped Containers, Rule 102.

141

292.

In a Memorandum to the Director of the Patents Office issued on 20

November 1980, the Minister of Trade and Industry directed the Director of the Patents Office to reject all applications for registration of internationally known trademarks such as Lacoste, Jordache, Vanderbilt, Sasson, Fila, Pierre Cardin, Gucci, Christian Dior, Oscar de la Renta, Calvin Klein, Givenchy, Ralph Lauren, Geoffrey Beene, Lanvin and Ted Lapidus.

293.

Thus, the word Barbizon, which is a well-known trademark for

lingerie, cannot be registered as a trademark for lingerie by somebody else. 1 Since the trademark Lacoste and Crocodile Device is owned by La Chemise Lacoste, S.A., it cannot be registered by somebody else.2 The trademark Nipa House for flour is confusingly similar to the trademark Casa Nipa also for flour, since the former is just the English translation of the latter. 3 1. 2. 3.
Mirpuri v. Court of Appeals [1999] 318 SCRA 516, 550. La Chemise Lacoste, S.A. v. Sadhwani, AC-G.R. S.P No. 113356, June 17, 1983. Wise & Company, Inc. v. De Castro [1941] 40 O.G. 1474, 1498.

D. 294.

Deceptive Trademarks Thus, kananga, the name of a flower, cannot be used as a

trademark for toilet water when it had nothing to do with the toilet water, because the trademark would be deceptive.1 Similarly, verbena, the name of a fragrant flower, cannot be used as a trademark for cosmetic products if no extracts of it are being used in their preparation.2 The word nylon cannot be used as part of the trademark of shirts which are not made of nylon.3

142

1. 2.
443, 451.

Baxter v. Zuazua [1905] 5 Phil. 160, 165. East Pacific Merchandising Corporation v. Director of Patents [1960] 110 Phil

3.

Ong Ai Gui v. Director of the Philippines Patent Office [1955] 96 Phil. 673, 678.

E. 295.

Generic Terms Generic terms are those which constitute the common descriptive

name of an article or substance, comprise the genus of which the particular product is a species, are commonly used as the name or description of a kind of goods, imply reference to every member of a genus and the exclusion of individuating characters, or refer to the basic nature of wares or services provided rather than to the more idiosyncratic characteristics of a particular product.1 The denomination generally used in commerce for designating a class of goods or services cannot be appropriated exclusively as a trademark by a business enterprise. For instance, the words funeral parlor 2, leather shoes,3 and bubble gum4 are generic. Since the suffix tussin, which is derived from tussis, the Latin word for cough, is merely generic when used as part of the trademark of a medicine for cough, the manufacturer of a cough syrup cannot have a monopoly over it.5 Likewise, since pas means plaster, it may be used by any manufacturer of medicated plaster.6 The phrase pale pilsen is generic. It refers to a light Bohemian beer with a strong hops flavor which originated in the City of Pilsen in Czechoslovakia. No brewery can have a monopoly over it.7 1.
2001. Societe des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, April 4,

2.

Del Rosario v. Quioque [1910] 15 Phil, 245. 347.

143

3. 4.
592, 601.

Masso Hermanos, S.A. v. Director of Patents [1953] 94 Phil. 136, 139. American Sweets, Inc. v. ORacca Confectionery Company, Inc. [1937] 2 ACR,

5. 6. 7.

Etepha, A.G. v. Director of Patents [1966] 16 SCRA 495, 498. Marvex Commercial Company, Inc. v. Petra Hawpia & Company [1966] 18 SCRA

1178, 1183. Asia Brewery, Inc. v. Court of Appeals [1993] 224 SCRA 437, 448.

F. 296.

Geometrical Shapes Geometrical shapes like a diamond1 or a pair of concentric circles2

may not be appropriated exclusively as a trademark: 1. 2.


Victorias Milling Company, Inc. v. Ong Siu [1977] 79 SCRA 207, 215. Procter & Gamble Philippine Manufacturing Corporation v. Cheng Ban Yek &

Company, Inc., CA-G.R. No. 56241-R, October 28, 1977.

G. 297.

Descriptive Terms A descriptive term conveys the characteristics, functions, qualities

or ingredients of a product to one who has never seen it and does not know what it is, or conveys an immediate idea of the ingredients, qualities or characteristics of the goods, or denotes what goods or services provided in such a way that the consumer does not have to exercise powers of perception or imagination. 1 The words corona, especiales and perfectos are commonly used by local cigar manufacturers to designate the different shapes or forms of cigars they manufacture. The word chorritos refers to a special kind of cigarettes the They cannot be

tobacco of which is rolled in sweetened black paper.

appropriated exclusively by a manufacturer of cigars and cigarettes. 2 The word


144

nylon when used to refer to shirts is merely descriptive. 3 The word orbic cannot be registered as a trademark for ball pens. It is merely descriptive because it refers to the tip of the ball pen.4 The word omni-beta is merely descriptive of a vitamin B complex.5 The word aquatogs is likewise merely descriptive of

raincoats.6 The word Super-Bee as a trademark for a vial containing vitamin B is merely descriptive of the product to which it is applied.7 1.
2001. Societe des Produits Nestle, A.A. v. Court of Appeals, G.R. No. 112012, April 11,

2. 3. 4. 5. 6. 7.

La Yebana Company, Inc. v. Alhambra Cigar & Cigarette Manufacturing

Company [19331] 56 Phil. 106, 108. Ong Ai Gui v. Director of the Philippine Patent Office [1955] 96 Phil. 673, 676. Ex Parte Eagle Pencil, [1949] 45 O.G. 1955, 1956. Ex Parte William R. Warner & Company [1949] 45 O.G. 1956, 1956. Ex Parte Aquatogs, Inc. [1949] 45 O.G. 1958,1958. Yu Hun & Company v. Palting [1955] 51 O.G. 5730, 5733.

H. 298.

Geographical Names The word Isabela is the name of a province in the Philippines Since it is merely a geographical name, no cigarette

which grows tobacco.

manufacturer can use it as a trademark. 1 1.


Compaia General de Tabacos de Filipinas v. Alhambra Cigar & Cigarette

Manufacturing Company [1916] 33 Phil. 485, 495-496.

I.

Method of Packaging

145

299.

No manufacturer may appropriate exclusively to himself the method

of labeling or packing his merchandise and prohibit others from using a common manner of labeling a particular class of goods such as spools of thread, cakes of soap, and cartons for cigarettes.1 The same holds true for tea bags.2 Since a steinie bottle is a standard type of bottle used by breweries, no brewery may exclude others from using it.3 It is also common practice in the yarn industry to market thread in the form of balls4 and in cylindrical cardboard bobbins.5 Moreover, no manufacturer can prevent his competitors from using the same sizes of packages.6 1. 2. 3. 4. 5. 6.
Alhambra Cigar & Cigarette Manufacturing Company v. Compaia General de

Tabacos de Filipinas [1916] 35 Phil. 62, 73-74. Dy Buncio v. Tan Tiao Bok [1921] 42 Phil. 190, 194-195. Asia Brewery, Inc. v. Court of Appeals [1993] 224 SCRA 437, 451. Kerr & Company, Ltd. v. Go Gee, CA-G.R. No. 7034-R, December 20, 1951. Continental Manufacturing Corporation v. Qui [1962] 59 O.G. 1093, 1098. Procter & Gamble Philippine Manufacturing Corporation v. Cheng Ban Yek &

Company, Inc. CA-G.R. No. 56241-R, October 28, 1977.

J. 300.

Colour No cigarette manufacturer can have a monopoly over the use of

brown in its labels.1 Likewise, a brewery cannot prevent a competitor from using white also in its labels. Neither can a brewery prevent a competitor from using amber-coloured bottles. Amber is commonly used to prevent the transmission of light and to provide maximum protection to the beer.2

146

1. 2.

Alhambra Cigar & Cigarette Manufacturing Company v. Compaia General de

Tabacos de Filipinas [1916] 35 Phil. 62, 78. Asia Brewery, Inc. v. Court of Appeals [1993] 224 SCRA 437, 452.

II. 301.

SECONDARY MEANING The signs or devices mentioned in paragraphs (j) (k) and (l) of

Subsection 123 of the Intellectual Property Code may be registered if they have become distinctive in relation to the goods for which registration is requested as a result of their use in commerce in the Philippines.1 This is pursuant to the doctrine of secondary meaning, which states that a word or phrase originally incapable of exclusive appropriation with reference to an article in the market might nevertheless have been used so long and exclusively by one manufacturer with reference to his article that in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article is his product. 2 For this doctrine to apply, the use must have been exclusive. 3 If it has been used exclusively and continuously in commerce in the Philippines for at least five years, it may be presumed to have become distinctive as used in connection with the goods or services of the applicant for registration.4
1. Intellectual Property Code, Subsection 123.2. Ang v. Teodoro [1942] 74 Phil. 50, 53; Arce Sons & Company v. Selecta Biscuit

2.

Company, Inc. [1961] 110 Phil. 858, 869; Philippine Nut Industry, Inc. v. Standard Brands, Inc. [1975] 65 SCRA 575, 585; Lyceum of the Philippines, Inc. v. Court of Appeals [1993] 219 SCRA 610, 617.

3.
4.

East Pacific Merchandising Corporation v. Director of Patents [1960] 110 Phil. 443, 453; Lyceum of the Philippines, Inc. v. Court of Appeals, [1993] 219 SCRA 610, 619; Intellectual Property Code, Subsection 123.2.

147

302.

Thus, since the family name Rogers had been used as a

trademark for flatware being sold in the Philippines for twenty years, it acquired a secondary meaning to refer to wares in which the manufacturer was dealing.1 Likewise, since the word Wigan, the name of a small town in England, had been used for six years to describe a certain quality of khaki textile being sold in the Philippines, it had become identified with that product and was entitled to protection. 2 1. 2.
American Trading Company v. H.E. Heacock Company [1932] 285 U.S. 247, 259. E. Spinner & Company v. Neuss Hesslein Corporation [1930] 54 Phil. 224, 234.

