INTELLECTUAL PROPERTY LAW
ATTY. ALLAN B. GEPTY
OUTLINE I.
Brief Overview of the IP System IP in General Various Kinds of IPRs
II. Intellectual Property Rights (Laws, principles, rules and relevant cases) Trademarks Copyrights Patents III. Jurisdictions and Procedures A.M. No. 10-3-10 SC (Special IP Rules)
BRIEF OVERVIEW OF THE IP SYSTEM
INTELLECTUAL PROPERTY (IP) refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs used in commerce.
TWO (2) CATEGORIES OF IP INDUSTRIAL PROPERTY - includes inventions (patents), trademarks, industrial designs, and geographic indications of source; and COPYRIGHT - includes literary and artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings, photographs and sculptures, and architectural designs. Rights related to copyright include those of performing artists in their performances, producers of phonograms in their recordings, and those of broadcasters in their radio and television programs. -‐ WIPO Defini,on
Four (4) Aspects of Intellectual Property
CREATION PROTECTION UTILIZATION ENFORCEMENT
Art. 427 of the Civil Code of the Philippines provides: “Ownership may be exercised over things or rights”
Art. 712 of the Civil Code of the Philippines provides: “Ownership is acquired by occupation and by intellectual creation. Ownership and other real rights over property are acquired and transmitted by law, by donation, by estate and intestate succession, and in consequence of certain contracts, by tradition. They may also be acquired by means of prescription”.
Nature of Intellectual Property
• • • • •
Intangible Conferred by Law Territorial Non Rivalrous Private Right `
IPR is distinct from the material object The incorporeal right, however, is distinct from the property in the material object subject to it. Ownership in one does not necessarily vest ownership in the other. The transfer or assignment of the intellectual property will not necessarily constitute a conveyance of the thing it covers, nor would a conveyance of the latter imply the transfer or assignment of the intellectual right. (Distilleria Washington, Inc. v. The Honorable Court of Appeals, G.R. No. 120961, October 17, 1996.) An infringement of intellectual rights is no less vicious and condemnable as theft of material property, whether personal or real. (Amigo Manufacturing vs. Cluetpeabody Co., Inc., G.R. No. 139300, 14 March 2001)
1987 CONSTITUTION SEC. 13, ART. XIV “The State shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people for such period as may be provided by law.”
Republic Act No. 8293 Section 2 of Republic Act No. 8293. Declaration of State Policy. – The State recognizes that an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products. It shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in this Act. The use of intellectual property bears a social function. To this end, the State shall promote the diffusion of knowledge and information for the promotion of national development and progress and the common good. It is also the policy of the State to streamline administrative procedures of registering patents, trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the Philippines.
Kinds of Intellectual Property Rights Section 4 of R.A. No. 8293 provides that: The term "intellectual property rights" consists of: 1. Copyright and Related Rights; 2. Trademarks and Service Marks; 3. Geographic Indications; 4. Industrial Designs; 5. Patents; 6. Layout-Designs (Topographies) of Integrated Circuits; and 7. Protection of Undisclosed Information
Copyright and Related Rights - exists over original and derivative intellectual creations in the literary and artistic domain protected from the moment of their creation.(§172, IP Code) Trademarks and Service Marks - any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods.(§121.1, IP Code) Geographic Indications - indications which identify a good as originating in the territory of a Member of the Agreement, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin. (Article 22, TRIPS Agreement)
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Industrial Designs - any composition of lines or colors or any threedimensional form, whether or not associated with lines or colors, provided that such composition or form gives a special appearance to and can serve as pattern for an industrial product or handicraft. It must be new or original. (§112, 113 IP Code) Patents - any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable. It may be, or may relate to, a product, or process, or an improvement of any of the foregoing. (§21, IP Code) Integrated Circuit - means a product, in its final form, or an intermediate form, in which the elements, at least one of which is an active element and some or all of the interconnections are integrally formed in and/or on a piece of material, and which is intended to perform an electronic function; Layout-Design is synonymous With 'Topography' and means the threedimensional disposition, however expressed, of the elements, at least one of which is an active element, and of some or all of the interconnections of an integrated circuit, or such a three-dimensional disposition prepared for an integrated circuit intended for manufacture. (§112.2, and 112.3 IP Code as amended by R.A. No. 9150 [August 6, 2001])
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Protection of Undisclosed Information - protection of information lawfully held from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information: (a) is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; (b) has commercial value because it is secret; and (c) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret. (Article 39, TRIPS Agreement)
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• Trade Secret - is a plan or process, tool, mechanism or compound known only to its owner and those of his employees to whom it is necessary to confide it. The definition also extends to: (a) a secret formula or process not patented, but known only to certain individuals using it in compounding some article of trade having a commercial value; or (b) any formula, pattern, device, or compilation of information that: (1) is used in one's business; and (2) gives the employer an opportunity to obtain an advantage over competitors who do not possess the information. (Air Philippines Corporation vs. Pennwell, Inc., G.R. No. 172835, 13 December 2007)
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INTELLECTUAL PROPERTY RIGHTS
(Laws, principles, rules and relevant cases)
TRADEMARKS
DEFINITIONS “Mark" means any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods; "Collective mark" means any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristic, including the quality of goods or services of different enterprises which use the sign under the control of the registered owner of the collective mark; "Trade name" means the name or designation identifying or distinguishing an enterprise. (§121.1, 121.2, 121.3, IP Code)
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FUNCTIONS OF A TRADEMARK A trademark is a distinctive mark of authenticity through which the merchandise of a particular producer or manufacturer may be distinguished from that of others, and its sole function is to designate distinctively the origin of the products to which it is attached. (Arce Sons and Company, G.R. No. L-14761 and G. R. No. 171981, 28 January 1961) A trademark is any visible sign capable of distinguishing goods. It includes any word, name, symbol, emblem, sign or device or any combination thereof, adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured, sold or dealt in by others. It symbolizes the goodwill and business reputation of the owner of the product and is a property right protected by law. (Mirpuri v. Court of Appeals, G.R. No. 114508, 19 November 1999)
Modern authorities on trademark law view trademarks as performing three distinct functions: (1) they indicate origin or ownership of the articles to which they are attached; (2) they guarantee that those articles come up to a certain standard of quality; and (3) they advertise the articles they symbolize. (Mirpuri v. Court of Appeals, G.R. No. 114508, 19 November 1999) The protection of trademarks as intellectual property is intended not only to preserve the goodwill and reputation of the business established on the goods bearing the mark through actual use over a period of time, but also to safeguard the public as consumers against confusion on these goods. (Berris Agricultural Co., Inc. vs. Norvy Abyadang, G.R. No. 183404, October 13, 2010)
REQUIREMENTS FOR PROTECTION OF TRADEMARKS HOW MARKS ARE ACQUIRED(§122) - The rights in a mark shall be acquired through registration made validly in accordance with the provisions of the IP Code. CERTIFICATE OF REGISTRATION AS PRIMA FACIE EVIDENCE OF VALIDITY OF REGISTRATION (§138) - A certificate of registration of a mark shall be prima facie evidence of the validity of the registration, the registrant's ownership of the mark, and of the registrant's exclusive right to use the same in connection with the goods or services and those that are related thereto specified in the certificate.
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PROTECTION OF TRADENAMES/BUSINESS NAMES A name or designation may not be used as a trade name if by its nature or the use to which such name or designation may be put, it is contrary to public order or morals and if, in particular, it is liable to deceive trade circles or the public as to the nature of the enterprise identified by that name. Notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties. In particular, any subsequent use of the trade name by a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be deemed unlawful. (§165, IP CODE)
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The two concepts of corporate name or business name and trademark or service mark, are not mutually exclusive. It is common, indeed likely, that the name of a corporation or business is also a trade name, trademark or service mark. (Shangri- La International Hotel Management, Ltd. vs. Developers Group of Companies, Inc., G.R. No. 159938, 31 March 2006)
A trade name of a national of a State that is a party to the Paris Convention, whether or not the trade name forms part of a trademark, is protected “without the obligation of prior filing or registration.” (Fredco Manufacturing Corporation vs President and Fellows of Harvard College (Harvard University), G.R. No. 185917, 01 June 2011)
TRADEMARK =
Visible + Distinctive + Not Barred from Registration
Guide on the Degree of Distinctiveness 1. Fanciful 2. Arbitrary 3. Suggestive 4. Descriptive 5. Generic
-
e.g. e.g. e.g. e.g. e.g.
Xerox (copier) Apple (mobile phone) Tough (shoes) Fragrant (perfume) Pants (pants)
NON REGISTRABLE MARKS REGISTRABILITY (§123) – A mark cannot be registered if it: 1. Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute; 2. Consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any simulation thereof; 3. Consists of a name, portrait or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any, except by written consent of the widow;
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NON REGISTRABLE MARKS REGISTRABILITY (§123) – A mark cannot be registered if it: 4. Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or priority date, in respect of: a) The same goods or services, or b) Closely related goods or services – (e.g. same class, same nature and/or characteristics ) c) If it nearly resembles such a mark as to be likely to deceive or cause confusion
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Priority Right An application for registration of a mark filed in the Philippines by a person referred to in Section 3 of the IP Code, and who previously duly filed an application for registration of the same mark in one of those countries, shall be considered as filed as of the day the application was first filed in the foreign country. No registration of a mark shall be granted until such mark has been registered in the country of origin of the applicant. (Sec. 131, IPC)
IDENTICAL = same, equal, alike, or having close similarity or resemblance Is mere similarity sufficient? The law does not prohibit or enjoin every similarity. The similarity must be such that the ordinary purchaser will be deceived into the belief that the goods are those of another. (The Alhambra Cigar and Cigarette Manufacturing Co. v. Compania General de Tabacos De Filipinas, G. R. No. 11490, October 14, 1916) LIKELIHOOD OF CONFUSION - is a relative concept; the particular, and sometimes peculiar, circumstances of each case being determinative of its existence. (Philip Morris, Inc. vs. Fortune Tobacco Corporation, G.R. No. 158589, 27 June 2006; Prosource International, Inc. vs. Horphag Research Management SA, G.R. No. 180073. November 25, 2009)
NO DEFINITE RULE In infringement or trademark cases in the Philippines, particularly in ascertaining whether one trademark is confusingly similar to or is a colorable imitation of another, no set of rules can be deduced. Each case must be decided on its own merits. The likelihood of confusion is a relative concept; to be determined only according to the particular, and sometimes peculiar, circumstances of each case. In trademark cases, even more than in any other litigation, precedent must be studied in light of the facts of the particular case. The wisdom of the likelihood of confusion test lies in its recognition that each trademark infringement case presents its own unique set of facts. Indeed, the complexities attendant to an accurate assessment of likelihood of confusion require that the entire panoply of elements constituting the relevant factual landscape be comprehensively examined. (Societe Des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, 04 April 2001; Esso Standard Eastern, Inc. vs. The Honorable Court of Appeals, G.R. No. L-29971, 31 August 1982; Canon Kabushiki Kaisha vs. Court of Appeals, G.R. No. 120900, 20 July 2000)
TESTS TO DETERMINE CONFUSING SIMILARITY OF MARKS 2 TYPES OF CONFUSION:
a. Confusion of Goods The ordinarily prudent purchaser would be induced to purchase one product in the belief that he was purchasing the other.
b. Confusion of Origin (Confusion of Business) The goods of the parties are different, the defendant’s product is such as might reasonably be assumed to originate with the plaintiff, and the public would then be deceived either into that belief or into the belief that there is some connection between the plaintiff and defendant which, in fact, does not exist. See: Nestle v. Dy, GR No. 172276, August 8, 2010, citing Sterling Products International, Inc. v. Farbenfabriken Bayer Aktiengesellschaft and Callman.
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TESTS TO DETERMINE CONFUSING SIMILARITY OF MARKS 2 TESTS TO DETERMINE COLORABLE IMITATION: a. Dominancy Test If the competing trademark contains the main or essential or dominant features of another, and confusion and deception are likely to result, infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate. (C. Neilman Brewing Co. v. Independent Brewing Co., 191 F. 489, 495, citing Eagle White Lead Co. vs. Pflugh [CC] 180 FED. 579) See Del Monte vs. CA, GR No. L-78325, January 25, 1990
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TESTS TO DETERMINE CONFUSING SIMILARITY OF MARKS 2 TESTS TO DETERMINE COLORABLE IMITATION: b. Holistic Test The trademarks in their entirety as they appear in their respective labels are considered in relation to the goods to which they are attached. The discerning eye of the observer must focus not only on the predominant words but also on the other features appearing in both labels in order that he may draw his conclusion whether one is confusingly similar to the other (Bristol Myers Co. vs. Director of Patents, 17 SCRA 131; See also Fruit of the Loom Inc. vs. CA, GR No. L-32747, November 29, 1984.)
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BEFORE THE ENACTMENT OF RA NO. 8293 Section 22 of R.A. No. 166, provides that: Section 22. Infringement, what constitutes. - Any person who shall use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copy or colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or services, shall be liable to a civil action by the registrant for any or all of the remedies herein provided.
UNDER R.A. NO. 8293 TRADEMARK INFRINGEMENT (§155) - The commission of the following acts by any person, without the consent of the owner of the registered mark: a. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or b. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant.
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RULES OF PROCEDURE FOR INTELLECTUAL PROPERTY RIGHTS CASES A.M. No. 10-3-10 SC, October 18, 2011
Rule 18 EVIDENCE IN TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION CASES
SEC. 3. Presumption of likelihood of confusion. – Likelihood of confusion shall be presumed in case an identical sign or mark is used for identical goods or services. SEC. 4. Likelihood of confusion in other cases. – In determining whether one trademark is confusingly similar to or is a colorable imitation of another, the court must consider the general impression of the ordinary purchaser, buying under the normally prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods. Visual, aural, connotative comparisons and overall impressions engendered by the marks in controversy as they are encountered in the realities of the marketplace must be taken into account. Where there are both similarities and differences in the marks, these must be weighed against one another to see which predominates.
In determining likelihood of confusion between marks used on nonidentical goods or services, several factors may be taken into account, such as, but not limited to: a) the strength of plaintiff’s mark; b) the degree of similarity between the plaintiff’s and the defendant’s marks; c) the proximity of the products or services; d) the likelihood that the plaintiff will bridge the gap; e) evidence of actual confusion; f) the defendant's good faith in adopting the mark; g) the quality of defendant's product or service; and/or h) the sophistication of the buyers.― Colorable imitation denotes such a close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other.
RELATED GOODS In resolving whether goods are related, several factors come into play: (a) the business (and its location) to which the goods belong; (b) the class of product to which the goods belong; (c) the product’s quality, quantity, or size, including the nature of the package, wrapper or container; (d) the nature and cost of the article; (e) The descriptive properties, physical attributes or essential characteristics with reference to their form, composition, texture or quality; (f) the purpose of the goods; (g) whether the article is bought for immediate consumption, that is, dayto-day household items; (h) fields of manufacture; (i) the conditions under which the article is usually purchased; and, (j) the channels of trade through which the goods flow, how they are distributed, marketed, displayed and sold. (Mighty Corporation vs. E. J. Gallo Winery, G.R. No. 154342, 14 July 2004)
Goods are related when they belong to the same class or have the same descriptive properties; when they possess the same physical attributes or essential characteristics with reference to their form, composition, texture or quality. They may also be related because they serve the same purpose or are sold in grocery stores. (Esso Standard Eastern, Inc. vs. The Honorable Court of Appeals; Canon Kabushiki Kaisha vs. Court of Appeals, G.R. No. 120900, 20 July 2000) Non-competing goods may be those which, though they are not in actual competition, are so related to each other that it might reasonably be assumed that they originate from one manufacturer. Non-competing goods may also be those which, being entirely unrelated, could not reasonably be assumed to have a common source. In the former case of related goods, confusion of business could arise out of the use of similar marks; in the latter case of non-related goods, it could not. (Esso Standard Eastern, Inc. vs. The Honorable Court of Appeals, G.R. No. L-29971 31 August 1982)
Related Supreme Court Cases Emerald Garment Manufacturing Corp. vs. CA, (GR No. 100098, December 1995)
Holistic Test was applied Pants products are not inexpensive Consumer is knowledgeable of the product he buys Ordinary Purchaser Rule
Asia Brewery vs. Court of Appeals G.R. No. 103543 July 5, 1993 San Miguel Pale Pilsen vs. Beer Pale Pilsen The words "pale pilsen" may not be appropriated by SMC for its exclusive use even if they are part of its registered trademark: SAN MIGUEL PALE PILSEN, any more than such descriptive words as "evaporated milk," "tomato ketchup," "cheddar cheese," "corn flakes" and "cooking oil" may be appropriated by any single manufacturer of these food products, for no other reason than that he was the first to use them in his registered trademark. The petitioner's contention that bottle size, shape and color may not be the exclusive property of any one beer manufacturer is well taken. SMC's being the first to use the steinie bottle does not give SMC a vested right to use it to the exclusion of everyone else. Being of functional or common use, and not the exclusive invention of any one, it is available to all who might need to use it within the industry. Nobody can acquire any exclusive right to market articles supplying simple human needs in containers or wrappers of the general form, size and character commonly and immediately used in marketing such articles (Dy Buncio vs. Tan Tiao Bok, 42 Phil. 190, 194-195.)