3.
I. 303.

CONDITIONS OF PROTECTION
PRIOR USE The rights in a trademark are acquired through a valid registration.1

Actual prior use in commerce in the Philippines has been abolished as a condition for the registration of a trademark. 2
1. Intellectual Property Code, Section 122. Record of the Senate, Vol. II, No. 29, October 8, 1996, p. 132; Journal of the House of Representatives, No. 35, November 12, 1996, p. 34.

2.

II. 304.

IMPORTER OR DISTRIBUTOR A mere importer or distributor cannot register the trademark of the

products he is importing or distributing, because an agent cannot acquire the property of his principal.1 1.
Muoz & Company v. Struckmann & Company [1907] 9 Phil. 52, 65; Marvex Commercial Company, Inc. v. Petra Hawpia & Company [1966] 18 SCRA 1178, 1182; Gabriel v. Perez

148

[1974] 55 SCRA 406, 416; Unno Commercial Enterprises, Inc. v. General Milling Company [1983] 120 SCRA 804, 808; Torres v. Venezuela [1972] 17 CAR (2s) 294, 302; Cua Lin Kiat v. Tan [1986] 83 O.G. 3453, 3457

III. 305.

FOREIGN APPLICANT Any person who is a national or who is domiciled or has a real and

effective industrial establishment in a foreign 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 which extends reciprocal rights to nationals of the Philippines may apply for the registration of a trademark.1
1. Intellectual Property Code, Section 3.

4.

FORMALITIES
I. 306. REQUIREMENTS OF APPLICATION The application for the registration of a trademark should be in the

Filipino or English language and should contain the following: a) b) c) A request for registration; The name and address of the applicant; The name of a State of which the applicant is a national or where he has his domicile; and the name of a State in which the applicant has a real and effective industrial or commercial establishment, if any; d) If the applicant is a juridical entity, the law under which it is organized and existing;

149

e)

The appointment of an agent or representative, if the applicant is not domiciled in the Philippines

f)

If the applicant claims the priority of an earlier application, a declaration claiming the priority of that earlier application, together with an indication of the following: i) The name of the state with whose national office the earlier application was filed or if filed with an office other than a national office, the name of that office; ii) iii) the date in which the earlier application was filed; and If available, the application number of the earlier application;

g)

If the applicant wishes to claim colour as a distinctive feature of the trademark, a statement to that effect as well as the name or names of the colour or colours claimed and an indication, in respect of each colour, of the principal parts of the trademark which are in that colour;

h)

if the trademark is a three-dimensional trademark, a statement to that effect;

i) j)

A reproduction of the trademark and facsimiles; A transliteration or translation of the trademark or of some parts of the trademark;

k)

The names of the goods or services for which the registration is sought, grouped according to the classes of the Nice Classification, together with the number of the class of the classification to which each group of goods or services belongs;

150

l) m)

if the application is for a collective trademark, a designation to that effect; A signature by, or other self identification of, the applicant or his representative;

n) o)

Power of attorney if the filing is through a representative; and Sworn statement that the applicant is a small entity if such be the fact.1
1. Intellectual Property Code, Section 124; Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 400.

II. 307.

PRIORITY RIGHT An application for registration of a trademark filed by a foreign

national who previously filed an application for registration of the same trademark in a foreign country which grants nationals of the Philippine reciprocal rights is considered filed as of the day the application was first filed in the foreign country.1
1. Intellectual Property Code, Subsection 131.1.

308.

An application claiming priority right must be filed within six months

from the date the earliest foreign application was filed. A certified copy of the foreign application with an English translation must be filed within three months from the date of filing in the Philippines.1 1.
Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 204; Sunshine Biscuits, Inc. v. Nutritive Snack Food

corporation [1940] 90 O.G. 1409, 1414.

309.

The application for registration of the trademark will not be granted

until it has been registered in the country of origin of the applicant.1


1. Intellectual Property Code, Subsection 131.2.

151

III. 310.

EXAMINATION AND PUBLICATION If the Intellectual Property Office examines and finds that the

application meets the filing requirements and that the trademark is registrable, the application will be published in the Intellectual Property Office Gazette.1
1. Intellectual Property Code, Subsection 133.2.

IV. 311.

OPPOSITION Any person who believes that he will be damaged by the

registration of a trademark may within thirty days after the publication of the application file an opposition to the application. The opposition should be in writing and should be verified by the oppositor or any person on his behalf who knows the facts and should specify the grounds for the opposition. Copies of certification of registration of the trademark in other countries or other supporting documents should be filed with the opposition. The Director of Legal Affairs may extend the period for filing an opposition. 1
1. Intellectual Property Code, Section 134.

V. 312.

ISSUANCE OF CERTIFICATE AND PUBLICATION When the period for filing an opposition has expired or if the

Director of Legal Affairs denies the opposition, the Intellectual Property Office will issue the certificate of registration.1
1. Intellectual Property Code, Section 136.

313.

Notice of the issuance of the certificate of registration will be

published in the Intellectual Property Office Gazette. 1


152

1.

Intellectual Property Code, Section 136.

5.

OWNERSHIP AND TRANSFER


I. 314. ASSIGNMENT An application for registration of a trademark, or its registration,

may be assigned or transferred with or without the transfer of the business using the trademark. 315. The assignment or transfer is null and void if it is liable to mislead

the public particularly as regards the nature, source, manufacturing process, characteristics, or suitability for their purpose, of the goods or services to which the trademark is applied.1
1. Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 906.

316.

The assignment of the application for registration of a mark, or of its

registration, should be notarized and should contain the signature of the applicant, registrant or the assignee of record in case of subsequent assignment. Transfers by mergers or other forms of succession may be evidenced by the deed of merger or by any document supporting such transfer.1
1. Rules and Regulations on Trademarks Service Marks, Trade Names and Marked or Stamped Containers, Rule 907.

317.

Assignments and transfers have no effect against third parties until

they are recorded at the Intellectual Property Office. 1


1. Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 908.

153

318.

Upon request of an assignee of record and upon payment of the

required fee, a new certificate of registration for the unexpired period of the registration will be issued to the assignee. 1
1. Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 911.

II. 319.

LICENSING AGREEMENTS Any trademark licensing agreement must be applied for clearance

with the Documentation Information and Technology Transfer Bureau of the Intellectual Property Office and will be recorded only upon certification by its Director that the agreement does not contain the prohibited provisions and contains the mandatory provisions for licensing agreements involving patents.1
1. Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 913.

154

6.

SCOPE OF EXCLUSIVE RIGHTS


320. The owner of a registered trademark has the exclusive right to

prevent all third parties who do not have his consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar in respect of which the trademark is registered if use will result in a likelihood of confusion.1
1. Intellectual Property Code, Subsection 147.1.

321.

The exclusive right of the owner of a trademark which is well-known

internationally and in the Philippines and which is registered in the Philippines extends to goods and services which are not similar to those in respect of which the trademark is registered if the use of the trademark in relation to those goods and services will indicate a connection between those goods and services and the owner of the registered trademark and the interests of the owner of the registered trademark are likely to be damaged by such use.1
1. Intellectual Property Code, Subsection 147.2.

7.

LIMITATIONS PROTECTION
322.

OF

THE

SCOPE

OF

TRADEMARK

The registration of a trademark does not confer on the registered

owner the right to prevent third parties from using bona fide their names, addresses, pseudonyms, a geographical name, or exact indications concerning the kind, quality, quantity, destination, value, place of origin, or time of production or of supply, of their goods or services, if such use is confined to the purposes of

155

mere identification or information and cannot mislead the public as to the source of the goods or services.1
1. Intellectual Property Code, Section 148.

8.

USE REQUIREMENTS
I. 323. DECLARATION OF USE The applicant or the owner of a registered trademark must file a

declaration of actual use of the trademark with evidence of the use within three years from the filing date of the application. Otherwise, the application will be denied or the trademark will be removed from the register.1
1. Intellectual Property Code, Subsection 174.2.

324.

If the only deficiency in an application based on foreign application

claiming priority right is the submission of a certified copy of the foreign registration, the application may be provisionally allowed and the submission of the certified copy of the foreign registration allowed within twelve months from the date of the provisional allowance. The period may be extended for not more than twelve months. Should the applicant fail to submit the certified copy of the foreign registration within the maximum period of twenty-four months, the applicant may waive his claim to priority right and request that the application be considered as based on intent to use. A declaration of actual use must be filed within twelve months, without extension and without need of notice, counted from the expiration of the twenty-four month period.1
1. Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 618.

156

325.

Within one year from the fifth anniversary of the date of the

registration of a trademark, the owner must file a declaration of actual use. Otherwise, the trademark will be removed from the register. 1
1. Intellectual Property Code, Section 145.

326.

The following uses constitute compliance with the requirement of

actual use of a trademark: a) Use in a form different from the form in which the trademark is registered which does not alter its distinctive character; 1 b) Use in connection with one or more of the goods or services belonging to the class in respect of which the trademark is registered;2 c) Use by a company related with the applicant or the owner of the registered trademark, in such a manner which will not deceive the public; d) Use by a person controlled by the applicant or the registered owner of the trademark with respect to the nature and quality of goods or services.3
1. 2. 3. Intellectual Property Code, Subsection 152.2. Intellectual Property Code, Subsection 152.3. Intellectual Property Code, Subsection 152.4.

327.

However, the distribution of samples does not constitute use, since

they are not for sale.1


1. Pagasa Industrial Corporation v. Court of Appeals [1982] 118 SCRA 526, 533.

157

II. 328.

NON-USE Non-use of a trademark may be excused if caused by

circumstances arising independently of the will of the owner of the trademark.1 The special circumstances must be clearly beyond the control of the owner of the trademark, such as prohibition of sale imposed by government regulation.2 The owner of the trademark should submit supporting documents and an affidavit setting forth the steps being undertaken to comply with the government regulation and the reasonable period within which the trademark is expected to be used.3
1. Intellectual Property Code, Subsection 152.1. Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 802 (b); Romero v. Maiden Form Brassiere Company, Inc. [1964] 10 SCRA 556, 563; Philippine Nut Industries, Inc. v. Standard Brands, Inc. [1975] 65 SCRA 575, 586. 3. Memorandum Circular BT 2K1-1-01.

2.

329.

Lack of funds will not excuse the non-use of a trademark.1


1. Intellectual Property Code, Subsection 152.1.

9.

DURATION OF PROTECTION
I. 330. DURATION A certificate of registration of a trademark remains in force for ten

years.1
1. Intellectual Property Code, Section 145.

158

II. 331.

RENEWAL A certificate of registration may be renewed for periods of ten years

at its expiration.1
1. Intellectual Property Code, Subsection 146.1.

III. A. 332.

CANCELLATION PETITIONER Any person who believes that he is or will be damaged by the

registration of a trademark may file a petition to cancel the registration.1


1. Intellectual Property Code, Subsection 151.1.

B. 333.

ALTERNATIVE REMEDY A party who failed to oppose an application for the registration of a

trademark may file a petition for its cancellation. 334. These are alternative remedies granted by the law.1 1.
Anchor Trading Company, Inc. v. Director of Patents, G.R. No. L-8004, May 30, 1956; Clorox Company v. Director of Patents [1967] 20 SCRA 965, 971.

C. 335.

PERIOD AND GROUNDS FOR FILING A petition to cancel the registration of a trademark may be filed

under the following circumstances: a) within five years from the date of registration of the trademark; b) at any time on any of the following grounds: i) The trademark has become the generic name for the goods or services or a portion of them for which it is registered;

159

336.

A trademark shall not be deemed to have become a generic name

of goods or services solely because it is also used as a name of a unique product or service. The test is the primary significance of the trademark to the relevant public rather than purchaser motivation.1 ii) iii) The trademark has been abandoned;2 The registration of the trademark was obtained fraudulently or contrary to the provisions of the Intellectual Property Code.3

337.

Thus, the erroneous registration of the trademark YKK for zippers

in favor of another company when it had been previously registered in favor of a foreign corporation should be cancelled.4 Likewise, the registration of the

trademark Barbizon for lingerie, which had been first used internationally by a foreign corporation, should be cancelled.5 iv) The trademark is being used by or with the permission of the owner so as to misrepresent the service of the goods or services in connection with which the trademark is being used; v) The owner of the trademark without any legitimate reason failed to use it within the Philippines or to license its use in the Philippines for an uninterrupted period of at least three years.6
1. Intellectual Property Code, Subsection 151.1 Intellectual Property Code, Subsection 151.1 (b); Heirs of Crisanta Y. Gabriel Almoradie v. Court of Appeals [1994] 229 SCRA 15, 31. 3. Intellectual Property Code, Subsection 151.1 (b). Pagasa Industrial Corporation v. Court of Appeals [1984] 131 SCRA 565, 568. Mirpuri v. Court of Appeals [1999] 318 SCRA 516, 551.

2.

4. 5.

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6.

Intellectual Property Code, Subsection 151.1.

10.

INFRINGEMENT AND REMEDIES


A. INFRINGEMENT OF TRADEMARK 1. 338. CONCEPT

Any person who, without the consent of the owner of the registered

trademark, performs any of the following acts is liable for infringement: a) Use in commerce of any reproduction, counterfeit, copy, or colourable imitation of a registered trademark or the same container or a dominant feature of it in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or b) Reproducing, counterfeiting, copying or colourably imitating a registered trademark or a dominant feature of it and applying such reproduction, counterfeit, copy or colourable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.

161

339.

Infringement takes place at the moment any of those acts is

committed even if there is no actual sale of the goods or services using the infringing material.1
1. Intellectual Property Code, Section 155.

340.

The law has adopted the dominancy test for determining whether or

not a trademark infringes a registered trademark.1 1.


Record of the Senate, Vol. II, No. 29, October 8, 1996 p. 132; Journal of the House of Representatives, No. 35, November 12, 1966.

341.

There can be no infringement of trademark if the trademark is not

registered.1 However, intent to defraud is not necessary, because the action is based on invasion of the rights of the owner in the trademark.2 1.
General Garments Corporation v. Director of Patents [1971] 41 SCRA 50, 58; Del Monte Corporation v. Court of Appeals [1990] 181 SCRA 410, 415; People v. Go Yee Bio [1937] 2 ACR 437, 447.

2.

Compaia General de Tabacos de Filipinas v. Alhambra Cigar & Cigarette Manufacturing Company [1916] 33 Phil. 485, 490; Del Monte Corporation v. Court of Appeals [1990] 181 SCRA 410, 415.

342.

An advertisement showing cans of milk made by a manufacturer

together with cans of milk produced by its competitor with a statement that it was the first processor of canned milk infringes the trademark of the competitor. The readers could be misled into believing that it was also manufacturing the other brand.1 A dealer of spare parts of motor vehicles who uses the trademark of a motor vehicle is guilty of infringement of the trademark, because he has no authority to use it.2

162

1. 2.

N.V. Holandes Blikmelk International v. Consolidated Philippines, Inc. CA-G.R. No. 60653R, February 9, 1981. Daimler-Benz Aktiengesellschaft v. First Consolidated Trading & Development Corporation [1990] 89 O.G. 6229, 6233.

B. 343.

RIGHTS OF FOREIGN CORPORATIONS

A foreign corporation whose country grants Filipino corporations

reciprocal rights may bring an action for infringement of trademark, unfair competition, false designation of origin and false description, whether or not it is licensed to do business in the Philippines.1 The complaint must allege that the country of the foreign corporation grants Filipino corporations reciprocal rights. Otherwise, the complaint may be dismissed for failure to allege that the foreign corporation has legal capacity to sue.2 However, if the country of the foreign corporation is a signatory to the Paris Convention for the Protection of Industrial Property, grant of reciprocal rights to Filipino corporations need not be alleged. The courts may take judicial notice of this.3 1
Intellectual Property Code, Section 160; Western Equipment & Supply Company v. Reyes [1927] 51 Phil. 115, 129; General Garments Corporation v. Director of Patents [1971] 41 SCRA 50, 57; Converse Rubber Corporation v. Jacinto Rubber & Plastics Company, Inc. [1980] 97 SCRA 158, 173; La Chemise Lacoste, S.A. v. Fernandez [1984] 129 SCRA 373, 384-385; Universal Rubber Products, Inc. v. Court of Appeals [1984] 130 SCRA 104, 113; Philip Morris, Inc. v. Court of Appeals [1993] 224 SCRA 576, 592; Amigo Manufacturing Inc. v. Cluett Peabody Company, Inc. G.R. No. 139300, March 14, 2001.

2 3

Leviton Industries, Inc. v. Salvador [1982] 114 SCRA 420, 424. Puma Sportschuhfabriken Rudolf Dassler, K,G. v. Intermediate Appellate Court [1988] 158 SCRA 233, 238.

C.

DEFENSES

163

1. 344.

Non-Registrability of Trademark A certificate of registration of a trademark is merely prima facie

evidence of the validity of the registration, the ownership of the trademark, and of the exclusive right of the registered owner to use it in connection with the goods or services and those related to them which are specified in the certificate. 1 Hence, in an action for infringement of a trademark, the right of the plaintiff to its registration may be raised as an issue; and the court may order the cancellation of the registration.2 1.
Intellectual Property Code, Section 138; Del Monte Corporation v. Court of Appeals [1990] 181 SCRA 410, 420; Conrad & Company, Inc. v. Court of Appeals [1995] 246 SCRA 691, 700; Amigo Manufacturing, Inc. v. Cluett Peabody Company, Inc., G.R. No. 139300, March 14, 2001. 2. Intellectual Property Code, Section 161.

2. 345.

Statute of Limitations No damages may be recovered for infringement of trademark after

four years from the time the cause of action arose.1


1 Intellectual Property Code, Section 226.

3. 346.

Equitable Principles The equitable principles of laches, estoppel, and acquiescence may

be applied in an action for infringement of trademark.1


1. Intellectual Property Code, Section 230.

164

347.

A party who has imitated the trademark of another cannot bring an

action for imitation of his own trademark, because he would be coming to court with unclean hands.1
1. Ubeda v. Zialcita [1913] 226 U.S. 452, 454; Ubeda v. Zialcita [1909] 13 Phil. 11, 19.

348.

A party cannot invoke the equitable principles of laches, estoppel

and acquiescence if he usurped the trademark of another. Equity will not lend its aid to someone who is guilty of unlawful or inequitable conduct.1
1. Pagasa Industrial Corporation v. Court of Appeals [1984] 131 SCRA 565, 568.

349.

To give rise to laches, the delay must be lengthy.1

The delay

should be counted from the time the owner of the trademark first acquired knowledge of the infringement. A delay of eight years before the filing of an action for infringement of trademark was considered insufficient.2 However, a delay of twelve years was deemed unreasonable.3 1. 2. 3.
Emerald Garment Manufacturing Corporation v. Court of Appeals [1995] 251 SCRA 600, 612. La Insular v. Jao Oge [1924] 47 Phil. 75, 80. La Insular v. Yu Lo [1923] 45 Phil. 398, 399-400.

350.

In one case, the owner of a trademark for shoes was able to

register it despite the objection of somebody else who had registered it earlier as a trademark for socks, because of its contention that shoes and socks are unrelated products. Later on, the owner of the trademark for socks abandoned it and somebody else applied to register it as a trademark for socks. The owner of

165

the trademark for shoes was estopped to oppose the application on the ground that there would be confusion as to the origin of the socks.1 1.
Bally Schuhfabricken A.G. v. Mil-Oro Manufacturing Corporation, CA-G.R. SP No. 10265, January 25, 1988.