Related Supreme Court Cases
Societe Des Produits Nestle vs. Court of Appeals, GR No. 112012, April 4, 2001
Flavor Master vs. Master Roast and Master Blend Dominancy Test was applied Master is the dominant feature (2x size of Roast) Master has been given in advertisements Master is suggestive not descriptive or generic
The totality or holistic test is contrary to the elementary postulate of the law on trademarks and unfair competition that confusing similarity is to be determined on the basis of visual, aural, connotative comparisons and overall impressions engendered by the marks in controversy as they are encountered in the realities of the marketplace. The totality or holistic test only relies on visual comparison between two trademarks whereas the dominancy test relies not only on the visual but also on the aural and con- notative comparisons and overall impressions between the two trademarks. (Societe Des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, 04 April 2001)
Colorable imitation denotes such a close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other. The test of dominancy focuses on the similarity of the prevalent features of the competing trademarks which might cause confusion or deception and thus constitute infringement. (Societe Des Produits Nestle, S.A. v. Court of Appeals, G.R. No. 112012, 04 April 2001)
• Mighty Corp. v. E. & J. Gallo (G.R. 154352, July 14, 2004)
GALLO and ERNEST & JULIO GALLO for wines vs GALLO for cigarettes
Both Holistic and Dominancy Test applied Whether a trademark causes confusion and is likely to deceive the public hinges on colorable imitation which has been defined as “similarity in form, content, words, sound, meaning, special arrangement or general appearance of the trademark or trade name in their overall presentation or in their essential and substantive and distinctive parts as would likely mislead or confuse persons in the ordinary course of purchasing the genuine article.” N.B. Tobacco and alcohol products may be considered related only in cases involving special circumstances which exist only if a famous mark is involved and there is a demonstrated intent to capitalize on it
In determining the likelihood of confusion, the Court must consider: [a] the resemblance between the trademarks; [b] the similarity of the goods to which the trademarks are attached; [c] the likely effect on the purchaser; and [d] the registrant’s express or implied consent and other fair and equitable considerations. The use of an identical mark does not, by itself, lead to a legal conclusion that there is trademark infringement. (Mighty Corporation vs. E. J. Gallo Winery, G.R. No. 154342, 14 July 2004)
2016 BAR QUESTION X's "MINI-ME" burgers are bestsellers in the country. Its "MINI-ME" logo, which bears the color blue, is a registered mark and has been so since the year 2010. Y, a competitor ofX, has her own burger which she named "ME-TOO" and her logo thereon is printed in bluish-green. When X sued Y for trademark infringement, the trial court ruled in favor of the plaintiff by applying the Holistic Test. The court held that Y infringed on X's mark since the dissimilarities between the two marks are too trifling and frivolous such that Y's "ME-TOO," when compared to X's "MINI-ME," will likely cause confusion among consumers. Is the application of the Holistic Test correct? (5%)
McDonald’s Corp. vs. L.C. Big Mak Burger, Inc. GR No. 143993, August 18, 2004
Big Mac vs. Big Mak The dominancy test focuses on the similarity of the prevalent features of the competing trademarks that might cause confusion. The dominancy test considers the dominant features in the competing marks in determining whether they are confusingly similar. Under the dominancy test, courts give greater weight to the similarity of the appearance of the product arising from the adoption of the dominant features of the registered mark, disregarding minor differences. Courts will consider more the aural and visual impressions created by the marks in the public mind, giving little weight to factors like prices, quality, sales outlets and market segments. (McDonalds Corporation v. L. C. Big Mak Burger, Inc., G.R. No. 143993, 18 August 2004)
It has been consistently held that the question of infringement of a trademark is to be determined by the test of dominancy. Similarity in size, form and color, while relevant, is not conclusive. If the competing trademark contains the main or essential or dominant features of another, and confusion and deception is likely to result, infringement takes place. Duplication or imitation is not necessary; nor is it necessary that the infringing label should suggest an effort to imitate. (G. Heilman Brewing Co. vs.Independent Brewing Company, 191 F., 489, 495, citing Eagle White Lead, Co. vs. Pluff (CC) 180 Fed. 579). The question at issue in cases of infringement of trademarks is whether the use of the marks involved would be likely to cause confusion or mis- takes in the mind of the public or deceive purchasers. (Auburn Rubber Corporation vs. Honover Rubber Co., 107 F. 2d 588). (McDonalds Corporation v. L. C. Big Mak Burger, Inc., G.R. No. 143993, 18 August 2004.)
Philip Morris, vs Fortune Tobacco, Inc. (GR 158589, June 27, 2006)
“MARK VII” &“MARK TEN vs. MARK No infringement The Supreme Court applied the Holistic Test as it took into account the striking dissimilarities of the entire marking system, but also ratiocinated that even if you apply the Dominancy Test, there can be no likelihood of confusion. Cigarette smokers are already predisposed to a certain brand. No actual commercial use of petitioners marks in local commerce was proven. There can thus be no occasion for the public in this country, unfamiliar in the first place with petitioners marks, to be confused.
Berris Agricultural Co., Inc. v. Norvy Abyadang (G.R. No. 183404, 13 Oct. 2010)
NS D-10- PLUS vs. D-10 80 WP Applying the Dominancy Test, it cannot be gainsaid that Abyadang’s “NS D-10 PLUS” is similar to Berris’ “D-10 80 WP,” that confusion or mistake is more likely to occur. ….. Both depictions of “D-10,” as found in both marks, are similar in size, such that this portion is what catches the eye of the purchaser. Undeniably, the likelihood of confusion is present. This likelihood of confusion and mistake is made more manifest when the Holistic Test is applied, taking into consideration the packaging, for both use the same type of material (foil type) and have identical color schemes (red, green, and white); and the marks are both predominantly red in color, with the same phrase “BROAD SPECTRUM FUNGICIDE” written underneath. Considering these striking similarities, predominantly the “D-10,” the buyers of both products, mainly farmers, may be misled into thinking that “NS D-10 PLUS” could be an upgraded formulation of the “D-10 80 WP.”
Societe Des Produits Nestle vs. Martin Dy, GR No. 172276, August 8, 2010
NAN vs. NANNY Applying the dominancy test in the present case, the Court finds that “NANNY” is confusingly similar to “NAN.” “NAN” is the prevalent feature of Nestle’s line of infant powdered milk products. It is written in bold letters and used in all products. The line consists of PRE-NAN, NAN-H.A., NAN-1, and NAN-2. Clearly, “NANNY” contains the prevalent feature “NAN.” The first three letters of “NANNY” are exactly the same as the letters of “NAN.” When “NAN” and “NANNY” are pronounced, the aural effect is confusingly similar. In determining the issue of confusing similarity, the Court takes into account the aural effect of the letters contained in the marks.
2014 Bar Question Skechers Corporation sued Inter-Pacific for trademark infringement, claiming that Inter-Pacific used Skechers’ registered “S” logo mark on Inter-Pacific’s shoe products without its consent. Skechers has registered the trademark “SKECHERS” and the trademark “S” (with an oval design) with the Intellectual Property Office (IPO). In its complaint, Skechers points out the following similarities: the color scheme of the blue, white and gray utilized by Skechers. Even the design and “wave-like” pattern of the mid-sole and outer sole of Inter- Pacific’s shoes are very similar to Skechers’ shoes, if not exact patterns thereof. On the side of Inter-Pacific’s shoes, near the upper part, appears the stylized “S” placed in the exact location as that of the stylized “S” the Skechers shoes. On top of the “tongue” of both shoes, appears the stylized “S” in practically the same location and size. In its defense, Inter-Pacific claims that under the Holistic Test, the following dissimilarities are present: the mark “S” found in Strong shoes is not enclosed in an “oval design”; the word “Strong” is conspicuously placed at the backside and insoles; the hang tags labels attached to the shoes bear the word “Strong” for Inter-Pacific and “Skechers U.S.A.” for Skechers; and, Strong shoes are modestly priced compared to the costs of Skechers shoes. Under the foregoing circumstances, which is the proper test to be applied – Holistic or Dominancy Test? Decide. (4%)
Skechers U.S.A., Inc. v. Inter Pacific Industrial Trading Corp. (G.R. No. 164321, 28 March 2011)
SKECHERS vs. STRONG Using the Dominancy Test, the Supreme Court found that the use of the “S” symbol by Strong rubber shoes infringes on the registered Skechers trademark. It is the most dominant feature of the mark -- one that catches the buyer’s eye first. The same font and style was used in this case. While there may be dissimilarities between the appearances of the shoes, such dissimilarities do not outweigh the stark and blatant dissimilarities in their general features. On MR the Supreme Court ruled: “Based on the foregoing, this Court is at a loss as to how the RTC and the CA, in applying the holistic test, ruled that there was no colorable imitation, when it cannot be any more clear and apparent to this Court that there is colorable imitation. The dissimilarities between the shoes are too trifling and frivolous that it is indubitable that respondent's products will cause confusion and mistake in the eyes of the public. Respondent's shoes may not be an exact replica of petitioner's shoes, but the features and overall design are so similar and alike that confusion is highly likely.”
GREAT WHITE SHARK vs. CARALDE, JR [G.R. No. 192294, November 21, 2012.]
The Holistic or Totality Test considers the entirety of the marks as applied to the products, including the labels and packaging, and focuses not only on the predominant words but also on the other features appearing on both labels to determine whether one is confusingly similar to the other as to mislead the ordinary purchaser. The “ordinary purchaser” refers to one accustomed to buy, and therefore to some extent familiar with, the goods in question. A trademark device is susceptible to registration if it is crafted fancifully or arbitrarily and is capable of identifying and distinguishing the goods of one manufacturer or seller from those of another. Apart from its commercial utility, the benchmark of trademark registrability is distinctiveness. Thus, a generic figure as that of a shark in this case, if employed and designed in a distinctive manner, can be a registrable trademark device, subject to the provisions of the IP Code. Irrespective of both tests, the Court finds no confusing similarity between the subject marks. While both marks use the shape of a shark, the Court noted distinct visual and aural differences between them.
Victorio P. Diaz vs. People of the Philippines and Levi Strauss [Phils.] Inc. (G.R. No. 180677, 18 February 2013) The Supreme Court acquitted the accused stating that maong pants or jeans made and sold by LEVI’s, which included “501,” were very popular in the Philippines. The consuming public knew that the original “501” jeans were under a foreign brand and quite expensive. Such jeans could be purchased only in malls or boutiques as ready-to-wear items, and were not available in tailoring shops like those of Diaz’s. Neither can the “501” be acquired on a “made-to-order” basis. The High Court noted that Diaz used the trademark “LS JEANS TAILORING” for the jeans he produced and sold in his tailoring shops. His trademark was visually and aurally different from the trademark “LEVI STRAUSS & CO” appearing on the patch of original jeans under the trademark LEVI’s 501. The word “LS” could not be confused as a derivative from “LEVI STRAUSS” by virtue of the “LS” being connected to the word “TAILORING”, thereby openly suggesting that the jeans bearing the trademark “LS JEANS TAILORING” came or were bought from the tailoring shops of Diaz, not from the malls or boutiques selling original LEVI’S 501 jeans to the consuming public.
Victorio P. Diaz vs. People of the Philippines and Levi Strauss [Phils.] Inc. (G.R. No. 180677, 18 February 2013)
The Court also noted that in terms of classes of customers and channels of trade, the jeans made by LEVI’s and the accused cater to different classes of customers and flow through the different channels of trade. The customers of LEVI’s are mall goers belonging to class A and B market group – while those of Diaz are those who belong to class D and E market who can only afford Php300 for a pair of made-to-order pants. Moreover, based on the certificate issued by the Intellectual Property Office, “LS JEANS TAILORING” was a registered trademark of Diaz. He had registered his trademark prior to the filing of the present cases. The IPOPHL would certainly not have allowed the registration had Diaz’s trademark been confusingly similar with the registered trademark for LEVI’s “501” jeans.
DERMALINE INC. VS. MYRA PHARMACEUTICALS, INC.. GR No. 190065, August 16, 2010
DERMALINE vs. DERMALIN
Health and beauty services vs. Skin treatment Trademark owner may use its mark on the same or similar products, in different segments of the market, and at different price levels depending on variation of the products for specific segments of the market. Trademark owner enjoys protection in product and market areas that are the normal potential expansion of his business
UFC PHILS. INC. v. FIESTA BARRIO MFTG. CORP., GR No. 198889, Jan. 20, 2016 "PAPA BOY & DEVICE" mark for lechon sauce and "PAPA KETSARAP" and "PAPA BANANA CATSUP”
Since petitioner's product, catsup, is also a household product found on the same grocery aisle, in similar packaging, the public could think that petitioner had expanded its product mix to include lechon sauce, and that the "PAPA BOY" lechon sauce is now part of the "PAPA" family of sauces, which is not unlikely considering the nature of business that petitioner is in. It is possible that petitioner could expand its business to include lechon sauce, and that would be well within petitioner's rights, but the existence of a "PAPA BOY" lechon sauce would already eliminate this possibility.
TAIWAN KOLIN CORP., LTD VS. KOLIN ELECTRONICS CO. INC. GR No. 209843, March 25, 2015
KOLIN vs. KOLIN Identical marks may be registered for products from the same classification Television and DVD players vs. Power Supply and Audio Equipment Products are unrelated. The ordinary intelligent buyer is not likely to be confused. In trademark cases, particularly in ascertaining whether one trademark is confusingly similar to another, no rigid set rules can plausible be formulated. Each case must be decided on its merits, with due regard to the goods or services involved, the usual purchaser’s character and attitude, among others. In such cases, even more than in any other litigation, precedent must be studied in the light of the facts of a particular case. That is the reason why in trademark cases, jurisprudential precedents should be applied only to a case if they are specifically in point.
TAIWAN KOLIN CORP., LTD VS. KOLIN ELECTRONICS CO. INC. GR No. 209843, March 25, 2015
KOLIN vs. KOLIN
Taiwan Kolin’s goods are classified as home appliances as opposed to Kolin Electronics’ goods which are power supply and audio equipment accessories. Taiwan Kolin’s television sets and DVD players perform distinct function and purpose from Kolin Electronics’ power supply and audio equipment; and Taiwan Kolin sells and distributes its various home appliance products on wholesale and to accredited dealers, whereas Kolin Electronics’ goods are sold and flow through electrical and hardware stores.
WHAT IF THE MARK IS NOT REGISTERED IN THE INTELLECTUAL PROPERTY OFFICE?
OWNERSHIP OF TRADEMARKS Intellectual property is in essence a creation of the mind, hence, the following considerations are relevant: q q q q q
Ownership Prior use Bad faith Probability of using similar marks Motivation
2015 Bar Question XV CHEN, Inc., a Taiwanese company, is a manufacturer of tires with the mark Light Year. From 2009 to 2014, Clark Enterprises, a Philippineregistered corporation, imported tires from CHEN, Inc. under several sales contracts and sold them here in the Philippines. In 2015, CHEN, Inc. filed a trademark application with the Intellectual Property Office (IPO) for the mark Light Year to be used for tires. The IPO issued CHEN, Inc. a certificate of registration (COR) for said mark. Clark Enterprises sought the cancellation of the COR and claimed it had a better right to register the mark Light Year. CHEN, Inc. asserted that it was the owner of the mark and Clark Enterprises was a mere distributor. Clark Enterprises argued that there was no evidence on record that the tires it imported from CHEN, Inc. bore the mark Light Year and Clark Enterprises was able to prove that it was the first to use the mark here in the Philippines. Decide the case. (4%)
2016 Bar Question ABC Appliances Corporation (ABC) is a domestic corporation engaged in the production and sale of televisions and other appliances. YYY Engineers, a Taiwanese company, is the manufacturer of televisions and other appliances from whom ABC actually purchases appliances. From 2000, when ABC started doing business with YYY, it has been using the mark "TTubes" in the Philippines for the television units that were bought from YYY. In 2015, YYY filed a trademark application for "TTubes." Later, ABC also filed its application. Both claim the right over the trademark "TTubes" for television products. YYY relies on the principle of "first to file" while ABC involves the "doctrine of prior use.” a] Does the fact that YYY filed its application ahead of ABC mean that YYY has the prior right over the trademark? Explain briefly. (2.5%) [b] Does the prior registration also mean a conclusive assumption that YYY Engineers is in fact the owner of the trademark "TTubes?" Briefly explain your answer. (2.5%)
Superior Commercial Enterprises Inc. Kunnan Enterprises Ltd. And Sports Concept & Distributor, Inc. (G.R. No. 169974, 20 April 2010)
Superior Commercial Enterprises, Inc. (SUPERIOR), as the registered owner of the trademarks, trading styles, company names and business names “KENNEX”, “KENNEX & DEVICE”, “PRO KENNEX” and “PRO-KENNEX” (disputed trademarks) filed a complaint for trademark infringement and unfair competition with preliminary injunction against Kunnan Enterprises Ltd. (KUNNAN) and Sports Concept and Distributor, Inc. (SPORTS CONCEPT). KUNNA presented proof that it is the prior user and true owner of the disputed trademarks, while SUPERIOR as the former distributor of KUNNAN fraudulently registered said trademarks. KUNNAN also presented proof of pending cancellation proceedings before the IPO against the registration of the disputed marks under SUPERIOR’s name.
Superior Commercial Enterprises Inc. Kunnan Enterprises Ltd. And Sports Concept & Distributor, Inc. (G.R. No. 169974, 20 April 2010) After the IPO cancelled SUPERIOR’s registration over the disputed marks, SUPERIOR’s case for trademark infringement lost its legal basis and no longer presented a valid cause of action since trademark ownership is an essential element to establish trademark infringement. SUPERIOR’s possession of the aforementioned Certificates of Principal Registration does not conclusively establish its ownership of the disputed trademarks as dominion over trademarks is not acquired by the fact of registration alone. At best, registration merely raises a presumption of ownership that can be rebutted by contrary evidence. SUPERIOR was a mere distributor and could not have been the owner, and was thus an invalid registrant of the disputed trademarks.
E.Y. Industrial Sales, Inc. v. Shen Dar Electricity and Machinery Co., Ltd. (G.R. No. 184850, 20 Oct. 2010) E.Y. Industrial Sales Inc. (EYIS) and Shen Dar Electricity and Machinery Co. (Shen Dar) both claim to have the right to register the trademark “VESPA” for air compressors. The Supreme Court rules that EYIS is the prior user of the mark. The use by EYIS in the concept of owner is shown by commercial documents and sales invoices unambiguously describing the goods as “VESPA” air compressors. “Ownership of a mark or trade name may be acquired not necessarily by registration but by adoption and use in trade or commerce. As between actual use of a mark without registration, and registration of the mark without actual use thereof, the former prevails over the latter. For a rule widely accepted and firmly entrenched, because it has come down through the years, is that actual use in commerce or business is a pre-requisite to the acquisition of the right of ownership.” xxxx By itself, registration is not a mode of acquiring ownership.
2014 Commercial Law Bar Examination Jinggy went to Kluwer University(KU) in Germany for his doctorate degree (Ph.D.). He completed his degree with the highest honors in the shortest time. When he came back, he decided to set-up his own graduate school in his hometown in Zamboanga. After seeking free legal advice from his high-flying lawyer-friends, he learned that the Philippines follows the territoriality principle in trademark law, i.e., trademark rights are acquired through valid registration in accordance with the law. Forth with, Jinggy named his school the Kluwer Graduate School of Business of Mindanao and immediately secured registration with the Bureau of Trademarks. KU did not like the unauthorized use of its name by its top alumnus no less. KU sought your help. What advice can you give KU?
Ecole De Cuisine Manille (Cordon Bleu of the Philippines), Inc. v. Renaud Cointreau & CIE and Le Condron Bleu Int’l., B.V. (G.R. No. 185830, 05 June 2013) Respondent Cointreau filed a trademark application for the mark "LE CORDON BLEU & DEVICE.“ After it was published for opposition purposes, Petitioner Ecole De Cuisine Manille, Inc. (Ecole) filed an opposition to the subject application, averring among others, that it is the owner of the mark "LE CORDON BLEU, ECOLE DE CUISINE MANILLE," which it has been using since 1948 in cooking and other culinary activities, including in its restaurant business. Cointreau filed its answer claiming to be the true and lawful owner of the subject mark. It averred that: (a) it has filed applications for the subject mark’s registration in various jurisdictions, including the Philippines; (b) Le Cordon Bleu is a culinary school of worldwide acclaim which was established in Paris, France in 1895; (c) Le Cordon Bleu was the first cooking school to have set the standard for the teaching of classical French cuisine and pastry making; and (d) it has trained students from more than eighty (80) nationalities.