351.

The failure to object for more than thirty years to the use of the

trademark of a registered owner by somebody else constitutes acquiescence.1 1.


Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellshaft [1969] 27 SCRA 1214, 1236.

352.

The owner of a registered trademark cannot recover damages if he

consented to its use by somebody else.1


1. Uy v. Santos [1934] 60 Phil. 109, 110.

D. 1. 353.

REMEDIES

RECOVERY OF DAMAGES The owner of a registered trademark may recover damages from The measure of the damage is the

any person who infringed his rights.

reasonable profit which the plaintiff would have made had the defendant not infringed his rights or the profits the defendant actually earned from the infringement.1 1.
Intellectual Property Code, Subsection 156.1; Forbes, Munn & Company, Ltd. v. Ang San To [1922] 43 Phil. 724, 727; Universal Rubber Products, Inc. v. Court of Appeals [1984] 130 SCRA 104, 112; Cheng U v. Villafania, [1966] 9 CAR (2s) 42, 51; Alhambra

Industries, Inc. v. New La Flor de la Isabela, Inc. CA-G.R. No. 55278-R, May 3, 1977.

166

354.

If the plaintiff wishes to recover damages because of his loss of

profits, it is not enough to prove the decrease in the sale of his goods. He must prove that the reduction was due to the infringement of his trademark. 1 Thus, if there was a general decline in the sale of all brands, the decrease in the sales of the owner of the registered trademark cannot be entirely attributed to its infringement.2 1.
La Sociedad Germinal v. Nubla [1908] 10 Phil. 18, 22; Song Fo & Company v. Tiu Co Siong [1909] 13 Phil. 143, 151; American Sweets, Inc. v. ORacca Confectionery

Company, Inc. [1937] 2 ACR 592, 603.

2.

Rueda Hermanos & Company v. Felix Paglinawan & Company [1916] 33 Phil 196, 210.

355.

If the plaintiff wishes to base his claim for damages on the profits

the defendant made, it should be based on the net profits.1 If the defendant wishes to reduce his liability for damages, he should prove his expenses or present his books of account.2 1. 2.
Converse Rubber Corporation v. Jacinto Rubber & Plastics Company, Inc. [1980] 95 SCRA 158, 176. Edward A. Keller & Company, Ltd. v. Kinkwa Meriyasu Company, Inc. [1932] 57 Phil. 262, 266.

356.

If the measure of damages cannot be readily ascertained with

reasonable certainty, the court may award as damages a reasonable percentage of the gross sales of the defendant or the value of the services in connection with which the trademark was used in infringing the rights of the plaintiff. 1 1.
Intellectual Property Code, Subsection 156.1; Universal Rubber Products, Inc. v. Court of Appeals [1984] 130 SCRA 104, 112.

167

357.

The court may impound during the pendency of the case the sales

invoices and other documents evidencing sales.1


1. Intellectual Property Code, Subsection 156.2.

358.

If actual intent to mislead the public or to defraud the plaintiff is

shown, the court may double the damages.1


1. Intellectual Property Code, Subsection 156.3.

359.

The plaintiff is not entitled to recover damages unless the acts were

committed with the knowledge that such imitation is likely to cause confusion, to cause mistake, or to deceive. Such knowledge is presumed if the owner of the trademark gives notice that his mark is registered by displaying with the mark the words Registered Mark or the letter R within a circle or if the defendant had actual notice of the registration.1
1. Intellectual Property Code, Section 158.

2. 360.

ISSUANCE OF INJUNCTION The court may also grant an injunction.1


1. Intellectual Property Code, Subsection 156.4.

3. 361.

DESTRUCTION OF INFRINGING MATERIALS The court may order that the goods found to be infringing be

disposed of without any compensation outside the channels of commerce in such a manner as to avoid any harm caused to the right of the owner, or be destroyed; and all labels, signs, prints, packages, wrappers, receptacles and advertisements in the possession of the defendant, bearing the registered trademark or any
168

reproduction, counterfeit, copy or colourable imitation of them, all plates, molds, matrices and other means of making them, be delivered up and destroyed.1
1. Intellectual Property Code, Subsection 157.1.

362.

In regard to counterfeit goods, the simple removal of the trademark

affixed is not sufficient except in special cases which permit the release of the goods into the channels of commerce.1
1. Intellectual Property Code, Subsection 157.2.

4. 363. a)

LIMITATION OF REMEDIES The remedies given to the plaintiff are limited as follows:

A registered trademark has no effect against any person who, in good faith, before the filing date or the priority date, was using the trademark for the purposes of his business or enterprise; but his right may only be transferred or assigned together with his enterprise or business or with that part of his enterprise or business in which the trademark is used.

b)

If an infringer who is engaged solely in the business of printing the trademark or other infringing materials for others is an innocent infringer, the owner of the infringed trademark is entitled as against such infringer to an injunction against future printing only.

c)

If the infringement complained of is contained in or is part of a paid advertisement in a newspaper, magazine, or other similar periodical or in an electronic communication, the remedy of the owner of the trademark as against the publisher or distributor of the newspaper, magazine, or other

169

similar periodical or electronic communication is limited to an injunction against the presentation of such advertising matter in future issues of the newspapers, magazines, or other similar periodicals or in future transmissions of the electronic communications. These limitations apply only to innocent infringers. The injunction is not available to the owner of the trademark with respect to an issue of a newspaper, magazine, or other similar periodical or an electronic communication containing infringing matter if restraining the dissemination of the infringing matter in any particular issue of such periodical or in an electronic communication will delay the delivery of the issue or transmission of the electronic communication.1
1. Intellectual Property Code, Section 159.

II.

UNFAIR COMPETITION 1. 364. Protection of Goodwill A person who has identified in the mind of the public the goods he

manufactures or deals in, his business or services from those of others, whether or not a registered trademark is employed, has a property right in the goodwill of his goods, business or services so identified, which will be protected in the same manner as other property rights.1
1. Intellectual Property Code, Subsection 168.1.

2. 365.

Concept of Unfair Competition Any person who employs deception or any other means contrary to

good faith by which he shall pass off the goods he manufactured or in which he
170

deals, or his business, or services for those of one having established goodwill, or who commits any acts calculated to produce this result, is guilty of unfair competition.1
1. Intellectual Property Code, Subsection 168.2.

3.

Distinction between Infringement of Trademark and Unfair Competition

366.

There are several distinctions between infringement of trademark

and unfair competition. 367. In infringement of trademark the prior registration of the trademark

is a prerequisite for the action; in unfair competition registration of the trademark is not necessary.1 1.
Compaia General de Tabacos de Filipinas [1916] 33 Phil. 485, 490; La Insular Cigar & Cigarette Factory, Inc. v. Jao Oge [1921] 42 Phil. 366, 375; Del Monte Corporation v. Court of Appeals [1990] 181 SCRA 410, 415.

368.

In infringement of trademark, fraudulent intent is not necessary; in

unfair competition fraudulent intent is essential. 369. Infringement of trademark is the unauthorized use of a trademark,

while unfair competition is the passing off of ones goods for the goods of another. 370. An action for unfair competition may be filed even if the owner of

the trademark has not registered it, because a trademark is entitled to protection even if it is not registered.1 In fact, a party who succeeded in registering a

trademark can be held liable for unfair competition if it is proven that the

171

trademark actually belongs to the plaintiff, because the certificate of registration is merely prima facie evidence of ownership of the trademark.2 1.
Ubeda v. Zialcita [1913] 226 U.S. 452, 454; Ubeda v. Zialcita [1909] 13 Phil. 11, 20; Yebana & Company v. Francisco Chua Seco & Company [1909] 14 Phil. 534, 538; Ogura v. Chua [1924] 59 Phil. 471, 477.

2.

Yebana & Company v. Francisco Chua Seco & Company [1909] 14 Phil. 534, 538; R. F. & J. Alexander & Company, Ltd. v. Ang [1955] 97 Phil. 157, 162; Tan Chai v. Chiong [1965] 7 CAR (2s) 325, 329.

371.

While a fraudulent intent is necessary in unfair competition, this can

be inferred from the similarity in the appearance of the packaging of the challenged goods with that of the goods of a competitor.1 1.
Inchausti & Company v. Sony Fo & Company [1912] 21 Phil. 278, 286; United States v. Gow Chiong [1912] 23 Phil. 138, 143; Rueda Hermanos & Company v. Felix Paglinawan & Company [1916] 33 Phil. 196, 199; E. Spinner & Company v. Neus Hesslein Corporation [1930] 54 Phil. 224, 233; Parke, Davis & Company v. Kui Foo & Company, Ltd. [1934] 60 Phil. 928, 931.

4. 372.

Acts Constituting Unfair Competition

The following are guilty of unfair competition:

a) Any person, who is selling his goods and gives them the general appearance of the 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 on them, or in any other feature of their appearance, which will 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

172

such appearance will deceive the public and defraud another of his legitimate trade, or any subsequent vendor or 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 he is offering the services of another who has identified such services in the mind of the public; or c) Any person who makes any false statement in the course of trade or who commits any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another. 373. By express provision of the law, unfair competition is not limited to

these acts, as they are cited only by way of illustration.1


1. Intellectual Property Code, Subsection 168.3.

374.

Since the seller of imitation goods is liable for unfair competition,

the manufacturer of the imitation goods should also be held liable for unfair competition. It need not be proven that the imitation goods were actually sold, for they were obviously manufactured to deceive the purchasing public.1 1.
Pro Line Sports Center, Inc. v. Court of Appeals [1997] 281 SCRA 162, 173; People v. Yap Peng Chong [1979] 24 CAR (2s) 921, 929-930.

375.

The seller of fake medicines is guilty of unfair competition. 1 The

same holds true of a manufacturer of cigars who tried to pass off his cigars for those of his competitor by putting around them a small paper ring which had the same general appearance as that used by his competitor. 2 imitation goods constitutes unfair competition.3 A mere offer to sell

However, if the seller of the

173

imitation goods is not the manufacturer, he is not liable for unfair competition if he did not know that the items he was selling are fake or bore a trademark similar to that of another brand. 4 1. 2. 3. 4.
People v. Detabali, CA G.R. No. 11990 Cr, February 19, 1973; People v. Yap Peng Chong, [1979] 24 CAR (2s) 921, 928. Nelle v. Baer, Senior & Company [1906] 5 Phil. 608, 610; Alhambra Cigar & Cigarette Manufacturing Company v. Mojica [1914] 27 Phil. 266, 270. People v. Caballero, CA-G.R. No. 10542-R, January 29, 1954. Gayatinea v. Lim Ka Ping & Company, [1963] 4 CAR (2s) 936, 945,; People v. Santos, CA-G.R. No. 15320 - CR, April 7, 1976.

376.

The owner of a new funeral parlor which opened with the trade

name Nueva Funeraria Paz at the site previously occupied by another funeral parlor with the trade name Funeraria Paz and used in his sign the same style of lettering used by the old funeral parlor is guilty of unfair competition.1
1. Del Rosario v. Quiogue [1910] 15 Phil. 345, 348.

377.

Since the rights arising under an exclusive distributorship are

property rights entitled to protection, the importation and sale of the goods covered by the exclusive distributorship by somebody else constitute unfair competition.1 1.
Yu v. Court of Appeals {1993] 217 SCRA 328, 332; Macsolutions, Inc. v. Aliposa, CA G.R. No. SP No. 34469, December 9, 1994.

378.

The reproduction of a racing programme containing tips which was

prepared after observing horses that are scheduled to take part in the races

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constitutes unfair competition. It amounts to appropriating material prepared by another and selling it as ones own.1
1. Guidotti v. Inciong, CA-G.R. No. 6268-R, July 10, 1951.

5. 379.

Procedure

The rules governing the right of foreign corporations to file an action

for infringement of trademark, the defenses available to an action for infringement of trademark, and the remedies for infringement of trademark are applicable to unfair competition.1
1. Intellectual Property Code, Section 3, Subsection 168.4 and Section 226.

III.

FALSE DECLARATION 380. Any person who procures registration of a trademark by a false or

fraudulent declaration or representation, whether oral or written, or by any false means is liable to any person injured for any damages suffered as a consequence of it.1
1. Intellectual Property Code, Section 162.

IV.

FALSE DESIGNATION OF ORIGIN OR DESCRIPTION 381. Any person who, on or in connection with any goods or services, or

any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination of them, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, is liable in a civil action for damages and injunction to any person who is damaged, the following cases:

175

a) The false statement is likely to cause confusion or to cause mistake or to deceive as to the affiliation, connection, or association of such person with another person, or to the origin, sponsorship, or approval of his goods, services, or commercial activities by another person; or b) The false statement misrepresents in commercial advertising or promotion the nature, characteristics, qualities or geographical origin of his goods, services, or commercial activities or those of another person.1
1. Intellectual Property Code, Subsection 169.1.

382.

Thus, a manufacturer of medicines who stated that the medicines

contain chloramphenicol when they contain chloramphenico palmitate is guilty of making a false statement in the course of trade.1
1. Parke, Davis & Company v. Doctors Pharmaceuticals, Inc. [1981] 104 SCRA 700, 708.

V.

PROHIBITION OF IMPORTATION 383. Any goods who are marked or labeled with a trademark which is

confusingly similar to another trademark or which contain a false designation of origin or false description of their nature, characteristics, qualities, or geographical origin shall not be imported.1
1. Intellectual Property Code, Subsection 169.2.

VI.

CRIMINAL PROSECUTION 384. A penalty of imprisonment from two years to five years and a fine

ranging from 50,000 pesos to 200,000 pesos is imposed on any person who commits any act of infringement of trademark, unfair competition, or false

176

designation of the origin or false description of the nature and characteristics of his goods.1
1. Intellectual Property Code, 170.

11.

OVERLAPPING

AND

RELATION

TO

OTHER

INTELLECTUAL

PROPERTY LAWS. I. CONTAINERS 385. A stamped or marked container of goods capable of distinguishing

the goods of a business enterprise may be considered a trademark.1 A stamped or marked container means any container of goods upon which a mark is impressed or mold which will give a distinctive effect and which cannot be deleted or removed from the container. 2
1. 2. Intellectual Property Code, Subsection 121.1. Rules and Regulations on Trademarks, Service Marks, Trade Names and Marked or Stamped Containers, Rule 1001.

386.

Section 1 of Republic Act 623, as amended by Republic Act 5700,

authorizes persons engaged in the manufacture, bottling, or selling of soda water, mineral or aerated waters, cider, milk, cream or other lawful beverages in bottles, boxes, kegs, barrels, and other similar containers, or in the manufacture, compressing or selling of gases such as oxygen, acetylene, nitrogen, carbon dioxide, ammonia, hydrogen, chloride, helium, sulphur, dioxide, butane, propane, freon, methyl chloride or similar gases contained in steel cylinders, tanks, flasks, accumulators or similar containers, with their trade names or the trademarks of

177

the products or other marks of ownership stamped or marked on them to register the trade names or trademarks. 387. It is unlawful for any person, without the written consent of the

owner of the registered trademark, to fill the bottles, boxes, kegs, barrels, steel cylinders, tanks, flasks, or other similar containers, for the purpose of sale, or to sell, dispose of, buy or traffic in, or wantonly destroy them.1 The mere use of the containers without the written consent of the owner of the registered trademarks is prohibited.2 The prohibition covers all lawful beverages, regardless of the

nature of their contents, and includes hard liquor. 3


1. Republic Act 623, Section 2, as amended by Republic Act 5700. Distileria Ayala, Inc. v. Tan Tay & Company [1943] 74 Phil. 301, 303; Cagayan Valley Enterprises, Inc. v. Court of Appeals [1989] 179 SCRA 218, 225; Distileria Washington, Inc. v. Court of Appeals [1996] 263 SCRA 303, 309.

2.

3.

Cagayan Valley Enterprises, Inc. v. Court of Appeals [1989] 179 SCRA 218, 226-227; Twin Ace Holding Corporation v. Court of Appeals [1997] 280 SCRA 884, 888.

388.

The use of the containers with registered trademarks as containers The

for native sauces is exempted from the prohibition against their use.

purpose of the exemption is to assist small-scale manufacturers of native sauces.1


1.
Republic Act 623, Section 6; Cagayan Valley Enterprises, Inc. v. Court of Appeals [1989] 179 SCRA 218, 225; Distilleria Washington, Inc. v. Court of Appeals [1996] 263 SCRA 303, 309; Twin Ace Holding Corporation v. Court of Appeals [1997] 280 SCRA 884, 889.

389.

If in addition to using the container with a registered trademark,

somebody uses the registered trademark or adopts a colourable imitation of it, he is liable for unfair competition or infringement of trademark.1 Thus, a

178

manufacturer of sherry who used bottles whose shape was similar to that of the bottles of a competitor, to deceive the public, was declared guilty of unfair competition.2 Similarly, a manufacturer of catsup who used the bottles of an established competitor and adopted a similar label was found guilty of infringement of trademark.3 1. 2. 3.
Destileria Ayala, Inc. v. Tan Tay & Company [1943] 74 Phil. 301, 303. United States v. Gow Chiong [1912] 23 Phil. 138, 143. Del Monte Corporation v. Court of Appeals [1990] 181 SCRA 410, 421.

390.

On the other hand, the seller of recycled lubricating oil who used

empty drums of oil companies but erased the trademarks on them and told the buyers that he was selling recycled lubricating oil, was not guilty of unfair competition. The purchasing public was not being deceived.1
1.
Shell Company of the Philippines, Ltd. v. Insular Petroleum Refining Company, Ltd. [1964] 11 SCRA 436, 443.

II. 391.

UNFAIR COMPETITION Article 28 of the Civil Code provides: Unfair competition in agricultural, commercial, or industrial

enterprises or in labor through the use of force, intimidation, deceit, machination, or any other unjust, oppressive or high-handed method shall give rise to a right of action by the person who suffers thereby. 392. The concept of unfair competition under this provision is broader It covers bribery of the

than that under the Intellectual Property Code.

employees of a competitor, misrepresentation of all kinds, interference with the

179

fulfillment of the contracts of a competitor, and any malicious interference with the business of a competitor.1 Thus, the operator of a public utility who operates outside its authorized zone of operation and encroaches upon the allocated territory of a competitor may be held liable for unfair competition under this provision.2 Giving someone the right to top the bid of a winner in a sealed public bidding is unfair competition.3
1.
A. Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines (Quezon City, Central Lawbook Publishing Company, Inc. 1987), Vol. 1, p. 120.

2.

Castro v. Ice & Cold Storage Industries of the Philippines, G.R. No. L-10147, December 27, 1958.

3.

J. G. Summit Holdings, Inc. v. Court of Appeals, G.R. No. 124293, November 20, 2000.

393.

On the other hand, a mere offer of goods or services to the

customers of a competitor does not constitute unfair competition. Competition, to be unfair, must involve acts which are contrary to good conscience, shocking to judicial sensibilities, or otherwise unlawful.1
1. Davao Stevedore Terminal Company, Inc. v. Fernandez [1957] 54 O.G. 1433, 1437.

394. competition. 395.

The Constitution of 1987 also contains several provisions on unfair

Article XII, Section 1 provides: However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

396.