Ecole De Cuisine Manille (Cordon Bleu of the Philippines), Inc. v. Renaud Cointreau & CIE and Le Condron Bleu Int’l., B.V. (G.R. No. 185830, 05 June 2013) Cointreau has been using the subject mark in France since 1895, prior to Ecole’s averred first use of the same in the Philippines in 1948, of which the latter was fully aware thereof. In fact, Ecole’s present directress, Ms. Lourdes L. Dayrit (and even its foundress, Pat Limjuco Dayrit), had trained in Cointreau’s Le Cordon Bleu culinary school in Paris, France. Cointreau was likewise the first registrant of the said mark under various classes, both abroad and in the Philippines, having secured Home Registration No. 1,390,912 dated November 25, 1986 from its country of origin, as well as several trademark registrations in the Philippines.
Ecole De Cuisine Manille (Cordon Bleu of the Philippines), Inc. v. Renaud Cointreau & CIE and Le Condron Bleu Int’l., B.V. (G.R. No. 185830, 05 June 2013) On the other hand, Ecole has no certificate of registration over the subject mark but only a pending application covering services limited to Class 41 of the Nice Classification, referring to the operation of a culinary school. Its application was filed only on February 24, 1992, or after Cointreau filed its trademark application for goods and services falling under different classes in 1990. Under the foregoing circumstances, even if Ecole was the first to use the mark in the Philippines, it cannot be said to have validly appropriated the same. It is thus clear that at the time Ecole started using the subject mark, the same was already being used by Cointreau, albeit abroad, of which Ecole’s directress was fully aware, being an alumna of the latter’s culinary school in Paris, France. Hence, Ecole cannot claim any tinge of ownership whatsoever over the subject mark as Cointreau is the true and lawful owner thereof.
BIRKENSTOCK ORTHOPAEDIE GMBH AND CO. KG v. PHIL. SHOE EXPO MKTG. CORP., G.R. No. 194307. Nov. 20, 2013 Petitioner was able to establish that it is the owner of the mark “BIRKENSTOCK.” It submitted evidence relating to the origin and history of “BIRKENSTOCK;” its use in commerce long before respondent registered the same here in the Philippines. It sufficiently proved that “BIRKENSTOCK” was first adopted in Europe in 1774 by its inventor, Johann Birkenstock, a shoemaker, on his line of quality footwear and thereafter, numerous generations of his kin continuously engaged in the manufacture and sale of shoes and sandals bearing the mark “BIRKENSTOCK” until it became the entity now known as the petitioner. Petitioner also submitted various certificates of registration of the mark “BIRKENSTOCK” in various countries and that it has used such mark in different countries worldwide, including the Philippines. To come up with a highly distinct and uncommon mark previously appropriated by another, for use in the same line of business, and without any plausible explanation, is incredible. The field from which a person may select a trademark is practically unlimited. As in all other cases of colorable imitations, the unanswered riddle is why, of the millions of terms and combinations of letters and designs available, respondent had to come up with a mark identical or so closely similar to the petitioner's if there was no intent to take advantage of the goodwill generated by the petitioner's mark. Being on the same line of business, it is highly probable that the respondent knew of the existence of BIRKENSTOCK and its use by the petitioner, before respondent appropriated the same mark and had it registered in its name.
WELL KNOWN MARKS REGISTRABILITY (§123) – A mark cannot be registered if it: 5. Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here, as being already the mark of a person other than the applicant for registration, and used for identical or similar goods or services: Provided, That in determining whether a mark is well-known, account shall be taken of the knowledge of the relevant sector of the public, rather than of the public at large, including knowledge in the Philippines which has been obtained as a result of the promotion of the mark;
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WELL KNOWN MARKS REGISTRABILITY (§123) – A mark cannot be registered if it: 6. Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods or services which are not similar to those with respect to which registration is applied for: Provided, That use of the mark in relation to those goods or services would indicate a connection between those goods or services, and the owner of the registered mark: Provided further, That the interests of the owner of the registered mark are likely to be damaged by such use;
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Fredco Manufacturing Corporation vs President and Fellows of Harvard College (Harvard University), G.R. No. 185917, 01 June 2011 There is no question then, and this Court so declares, that “Harvard” is a wellknown name and mark not only in the United States but also internationally, including the Philippines. The mark “Harvard” is rated as one of the most famous marks in the world. It has been registered in at least 50 countries. It has been used and promoted extensively in numerous publications worldwide. It has established a considerable goodwill worldwide since the founding of Harvard University more than 350 years ago. It is easily recognizable as the trade name and mark of Harvard University of Cambridge, Massachusetts, U.S.A., internationally known as one of the leading educational institutions in the world. As such, even before Harvard University applied for registration of the mark “Harvard” in the Philippines, the mark was already protected under Article 6bis and Article 8 of the Paris Convention. Again, even without applying the Paris Convention, Harvard University can invoke Section 4(a) of R.A. No. 166 which prohibits the registration of a mark “which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs x x x.”
Indeed, Section 123.1 (e) of R.A. No. 8293 now categorically states that “a mark which is considered by the competent authority of the Philippines to be well-known internationally and in the Philippines, whether or not it is registered here,” cannot be registered by another in the Philippines. Section 123.1 (e) does not require that the well-known mark be used in commerce in the Philippines but only that it be wellknown in the Philippines. Thus, while under the territoriality principle a mark must be used in commerce in the Philippines to be entitled to protection, internationally well-known marks are the exceptions to this rule. (Fredco Manufacturing Corporation vs President and Fel- lows of Harvard College (Harvard University), G.R. No. 185917, 01 June 2011)
The scope of protection initially afforded by Article 6bis of the Paris Convention has been expanded in the 1999 Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks, wherein the World Intellectual Property Organization (WIPO) General Assembly and the Paris Union agreed to a nonbinding recommendation that a wellknown mark should be protected in a country even if the mark is neither registered nor used in that country. (Sehwani, Incorporated vs. In-N-Out Burger, Inc., G. R. No. 171053, 15 October 2007)
The use of the well-known mark on the entirely unrelated goods or services would indicate a connection between such unrelated goods and services and those goods and services specified in certificate of registration in the well known mark. This requirement refers to the likelihood of confusion of origin or business or some business connection or relationship between the registrant and the user of the mark. (246 Corporation, doing business under the name and style of Rolex Music Lounge vs. Hon. Reynaldo B. Daway, in his capacity as Presiding Judge of RTC Branch 90, Quezon City, GR No. 157216, November 20, 2003)
NON REGISTRABLE MARKS REGISTRABILITY (§123) – A mark cannot be registered if it: 7. Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of the goods or services; 8. Consists exclusively of signs that are generic for the goods or services that they seek to identify; 9. Consists exclusively of signs or of indications that have become customary or usual to designate the goods or services in everyday language or in bona fide and established trade practice; 10. Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality, quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of the services, or other characteristics of the goods or services;
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NON REGISTRABLE MARKS REGISTRABILITY (§123) – A mark cannot be registered if it: 11. Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves or factors that affect their intrinsic value; 12. Consists of color alone, unless defined by a given form; or 13. Is contrary to public order or morality. Note: The nature of the goods to which the mark is applied will not constitute an obstacle to registration.
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NON REGISTRABLE MARKS EXCEPTIONS – Descriptive marks, shapes, and color alone, may be registered if it has become distinctive in relation to the goods for which registration is requested as a result of the use that have been made of it in commerce in the Philippines. The IPO may accept as prima facie evidence that the mark has become distinctive, as used in connection with the applicant's goods or services in commerce, proof of substantially exclusive and continuous use thereof by the applicant in commerce in the Philippines for five (5) years before the date on which the claim of distinctiveness is made. See: Section 123.2, IP Code
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DOCTRINE OF SECONDARY MEANING This doctrine is to the effect that a word or phrase originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nevertheless have been used so long and so exclusively by one producer with reference to his article that, in that trade and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product. (Ang v. Teodoro, G. R. No. 48226, 14 December 1942)
SHANG PROPERTIES REALTY CORP. & SHANG PROPERTIES V. ST. FRANCIS DEVT. CORP. G.R. No. 190706, July 21, 2014
“THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE” No secondary meaning. No unfair competition. As its use of the mark is clearly limited to a certain locality, it cannot be said that there was substantial commercial use of the same recognized all throughout the country. No showing of a mental recognition in buyers’ and potential buyers’ minds that products connected with the mark “ST. FRANCIS” are associated with the same source. The element of fraud to be wanting; hence, there can be no unfair competition. The geographically descriptive nature of the mark "ST. FRANCIS” bars its exclusive appropriability, unless a secondary meaning is acquired. A ‘geographically descriptive term’ is any noun or adjective that designates geographical location and would tend to be regarded by buyers as descriptive of the geographic location of origin of the goods or services.
PROTECTION OF TRADENAMES/BUSINESS NAMES (§165) A name or designation may not be used as a trade name if by its nature or the use to which such name or designation may be put, it is contrary to public order or morals and if, in particular, it is liable to deceive trade circles or the public as to the nature of the enterprise identified by that name. Notwithstanding any laws or regulations providing for any obligation to register trade names, such names shall be protected, even prior to or without registration, against any unlawful act committed by third parties. In particular, any subsequent use of the trade name by a third party, whether as a trade name or a mark or collective mark, or any such use of a similar trade name or mark, likely to mislead the public, shall be deemed unlawful.
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Coffee Partners, Inc. v. San Francisco Coffee & Roastery, Inc., (G.R. No. 169504, 03 March 2010) The issue in this case is whether the use of the trademark “SAN FRANCISCO COFFEE” constitutes infringement of the tradename ‘SAN FRANCISCO COFFEE & ROASTERY, INC.” even if the tradename is not registered with the IPO. The Supreme Court ruled that a trade name need not be registered with the IPO before an infringement suit may be filed by its owner against the owner of an infringing trademark. All that is required is that the trade name is previously used in trade or commerce in the Philippines. A corporation has the exclusive right to use its name. The right proceeds from the theory that it is a fraud on the corporation which has acquired a right to that name and perhaps carried on its business thereunder, that another should attempt to use the same name, or the same name with a slight variation in such a way as to induce persons to deal with it in the belief that they are dealing with the corporation which has given a reputation to the name.
Coffee Partners, Inc. v. San Francisco Coffee & Roastery, Inc., (G.R. No. 169504, 03 March 2010) The Supreme Court likewise upheld the ruling of the IPO Bureau of Legal Affairs (BLA) that the right to the exclusive use of a trade name with freedom from infringement by similarity is determined from priority of adoption. Since SAN FRANCISCO COFFEE & ROASTERY, INC. registered its business name with the Department of Trade and Industry in 1995 and COFFEE PARTNERS, INC. registered its trademark with the IPO in 2001 in the Philippines and in 1997 in other countries, then the former must be protected from infringement of its trade name. The IPO-BLA also held that SAN FRANCISCO COFFEE & ROASTERY, INC. did not abandon the use of its trade name as substantial evidence indicated that it continuously used its trade name in connection with the purpose for which it was organized.
LEGAL REMEDIES
q Trademark Infringement q Unfair Competition q Damages
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TRADEMARK INFRINGEMENT
(§155) - The commission of the following acts by any person, without the consent of the owner of the registered mark: a. Use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark or the same container or a dominant feature thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or b. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive, shall be liable in a civil action for infringement by the registrant.
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Counterfeit Goods vs. Colorable Imitation Counterfeit Goods shall mean any goods, including packaging, bearing without authorization a trademark which is identical to the trademark validly registered in respect of such goods, or which cannot be distinguished in its essential aspects from such a trademark, and which thereby infringes the rights of the owner of the trademark in question under the law of the country of importation [TRIPs Agreement] Colorable Imitation. This term has been defined as "such a close or ingenious imitation as to be calculated to deceive ordinary purchasers, or such resemblance of the infringing mark to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, and to cause him to purchase the one supposing it to be the other.“ [Emerald v. CA, G.R. No. 100098. December 29, 1995]
Infringement takes place when the competing trademark contains the essential features of another. Imitation or an effort to imitate is unnecessary. The question is whether the use of the marks is likely to cause confusion or deceive purchasers. (Societe Des Produits Nestle, S. A. vs. Martin T.Dy, G.R. No. 172276, 09 August 2010)
A crucial issue in any trademark infringement case is the likelihood of confusion, mistake or deceit as to the identity, source or origin of the goods or identity of the business as a consequence of using a certain mark. Likelihood of confusion is admit- tedly a relative term, to be determined rigidly according to the particular (and some- times peculiar) circumstances of each case. Thus, in trademark cases, more than in other kinds of litigation, precedents must be studied in the light of each particular case. (Mighty Corporation vs. E. J. Gallo Winery, G.R. No. 154342, 14 July 2004)
Failure to present proof of actual confusion does not negate their claim of trademark infringement. Trademark infringement requires the less stringent standard of “likelihood of confusion” only. While proof of actual confusion is the best evidence of infringement, its absence is inconsequential. (McDonalds Corporation v. L. C. Big Mak Burger, Inc., G.R. No. 143993, 18 August 2004.)
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The mere unauthorized use of a container bearing a registered trademark in connection with the sale, distribution or advertising of goods or services which is likely to cause confusion, mistake or deception among the buyers or consumers can be considered as trademark infringement. (Republic Gas Corporation v. Petron Corporation, G. R. No. 194062, 17 June 2013)
Unauthorized use of a container bearing a registered trademark in connection with the sale, distribution or advertising of goodsor services which is likely to cause confusion, mistake or deception among the buyers/consumers can be considered as trade- mark infringement. (Yao v. People of the Philippines, G. R. No. 168306, 19 June 2007)
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Republic Gas Corporation v. Petron Corporation, G. R. No. 194062, 17 June 2013 •
From the foregoing provision, the Court in a very similar case, made it categorically clear that the mere unauthorized use of a container bearing a registered trademark in connection with the sale, distribution or advertising of goods or services which is likely to cause confusion, mistake or deception among the buyers or consumers can be considered as trademark infringement.
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Here, petitioners have actually committed trademark infringement when they refilled, without the respondents’ consent, the LPG containers bearing the registered marks of the respondents. As noted by respondents, petitioners’ acts will inevitably confuse the consuming public, since they have no way of knowing that the gas contained in the LPG tanks bearing respondents’ marks is in reality not the latter’s LPG product after the same had been illegally refilled. The public will then be led to believe that petitioners are authorized refillers and distributors of respondents’ LPG products, considering that they are accepting empty containers of respondents and refilling them for resale.
•
In sum, this Court finds that there is sufficient evidence to warrant the prosecution of petitioners for trademark infringement and unfair competition, considering that petitioner Republic Gas Corporation, being a corporation, possesses a personality separate and distinct from the person of its officers, directors and stockholders.12 Petitioners, being corporate officers and/or directors, through whose act, default or omission the corporation commits a crime, may themselves be individually held answerable for the crime.
MANUEL ESPIRITU, JR. et. al. v. PETRON CORP et.al. G.R. No. 170891. Nov. 24, 2009 Reloading of the liquefied petroleum gas cylinder container of one brand with the liquefied petroleum gas of another brand. What the law punishes is the act of giving one's goods the general appearance of the goods of another, which would likely mislead the buyer into believing that such goods belong to the latter. Corporate officers or employees, through whose act, default or omission the corporation commits a crime, may themselves be individually held answerable for the crime. Before a stockholder may be held criminally liable for acts committed by the corporation, therefore, it must be shown that he had knowledge of the criminal act committed in the name of the corporation and that he took part in the same or gave his consent to its commission, whether by action or inaction.
Juno Batistis v. People G.R. No. 181571, 19 December 2009
The case involves refilling of empty liquor bottles of Fundador. The RTC convicted accused for trademark infringement and unfair competition but on appeal he was acquitted for unfair competition but conviction for trademark infringement was affirmed. According to the Supreme Court: “Batistis exerted the effort to make the counterfeit products look genuine to deceive the unwary public into regarding the products as genuine. The buying public would be easy to fall for the counterfeit products due to their having been given the appearance of the genuine products, particularly with the difficulty of detecting whether the products were fake or real if the buyers had no experience and the tools for detection, like black light.” “He thereby infringed the registered Fundador trademark by the colorable imitation of it through applying the dominant features of the trademark on the fake products, particularly the two bottles filled with Fundador brandy. His acts constituted infringement of trademark…”
GEMMA ONG a.k.a. MARIA TERESA GEMMA CATACUTAN, v. PEOPLE OF THE PHILS. G.R. No. 169440, Nov. 23, 2011 Counterfeit Marlboro cigarettes. The counterfeit cigarettes seized from Gemma's possession were intended to confuse and deceive the public as to the origin of the cigarettes intended to be sold, as they not only bore Philip Morris Phils, Inc. (PMPI's) mark, but they were also packaged almost exactly as PMPI's products.
LEGAL REMEDIES - UNFAIR COMPETITION (Sec. 168) Ø A person who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those of others, whether or not a registered mark is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights. Ø Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition.
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UNFAIR COMPETITION The following shall be deemed guilty of unfair competition: – Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;
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UNFAIR COMPETITION The following shall be deemed guilty of unfair competition: – Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public; or – Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.
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RULE 18, A.M. 10-3-10 SC SEC. 6. Intent to defraud or deceive. – In an action for unfair competition, the intent to defraud or deceive the public shall be presumed: a) when the defendant passes off a product as his by using imitative devices, signs or marks on the general appearance of the goods, which misleads prospective purchasers into buying his merchandise under the impression that they are buying that of his competitors; b) when the defendant makes any false statement in the course of trade to discredit the goods and business of another; or c) where the similarity in the appearance of the goods as packed and offered for sale is so striking.
Unfair competition has been defined as the passing off (palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. The essential elements of unfair competition are (1) confusing similarity in the general appearance of the goods; and (2) intent to deceive the public and defraud a competitor. (Superior Enterprises, Inc. vs. Kunnan Enterprises Ltd., G.R. No. 169974, 20 April 2010)
The essential elements of an action for unfair competition are (1) confusing similarity in the general appearance of the goods, and (2) intent to deceive the public and defraud a competitor. The confusing similarity may or may not result from similarity in the marks, but may result from other external factors in the packaging or presentation of the goods. The intent to deceive and defraud may be inferred from the similarity of the appearance of the goods as offered for sale to the public. (McDonalds Corporation v. L. C. Big Mak Burger, Inc., G.R. No. 143993, 18 August 2004)
TM INFRINGEMENT vs. UNFAIR COMPETITION q In infringement of trademark the prior registration of the trademark is a prerequisite for the action; in unfair competition registration of the trademark is not necessary. q In infringement of trademark, fraudulent intent is not necessary; in unfair competition fraudulent intent is essential. q Infringement of trademark is the unauthorized use of a trademark, while unfair competition is the passing off of one’s goods for the goods of another.