Article XII, Section 19 states: No combinations in restraint of trade or unfair competition shall be allowed.
180

397.

Article XVI, Section 11 (1) reads: The Congress shall regulate or prohibit monopolies in commercial mass media when the public interest so requires. No combinations in restraint of trade or unfair competition therein shall be allowed.

181

CHAPTER 5.

TRADE NAMES

1. SOURCES-LEGISLATION 398. The historical background and the sources of legislation on

trademarks and trade names were discussed in Chapter 4. 399. In addition, Section 18 of the Corporation Code, which was

approved on 1 May 1980, provides: No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing or contrary to existing laws. 2. THE PROTECTION OF TRADE NAMES I. Concept and Protection 400. A trade name is the name or designation identifying or

distinguishing an enterprise.1 A trade name is entitled to be protected against any unlawful act of third parties even prior to or without registration.2 1. 2.
Intellectual Property Code, Subsection 121.3; United States v. Kyburz [1914] 28 Phil. 475, 481. Intellectual Property Code, Subsection 165.2 (a); Red Line Transportation Company v. Rural Transit Company [1934] 60 Phil. 549, 555.

II. A. 401.

Limitations of the Scope of Trade Name Protection Generic Words

A business enterprise has no exclusive right to use a word as part

of its trade name, if the word is generic. Thus, an educational institution has no
182

exclusive right to use the word lyceum, since it denotes a school and is generic. 1 The word gaslam cannot be adopted as a trade name by a dealer of gas lamps, as it is merely a contraction of the words gas lamp and is therefore merely descriptive of the articles he is selling.2 1. 2.
Lyceum of the Philippines v. Court of Appeals [1993] 219 SCRA 610, 616-617. People v. Chan Chu [1948] 45 O.G. 3964, 3968.

B. 402.

Geographical Names

Since Wellington is the capital of New Zealand, it is merely a

geographical name and cannot be appropriated as a trade name.1


1. Ang Si Heng v. Wellington Department Store, Inc. [1953] 92 Phil. 448, 452.

C. 403.

Legal Prohibitions

A name may not be used as trade name if it is contrary to public

order or morals and is liable to deceive trade circles or the public as to the nature of the enterprise identified by it.1
1. Intellectual Property Code, Subsection 165.1.

404. name.1

It is unlawful to use the name of the United Nations as a trade

1.

Republic Act 226, Section 1.

405.

The word bonded may not be used as part of the trade name of a

business enterprise operating a warehouse, if the warehouse is not licensed under the General Bonded Warehouse Act or was not established under the Tariff and Customs Code.1
183

1.

Republic Act 247, Section 3.

406.

No business enterprises may use the word, bank, banking,

banker, building and loan association, trust corporation, and trust company unless it is authorized to engage in these businesses by the Monetary Board.1
1. Republic Act 337, Section 6.

407.

No business enterprise may use the words savings and loan

association as part of its trade name unless it has been authorized to operate as a savings and loan association by the Monetary Board.1
1. Republic Act 337, Section 6; Republic Act 3779, Section 13.

408.

No business enterprise may use the words development bank as

part its trade name unless it has been authorized to operate as a development bank by the Monetary Board. 1
1. Republic Act 4093, Section 16.

409.

No business enterprise may use the words financing company,

leasing company, financing and leasing company, or finance and investment company as part of its business name it has not been authorized to operate as a financing or leasing company by the Securities and Exchange Commission.1
1. Republic Act 5980, Section 14 (c) , as amended by Republic Act 8556.

410.

No business enterprise may use the word cooperative as part of

its trade name unless it has been registered as a cooperative.1


1. Republic Act 6938, Section 124 (1); Republic Act 6939, Section 14.

184

411.

No business enterprise may use the words rural bank as part of its

trade name unless it has been authorized to operate as a rural bank by the Monetary Board.1
1. Republic Act 7353, Section 28.

412.

No bank may use the word national as part of its trade name

except the Philippine National Bank.1


1. Revised Charter of the Philippine National Bank, Section 35.

D. 413.

Confusing Similarity

It is unlawful to use a trade name which is similar to a prior trade

name, likely to mislead the public.1 Specifically, investment companies are prohibited from using a word which is deceptive or misleading as part of their trade name.2
1. 2. Intellectual Property Code, Subsection 165.2 (b). Investment Company Act, Section 32 (d).

414.

The Securities and Exchange Commission has adopted the

following guidelines in the approval of the names of corporations and partnerships: a) The name must not be identical, misleading or confusingly similar to one already registered by another corporation or partnership with the Securities and Exchange Commission or a sole proprietorship registered with the Department of Trade and Industry.

185

If the proposed name is similar to the name of a registered firm, the proposed name must contain at least one distinctive word different from the name of the company already registered. b) A tradename or trademark duly registered with the Intellectual Property Office can not be used as part of a corporate or partnership name without the consent of the owner of such tradename or trademark. c) If the name or surname of a person is used as part of a corporate or partnership name, the consent of such person or his heirs must be submitted except if that person is a stockholder, member, partner or a declared national hero. If such person can not be identified or is nonexistent, an explanation for the use of such name is required. d) The meaning of initials in the name must be disclosed in writing by the registrant. e) A name containing a term descriptive of a business different from the business of a registered company whose name also bears similar term used by the former may be allowed. f) The name should not be patently deceptive, confusing or contrary to existing laws. g) A name which contains a word identical to a word in a registered name shall not be allowed if such word was coined or was already appropriated by a registered firm, regardless of the number of the different words in the proposed name, unless the registered firm consents or this firm is one of the stockholders or partners of the entity to be registered.

186

h)

The name of an internationally known foreign corporation or one similar to it may not be used by a domestic corporation without the consent of the former.

i)

The words engineer, engineering, or architects can not be used as part of a corporate name.

j)

The word national cannot be used by any stock corporation and partnership.

k)

The words Asean, Calabarzon and Philippines 2000 can not be used by any corporation or partnership.

l)

The name of a dissolved firm can not be used by any other firm within three years after the approval of the dissolution by the Securities and Exchange Commission unless it is allowed by the last stockholders representing at least majority of the outstanding capital stock of the dissolved firm 1.
1. Memorandum Circular No. 14-00.

415.

The way decisions have developed, new business enterprises are

not allowed to adopt a trade name on the ground that it is confusingly similar to that of an existing business enterprise if two requisites are present: (a) the

proposed name contains a dominant word or phrase in the trade name of the existing business enterprise; and (b) they are engaged in the same line of business. Thus, in the following cases, the new business enterprises were not allowed to use a trade name on the ground of confusing similarity with that of an existing business enterprise:

187

Prior User a) Funeraria Paz

Later User a) Nueva Funeraria Paz

Nature of Business a). Funeral service1

b) Universal Textile Mills b) Universal Mills Inc. c) Armco Steel Corporation d) Philips Export B.V. c) Corporation Armco Steel Corporation d) Philips Industrial Development . Corporation e) Industrial Refractories Corporation of the Philippines e) Industrial Refractories Corporation of the Philippines f) Malaya Books, Inc. f) Malaya Publishing Corporation g) General Telephone Directory Company h) Tropical Flora Philippines, Inc. i) St. Cyr Academy, Inc. i) Lycee D St. Cyr, Inc. j) Human Resources & j) C & A Human g) General Directory Company h) Tropflora, Inc.

b) Textile mill2

c) Manufacturer of steel products3 d) Sale of chains, rollers, belts, bearings and cutting saws.4 e) Manufacture of refractory materials5

f) Publication of books6 g) Publication of telephone directory7 h) Sale of plants8

i) School9

j) Recruitment of

188

Services, Inc.

Resources & Services, Inc.

Employees10

k) Allied Thread Corporation l) Rolls Royce Corporation

k) Alliance Thread Company, Inc. l) Rolls Royce Industrial Corporation

k)

Manufacture of thread11

l)

Sale of automotive products12

m) Mechanical Handling m) Mechanical Handling Company, Inc.

m) Sale of equipment13

Engineering (Philippines), Inc.

n) Oleo Fats, Inc.

n) Oleo Manufacturing Corporation

n) Manufacture of products using oil and fats14

o) Orient Ships Management Philippines, Inc.


1. 2. 3.

o) OSM Shipping Philippines, Inc.

o) Recruitment of seaman15

Del Rosario v. Quiogue [1910] 15 Phil. 345, 348. Universal Mills Corporation v. Universal Textile Mills, Inc. [1977] 78 SCRA 62, 65. Armco Steel Corporation v. Securities and Exchange Commission [1987] 156 SCRA 822, 829.

4. 5.

Philips Export B. V. v. Court of Appeals [1992] 206 SCRA 457, 464. Industrial Refractories Corporation of the Philippines v. Industrial Refractories Corporation of the Philippines, CA G.R. S.P No. 35056, June 16, 1995.

6. 7.

Malaya Books, Inc. v. Malaya Publishing Corporation, SEC Case No. 1478, June 29, 1979. General Telephone Directory Company v. General Directory Company, SEC Case No. 2039, September 30, 1981.

189

8.

Benedict Investment Realty Corporation v. Tropiflora, Inc., SEC Case No. 2570, January 10, 1985.

9. 10.

St. Cyr Academy, Inc. v. Lycee D St. Cyr, Inc., SEC Case No. 2765, May 22, 1987. Human Resources & Services, Inc. v. C & A Human Resources & Services, Inc., SEC Case No. 3357, April 24, 1990.

11.

Allied Thread Company, Inc. v. Alliance Thread Company, Inc. SEC Case No. 2846, July 30, 1990.

12.

Rolls Royce Corporation v. Rolls Royce Industrial Corporation, SEC-AC No. 353, March 9, 1992.

13.

Mechanical Handling Equipment Company, Inc. v. Mechanical Handling Engineering (Philippines), Inc., SEC AC No. 452, December 5, 1994.

14.

Oleo Fats, Inc. v. Oleo Manufacturing Corporation, SEC Case No. 10-97-5800, August 10, 1998.

15.

Orient Ship Management Philippines, Inc. v. OSM Shipping Philippines, Inc., SEC Case No. 07-98-5388, August 12, 1999.

416.

On the other hand, the following cases held that there was no

confusing similarity between the two trade names in question, because the business enterprises were engaged in different lines of business: Prior User
a) Filipinas Pawnshop, Inc. b) Lakeview Health Resort b) Operation of a resort b) Lakeview Industrial Corporation c) Firestone Tire & Rubber c) Manufacture of tires for motor c) Firestone Ceramic, Inc.

Nature of Business
a) Operating a pawnshop

Later User
a) Pilipinas Loan Company, Inc.

Nature of Business
a) Lending money without engaging in pawnbroking1 b) Manufacture of fiber, yarn and textiles2 c) Manufacture of ceramic wares3

190

Company Philippines d) Carlos J. Valdes & Company

vehicles

d) Accounting

d) Valdes Consultants

d) Management consultancy4

417.

In the last case, the Securities and Exchange Commission also

considered that both firms were catering to a small class of highly sophisticated businessmen.
1.
Pilipinas Loan Company, Inc. v. Securities and Exchange Commission, CA G.R. SP No. 25782, October 31, 1991.

2. 3.

Sta. Romana v. Lakeview Industrial Corporation, SEC Case No. 1341, October 24, 1980. Firestone Tire & Rubber Company Philippines v. Firestone Ceramics, Inc., SEC Case No. 2045, March 24, 1982.

4.

In the Matter of Valdes Consultants, Inc., SEC AC No. 304, 1991.

418.

In Intermodal Shipping Agencies, Inc. v. Intermodal Transport

Forwarders, Inc., SEC Case No. 1309, August 2, 1984, the Securities and Exchange Commission declared the trade name of the respondent confusingly similar to that of the complainant. The complainant was engaged in business as a shipping agent and intermodal carrier, while the respondent was engaged in business as a shipping broker and forwarding agent. The Securities and

Exchange Commission took into consideration that their business activities were related and that they were dealing with the same market. 419. In Manila Credit Corporation v. Credit Manila, Inc., SEC Case No.

3347, July 27, 1990, the Securities and Exchange Commission adjudged the

191

name of the respondent as confusingly similar to that of the complainant. The complainant was engaged in financing, while the respondent was dealing in securities. What persuaded the Securities and Exchange Commission was the fact that there had actually been confusion. Letters intended for the respondent were being delivered to the complainant, and customers of the respondent were calling the office of the complainant. 420. In Web TV Networks, Inc. v. Web TV Philippines, Inc., SEC Case

No. 05-98-5983, April 8, 1999, the Securities and Exchange Commission ordered the respondent to change its trade name to avoid confusing similarity. The

complainant and the respondent were engaged in different lines of business, as the respondent was engaged in trading. However, the trade name of the

respondent did not reflect the nature of its business. The adoption of the name Web TV coupled with the word Philippines would give the public the impression that the respondent was a subsidiary of the complainant. 3. 421. TRANSFER OF OWNERSHIP The rules on assignment of trademarks are also applicable to the

assignment of trade names. 1


1. Intellectual Property Code, Subsection 165.4.

4. 422.

INFRINGEMENT AND REMEDIES The remedies for infringement of trademarks are also applicable to

infringement of trade names. 1


1. Intellectual Property Code, Subsection 165.3.

192

CHAPTER 6.
1. 423.

INDUSTRIAL DESIGNS

SOURCES LEGISLATION Philippine law extended protection to industrial designs for the first

time when Republic Act 165 took effect on 20 June 1947. 424. This has been retained in the Intellectual Property Code. However,

industrial designs are now registered instead of being patented. 2. 425. SUBJECT MATTER OF PROTECTION An industrial design is any composition of lines or colours or any

three-dimensional form, whether or not associated with lines or colours, if such composition or form gives a special appearance to and can serve as pattern for an industrial product or handicraft. 1
1. Intellectual Property Code, Section 112.

426.

A design is that characteristic of a physical substance which, by

means of lines, images, configuration and the like, token is a whole, make an impression through the eye, upon the mind of the observer, with respect to the thing observed, of uniqueness and character. It gives a special or distinctive appearance to the thing to which it is applied. The characteristic features of a design may reside in the symmetry and proportion of the manufacture or in its decorative design or in the combination of both. The impression produced may be the result of the peculiarity of configuration or of ornament or both. The essence of a design resides in the appearance of the design as a whole and not in its elements individually or in the method of arrangement. 1

193

1.

T. C. Martin, Commentaries and Jurisprudence on the Commercial Laws of the Philippines (rev. ed. Manila, Central Book Supply, Inc. 1986), Vol. 2, p. 466.

3. 427.

CONDITIONS OF PROTECTION Only industrial designs that are new or original are protected. 1

Industrial designs dictated essentially by technical or functional considerations to obtain a technical result or those that are contrary to public order, health or morals are not protected.1
1. 2. Intellectual Property Code, Subsection 113.1. Intellectual Property Code, Subsection 113.2.

428.

To be registrable, an industrial design must be a new or original

creation relating to the ornamental features of shape, configuration, form or combination of them, of an article of manufacture, whether or not associated with lines, pattern or colours, which imparts an aesthetic and pleasing appearance to the article. The design which is embodied in any composition of lines, patterns or colours must be inseparable from the article and incapable of existing alone merely as a scheme of surface ornamentation. 1
1. Rules and Regulations on Utility Models and Industrial Design, Rule 301.

194

I. 429.

NOVELTY The standard of novelty established for inventions applies to

industrial design, but the period of non-prejudicial disclosure is reduced to six months.1
1. Intellectual Property Code, Subsection 119.1; Rules and Regulations on Utility Models and Industrial Designs, Rule 302.

430.

An industrial design is not considered new if it differs from prior

designs only in minor respects that it can be mistaken as a prior design by an ordinary observer.1 It must significantly differ from prior designs or combinations of prior designs. 2
1. 2. Rules and Regulations on Utility Models and Industrial Designs, Rule 302. Rules and Regulations on Utility Models and Industrial Designs, Rule 301.1.

II. 431.

ORNAMENTATION An industrial design which merely pleases the eye may be

registered. An industrial design must be ornamental. Ornamentation implies beauty, the giving of a pleasing appearance to an object or article. The industrial design must show a variance which enhances the aesthetic beauty and attractive appearance of the article.1
1. Rules and Regulations on Utility Models and Industrial Designs, Rule 301.1.

III. 432.

INDUSTRIAL APPLICABILITY The industrial design must be capable of application to an article of

manufacture. A mere abstract impression or picture is not an industrial design. 1

195

An article of manufacture is anything which belongs to the useful or practical art, or any part of it, which can be made and sold separately. 1
1. 2. T.C. Martin, p. 466. Rules and Regulations on Utility Models and Industrial Design, Rule 301.

4. I.

FORMALITIES APPLICATION A. Contents

433.

Every application for registration of an industrial design must

contain the following: a) b) c) A request for registration of the industrial design; Information identifying the applicant; An indication of the kind of article of manufacture or handicraft to which the design will be applied; d) A representation of the article of manufacture or handicraft by way of drawings, photographs or other adequate graphic representation of the design as applied to the article of manufacture or handicraft which clearly and fully discloses those features for which design protection is claimed; and
e)

The name and address of the creator, or if the applicant is not the creator, a statement indicating the origin of the right to the industrial design registration.1
1. Intellectual Property Code, Subsection 114.1.

196

434. the following: a) b) c)


d)

The application must be accompanied by a specification containing

Title; Brief description of the different views of the drawings; Characteristic-feature description of the design; Claim.1
1. Rules and Regulations on Utility Models and Industrial Designs, Rule 309 (b)

435.

The application must also be accompanied by drawings of the

different views of the design showing its complete appearance, including the signature of the applicant or his representative. Photographs or other graphic representations of the design may be submitted instead.1 The Bureau of Patents of the Intellectual Property Office may require that the application be accompanied by a specimen. A specimen is a sample or unit of the industrial product that is deliberately selected for examination, display or study and chosen as typical of its kind.2
1. 2. Rules and Regulations on Utility Models and Industrial Designs, Rule 309 (c). Rules and Regulations on Utility Models and Industrial Designs, Rule 311.

B. 436.

Multiple Industrial Designs

The same application may be filed for two or more industrial

designs if they relate to the same sub-class of the International Classification or to the same set or composition of articles.1 They should not be patently distinct from each other, and they should be of substantially similar dominant design features that are embodied in a single design concept. A set of articles which is

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customarily sold or used together as a set may be the subject matter of a single application if the articles have the same design or substantially the same design.2
1. 2. Intellectual Property Code, Section 115. Rules and Regulations on Utility Models and Industrial Design, Rule 313.

C. 437.

Priority

The rules on priority of application under the first-to-file system

applicable to inventions is also applicable to industrial designs.1


1. Intellectual Property Code, Subsection 119.1; Rules and Regulations on Utility Models and Industrial Designs, Rule 305.

II.

EXAMINATION
438. The Bureau of Patents of the Intellectual Property Office will

examine whether or not the industrial design complies with the requirements for registration.1
1. Intellectual Property Code, Subsection 116.4.

III.

REGISTRATION AND PUBLICATION


439. If the conditions for the registration of an industrial design are

fulfilled, the Bureau of Patents of the Intellectual Property Office will order that the design be registered and a certificate of registration will be issued to the applicant.1
1. Intellectual Property Code, Section 117.

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440.

Registration of an industrial design will be published in the form of

bibliographic data and representative drawing in the Intellectual Property Office Gazette within six months after registration. 1
1. Rules and Regulations on Utility Models and Industrial Designs, Rule 314.