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ROBERTO CO V. KENG HUAN JERRY YEUNG & EMMA YEUNG G.R. No. 212705, Sept. 10, 2014
Greenstone Medicated Oil Unfair competition is defined as the passing off (or palming off) or attempting to pass off upon the public of the goods or business of one person as the goods or business of another with the end and probable effect of deceiving the public. This takes place where the defendant gives his goods the general appearance of the goods of his competitor with the intention of deceiving the public that the goods are those of his competitor. Co conspired with the Laus in the sale/distribution of counterfeit Greenstone products to the public, which were even packaged in bottles identical to that of the original, thereby giving rise to the presumption of fraudulent intent. Registration of the trademark “Greenstone”– essential in a trademark infringement.
COCA-COLA Bottlers, Phils., Inc. vs. Quintin Gomez, et al., G.R. No. 154491, November 14, 2008 As basis for this interpretative analysis, we note that Section 168.1 speaks of a person who has earned goodwill with respect to his goods and services and who is entitled to protection under the Code, with or without a registered mark. Section 168.2, as previously discussed, refers to the general definition of unfair competition. Section 168.3, on the other hand, refers to the specific instances of unfair competition, with Section 168.1 referring to the sale of goods given the appearance of the goods of another; Section 168.2, to the inducement of belief that his or her goods or services are that of another who has earned goodwill; while the disputed Section 168.3 being a catch all clause whose coverage the parties now dispute. Under all the above approaches, we conclude that the hoarding - as defined and charged by the petitioner does not fall within the coverage of the IP Code and of Section 168 in particular. It does not relate to any patent, trademark, trade name or service mark that the respondents have invaded, intruded into or used without proper authority from the petitioner. Nor are the respondents alleged to be fraudulently passing off their products or services as those of the petitioner. The respondents are not also alleged to be undertaking any representation or misrepresentation that would confuse or tend to confuse the goods of the petitioner with those of the respondents, or vice versa. What in fact the petitioner alleges is an act foreign to the Code, to the concepts it embodies and to the acts it regulates; as alleged, hoarding inflicts unfairness by seeking to limit the oppositions sales by depriving it of the bottles it can use for these sales.
WILLAWARE PRODUCTS CORP. V. JESICHRIS MFTG. CORP., G.R. No. 195549, Sept. 03, 2014 Unfair Competition under Article 28 of the New Civil Code Willaware was held to be engaged in unfair competition as shown by its act of suddenly shifting business from manufacturing kitchenware to plastic-made automotive parts; luring the employees of Jesichris to transfer to its employ and discovering the trade secrets of the latter. “Unfair competition” under Article 28 of the Civil Code, is very much broader than that covered by intellectual property laws. In order to qualify the competition as "unfair," it must have two characteristics: (1) it must involve an injury to a competitor or trade rival, and (2) it must involve acts which are characterized as "contrary to good conscience," or "shocking to judicial sensibilities," or otherwise unlawful; in the language of our law, these include force, intimidation, deceit, machination or any other unjust, oppressive or high-handed method. The public injury or interest is a minor factor; the essence of the matter appears to be a private wrong perpetrated by unconscionable means.
2016 BAR QUESTION MS Brewery Corporation (MS) is a manufacturer and distributor of the popular beer "MS Lite." It faces stiff competition from BA Brewery Corporation (BA) whose sales of its own beer product, "BA Lighter," has soared to new heights. Meanwhile, sales of the "MS Lite" decreased considerably. The distribution and marketing personnel of MS later discovered that BA has stored thousands of empty bottles of "MS Lite" manufactured by MS in one of its warehouses. MS filed a suit for unfair competition against BA before the Regional Trial Court (RTC). Finding a connection between the dwindling sales of MS and the increased sales of BA, the RTC ruled that BA resorted to acts of unfair competition to the detriment of MS. Is the RTC correct? Explain. (5%)
SHANG PROPERTIES REALTY CORP. & SHANG PROPERTIES V. ST. FRANCIS DEVT. CORP. G.R. No. 190706, July 21, 2014
“THE ST. FRANCIS TOWERS” and “THE ST. FRANCIS SHANGRI-LA PLACE” No secondary meaning. No unfair competition. As its use of the mark is clearly limited to a certain locality, it cannot be said that there was substantial commercial use of the same recognized all throughout the country. No showing of a mental recognition in buyers’ and potential buyers’ minds that products connected with the mark “ST. FRANCIS” are associated with the same source. The element of fraud to be wanting; hence, there can be no unfair competition. The geographically descriptive nature of the mark "ST. FRANCIS” bars its exclusive appropriability, unless a secondary meaning is acquired. A ‘geographically descriptive term’ is any noun or adjective that designates geographical location and would tend to be regarded by buyers as descriptive of the geographic location of origin of the goods or services.
LEVI STRAUSS (PHILS.), INC., v. TONY LIM G.R. No. 162311. December 4, 2008
LIVES vs. LEVI’s No unfair competition. Unfair competition consists in employing deception or any other means contrary to good faith by which any person shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established goodwill, or committing any acts calculated to produce such result. While it is true that there may be unfair competition even if the competing mark is registered in the Intellectual Property Office, it is equally true that the same may show prima facie good faith. Indeed, registration does not negate unfair competition where the goods are packed or offered for sale and passed off as those of complainant. However, the mark's registration, coupled with the stark differences between the competing marks, negate the existence of actual intent to deceive, in this particular case.
UNILEVER PHILIPPINES, INC. V. MICHAEL TAN A.K.A. PAUL D. TAN G.R. No. 179367, Jan. 29, 2014 Unfair Competition under RA 8293 The sheer number and volume of imitation Unilever shampoo products found in respondent’s possession belie the claim of personal use. What is material to a finding of probable cause is the commission of acts constituting unfair competition, the presence of all its elements and the reasonable belief, based on evidence, that the respondent had committed it. The CA was in error in sustaining DOJ’s finding of lack of probable cause.
SHIRLEY F. TORRES v. IMELDA PEREZ and RODRIGO PEREZ, G.R. No. 188225. Nov. 28, 2012
Unfair competition may not be inferred from the use of vendor codes by product suppliers to a mall The criminal complaint for unfair competition against respondents cannot prosper, for the elements of the crime were not present. The key elements of unfair competition are "deception, passing off and fraud upon the public.” No deception can be imagined to have been foisted on the public through different vendor codes, which are used by SM only for the identification of suppliers' products.
Cybercrime Prevention Act (RA No. 10175) Section 4. Cybercrime Offenses. xxx xxx xxx (6) Cyber-squatting. – The acquisition of a domain name over the internet in bad faith to profit, mislead, destroy reputation, and deprive others from registering the same, if such a domain name is: (i) Similar, identical, or confusingly similar to an existing trademark registered with the appropriate government agency at the time of the domain name registration: (ii) Identical or in any way similar with the name of a person other than the registrant, in case of a personal name; and (iii) Acquired without right or with intellectual property interests in it.
2014 Bar Question
In intellectual property cases, fraudulent intent is not an element of the cause of action except in cases involving: (1%) (A) (B) (C) (D)
trademark infringement copyright infringement patent infringement unfair competition
Counterfeit Goods vs. Colorable Imitation
Under Section 147.1 of the IP Code: The owner of a registered mark shall have the exclusive right to prevent all third parties not having the owner's consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar to those in respect of which the trademark is registered where such use would result in a likelihood of confusion. In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be presumed. [Also, §1 Article 16, TRIPs Agreement]
RULES OF PROCEDURE FOR INTELLECTUAL PROPERTY RIGHTS CASES A.M. No. 10-3-10 SC, October 18, 2011
Rule 18 EVIDENCE IN TRADEMARK INFRINGEMENT AND UNFAIR COMPETITION CASES
SEC. 3. Presumption of likelihood of confusion. – Likelihood of confusion shall be presumed in case an identical sign or mark is used for identical goods or services. SEC. 4. Likelihood of confusion in other cases. – In determining whether one trademark is confusingly similar to or is a colorable imitation of another, the court must consider the general impression of the ordinary purchaser, buying under the normally prevalent conditions in trade and giving the attention such purchasers usually give in buying that class of goods. Visual, aural, connotative comparisons and overall impressions engendered by the marks in controversy as they are encountered in the realities of the marketplace must be taken into account. Where there are both similarities and differences in the marks, these must be weighed against one another to see which predominates.
In determining likelihood of confusion between marks used on nonidentical goods or services, several factors may be taken into account, such as, but not limited to: a) the strength of plaintiff’s mark; b) the degree of similarity between the plaintiff’s and the defendant’s marks; c) the proximity of the products or services; d) the likelihood that the plaintiff will bridge the gap; e) evidence of actual confusion; f) the defendant's good faith in adopting the mark; g) the quality of defendant's product or service; and/or h) the sophistication of the buyers.― Colorable imitation denotes such a close or ingenious imitation as to be calculated to deceive ordinary persons, or such a resemblance to the original as to deceive an ordinary purchaser giving such attention as a purchaser usually gives, as to cause him to purchase the one supposing it to be the other.
TRADEMARK DILUTION Trademark dilution is the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of: (1) competition between the owner of the famous mark and other parties; or (2) likelihood of confusion, mistake or deception. Subject to the principles of equity, the owner of a famous mark is entitled to an injunction against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark. (Levi Strauss & Co., v. Clinton Apparelle, Inc., G.R. No. 138900, 20 September 2005)
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Levi Strauss & Co., v. Clinton Apparelle, Inc., G.R. No. 138900, 20 September 2005 DOCKERS
VS.
PADDOCKS
Based on the foregoing, to be eligible for protection from dilution, there has to be a finding that: (1) the trademark sought to be protected is famous and distinctive; (2) the use by respondent of “Paddocks and Design” began after the petitioners’ mark became famous; and (3) such subsequent use defames petitioners’ mark. In the case at bar, petitioners have yet to establish whether “Dockers and Design” has acquired a strong degree of distinctiveness and whether the other two elements are present for their cause to fall within the ambit of the invoked protection. The Trends MBL Survey Report which petitioners presented in a bid to establish that there was confusing similarity between two marks is not sufficient proof of any dilution that the trial court must enjoin. (
Levi Strauss & Co., v. Clinton Apparelle, Inc., G.R. No. 138900, 20 September 2005 Given the single registration of the trademark “Dockers and Design” and considering that respondent only uses the assailed device but a different word mark, the right to prevent the latter from using the challenged “Paddocks” device is far from clear. Stated otherwise, it is not evident whether the single registration of the trademark “Dockers and Design” confers on the owner the right to prevent the use of a fraction thereof in the course of trade. It is also unclear whether the use without the owner’s consent of a portion of a trademark registered in its entirety constitutes material or substantial invasion of the owner’s right. It is likewise not settled whether the wing-shaped logo, as opposed to the word mark, is the dominant or central feature of petitioners’ trademark—the feature that prevails or is retained in the minds of the public—an imitation of which creates the likelihood of deceiving the public and constitutes trademark infringement. In sum, there are vital matters which have yet and may only be established through a full-blown trial.
Tanduay Distillers, Inc. vs. Ginebra San Miguel, Inc. G.R. NO. 164324, August 14, 2009 It is not evident whether San Miguel has the right to prevent other business entities from using the word “Ginebra.” It is not settled (1) whether “Ginebra” is indeed the dominant feature of the trademarks, (2) whether it is a generic word that as a matter of law cannot be appropriated, or (3) whether it is merely a descriptive word that may be appropriated based on the fact that it has acquired a secondary meaning. The issue that must be resolved by the trial court is whether a word like “Ginebra” can acquire a secondary meaning for gin products so as to prohibit the use of the word “Ginebra” by other gin manufacturers or sellers. This boils down to whether the word “Ginebra” is a generic mark that is incapable of appropriation by gin manufacturers. In Asia Brewery, Inc. v. Court of Appeals,[53] the Court ruled that “pale pilsen” are generic words, “pale” being the actual name of the color and “pilsen” being the type of beer, a light bohemian beer with a strong hops flavor that originated in Pilsen City in Czechoslovakia and became famous in the Middle Ages, and hence incapable of appropriation by any beer manufacturer.Moreover, Section 123.1(h) of the IP Code states that a mark cannot be registered if it “consists exclusively of signs that are generic for the goods or services that they seek to identify.”
In this case, a cloud of doubt exists over San Miguel’s exclusive right relating to the word “Ginebra.” San Miguel’s claim to the exclusive use of the word “Ginebra” is clearly still in dispute because of Tanduay’s claim that it has, as others have, also registered the word “Ginebra” for its gin products. This issue can be resolved only after a full-blown trial.
LEGAL REMEDIES SEC. 151. Cancellation. - 151.1. A petition to cancel a registration of a mark under this Act may be filed with the Bureau of Legal Affairs by any person who believes that he is or will be damaged by the registration of a mark under this Act as follows: (a) Within five (5) years from the date of the registration of the mark under this Act. (b) At any time, if the registered mark becomes the generic name for the goods or services, or a portion thereof, for which it is registered, or has been abandoned, or its registration was obtained fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used. If the registered mark becomes the generic name for less than all of the goods or services for which it is registered, a petition to cancel the registration for only those goods or services may be filed. A registered mark shall not be deemed to be the generic name of goods or services solely because such mark is also used as a name of or to identify a unique product or service. The primary significance of the registered mark to the relevant public rather than purchaser motivation shall be the test for determining whether the registered mark has become the generic name of goods or services on or in connection with which it has been used. (c) At any time, if the registered owner of the mark without legitimate reason fails to use the mark within the Philippines, or to cause it to be used in the Philippines by virtue of a license during an uninterrupted period of three (3) years or longer.
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LEGAL REMEDIES SEC. 151. Cancellation. – xxx 151.2. Notwithstanding the foregoing provisions, the court or the administrative agency vested with jurisdiction to hear and adjudicate any action to enforce the rights to a registered mark shall likewise exercise jurisdiction to determine whether the registration of said mark may be cancelled in accordance with this Act. The filing of a suit to enforce the registered mark with the proper court or agency shall exclude any other court or agency from assuming jurisdiction over a subsequently filed petition to cancel the same mark. On the other hand, the earlier filing of petition to cancel the mark with the Bureau of Legal Affairs shall not constitute a prejudicial question that must be resolved before an action to enforce the rights to same registered mark may be decided. (Sec. 17, R.A. No. 166a)
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LEGAL REMEDIES – SEC. 156. Actions, and Damages and Injunction for Infringement. -156.1. The owner of a registered mark may recover damages from any person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his rights, or the profit which the defendant actually made out of the infringement, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party. 156.2. On application of the complainant, the court may impound during the pendency of the action, sales invoices and other documents evidencing sales. 156.3. In cases where actual intent to mislead the public or to defraud the complainant is shown, in the discretion of the court, the damages may be doubled. 156.4. The complainant, upon proper showing, may also be granted injunction.
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LEGAL REMEDIES - CIVIL ACTION REQUIREMENT OF NOTICE FOR DAMAGES (§158) – In any suit for infringement, the owner of the registered mark shall not be entitled to recover profits or damages unless the acts have been committed with knowledge that such imitation is likely to cause confusion, or to cause mistake, or to deceive. Such knowledge is presumed if the registrant gives notice that his mark is registered by displaying with the mark the words '"Registered Mark" or the letter R within a circle or if the defendant had otherwise actual notice of the registration.
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LEGAL REMEDIES – SEC. 157. Power of Court to Order Infringing Material Destroyed. 157.1. In any action arising under this Act, in which a violation of any right of the owner of the registered mark is established, the court may order that goods found to be infringing be, without compensation of any sort, disposed of outside the channels of commerce in such a manner as to avoid any harm caused to the right holder, or destroyed; and all labels, signs, prints, packages, wrappers, receptacles and advertisements in the possession of the defendant, bearing the registered mark or trade name or any reproduction, counterfeit, copy or colorable imitation thereof, all plates, molds, matrices and other means of making the same, shall be delivered up and destroyed. 157.2. In regard to counterfeit goods, the simple removal of the trademark affixed shall not be sufficient other than in exceptional cases which shall be determined by the Regulations, to permit the release of the goods into the channels of commerce.
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A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 22. Judgment. - If it appears after trial that the seized documents and articles are found to infringe the intellectual property right of the applicant or that they constitute the means for the production of infringing goods, the court shall order their destruction or donation to charitable, educational or religious institutions with the prohibition against bringing the same into the channels of commerce. In the latter case, infringing trademarks or trade names found on labels, tags and other portions of the infringing materials shall be removed or defaced before the donation. In no case shall the infringing materials be returned to the defendant. If the court finds no infringement, the seized materials shall be immediately returned to the defendant.
CENTURY CHINESE MEDICINE CO.,ETC., V. PEOPLE OF THE PHILIPPINES and LING NA LAU, G.R. No. 188526, Nov. 11, 2013
Search and seizures in civil actions vis-a-vis search warrants Unfair competition/trademark infringement because of the sale of counterfeit Top Gel papaya whitening soap and use of “Top Gel T.G. and Device of a Leaf” perpetrated by respondents. There was no prejudicial question and that the Rules on the Issuance of Search and Seizure in Civil Actions for Infringement of IPRs were not applicable to the case for the reason that the search warrants issued were in contemplation of criminal actions for violation of IPRs under RA 8293. The object of the violation of respondent's intellectual property right is the alleged counterfeit TOP GEL T.G. & DEVICE OF A LEAF papaya whitening soap products being sold by petitioners, so there is a need to confiscate all these articles to protect respondent's right as the registered owner of such trademark.
LEGAL REMEDIES - FALSE DESIGNATION OF ORIGIN, FALSE DESCRIPTION OR REPRESENTATION (SEC. 169) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which: – Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person; or
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LEGAL REMEDIES - FALSE DESIGNATION OF ORIGIN, FALSE DESCRIPTION OR REPRESENTATION Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which: In commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person's goods, services, or commercial activities, shall be liable to a civil action for damages and injunction by any person who believes that he or she is or is likely to be damaged by such act.
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LEGAL REMEDIES - FALSE DESIGNATION OF ORIGIN, FALSE DESCRIPTION OR REPRESENTATION Any goods marked or labelled in contravention of the provisions of this Section shall not be imported into the Philippines or admitted entry at any customhouse of the Philippines. The owner, importer, or consignee of goods refused entry at any customhouse under this section may have any recourse under the customs revenue laws or may have the remedy given by the IP Code in cases involving goods refused entry or seized.