5. 441.

OWNERSHIP AND TRANSFER The provision applicable to the ownership and the assignment of

inventions are also applicable to the assignment of industrial designs. 1


1. Intellectual Property Code, Subsection 119.1.

6. 442.

SCOPE OF EXCLUSIVE RIGHTS The scope of the exclusive rights of the owner of an industrial

design is the same as that of the owner of a patent for an invention.1


1. Intellectual Property Code, Subsection 119.1.

7. 443.

LIMITATIONS OF THE SCOPE OF PROTECTION The limitations on the scope of the protection granted to owners of

the patents for inventions are applicable to owners of industrial design. However, industrial designs may not be the subject of compulsory licensing.1
1. Intellectual Property Code, Subsection 119.1.

8. 444.

DURATION OF PROTECTION The term of the registration of an industrial design is five years from

the filing date of the application.1 The registration may be renewed for not more than two consecutive periods of five years each. 2
1. Intellectual Property Code, Subsection 118.1.

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2.

Intellectual Property Code, Subsection 118.2.

9. I. 445.

INFRINGEMENT AND REMEDIES CONCEPT AND REMEDIES The provisions applicable to the infringement of a patent for an

invention and the remedies for the infringement are applicable to the infringement of an industrial design.1 Thus, someone who manufactured wrought iron furniture sets similar to those covered by an industrial design is guilty of infringement. However, he cannot be held liable for unfair competition, because the definition of unfair competition in the Intellectual Property Code does not include industrial designs.2
1. Intellectual Property Code, Subsection 119.1. Savage v. Taypin, [2000] 331 SCRA 697, 705.

2.

II. 446.

DEFENSE If the essential elements of an industrial design which is the subject

of an application were obtained from the creation of another person without his consent, the owner of the industrial design cannot invoke the protection of the law against the other person whose creation he copied.1
1. Intellectual Property Code, Subsection 119.2.

10. 447.

CANCELLATION OF REGISTRATION At any time during the term of the registration of an industrial

design, any person, upon payment of the required fee, may petition the Director

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of Legal Affairs of the Intellectual Property Office to cancel the registration on any of the following grounds: a) b)
c)

The subject matter of the industrial design is not registrable; The subject matter is not new; or The subject matter of the industrial design extends beyond the content of the application as originally filed. 1
1. Intellectual Property Code, Subsection 119.1.

448.

Thus, the registration of the design for ornamental strips placed on

the borders of suitcases which were merely copied from the catalogues of foreign manufacturers of suitcases may be cancelled. 1 1.
Co San v. Agrava [1954], 94 Phil. 739, 741-742.

449.

If the ground for cancellation relates only to a part of the industrial

design, the cancellation should be limited to that extent only. This may be made by altering the affected features of the design. 1
1. Intellectual Property Code, Subsection 120.2.

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CHAPTER 7. TRADE SECRETS/CONFIDENTIAL INFORMATION


I. SOURCES - LEGISLATION I. 450. Public Officers

There are various laws which penalize the disclosure of trade

secrets by public officers. 451. Article 230 of the Revised Penal Code penalizes with imprisonment

from one month and one day to six months and a fine not exceeding 1,000 pesos any public officer who reveals the secrets of any private individual which became known to him by reason of his office. 452. Spanish This was taken from the Spanish Penal Code of 1870.1 The Code of 1870, as modified in accordance with the

Penal

recommendation of the Code Commission for Overseas Provinces, was extended to the Philippines, by the Royal Decree of 4 September 1884 issued by King Alfonso XII.2
1.
R. Aquino and C. Grio - Aquino, The Revised Penal Code, (4th ed., Quezon City, Central Professional Books, Inc. 1997), Vol. No. II, p. 534).

2.

United States v. Tamparong, [1915] 31 Phil. 321, 323.

453.

Sections 3 (k) and 9 of the Anti-Graft and Corrupt Practices Act

penalize with imprisonment from one to ten years and perpetual disqualification from public office any public officer who divulges information of a confidential character acquired by his office or by him on account of his official position to unauthorized persons or releases such information in advance of its authorized released date.

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454.

Section 270 of the National Internal Revenue Code of 1997

punishes with a fine of 50,000 to 100,000 pesos or imprisonment from two years to five years, or both such fine and imprisonment any official, agent, or employee of the Bureau of Internal Revenue who divulges to any person information regarding the business, income, or estate of any taxpayer, the secrets, operations, style or work, or apparatus of any manufacturer or producer, or confidential information regarding the business of any taxpayer which came to his knowledge in the discharge of his official duties. 455. Under Article 81 of the Omnibus Investments Code, all applications

and their supporting documents filed with the Board of Investments are confidential and may not be disclosed to any person, except with the consent of the applicant or on order of a court. 456. Sections 7 (c) and 11 of the Code of Conduct and Ethical

Standards for Public Officials and Employees penalize with imprisonment not exceeding five years, or a fine not exceeding 5,000 pesos or both such imprisonment and fine, and disqualification to hold public office a public official or employee who uses or divulges confidential or classified information which became officially known to him by reason of his office and which is not made available to the public, for the following purposes: a) b) to further his private interest or to give undue advantage to anyone; or to prejudice the public interest.

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II. 457.

Private Individuals

Article 292 of the Revised Penal Code penalizes with imprisonment

from six months and one day to four years and a fine not exceeding five hundred pesos. The person in charge, employee or worker of any manufacturing or industrial establishment who, to the prejudice of its owner, reveals its industrial secrets. 458. 1870. 1
1. Aquino, R. and Grino-Aquino, C., Vol. III, p. 92.

This provision was also taken from the Spanish Penal Code of

459.

Section 40 (f) of the Consumer Act prohibits any person form using

to his advantage or revealing to anyone except the Department of Health or to the courts when it is relevant in any judicial proceeding under the Consumer Act, any information concerning any method or process involving food, drugs, cosmetics and devices which as a trade secret is entitled to protection.

2.

THE

PROTECTION

OF

TRADE

SECRETS/CONFIDENTIAL

INFORMATION

I. 460.

Public Officers Public officers are prohibited from disclosing the secrets of private

individuals to maintain faith and trust in public service. It is an essential element of these crimes that the public officer acquired knowledge of the secrets because

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of his office. If he acquired his knowledge through some other way, he is not criminally liable.1 It is not necessary that the secrets be disclosed publicly. It is sufficient that they were revealed to another person even if the disclosure was made confidentially.2 It is also not necessary that the private person whose

secrets were divulged be prejudiced. 2


1.
F. Puig Pea, Derecho Penal (2nd ed., Barcelona, 1950), Tomo II, p. 208; S. Viada, Tomo IV, p. 373.

2.

F. Puig Pea, p. 208; E. Cuello Calon, Derecho Penal (12th ed., Barcelona, Bosch, Casa Editorial, 1967), Tomo II, Vol. 1, p. 374.

461.

The following are the elements of violation of Article 230 of the

Revised Penal Code: a) The offender is a public officer; b) He came to know of the secrets of a private individual by reason of his office; c) He revealed such secrets without authority.1
1.
L. B. Reyes, The Revised Penal Code (145h ed., Manila, Rex Book Store, 2000), Vol. 2. P. 431.

II.

Private Individuals A. Criminal Liability

462.

The following are the elements of violation of Article 292 of the

Revised Penal Code: a) The offender is a person in charge, employee or worker of a manufacturing or industrial establishment; b) The manufacturing or industrial establishment has an industrial secret which the offender has learned;

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c) d)

The offender reveals such secret; Prejudice is caused to the manufacturing or industrial establishment.1
1. L. B. Reyes, Vol. 2, p. 608.

463.

Even if the offender has resigned when he revealed the industrial

secret, he is still liable. What is decisive is that he learned of the industrial secret when he was still an employee. 1
1. E. Cuello Calon, Tomo II, Vol. 2, p. 758; A. Groizard, El Codigo Penal de 1870 Concordado y Comentado, (2nd ed., Madrid, Establecimiento Tipografico de Hijos de J.A. Garcia, 1913), Tomo V, p. 846; F. Puig Pea, p. 419.

2.

464.

It is not necessary that the industrial secret be patented.1 However,

if the process of the manufacturing or industrial establishment is being used generally, it is not a secret and its disclosure is not a crime. 2 Thus, a former foreman of a manufacturer of wire mesh who made a wire mesh machine for somebody else could not be convicted, because the wire mesh machine is commonly used and did not involve any industrial secret. 3
1. 2. E. Cuello Colon, Tomo II, Vol. 2, p. 757. S. Viada, [1927] Vol. VI, p. 102. People v. De la Merced, [1979] 24 CAR (2s) 967, 972.

3.

465.

The disclosure of the industrial secret may be made by any means,

such as writing a book or an article for a periodical, knowingly allowing another person desiring to discover the industrial secret to enter the establishment, or showing to him plans, documents or formulas containing the industrial secret.1

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However, if the employees uses the industrial secret for his own benefit, he does not violate the law since he has not disclosed it to another person. 2
1. 2. E. Cuello Calon, Tomo II, Vol. 2, p. 758. E. Cuello Calon, Tomo II, Vol. 2, p. 758, A. Groizard, p. 846.

466.

If there was no prejudice to the owner of the manufacturing or

commercial establishment, there is no criminal liability.1


1. E. Cuello Calon, Tomo II, Vol. 2, p. 758, A. Groizard, p. 846; F. Puig Pea, p. 420.

B. 467.

Relation to Civil Code

Article 28 of the Civil Code provides:


Unfair competition in agricultural, commercial or industrial enterprises or in labor through the use of force, intimidation, deceit, machination, or any other unjust, oppressive or high-handed method shall give rise to a right of action by the person who thereby suffers damages.

468.

The concept of unfair competition under this provision is broad. It

includes even cases of discovery of the trade secrets of a competitor.1


1. Tolentino, p. 120.

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