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LEGAL REMEDIES – CRIMINAL PENALTY • Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000) to Two hundred thousand pesos(P200,000), shall be imposed on any person who is found guilty of committing infringement (§159), unfair competition (§168) and false designation of origin, false or misleading description of fact, or false or misleading representation of fact (§169.1). • See Samson vs. Daway
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LEGAL REMEDIES: LIMITATIONS ON ACTIONS SEC. 159. Limitations to Actions for Infringement. -Notwithstanding any other provision of this Act, the remedies given to the owner of a right infringed under this Act shall be limited as follows: 159.1. Notwithstanding the provisions of Section 155 hereof, a registered mark shall have no effect against any person who, in good faith, before the filing date or the priority date, was using the mark for the purposes of his business or enterprise: Provided, That his right may only be transferred or assigned together with his enterprise or business or with that part of his enterprise or business in which the mark is used. 159.2. Where an infringer who is engaged solely in the business of printing the mark or other infringing materials for others is an innocent infringer, the owner of the right infringed shall be entitled as against such infringer only to an injunction against future printing.
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LEGAL REMEDIES: LIMITATIONS ON ACTIONS 159.3. Where the infringement complained of is contained in or is part of paid advertisement in a newspaper, magazine, or other similar periodical or in an electronic communication, the remedies of the owner of the right infringed as against the publisher or distributor of such newspaper, magazine, or other similar periodical or electronic communication shall be limited to an injunction against the presentation of such advertising matter in future issues of such newspapers, magazines, or other similar periodicals or in future transmissions of such electronic communications. The limitations of this subparagraph shall apply only to innocent infringers: Provided, That such injunctive relief shall not be available to the owner of the right infringed with respect to an issue of a newspaper, magazine, or other similar periodical or an electronic communication containing infringing matter where restraining the dissemination of such infringing matter in any particular issue of such periodical or in an electronic communication would delay the delivery of such issue or transmission of such electronic communication is customarily conducted in accordance with the sound business practice, and not due to any method or device adopted to evade this section or to prevent or delay the issuance of an injunction or restraining order with respect to such infringing matter; and
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LEGAL REMEDIES: LIMITATIONS ON ACTIONS 159.4. There shall be no infringement of trademarks or tradenames of imported or sold drugs and medicines allowed under Section 72.1 of this Act, as well as imported or sold off-patent drugs and medicines: Provided, That said drugs and medicines bear the registered marks that have not been tampered, unlawfully modified, or infringed upon as defined under Section 155 of this Code. (As amended by Republic Act No.9502 or the Universally Accessible Cheaper and Quality Medicines Act of 2008)
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LEGAL REMEDIES AUTHORITY TO DETERMINE RIGHT TO REGISTRATION (SEC. 161) In any action involving a registered mark, the court may determine the right to registration, order the cancellation of a registration, in whole or in part, and otherwise rectify the register with respect to the registration of any party to the action in the exercise of this.
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COLLECTIVE MARKS (§167) • "Collective mark" means any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristic, including the quality of goods or services of different enterprises which use the sign under the control of the registered owner of the collective mark; • An application for registration of a collective mark shall designate the mark as a collective mark and shall be accompanied by a copy of the agreement, if any, governing the use of the collective mark. • The registration of a collective mark, or an application therefor shall not be the subject of a license contract
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2010 BAR EXAMINATION QUESTION: 1. Can an article of commerce serve as a trademark and at the same time enjoy patent and copyright protection? Explain and give an example. 2. For years, Y has been engaged in the parallel importation of famous brands, including shoes carrying the foreign brand MAGIC. Exclusive distributor X demands that Y cease importation because of his appointment as exclusive distributor of MAGIC shoes in the Philippines. Y counters that the trademark MAGIC is not registered with the Intellectual Property Office as a trademark and therefore no one has the right to prevent its parallel importation. Who is correct? Why?
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2009 BAR EXAMINATION QUESTION:
After disposing of his last opponent in only two rounds in Las Vegas, the renowned Filipino boxer Sonny Bachao arrived at the Ninoy Aquino International Airport met by thousands of hero-worshipping fans and hundreds of media photographers. The following day, a colored photograph of Sonny wearing a black polo shirt embroidered with the 2inch Lacoste crocodile logo appeared on the front page of every Philippine newspaper.
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2009 BAR EXAMINATION QUESTION: Lacoste International, the French firm that manufactures Lacoste apparel and owns the Lacoste trademark, decided to cash in on the universal popularity of the boxing icon. It reprinted the photographs, with the permission of the newspaper publishers, and went on a world-wide blitz of print commercials in which Sonny is shown wearing a Lacoste shirt alongside the phrase “Sonny Bachao just loves Lacoste.” When Sonny sees the Lacoste advertisements, he hires you as lawyer and asks you to sue Lacoste International before a Philippine court:
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2009 BAR EXAMINATION QUESTION: 1. For trademark infringement in the Philippines because Lacoste International used his image without his permission; 2. For injunction in order to stop Lacoste International from featuring him in their commercials. 3. Can Lacoste International validly invoke the defense that it is not a Philippine company and, therefore, Philippine courts have no jurisdiction? Explain.
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2005 BAR EXAMINATION QUESTION: S Development Corporation sued Shangrila Corporation for using the “S” logo and the tradename “Shangrila”. The former claims that it was the first to register the logo and the tradename in the Philippines and that it had been using the same in its restaurant business. Shangrila Corporation counters that it is an affiliate of an international organization which has been using such logo and tradename “Shangrila” for over 20 years. However, Shangrila Corporation registered the tradename and logo in the Philippines only after the suit was filed.
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2005 BAR EXAMINATION QUESTION:
1. Which of the two corporations has a better right to use the logo and the tradename? Explain. 2. How does the international affiliation of Shangrila Corporation affect the outcome of the dispute? Explain.
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COPYRIGHT
GENERAL PRINCIPLES Copyright, in the strict sense of the term, is purely a statutory right. Being a mere statutory grant, the rights are limited to what the statute confers. It may be obtained and enjoyed only with respect to the subjects and by the persons, and on terms and conditions specified in the statute. Accordingly, it can only cover the works falling within the statutory enumeration or description. (Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated, G.R. No. 148222, 15 August 2003; Joaquin, Jr. vs. Drilon, G.R. No. 108946, 28 January 1999; Ching vs. Salinas, G.R. No. 161295, 29 June 2005)
The subject of copyright refers to finished works. The copyright does not extend to an idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work. (Joaquin, Jr. vs. Drilon, G.R. No. 108946, 28 January 1999)
Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one another. The scope of copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. (Ching vs. Salinas, G.R. No. 161295, 29 June 2005). The copyright protection extended to the creator should ensure his attainment of some form of personal satisfaction and economic reward from the work he produced. (Habana vs. Robles, G.R. No. 131522, 19 July 1999) A person to be entitled to a copyright must be the original creator of the work. He must have created it by his own skill, labor and judgment without directly copying or evasively imitating the work of another. (Kian Chuan v. Hon. Court of Appeals, G.R. No. 130360, 15 August 2001; Sambar v. Levi Strauss & Co., G.R. No. 132604, 06 March 2002)
Requirement of Originality “X X X the Constitution mandates originality as a prerequisite for copyright protection. The constitutional requirement necessitates independent creation plus a modicum of creativity. X X X Rural’s selection of listings – subscribers’ names, towns and telephone numbers – could not be more obvious and lacks the modicum of creativity necessary to transform mere selection into copyrightable expression. X X X Moreover, there is nothing remotely creative about arranging names alphabetically in a white pages directory. It is an age-old practice, firmly rooted in tradition and is so commonplace that it has come to be expected as a matter of course.”” Feist Publications vs. Rural Telephone (499 U.S. 340, 111 S. Ct. 1282, 1991)
BASIC PRINCIPLES PROTECTED FROM THE MOMENT OF CREATION (§172.2) Works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well as of their content, quality and purpose. DEPOSIT AND NOTICE IN NATIONAL LIBRARY OF THE PHILIPPINES - After the first public dissemination of performance by authority of the copyright owner of an original work, there shall, for the purpose of completing the records of the National Library and the Supreme Court Library, within three (3) weeks, be registered and deposited with it, by personal delivery or by registered mail two (2) complete copies or reproductions of the work in suchform as the directors of said libraries may prescribe.
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BASIC PRINCIPLES
UNPROTECTED SUBJECT MATTER (§175) - No protection shall extend to: 1. any idea, procedure, system, method or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; 2. news of the day and other miscellaneous facts having the character of mere items of press information; or 3. any official text of a legislative, administrative or legal nature, as well as any official translation thereof.
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BASIC PRINCIPLES
UNPROTECTED SUBJECT MATTER (§176) 4. WORKS OF THE GOVERNMENT. - No copyright shall subsist in any work of the Government of the Philippines. • However, prior approval of the government agency or office wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or office may, among other things, impose as a condition the payment of royalties. • No prior approval or conditions shall be required for the use of any purpose of statutes, rules and regulations, and speeches, lectures, sermons, addresses, and dissertations, pronounced, read or rendered in courts of justice, before administrative agencies, in deliberative assemblies and in meetings of public character.
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UNPROTECTED SUBJECT MATTER (§176) 4. WORKS OF THE GOVERNMENT. - No copyright shall subsist in any work of the Government of the Philippines. • The author of speeches, lectures, sermons, addresses, and dissertations mentioned in the preceding paragraphs shall have the exclusive right of making a collection of his works. N.B. The Government is not precluded from receiving and holding copyrights transferred to it by assignment, bequest or otherwise; nor shall publication or republication by the Government in a public document of any work in which copyright is subsisting be taken to cause any abridgment or annulment of the copyright or to authorize any use or appropriation of such work without the consent of the copyright owner.
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BASIC PRINCIPLES COPYRIGHT AS DISTINCT FROM MATERIAL OBJECT • General Rule – The copyright is distinct from the property in the material object subject to it. Consequently, the transfer or assignment of the copyright shall not itself constitute a transfer of the material object. Nor shall a transfer or assignment of the sole copy or of one or several copies of the work imply transfer or assignment of the copyright. • EXCEPTION: WORK OF ARCHITECTURE - Copyright in a work of architecture shall include the right to control the erection of any building which reproduces the whole or a substantial part of the work either in its original form or in any form recognizably derived from the original: Provided, That the copyright in any such work shall not include the right to control the reconstruction or rehabilitation in the same style as the original of a building to which that copyright relates. (Sec. 186, IP Code)
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ORIGINAL WORKS SEC. 172. Literary and Artistic Works. – 172.1 Literary and artistic works, hereinafter referred to as "works", are original intellectual creations in the literary and artistic domain protected from the moment of their creation and shall include in particular (a) Books, pamphlets, articles and other writings; (b) Periodicals and newspapers; (c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in writing or other material form;
(d) Letters; (e) Dramatic or dramatico-musical compositions; choreographic works or entertainment in dumb shows; (f) Musical compositions, with or without words; (g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art; models or designs for works of art; (h) Original ornamental designs or models for articles of manufacture, whether or not registrable as an industrial design, and other works of applied art; (i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography, architecture or science;
(j) Drawings or plastic works of a scientific or technical character; (k) Photographic works including works produced by a process analogous to photography; lantern slides; (l) Audiovisual works and cinematographic works and works produced by a process analogous to cinematography or any process for making audio-visual recordings; (m) Pictorial illustrations and advertisements; (n) Computer programs; and (o) Other literary, scholarly, scientific and artistic works.
Only the expression of an idea is protected by copyright, not the idea itself. (Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated, G.R. No. 148222, 15 August 2003) While works of applied art, original intellectual, literary and artistic works are copyrightable, useful articles and works of industrial design are not. A useful article may be copyrightable only if and only to the extent that such design incorporates pictorial, graphic, and sculptural features that can be identified separately from and are capable of existing independently of the utilitarian aspects of the article. (Ching vs. Salinas, G.R. No. 161295, 29 June 2005). Functional components of useful articles, no matter how artistically designed, have generally been denied copyright protection unless they are separable from the useful article. (Ching vs. Salinas, G.R. No. 161295, 29 June 2005).
Ching vs. Salinas G.R. No. 161295, 29 June 2005
• • • • •
Leaf spring eye bushing / vehicle bearing cushion Not artistic, hence not covered by copyright protection Functional Solutions to technical problems A useful article may be copyrightable only if and only to the extent that such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of the utilitarian aspects of the article.
Pearl and Dean, Inc. vs. Shoemart G.R. No. 148222, 15 August 2003 • The light box was not a literary or artistic piece; • Copyright is purely a statutory right. • Protection extended only to the technical drawings & not to the light box itself •
Image: http://hclightbox.en.made-in-china.com/product/mownMtZjEeGb/China-Shopping-Mall-Advertising-Display-Light-Box-and-Store-Background-Light-Box.html
Sison Olaño, et al. vs. Lim Eng Co G.R. No. 195835, March 14, 2016 Sometime in 2002, LEC was invited by the architects of the Manansala Project (Project), a high-end residential building in Rockwell Center, Makati City, to submit design/drawings and specifications for interior and exterior hatch doors. LEC complied by submitting on July 16, 2002, shop plans/drawings, including the diskette therefor, embodying the designs and specifications required for the metal hatch doors. After a series of consultations and revisions, the final shop plans/ drawings were submitted by LEC on January 15, 2004 and thereafter copied and transferred to the title block of Ski-First Balfour Joint Venture (SKI-FB), the Project’s contractor, and then stamped approved for construction on February 3, 2004. LEC was thereafter subcontracted by SKI-FB, to manufacture and install interior and exterior hatch doors for the 7th to 22nd floors of the Project based on the final shop plans/drawings.
Sison Olaño, et al. vs. Lim Eng Co G.R. No. 195835, March 14, 2016 Since the hatch doors cannot be considered as either illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography, topography, architecture or science, to be properly classified as a copyrightable class “I” work, what was copyrighted were their sketches/ drawings only, and not the actual hatch doors themselves. To constitute infringement, the usurper must have copied or appropriated the original work of an author or copyright proprietor, absent copying, there can be no infringement of copyright. A hatch door, by its nature is an object of utility. It is defined as a small door, small gate or an opening that resembles a window equipped with an escape for use in case of fire or emergency.64 It is thus by nature, functional and utilitarian serving as egress access during emergency. It is not primarily an artistic creation but rather an object of utility designed to have aesthetic appeal. It is intrinsically a useful article, which, as a whole, is not eligible for copyright. A “useful article” defined as an article “having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information” is excluded from copyright eligibility.
DERIVATIVE WORKS (Sec. 173) The following derivative works shall also be protected by copyright as new works: 1. D r a m a t i z a t i o n s , t r a n s l a t i o n s , a d a p t a t i o n s , abridgments, arrangements, and other alterations of literary or artistic works; and 2. Collections of literary, scholarly or artistic works, and compilations of data and other materials which are original by reason of the selection or coordination or arrangement of their contents.
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SCOPE OF PROTECTION SEC. 177. Copy or Economic Rights. - Subject to the provisions of Chapter VIII, copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts: 177.1. Reproduction of the work or substantial portion of the work; 177.2. Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work; 177.3. The first public distribution of the original and each copy of the work by sale or other forms of transfer of ownership;
177.4. Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound recording, a computer program, a compilation of data and other materials or a musical work in graphic form, irrespective of the ownership of the original or the copy which is the subject of the rental; 177.5. Public display of the original or a copy of the work; 177.6. Public performance of the work; and 177.7. Other communication to the public of the work
EXHAUSTION OF RIGHTS § National Exhaustion: does not allow the IP owner to control the commercial exploitation of works put on the domestic market by the IP owner or with his consent. § Regional Exhaustion: the first sale of the protected work by the IP owner or with his consent exhausts any IP rights over these works within the whole region, and parallel imports within the region can no longer be opposed based on the IP right. § International Exhaustion: the IP rights are exhausted once the work has been sold by the IP owner or with his consent in any part of the world. Source: http://www.wipo.int/sme/en/ip_business/export/international_exhaustion.htm
Kirtsaeng v. John Wiley & Sons, Inc., Docket No. 11–697.Argued October 29, 2012—Decided March 19, 2013
The “first sale” doctrine is a defense to copyright infringement US Copyright Act Section 109(a) sets forth the “first sale” doctrine as follows: “Notwithstanding the provisions of section 106(3) [the section that grants the owner exclusive distribution rights], the owner of a particular copy or phonorecord lawfully made under this title . . . is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord.”
2014 Commercial Law Bar Examination KK is from Bangkok, Thailand. She studies medicine in the Pontifical University of Santo Tomas (UST). She learned that the same foreign books prescribed in UST are 40-50% cheaper in Bangkok. So she ordered 50 copies of each book for herself and her classmates and sold the books at 20% less than the price in the Philippines. XX, the exclusive licensed publisher of the books in the Philippines, sued KK for copyright infringement. Decide.
"Communication to the public" or "communicate to the public" means any communication to the public, including broadcasting, rebroadcasting, retransmitting by cable, broadcasting and retransmitting by satellite, and includes the making of a work available to the public by wire or wireless means in such a way that members of the public may access these works from a place and time individually chosen by them; "Public performance," in the case of a work other than an audiovisual work, is the recitation, playing, dancing, acting or otherwise performing the work, either directly or by means of any device or process; in the case of an audiovisual work, the showing of its images in sequence and the making of the sounds accompanying it audible; and, in the case of a sound recording, making the recorded sounds audible at a place or at places where persons outside the normal circle of a family and that family’s closest social acquaintances are or can be present, irrespective of whether they are or can be present at the same place and at the same time, or at different places and/or at different times, and where the performance can be perceived without the need for communication within the meaning of Subsection 171.3; "Reproduction" is the making of one (1) or more copies, temporary or permanent, in whole or in part, of a work or a sound recording in any manner or form without prejudice to the provisions of Section 185 of this Act
SCOPE OF PROTECTION MORAL RIGHTS (Sec. 193) The author of a work shall, independently of the economic rights or the grant of an assignment or license with respect to such right, have the right: 1. To require that the authorship of the works be attributed to him, in particular, the right that his name, as far as practicable, be indicated in a prominent way on the copies, and in connection with the public use of his work; 2. To make any alterations of his work prior to, or to withhold it from publication; 3. To object to any distortion, mutilation or other modification of, or other derogatory action in relation to, his work which would be prejudicial to his honor or reputation; and 4. To restrain the use of his name with respect to any work not of his own creation or in a distorted version of his work.
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Waiver of Moral Rights
• Section 195. Waiver of Moral Rights. - An author may waive his rights mentioned in Section 193 by a written instrument, but no such waiver shall be valid where its effects is to permit another: 195.1. To use the name of the author, or the title of his work, or otherwise to make use of his reputation with respect to any version or adaptation of his work which, because of alterations therein, would substantially tend to injure the literary or artistic reputation of another author; or 195.2. To use the name of the author with respect to a work he did not create.
SCOPE OF PROTECTION MORAL RIGHTS (§194) Breach of Contract - An author cannot be compelled to perform his contract to create a work or for the publication of his work already in existence. However, he may be held liable for damages for breach of such contract.
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SCOPE OF PROTECTION MORAL RIGHTS (§ 196 -197) Contribution to Collective Work When an author contributes to a collective work, his right to have his contribution attributed to him is deemed waived unless he expressly reserves it.
Editing, Arranging and Adaptation of Work In the absence of a contrary stipulation, at the time an author licenses or permits another to use his work, the necessary editing, arranging or adaptation of such work, for publication, broadcast, use in a motion picture, dramatization, or mechanical or electrical reproduction in accordance with the reasonable and customary standards or requirements of the medium in which the work is to be used, shall not be deemed to contravene the author's moral rights. Nor shall complete destruction of a work unconditionally transferred by the author be deemed to violate such rights.
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SCOPE OF PROTECTION
SUBSEQUENT TRANSFERS (§200-201) Sale or Lease of Work. In every sale or lease of an original work of painting or sculpture or of the original manuscript of a writer or composer, subsequent to the first disposition thereof by the author, the author or his heirs shall have an inalienable right to participate in the gross proceeds of the sale or lease to the extent of five percent (5%). This right shall exist during the lifetime of the author and for fifty (50) years after his death. [“Droit De Suite”] Works Not Covered - This shall not apply to prints, etchings, engravings, works of applied art, or works of similar kind wherein the author primarily derives gain from the proceeds of reproductions.
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DROITE DE SUITE – or “art proceeds right” is the artist’s resale right, which requires that a percentage of the resale price of an artistic work is paid to the author. The right is exercisable even after the author’s death, provided the work is still in copyright. (David Bainbridge, Intellectual Property, 3rd Ed., p. 220 1996, also cited in Copyright Law of the Philippines by D. Funa)
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Berne Convention Article 14ter “Droit de suite” in Works of Art and Manuscripts: 1. Right to an interest in resales; 2. Applicable law; 3. Procedure (1) The author, or after his death the persons or institutions authorized by national legislation, shall, with respect to original works of art and original manuscripts of writers and composers, enjoy the inalienable right to an interest in any sale of the work subsequent to the first transfer by the author of the work. (2) The protection provided by the preceding paragraph may be claimed in a country of the Union only if legislation in the country to which the author belongs so permits, and to the extent permitted by the country where this protection is claimed. (3) The procedure for collection and the amounts shall be matters for determination by national legislation.
OWNERSHIP & PRESUMPTION OF AUTHORSHIP (Sec. 178) 1. In the case of original literary and artistic works, copyright shall belong to the author of the work; 2.
Works of joint authorship, the co-authors shall be the original owners of the copyright and in the absence of agreement, their rights shall be governed by the rules on co-ownership. If, however, a work of joint authorship consists of parts that can be used separately and the author of each part can be identified, the author of each part shall be the original owner of the copyright in the part that he has created;
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OWNERSHIP & PRESUMPTION OF AUTHORSHIP 3. Work created by an author during and in the course of his employment, the copyright shall belong to: a) The employee, if the creation of the object of copyright is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer. b) The employer, if the work is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary.
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OWNERSHIP & PRESUMPTION OF AUTHORSHIP 4. Work commissioned by a person other than an employer of the author and who pays for it and the work is made in pursuance of the commission, the person who so commissioned the work shall have ownership of the work, but the copyright thereto shall remain with the creator, unless there is a written stipulation to the contrary
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OWNERSHIP & PRESUMPTION OF AUTHORSHIP (Sec. 178.5)
5. Audiovisual work, the copyright shall belong to the producer, the author of the scenario, the composer of the music, the film director, and the author of the work so adapted. However, subject to contrary or other stipulations among the creators, the producer shall exercise the copyright to an extent required for the exhibition of the work in any manner, except for the right to collect performing license fees for the performance of musical compositions, with or without words, which are incorporated into the work;
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OWNERSHIP & PRESUMPTION OF AUTHORSHIP 6. In respect of letters, the copyright shall belong to the writer subject to the provisions of Article 723 of the Civil Code. Civil Code of the Philippines Article 723. Letters and other private communications in writing are owned by the person to whom they are addressed and delivered, but they cannot be published or disseminated without the consent of the writer or his heirs. However, the court may authorize their publication or dissemination if the public good or the interest of justice so requires. 1987 Constitution, Article 3 Section 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise, as prescribed by law.
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OWNERSHIP & PRESUMPTION OF AUTHORSHIP (Sec. 179) Anonymous and Pseudonymous Works - the publishers shall be deemed to represent the authors of articles and other writings published without the names of the authors or under pseudonyms, unless the contrary appears, or the pseudonyms or adopted name leaves no doubt as to the author's identity, or if the author of the anonymous works discloses his identity.
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OWNERSHIP & PRESUMPTION OF AUTHORSHIP (Sec. 219) Presumption of Authorship 1. The natural person whose name is indicated on a work in the usual manner as the author shall, in the absence of proof to the contrary, be presumed to be the author of the work. This provision shall be applicable even if the name is a pseudonym, where the pseudonym leaves no doubt as to the identity of the author. 2. The person or body corporate whose name appears on a audio-visual work in the usual manner shall, in the absence of proof to the contrary, be presumed to be the maker of said work.
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NEIGHBOURING or RELATED RIGHTS 1. Performers Rights 2. Producers Of Sound Recordings 3. Broadcasting Organizations
SEC. 203. Scope of Performers' Rights. Subject to the provisions of Section 212, performers shall enjoy the following exclusive rights: 203.1. As regards their performances, the right of authorizing: (a) The broadcasting and other communication to the public of their performance; and (b) The fixation of their unfixed performance. 203.2. The right of authorizing the direct or indirect reproduction of their performances fixed in sound recordings or audiovisual works or fixations in any manner or form; 203.3. Subject to the provisions of Section 206, the right of authorizing the first public distribution of the original and copies of their performance fixed in the sound recordings or audiovisual works or fixations through sale or rental or other forms of transfer of ownership;
203.4. The right of authorizing the commercial rental to the public of the original and copies of their performances fixed in sound recordings or audiovisual works or fixations, even after distribution of them by, or pursuant to the authorization by the performer; and 203.5. The right of authorizing the making available to the public of their performances fixed in sound recordings or audiovisual works or fixations, by wire or wireless means, in such a way that members of the public may access them from a place and time individually chosen by them. (Sec. 42, P.D. No. 49a)(As amended by Republic Act No.10372 or an Act Amending Certain Provisions of Republic Act 8293 otherwise known as the Intellectual Property Code of the Philippines)
SEC. 204. Moral Rights of Performers. - 204.1. Independently of a performer's economic rights, the performer, shall, as regards his live aural performances or performances fixed in sound recordings or in audiovisual works or fixations, have the right to claim to be identified as the performer of his performances, except where the omission is dictated by the manner of the use of the performance, and to object to any distortion, mutilation or other modification of his performances that would be prejudicial to his reputation. (As amended by Republic Act No.10372 or an Act Amending Certain Provisions of Republic Act 8293 otherwise known as the Intellectual Property Code of the Philippines)
SEC. 205. Limitation on Right. - 205.1. Subject to the provisions of Section 206, once the performer has authorized the broadcasting or fixation of his performance, the provisions of Sections 203 shall have no further application.205.2. The provisions of Section 184 and Section 185 shall apply mutatis mutandis to performers. SEC. 206. Additional Remuneration for Subsequent Communications or Broadcasts. - Unless otherwise provided in the contract, in every communication to the public or broadcast of a performance subsequent to the first communication or broadcast thereof by the broadcasting organization, the performer shall be entitled to an additional remuneration equivalent to at least five percent (5%) of the original compensation he or she received for the first communication or broadcast.
PRODUCERS OF SOUND RECORDINGS SEC. 208. Scope of Right. - Subject to the provisions of Section 212, producers of sound recordings shall enjoy the following exclusive rights: 208.1. The right to authorize the direct or indirect reproduction of their sound recordings, in any manner or form; the placing of these reproductions in the market and the right of rental or lending; 208.2. The right to authorize the first public distribution of the original and copies of their sound recordings through sale or rental or other forms of transferring ownership; and 208.3. The right to authorize the commercial rental to the public of the original and copies of their sound recordings, even after distribution by them by or pursuant to authorization by the producer. 208.4. The right to authorize the making available to the public of their sound recordings in such a way that members of the public may access the sound recording from a place and at a time individually chosen or selected by them, as well as other transmissions of a sound recording with like effect. (As amended by Republic Act No.10372 or an Act Amending Certain Provisions of Republic Act 8293 otherwise known as the Intellectual Property Code of the Philippines)
BROADCASTING ORGANIZATIONS SEC. 211. Scope of Right. - Subject to the provisions of Section 212, broadcasting organizations shall enjoy the exclusive right to carry out, authorize or prevent any of the following acts: 211.1. The rebroadcasting of their broadcasts; 211.2. The recording in any manner, including the making of films or the use of video tape, of their broadcasts for the purpose of communication to the public of television broadcasts of the same; and 211.3. The use of such records for fresh transmissions or for fresh recording.
ABS-CBN Broadcasting Corporation vs. Philippine Multimedia System, Inc., G.R. Nos. 175769-70, 19 January 2009 Retransmission is not rebroadcasting Under the Rome Convention, rebroadcasting is “the simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting organization.” xxx ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which the viewers receive in its unaltered form. PMSI does not produce, select, or determine the programs to be shown in Channels 2 and 23. Likewise, it does not pass itself off as the origin or author of such programs. Insofar as Channels 2 and 23 are concerned, PMSI merely retransmits the same in accordance with Memorandum Circular 04-08-88. With regard to its premium channels, it buys the channels from content providers and transmits on an as-is basis to its viewers. Clearly, PMSI does not perform the functions of a broadcasting organization; thus, it cannot be said that it is engaged in rebroadcasting Channels 2 and 23.
TERMS OF PROTECTION (§213-214)
Copyrighted Works
Terms of Protec@on
Original and deriva,ve works, as well as posthumous works.
During the life of the author and for fi?y (50) years a?er his death
Works of joint authorship
Economic rights shall be protected during the life of the last surviving author and for fi?y (50) years a?er his death
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TERMS OF PROTECTION (§213-214) Copyrighted Works
Terms of Protec@on
Published Anonymous or pseudonymous works
• fi?y (50) years from the date on which the work was first lawfully published • If the author's iden,ty is revealed or is no longer in doubt before the 50-‐year period, the provisions on original and deriva,ve works , as well as works of joint authorship, shall apply.
Unpublished Anonymous or pseudonymous works
fi?y (50) years counted from the making of the work
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TERMS OF PROTECTION (§213-214) Copyrighted Works works of applied art
Terms of Protec@on twenty-‐five (25) years from the date of making.
photographic works
fi?y (50) years from publica,on of the work and, if unpublished, fi?y (50) years from the making
audio-‐visual works including those produced by process analogous to photography or any process for making audio-‐visual recordings
fi?y (50) years from date of publica,on and, if unpublished, from the date of making
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TERM OF MORAL RIGHTS Sec. 198. Term of Moral Rights. – 198.1. The right[s] of an author under [this chapter] SECTION 193.1 shall last during the lifetime of the author and [for fifty (50) years] IN PERPETUITY after his death [and shall not be assignable or subject to license.] WHILE THE RIGHTS UNDER SECTIONS 193.2, 193.3 AND 193.4 SHALL BE COTERMINOUS WITH THE ECONOMIC RIGHTS, THE MORAL RIGHTS SHALL NOT BE ASSIGNABLE OR SUBJECT TO LICENSE. The person or persons to be charged with the posthumous enforcement of these rights shall be named in [writing to] A WRITTEN INSTRUMENT WHICH SHALL be filed with the National Library. In default of such person or persons, such enforcement shall devolve upon either the author’s heirs, and in default of the heirs, the Director of the National Library. RA No. 10372, Sec. 17 (amend Sec. 198)
LIMITATIONS SEC. 184. Limitations on Copyright. - 184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright: (a) the recitation or performance of a work, once it has been lawfully made accessible to the public, if done privately and free of charge or if made strictly for a charitable or religious institution or society; (Sec. 10(1), P.D. No.49) (b) The making of quotations from a published work if they are compatible with fair use and only to the extent justified for the purpose, including quotations from newspaper articles and periodicals in the form of press summaries: Provided, That the source and the name of the author, if appearing on the work, are mentioned; (Sec. 11, third par., P.D. No. 49)
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LIMITATIONS (c) The reproduction or communication to the public by mass media of articles on current political, social, economic, scientific or religious topic, lectures, addresses and other works of the same nature, which are delivered in public if such use is for information purposes and has not been expressly reserved: Provided, That the source is clearly indicated; (Sec. 11, P.D. No. 49) d) The reproduction and communication to the public of literary, scientific or artistic works as part of reports of current events by means of photography, cinematography or broadcasting to the extent necessary for the purpose; (Sec. 12, P.D. No. 49) (e) The inclusion of a work in a publication, broadcast, or other communication to the public, sound recording or film, if such inclusion is made by way of illustration for teaching purposes and is compatible with fair use: Provided, That the source and of the name of the author, if appearing in the work, are mentioned;
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LIMITATIONS (f) The recording made in schools, universities, or educational institutions of a work included in a broadcast for the use of such schools, universities or educational institutions: Provided, That such recording must be deleted within a reasonable period after they were first broadcast: Provided, further, That such recording may not be made from audiovisual works which are part of the general cinema repertoire of feature films except for brief excerpts of the work; (g) The making of ephemeral recordings by a broadcasting organization by means of its own facilities and for use in its own broadcast; (h) The use made of a work by or under the direction or control of the Government, by the National Library or by educational, scientific or professional institutions where such use is in the public interest and is compatible with fair use;
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ABS-CBN Broadcasting Corporation vs. Philippine Multimedia System, Inc., G.R. Nos. 175769-70, 19 January 2009 Sec. 184. Limitations on Copyright. - 184.1. Notwithstanding the provisions of Chapter V, the following acts shall not constitute infringement of copyright: x x x x (h) The use made of a work by or under the direction or control of the Government, by the National Library or by educational, scientific or professional institutions where such use is in the public interest and is compatible with fair use; The carriage of ABS-CBN’s signals by virtue of the must-carry rule in Memorandum Circular No. 04-08-88 is under the direction and control of the government though the NTC which is vested with exclusive jurisdiction to supervise, regulate and control telecommunications and broadcast services/ facilities in the Philippines. The imposition of the must-carry rule is within the NTC’s power to promulgate rules and regulations, as public safety and interest may require, to encourage a larger and more effective use of communications, radio and television broadcasting facilities, and to maintain effective competition among private entities in these activities whenever the Commission finds it reasonably feasible
Must Carry Rule Obligates operators to carry the signals of local channels within their respective systems. This is to give the people wider access to more sources of news, information, education, sports event and entertainment programs other than those provided for by mass media and afforded television programs to attain a well informed well-versed and culturally refined citizenry and enhance their socio-economic growth (ABS-CBN Broadcasting Corporation v. Philippine Multimedia System, G.R. No. 175769-70, Jan. 19, 2009).
LIMITATIONS (i) The public performance or the communication to the public of a work, in a place where no admission fee is charged in respect of such public performance or communication, by a club or institution for charitable or educational purpose only, whose aim is not profit making, subject to such other limitations as may be provided in the Regulations; (n) (j) Public display of the original or a copy of the work not made by means of a film, slide, television image or otherwise on screen or by means of any other device or process: Provided, That either the work has been published, or, that original or the copy displayed has been sold, given away or otherwise transferred to another person by the author or his successor in title;
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LIMITATIONS k) Any use made of a work for the purpose of any judicial proceedings or for the giving of professional advice by a legal practitioner. And (l) The reproduction or distribution of published articles or materials in a specialized format exclusively for the use of the blind, visuallyand reading-impaired persons: Provided, That such copies and distribution shall be made on a nonprofit basis and shall indicate the copyright owner and the date of the original publication. (As amended by Republic Act No.10372 or an Act Amending Certain Provisions of Republic Act 8293 otherwise known as the Intellectual Property Code of the Philippines)
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PLAGIARISM Plagiarism means the theft of another person’s language, thoughts, or ideas. To plagiarize, is to take (ideas, writings, etc.) from (another) and pass them off as one’s own. The passing off of the work of another as one’s own is thus an indispensable element of plagiarism. (In the matter of the charges of plagiarism against Associate Justice Mariano C. Del Castillo, A.M. No. 10-7-17-SC, 12 October 2010)
Plagiarism presupposes intent and a deliberate, conscious effort to steal another’s work and pass it off as one’s own. (In the matter of the charges of plagiarism against Associate Justice Mariano C. Del Castillo, A.M. No. 10-7-17-SC, 12 October 2010)
EXHAUSTION OF RIGHTS § Concept: One of the limits of intellectual property rights whereby once a protected work has been marketed by the rights holder or with his consent, the IP rights of commercial exploitation over the work can no longer be exercised by the right holder, as they are already exhausted. § Also called the “first sale doctrine”: the rights of commercial exploitation for a given work ends with its first sale. Source: http://www.wipo.int/sme/en/ip_business/export/international_exhaustion.htm
FAIR USE DOCTRINE
SEC. 185. Fair Use of a Copyrighted Work. - 185.1. The fair use of a copyrighted work for criticism, comment, news reporting, teaching including limited number of copies for classroom use, scholarship, research, and similar purposes is not an infringement of copyright. Decompilation, which is understood here to be the reproduction of the code and translation of the forms of a computer program to achieve the interoperability of an independently created computer program with other programs may also constitute fair use under the criteria established by this section, to the extent that such decompilation is done for the purpose of obtaining the information necessary to achieve such interoperability.
In determining whether the use made of a work in any particular case is fair use, the factors to be considered shall include: (a) The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes; (b) The nature of the copyrighted work; (c) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (d) The effect of the use upon the potential market for or value of the copyrighted work.
Fair use has been defined as a privilege to use the copyright material in a reasonable manner without the consent of the copyright owner or as copying the theme or ideas rather than their expression. No question of fair or unfair use arises however, if no copying is proved to begin with. This is in consonance with the principle that there can be no infringement if there was no copying. It is only where some form of copying has been shown that it becomes necessary to determine whether it has been carried to an “unfair,” that is, illegal, extent. (Habana vs. Robles, G.R. No. 131522, 19 July 1999)
ABS CBN Corp. vs. Gozon, et al. G.R. No. 195956, March 11, 2015
q Infringement under the Intellectual Property Code is malum prohibitum. The Intellectual Property Code is a special law. Copyright is a statutory creation. q The general rule is that acts punished under a special law are malum prohibitum. "An act which is declared malum prohibitum, malice or criminal intent is completely immaterial.” q In its current form, the Intellectual Property Code is malum prohibitum and prescribes a strict liability for copyright infringement. Good faith, lack of knowledge of the copyright, or lack of intent to infringe is not a defense against copyright infringement. Copyright, however, is subject to the rules of fair use and will be judged on a case-to-case basis.
COPYRIGHT INFRINGEMENT “SEC. 216. Infringement. – A person infringes a right protected under this Act when one: (a) Directly commits an infringement; (b) Benefits from the infringing activity of another person who commits an infringement if the person benefiting has been given notice of the infringing activity and has the right and ability to control the activities of the other person; (c) With knowledge of infringing activity, induces, causes or materially contributes to the infringing conduct of another. As amended by Sec. 22 of RA 10372
SEC. 217. Criminal Penalties. - 217.1. Any person infringing any right secured by provisions of Part IV of this Act or aiding or abetting such infringement shall be guilty of a crime punishable by:
Habana vs. Robles, G.R. No. 131522, 19 July 1999 In cases of infringement, copying alone is not what is prohibited. The copying must produce an “injurious effect”. Here, the injury consists in that respondent Robles lifted from petitioners’ book materials that were the result of the latter’s research work and compilation and misrepresented them as her own. She circulated the book DEP for commercial use and did not acknowledge petitioners as her source. Hence, there is a clear case of appropriation of copyrighted work for her benefit that respondent Robles committed. xxx xxx Quotations from a published work if they are compatible with fair use and only to the extent justified by the purpose, including quotations from newspaper articles and periodicals in the form of press summaries are allowed provided that the source and the name of the author, if appearing on the work, are mentioned. In the case at bar, the least that respondent Robles could have done was to acknowledge petitioners Habana et. al. as the source of the portions of DEP. The final product of an author’s toil is her book. To allow another to copy the book without appropriate acknowledgment is injury enough.
“171.12 ‘Technological measure’ means any technology, device or component that, in the normal course of its operation, restricts acts in respect of a work, performance or sound recording, which are not authorized by the authors, performers or producers of sound recordings concerned or permitted by law.” RA No. 10372, Sec. 6 (amend Sec. 171) Example: crytography, password, digital signature, scrambling system for DVD and serial copy management system
“171.13 ‘Rights management information’ means information which identifies the work, sound recording or performance; the author of the work, producer of the sound recording or performer of the performance; the owner of any right in the work, sound recording or performance; or information about the terms and conditions of the use of the work, sound recording or performance; and any number or code that represent such information, when any of these items is attached to a copy of the work, sound recording or fixation of performance or appears in conjunction with the communication to the public of a work, sound recording or performance.” Sec. 6 (amend Sec. 171) Example: Watermark, digital signature
216.1 Remedies for Infringement. - Any person infringing a right protected under this law shall be liable: x x x (b) TO [P]pay to the copyright proprietor or his assigns or heirs such actual damages, including legal costs and other expenses, as he may have incurred due to the infringement as well as the profits the infringer may have made due to such infringement, and in proving profits the plaintiff shall be required to prove sales only and the defendant shall be required to prove every element of cost which he claims, or, in lieu of actual damages and profits, such damages which to the court shall appear to be just and shall not be regarded as penalty: PROVIDED, THAT THE AMOUNT OF DAMAGES TO BE AWARDED SHALL BE DOUBLED AGAINST ANY PERSON WHO: Sec. 22 (amend Sec. 216)
(i) CIRCUMVENTS EFFECTIVE TECHNOLOGICAL MEASURES; OR (ii) HAVING REASONABLE GROUNDS TO KNOW THAT IT WILL INDUCE, ENABLE, FACILITATE OR CONCEAL THE INFRINGEMENT, REMOVE OR ALTER ANY ELECTRONIC RIGHTS MANAGEMENT INFORMATION FROM A COPY OF A WORK, SOUND RECORDING, OR FIXATION OF A PERFORMANCE, OR DISTRIBUTE, IMPORT FOR DISTRIBUTION, BROADCAST, OR COMMUNICATE TO THE PUBLIC WORKS OR COPIES OF WORKS WITHOUT AUTHORITY, KNOWING THAT ELECTRONIC RIGHTS MANAGEMENT INFORMATION HAS BEEN REMOVED OR ALTERED WITHOUT AUTHORITY. x x x Sec. 22 (amend Sec. 216)
AFFIDAVIT EVIDENCE SEC. 218. Affidavit Evidence. - 218.1.In an action under this Chapter, an affidavit made before a notary public by or on behalf of the owner of the copyright in any work or other subject matter and stating that: (a) At the time specified therein, copyright subsisted in the work or other subject matter; (b) He or the person named therein is the owner of the copyright; and (c) The copy of the work or other subject matter annexed thereto is a true copy thereof. The affidavit shall be admitted in evidence in any proceedings under this Chapter and shall be prima facie proof of the matters therein stated until the contrary is proved, and the court before which such affidavit is produced shall assume that the affidavit was made by or on behalf of the owner of the copyright.
2007 BAR EXAMINATION Diana and Piolo are famous personalities in showbusiness who kept their love affair secret. They use a special instant messaging service which allows them to see one another’s typing on their own screen as each letter key is pressed. When Greg, the controller of the service facility, found out their identities, he kept a copy of all the messages Diana and Piolo sent each other and published them. Is Greg liable for copyright infringement? Reason briefly.
2012 BAR EXAMINATION The Fair Use Doctrine allows others to utilize copyrighted works under certain conditions. The factors to consider whether use is fair or not would be the purpose and character of the use, nature of the copyrighted work, amount and substantiality of the portions used, and what else? A) effect of the use upon the creator of the work; B) effect of the use upon the potential market of the work. C) effect of the use upon the public in general; D) effect of the use upon the class in which the creator belongs.
2011 BAR EXAMINATION T, an associate attorney in XYZ Law Office, wrote a newspaper publisher a letter disputing a columnist’s claim about an incident in the attorney’s family. T used the law firm’s letterhead and its computer in preparing the letter. T also requested the firm’s messenger to deliver the letter to the publisher. Who owns the copyright to the letter? A.T, since he is the original creator of the contents of the letter. B. Both T and the publisher, one wrote the letter to the other who has possession of it. C. The law office since T was an employee and he wrote it on the firm’s letterhead. D. The publisher to whom the letter was sent.
2011 BAR EXAMINATION X came up with a new way of presenting a telephone directory in a mobile phone, which he dubbed as the “iTel” and which uses lesser time for locating names and telephone numbers. May X have his “iTel” copyrighted in his name? A. No, because it is a mere system or method. B. Yes, because it is an original creation. C. Yes, because it entailed the application of X’s intellect. D. No, because it did not entail any application of X’s intellect.
2012 BAR EXAMINATION
X's painting of Madonna and Child was used by her mother to print some personalized gift wrapper. As part of her mother's efforts to raise funds for Bantay Bata, the mother of X sold the wrapper to friends. Y, an entrepeneur, liked the painting in the wrapper and made many copies and sold the same through National Bookstore. Which statement is most accurate? a) Y can use the painting for his use because this is not a copyrightable material. b) X can sue Y for infringement because artistic works are protected from moment of creation. c) Works of art need to be copyrighted also to get protection under the law. d) Y can use the drawing even though not copyrighted because it is already a public property having been published already.
2013 BAR EXAMINATION Rudy is a fine arts student in a university. He stays in a boarding house with Bernie as his roommate. During his free time, Rudy would paint and leave his finished works lying around the boarding house. One day, Rudy saw one of his works — an abstract painting entitled Manila Traffic Jam — on display at the university cafeteria. The cafeteria operator said he purchased the painting from Bernie who represented himself as its painter and owner.Rudy and the cafeteria operator immediately confronted Bernie. While admitting that he did not do the painting, Bernie claimed ownership of its copyright since he had already registered it in his name with the National Library as provided in the Intellectual Property Code. Who owns the copyright to the painting? Explain. (8%)
2015 Bar Question
XIV A. Differentiate trademark, copyright, and patent from each other. (6%) B. What is the Doctrine of Equivalents? (2%) C. In what ways would an infringement of trademark be different from a case for unfair competition? (3%)
PATENTS
GENERAL PRINCIPLES The primary purpose of the patent system is not the reward of the individual but the advancement of the arts and sciences. The function of a patent is to add to the sum of useful knowledge and one of the purposes of the patent system is to encourage dissemination of information concerning discoveries and inventions. (Manzano v. Court of Appeals, G.R. No. 113388, 05 September 1997) The patent law has a three fold purpose: 1. patent law seeks to foster and reward invention; 2. it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; and 3. the stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the free use of the public. (Pearl & Dean (Phil.), Incorporated v. Shoemart, Incorporated, G.R. No. 148222, 15 August 2003)
GENERAL PRINCIPLES
1. TERRITORIAL – patent should be registered in the jurisdiction to be protected 2. EXCLUSIVE – patents grants the holder the right to exclude others from making, using, selling, offering for sale or importing products or process. This is a monopoly but no obligation to commercialize invention. 3. DISCLOSURE – the need for publication and disclosure. It must be sufficient so that it can be carried out by the person skilled in the art 4. LIMITED RIGHTS – rights granted are subject to limitations, e.g.public policy, public health 5. CONDITIONAL – patent rights subject to compliance with criteria and conditions both prior to and subsequent to grant 6. FIRST TO FILE RULE – priority in right is the first person/applicant who filed an application subject to principle of bad faith
PATENTABLE INVENTIONS (§21, IP Code)
Any technical solution of a problem in any field of human activity which is: 1. NEW - Novel, no prior art, or disclosure 2. INVENTIVE STEP - Not obvious to the person skilled in the art 3. INDUSTRIALLY APPLICABLE – Useful, beneficial, and that it can be produced and used
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PATENTABLE INVENTIONS (§21, IP Code)
PRODUCT - e.g. machine, a device, an article of manufacture, a composition of matter, a microorganism PROCESS - e.g. a method of use, a method of manufacturing, a non-biological process, a microbiological process IMPROVEMENT – enhancement or modification of any of the foregoing subject to patentability criteria
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REQUIREMENTS FOR PROTECTION (§23 to 27, IP Code) 1. NOVELTY – An invention shall not be considered new if it forms part of a prior art. Prior art is: (a) Everything which has been made available to the public anywhere in the world, before the filing date or the priority date of the application claiming the invention; and (b) The whole contents of an earlier published Philippine application or application with earlier priority date of a different inventor.
N.B. Novelty is not something which can be proved or established; only its absence can be proved. Prior disclosure must not be confidential or restricted.
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NON-PREJUDICIAL DISCLOSURE Not Prejudicial to the filing of an Application: 1. Disclosure by the Inventor (Patent) or Maker (Utility Model) or one with the right to the patent (N.B. must be filed within one (1) year from the time of disclosure) 2. Disclosure by the Designer (Industrial Design) (N.B. must be filed within six (6) months from the time of disclosure)
2. INVENTIVE STEP – having regard to prior art, it is not obvious to a person skilled in the art at the time of the filing date or priority date of the application claiming the invention. • For drugs and medicines, there is no inventive step if the invention results from the mere discovery of: (a) a new form or property of a known substance if it does not enhance the efficacy of the substance; (b) any new property or new use for a known substance; or (c) the mere use of a known process unless such process results in a new product that employs at least one new reactant. (§6, Cheaper Medicines Act)
3.
INDUSTRIALLY APPLICABLE - If the invention can be produced and used in any industry
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NON PATENTABLE INVENTIONS (Sec. 22 IP Code) 1. Discoveries, scientific theories and mathematical methods; (N.B. Drugs and medicines per RA No. 9502) 2. Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers; 3. Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body; 4. Plant varieties or animal breeds or essentially biological process for the production of plants or animals. This provision shall not apply to micro- organisms and non-biological and microbiological processes. (N.B. see Plant Variety Act) 5. Aesthetic creations; and 6. Anything which is contrary to public order or morality.
NON PATENTABLE DRUGS AND MEDICINES 1. New form or new property of a known substance which does not result in the enhancement of the known efficacy of that substance. 2. New property or new use for a known substance◦ e.g. second medical use. 3. The mere use of a known process unless such known process results in a new product that employs at least one new reactant. e.g. use of a process for manufacturing drug A in the manufacture of drug B
RIGHT TO A PATENT SEC. 28. Right to a Patent. -The right to a patent belongs to the inventor, his heirs, or assigns. When two (2) or more persons have jointly made an invention, the right to a patent shall belong to them jointly. (Sec. 10, R.A. No. 165a) SEC. 30. Inventions Created Pursuant to a Commission. -30.1. The person who commissions the work shall own the patent, unless otherwise provided in the contract. 30.2. In case the employee made the invention in the course of his employment contract, the patent shall belong to: (a) The employee, if the inventive activity is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer. (b) The employer, if the invention is the result of the performance of his regularly assigned duties, unless there is an agreement, express or implied, to the contrary.
FIRST TO FILE RULE SEC. 29. First to File Rule. - If two (2) or more persons have made the invention separately and independently of each other, the right to the patent shall belong to the person who filed an application for such invention, or where two or more applications are filed for the same invention, to the applicant who has the earliest filing date or, the earliest priority date.
PRIORITY DATE RIGHT OF PRIORITY FOR INVENTIONS ALREADY APPLIED FOR IN OTHER COUNTRIES (§31, IP Code) (a) the local application expressly claims priority; (b) it is filed within twelve (12) months from the date the earliest foreign application was filed; and (c) a certified copy of the foreign application together with an English translation is filed within six (6) months from the date of filing in the Philippines
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THREE (3) MAIN AREAS OF ACTVITY IN THE GRANT OF PATENT
• examination as to form or formality examination; • classification, search and first publication; and • examination as to substance or substantive examination
CLAIMS The application for invention must contain claims which determine the scope of the protection. The patent application must conclude with a claim, particularly pointing out and distinctly claiming the part, improvement, or combination which the applicant regards as his invention. The claims must be clear and concise and fully supported by the description. This third basic requirement is important since the claims are the basis of interpretation of patent protection. It is from the claims that third parties are able to know what they may do and what they may not do. The claims may not be significantly broader or different from that which has been described. The claims are the center or the heart of any granted patent because they define the protection which is the purpose of the patent, that is to say, they define clearly the scope of the exclusive right provided by the patent. WIPO Handbook, Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No. 489 (E), 2nd Edition, page 22.
RIGHTS CONFERRED BY A PATENT (Sec. 71) A patent shall confer on its owner the following exclusive rights: (a) Where the subject matter of a patent is a PRODUCT, to restrain, prohibit and prevent any unauthorized person or entity from making, using, offering for sale, selling or importing that product; (b) Where the subject matter of a patent is a PROCESS, to restrain, prevent or prohibit any unauthorized person or entity from using the process, and from manufacturing, dealing in, using, selling or offering for sale, or importing any product obtained directly or indirectly from such process. 71.2. Patent owners shall also have the right to assign, or transfer by succession the patent, and to conclude licensing contracts for the same.
RIGHTS CONFERRED AFTER PUBLICATION OF APPLICATION, BUT BEFORE GRANT OF PATENT (§46, IP Code)
All the rights of a patentee against any person who infringes his rights, as if a patent had been granted for that invention: Actual knowledge of infringer that the invention that he was using was the subject matter of a published application; or Received written notice that the invention that he was using was the subject matter of a published application being identified in the said notice by its serial number.
N.B. The action may not be filed until after the grant of a patent on the published application and within four (4) years from the commission of the acts complained of.
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LEGAL REMEDIES TESTS OF PATENT INFRINGEMENT (§75) • LITERAL INFRINGEMENT - The extent of protection conferred by the patent shall be determined by the claims, which are to be interpreted in the light of the description and drawings. • DOCTRINE OF EQUIVALENTS - Account shall be taken of elements which are equivalent to the elements expressed in the claims, so that a claim shall be considered to cover not only all the elements as expressed therein, but also equivalents.
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LITERAL INFRINGEMENT – In using literal infringement, resort must be had, in the first instance, to the words of the claim. If accused matter clearly falls within the claim, infringement is made out and that is the end of it. To determine whether the particular item falls within the literal meaning of the patent claims, the Court must juxtapose the claims of the patent and the accused product within the overall context of the claims and specifications, to determine whether there is exactly identity of all material elements. (Godines v. The Honorable Court of Appeals, G.R. No. 97343, 13 September 1993)
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DOCTRINE OF EQUIVALENTS - According to the doctrine of equivalents, an infringement also occurs when a device appropriates a prior invention by incorporating its innovative concept and, despite some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result. (Godines v. The Honorable Court of Appeals, G.R. No. 97343, 13 September 1993)
The doctrine of equivalents thus requires satisfaction of the function means and-result test, the patentee having the burden to show that all three components of such equivalency test are met. (Smithkline Beckman Corporation vs. The Honorable Court of Appeals, G.R. No. 126627, 14 August 2003)
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GROUNDS FOR CANCELLATION OF PATENT (§61 and 82) Any interested person may file a petition for cancellation of the Patent or any claim included therein, on the following grounds: a. That what is claimed as the invention is not new or patentable; b. That the patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by any person skilled in the art; or c. That the patent is contrary to public order or morality.
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REMEDIES OF THE TRUE & ACTUAL INVENTOR AGAINST PATENT APPLICATION BY PERSONS NOT HAVING THE RIGHT TO A PATENT (§67, IP CODE) If a court by final order or decision declares that the first filer of the application (under the first to file system) is not the true inventor and does not have the right to the patent, within three (3) months after the court decision has become final, the person declared by the court as having the right to the patent may: a) Prosecute the application as his own application in place of the applicant; b) File a new patent application in respect of the same invention; c) Request that the application be refused; or d) Seek cancellation of the patent, if one has already been issued.
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REMEDIES OF THE TRUE & ACTUAL INVENTOR If a person, who was deprived of the patent without his consent or through fraud is declared by final court order or decision to be the true and actual inventor, the court shall order for his substitution as patentee, or at the option of the true inventor, cancel the patent, and award actual and other damages in his favor if warranted by the circumstances. (§68, IP CODE)
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LIMITATIONS ON PATENT RIGHTS (§72 AS AMENDED BY CHEAPER MEDICINES ACT) - The owner of a patent has no right to prevent third parties from making, using, offering for sale, selling or importing a patented product in the following circumstances: 1. Using a patented product after it has been put on the market in the Philippines by the owner of the product, or with his express consent: Except: Drugs or medicines. We apply international exhaustion. Right to import the drugs and medicines under this provision shall be available to any government agency or any private third party.
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PARALLEL IMPORTATION - Unauthorized importation of a patented drug or medicine; and drugs or medicines obtained from a patented process. GENERAL RULE – under Section 71 (a) and (b) of the IP Code, the patentee of drugs and medicines has the exclusive right to prevent any unauthorized person from importing a patented product or one that is obtained from a patented process. EXCEPTION – under the Cheaper Medicines Act, the patent owner of drugs and medicines can no longer prevent an unauthorized person from using that product once it has been has been introduced in the Philippines or anywhere else in the world by the patent owner, or by any party authorized to use the invention. Any government agency or any private third party may also import such products.
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LIMITATIONS ON PATENT RIGHTS (§72 AS AMENDED BY CHEAPER MEDICINES ACT) 2. Where the act is done privately and on a noncommercial scale or for a non-commercial purpose: Provided, That it does not significantly prejudice the economic interests of the owner of the patent; 3. Where the act consists of making or using exclusively for experimental use of the invention for scientific purposes or educational purposes and such other activities directly related to such scientific or educational experimental use;
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LIMITATIONS ON PATENT RIGHTS (§72 AS AMENDED BY CHEAPER MEDICINES ACT) 4. In the case of drugs and medicines, where the act includes testing, using, making or selling the invention including any data related thereto, solely for purposes reasonably related to the development and submission of information and issuance of approvals by government regulatory agencies required under any law of the Philippines or of another country that regulates the manufacture, construction, use or sale of any product: The data submitted by the original patent holder may be protected from unfair commercial use provided in Article 39.3 of the TRIPS Agreement.
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LIMITATIONS ON PATENT RIGHTS (§72 AS AMENDED BY CHEAPER MEDICINES ACT) 5. Where the act consists of the preparation for individual cases, in a pharmacy or by a medical professional, of a medicine in accordance with a medical prescription or acts concerning the medicine so prepared. 6. Where the invention is used in any ship, vessel, aircraft, or land vehicle of any other country entering the territory of the Philippines temporarily or accidentally: Provided, That such invention is used exclusively for the needs of the ship, vessel, aircraft, or land vehicle and not used for the manufacturing of anything to be sold within the Philippines.
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PRIOR USER IN GOOD FAITH (§73, IP CODE) • Any prior user, who, in good faith was using the invention or has undertaken serious preparations to use the invention in his enterprise or business, before the filing date or priority date of the application on which a patent is granted, shall have the right to continue the use thereof as envisaged in such preparations within the territory where the patent produces its effect. • The right of the prior user may only be transferred or assigned together with his enterprise or business, or with that part of his enterprise or business in which the use or preparations for use have been made.
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USE BY GOVERNMENT (§74) SEC. 74. Use of Invention by Government. - 74.1. A Government agency or third person authorized by the Government may exploit the invention even without agreement of the patent owner where: (a) The public interest, in particular, national security, nutrition, health or the development of other sectors, as determined by the appropriate agency of the government, so requires; or (b) A judicial or administrative body has determined that the manner of exploitation, by the owner of the patent or his licensee, is anticompetitive; or (c) In the case of drugs and medicines, there is a national emergency or other circumstance of extreme urgency requiring the use of the invention; or (d) In the case of drugs and medicines, there is a public non- commercial use of the patent by the patentee, without satisfactory reason; or (e) In the case of drugs and medicines, the demand for the patented article in the Philippines is not being met to an adequate extent and on reasonable terms, as determined by the Secretary of the Department of Health.
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USE BY GOVERNMENT (§74) 74.2. Unless otherwise provided herein, the use by the Government, or third person authorized by the Government shall be subject, where applicable, to the following provisions: (a) In situations of national emergency or other circumstances of extreme urgency as provided under Section 74.1 (c), the right holder shall be notified as soon as reasonably practicable; (b) In the case of public non-commercial use of the patent by the patentee, without satisfactory reason, as provided under Section 74.1 (d), the right holder shall be informed promptly: Provided, That, the Government or third person authorized by the Government, without making a patent search, knows or has demonstrable ground to know that a valid patent is or will be used by or for the Government; (c) If the demand for the patented article in the Philippines is not being met to an adequate extent and on reasonable terms as provided under Section 74.1 (e), the right holder shall be informed promptly;
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USE BY GOVERNMENT (§74) 74.2. Unless otherwise provided herein, the use by the Government, or third person authorized by the Government shall be subject, where applicable, to the following provisions: (d) The scope and duration of such use shall be limited to the purpose for which it was authorized; (e) Such use shall be non-exclusive; (f) The right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization; and (g) The existence of a national emergency or other circumstances of extreme urgency, referred to under Section 74.1 (c), shall be subject to the determination of the President of the Philippines for the purpose of determining the need for such use or other exploitation, which shall be immediately executory.
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USE BY GOVERNMENT (§74)
74.3. All cases arising from the implementation of this provision shall be cognizable by courts with appropriate jurisdiction provided by law. No court, except the Supreme Court of the Philippines, shall issue any temporary restraining order or preliminary injunction or such other provisional remedies that will prevent its immediate execution. 74.4. The Intellectual Property Office (IPO), in consultation with the appropriate government agencies, shall issue the appropriate implementing rules and regulations for the use or exploitation of patented inventions as contemplated in this section within one hundred twenty (120) days after the effectivity of this law. (As amended by Republic Act No.9502 or the Universally Accessible Cheaper and Quality Medicines Act of 2008)
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LEGAL REMEDIES SEC. 76. Civil Action for Infringement. -76.1. The making, using, offering for sale, selling, or importing a patented product or a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorization of the patentee constitutes patent infringement. Provided, That, this shall not apply to instances covered by Sections 72.1 and 72.4 (Limitations of Patent Rights); Section 74 (Use of Invention by Government); Section 93.6 (Compulsory Licensing); and Section 93-A (Procedures on Issuance of a Special Compulsory License under the TRIPS Agreement) of this Code. (As amended by Republic Act No.9502 or the Universally Accessible Cheaper and Quality Medicines Act of 2008) 76.2. Any patentee, or anyone possessing any right, title or interest in and to the patented invention, whose rights have been infringed, may bring a civil action before a court of competent jurisdiction, to recover from the infringer such damages sustained thereby, plus attorney’s fees and other expenses of litigation, and to secure an injunction for the protection of his rights. 76.3. If the damages are inadequate or cannot be readily ascertained with reasonable certainty, the court may award by way of damages a sum equivalent to reasonable royalty.
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LEGAL REMEDIES 76.4. The court may, according to the circumstances of the case, award damages in a sum above the amount found as actual damages sustained: Provided, That the award does not exceed three (3) times the amount of such actual damages. 76.5. The court may, in its discretion, order that the infringing goods, materials and implements predominantly used in the infringement be disposed of outside the channels of commerce or destroyed, without compensation; and 76.6. Anyone who actively induces the infringement of a patent or provides the infringer with a component of a patented product or of a product produced because of a patented process knowing it to be especially adopted for infringing the patented invention and not suitable for substantial non-infringing use shall be liable as a contributory infringer and shall be jointly and severally liable with the infringer.
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LEGAL REMEDIES NOTICE REQUIREMENT FOR DAMAGES (§80) Damages cannot be recovered for acts of infringement committed before the infringer had known, or had reasonable grounds to know of the patent. It is presumed that the infringer had known of the patent if on the patented product, or on the container or package in which the article is supplied to the public, or on the advertising material relating to the patented product or process, are placed the words "Philippine Patent" with the number of the patent.
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LEGAL REMEDIES PRESCRIPTIVE PERIOD FOR CIVIL ACTION (§79) No damages can be recovered for acts of infringement committed more than four (4) years before the institution of the action for infringement. PRESCRIPTIVE PERIOD FOR CRIMINAL ACTION (§84) The criminal action shall prescribe in three (3) years from date of the commission of the crime.
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Technology Transfer Agreements Provides requirements to prevent practices that may constitute an abuse of intellectual property rights having an adverse effect on competition and trade: (1) No prohibited clauses that are deemed prima facie to have an adverse effect on competition (Section 87, Intellectual Property Code) (2) Should contain certain mandatory clauses (Section 88, Intellectual Property Code)
LICENSING OF PATENTS: VOLUNTARY LICENSING PROHIBITED CLAUSES (§87) - The following provisions shall be deemed prima facie to have an adverse effect on competition and trade: 1. Those which impose upon the licensee the obligation to acquire from a specific source capital goods, intermediate products, raw materials, and other technologies, or of permanently employing personnel indicated by the licensor; 2. Those pursuant to which the licensor reserves the right to fix the sale or resale prices of the products manufactured on the basis of the license; 3. Those that contain restrictions regarding the volume and structure of production;
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LICENSING OF PATENTS: VOLUNTARY LICENSING PROHIBITED CLAUSES (§87) - The following provisions shall be deemed prima facie to have an adverse effect on competition and trade: 4. Those that prohibit the use of competitive technologies in a non-exclusive technology transfer agreement; 5. Those that establish a full or partial purchase option in favor of the licensor; 6. Those that obligate the licensee to transfer for free to the licensor the inventions or improvements that may be obtained through the use of the licensed technology; 7. Those that require payment of royalties to the owners of patents for patents which are not used;
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LICENSING OF PATENTS: VOLUNTARY LICENSING PROHIBITED CLAUSES (§87) - The following provisions shall be deemed prima facie to have an adverse effect on competition and trade: (8) Those that prohibit the licensee to export the licensed product unless justified for the protection of the legitimate interest of the licensor such as exports to countries where exclusive licenses to manufacture and/or distribute the licensed product(s) have already been granted; (9) Those which restrict the use of the technology supplied after the expiration of the technology transfer arrangement, except in cases of early termination of the technology transfer arrangement due to reason(s) attributable to the licensee;
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LICENSING OF PATENTS: VOLUNTARY LICENSING PROHIBITED CLAUSES (§87) - The following provisions shall be deemed prima facie to have an adverse effect on competition and trade: 10. Require payments for patents and other industrial property rights after their expiration, termination [of the] arrangement; 11. Require that the technology recipient shall not contest the validity of any of the patents of the technology supplier; 12. Restrict the research and development activities of the licensee designed to absorb and adapt the transferred technology to local conditions or to initiate research and development programs in connection with new products, processes or equipment;
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LICENSING OF PATENTS: VOLUNTARY LICENSING PROHIBITED CLAUSES (§87) - The following provisions shall be deemed prima facie to have an adverse effect on competition and trade: 13. Prevent the licensee from adapting the imported technology to local conditions, or introducing innovation to it, as long as it does not impair the quality standards prescribed by the licensor; 14. Exempt the licensor for liability for non-fulfillment of his responsibilities under the technology transfer arrangement and/or liability arising from third party suits brought about by the use of the licensed product or the licensed technology; and 15. Other clauses with equivalent effects.
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LICENSING OF PATENTS: VOLUNTARY LICENSING MANDATORY PROVISIONS (§88) - The following provisions shall be included in voluntary license contracts: 1. That the laws of the Philippines shall govern the interpretation of the same and in the event of litigation, the venue shall be the proper court in the place where the licensee has its principal office; 2. Continued access to improvements in techniques and processes related to the technology shall be made available during the period of the technology transfer arrangement;
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LICENSING OF PATENTS: VOLUNTARY LICENSING MANDATORY PROVISIONS (§88) - The following provisions shall be included in voluntary license contracts: 3. In the event the technology transfer arrangement shall provide for arbitration, the Procedure of Arbitration of the Arbitration Law of the Philippines or the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL) or the Rules of Conciliation and Arbitration of the International Chamber of Commerce (ICC) shall apply and the venue of arbitration shall be the Philippines or any neutral country; and 4. The Philippine taxes on all payments relating to the technology transfer arrangement shall be borne by the licensor.
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Prohibited Clauses (Sec. 87, RA No. 8293) (1) tying arrangements; (2) price restraints; (3) restric,ons on volume and produc,on; (4) Prohibi,on to use compe,,ve technologies in a non-‐exclusive TTA; (5) purchase op,on in favor of licensor; (6) exclusive grantback condi,ons; (7) royalty payments for unused patents; (8) export restric,ons; (9) restric,on on technology use upon expiry of agreement; (10) royalty payments for expired intellectual property rights; (11) non-‐challenges to patent validity; (12) restric,ons to adapta,ons of the technology; (13) non-‐liability clause or exemp,on from liability arising from non-‐ fulfillment of obliga,ons; and (14) other clauses with similar effects.
Mandatory Clauses (Sec. 88, RA No. 8293) 1. Philippine laws shall govern the interpreta,on of TTAs 2. Access to improvements in techniques and processes for the dura,on of the TTA 3. Arbitra,on rules shall follow Philippine law or UNCITRAL or ICC 4. Licensor pays all local taxes rela,ng to the TTA
Legal Implications
(on failure to comply with Sec,ons 87 and 88 of the IP Code)
General Rule: TTA shall be rendered unenforceable. Excep@on: When TTA is registered with IPOPHL pursuant to the provisions of Sec,on 91 on excep,onal or meritorious cases: (1) high technology content (2) increase in foreign exchange earnings (3) employment genera,on (4) regional dispersal of industries (5) subs,tu,on with or use of local raw materials (6) investment companies with pioneer status TTAs that contain any of the prohibited clauses may be allowed and registered where any of the excep,onal or meritorious cases are present.
Compulsory Licensing Compulsory licensing is also one of the mechanisms that address an,-‐compe,,ve behavior. Several types of compulsory licenses may be issued under the Intellectual Property Code: i. government-‐use and government contractor-‐use compulsory license (Sec@on 74, IP Code) ii. third party-‐use compulsory license (Sec@on 93, IP Code) iii. a special compulsory license (Sec@on 93-‐A, IP Code) iv. compulsory licensing based on interdependence of patents (Sec@on 97, IP Code)
LICENSING OF PATENTS: COMPULSORY LICENSING GROUNDS FOR COMPULSORY LICENSING – The Director General of the Intellectual Property Office may grant a license to exploit a patented invention, even without the agreement of the patent owner, in favor of any person who has shown his capability to exploit the invention, under any of the following circumstances: 1. National emergency or other circumstances of extreme urgency; 2. Where the public interest, in particular, national security, nutrition, health or the development of other vital sectors of the national economy as determined by the appropriate agency of the Government, so requires; • May be applied for at any time after grant of patent.
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LICENSING OF PATENTS: COMPULSORY LICENSING GROUNDS FOR COMPULSORY LICENSING 4. Where a judicial or administrative body has determined that the manner of exploitation by the owner of the patent or his licensee is anti-competitive; May be applied for at any time after the grant of the patent. 5. In case of public non-commercial use of the patent by the patentee, without satisfactory reason; May be applied for at any time after the grant of the patent.
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LICENSING OF PATENTS: COMPULSORY LICENSING GENERAL RULE - the license will only be granted after the petitioner has made efforts to obtain authorization from the patent owner on reasonable commercial terms and conditions but such efforts have not been successful within a reasonable period of time. EXCEPTIONS– the requirement shall not apply in the following cases: a) Where the petition for compulsory license seeks to remedy a practice determined after judicial or administrative process to be anti-competitive; b) In situations of national emergency or other circumstances of extreme urgency; c) In cases of public non-commercial use.
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LICENSING OF PATENTS: COMPULSORY LICENSING In situations of national emergency or other circumstances of extreme urgency, the right holder shall be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly.
N.B. Compulsory Licensing of Patents Involving SemiConductor Technology. - the license may only be granted in case of public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive.
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LICENSING OF PATENTS: COMPULSORY LICENSING Compulsory License Based on Interdependence of Patents. - If the invention protected by a patent ("second patent“) within the country cannot be worked without infringing another patent ("first patent”) granted on a prior application or benefiting from an earlier priority, a compulsory license may be granted to the owner of the second patent to the extent necessary for the working of his invention, subject to the following conditions: 1. The invention claimed in the second patent involves an important technical advance of considerable economic significance in relation to the first patent; 2. Owner of the first patent shall be entitled to a cross-license on reasonable terms to use the invention claimed in the second patent;
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LICENSING OF PATENTS: COMPULSORY LICENSING Compulsory License Based on Interdependence of Patents. - If the invention protected by a patent ("second patent“) within the country cannot be worked without infringing another patent ("first patent”) granted on a prior application or benefiting from an earlier priority, a compulsory license may be granted to the owner of the second patent to the extent necessary for the working of his invention, subject to the following conditions: 3. The use authorized in respect of the first patent shall be nonassignable except with the assignment of the second patent; and 4. The terms and conditions applicable to compulsory licenses in general.
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ASSIGNMENT AND TRANSMISSION OF RIGHTS TRANSMISSION OF RIGHTS (§103, IP Code) Patents or applications for patents and invention to which they relate, shall be protected in the same way as the rights of other property under the Civil Code. Inventions and any right, title or interest in and to patents and inventions covered thereby, may be assigned or transmitted by inheritance or bequest or may be the subject of a license contract.
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ASSIGNMENT AND TRANSMISSION OF RIGHTS ASSIGNMENT OF INVENTIONS (§104, IP CODE) An assignment may be of the entire right, title or interest in and to the patent and the invention covered thereby, or of an undivided share of the entire patent and invention, in which event the parties become joint owners thereof. An assignment may be limited to a specified territory. Form of Assignment (§105 and 106, IP Code) 1. Must be in writing; 2. Notarized; 3. Recorded in the IPO, otherwise void as against any subsequent purchaser or mortgagee for valuable consideration and without notice, unless recorded in the Office within three (3) months from date of instrument or prior to subsequent purchase or mortgage.
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ASSIGNMENT AND TRANSMISSION OF RIGHTS RIGHTS OF JOINT OWNERS (§107, IP CODE) If two (2) or more persons jointly own a patent and the invention covered thereby, each of the joint owners shall be entitled to personally make, use, sell, or import the invention for his own profit Provided, however, That neither of the joint owners shall be entitled to grant licenses or to assign his right, title or interest or part thereof without the consent of the other owner or owners, or without proportionally dividing the proceeds with such other owner or owners.
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UTILITY MODEL - An invention qualifies for registration as a utility model if it is new and industrially applicable. (§109, IP Code) Utility models differ from inventions for which patents for invention are available mainly in two respects. First, the technological progress required is smaller than the technological progress (“inventive step”) required in the case of an invention for which a patent for invention is available. Second, the maximum term of protection provided in the law for a utility model is generally much shorter than the maximum term of protection provided in the law for an invention for which a patent for invention is available. (WIPO Handbook, Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No. 489 (E), 2nd Edition, p. 40.)
The provisions regarding non-patentable subject-matter, industrial applicability, novelty and sufficiency of disclosure under invention patent will apply, mutatis mutandis, to utility models. (Revised Implementing Rules & Regulations for RA 8293, pp. 36-38.)
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Industrial Designs - any composition of lines or colors or any three-dimensional form, whether or not associated with lines or colors, provided that such composition or form gives a special appearance to and can serve as pattern for an industrial product or handicraft. It must be new or original. (§112, 113 IP Code) An industrial design is not considered new if it differs from prior designs only in minor respects that can be mistaken as such prior designs by an ordinary observer. (WIPO Handbook, Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No. 489 (E), 2nd Edition, pp. 98-106.)
Industrial products include articles of manufacture that belong to the useful or practical art, or any part including thereof, which can be made and sold separately. WIPO Handbook, Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No. 489 (E), 2nd Edition, pp. 98-106.
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Industrial Designs The following industrial designs are excluded from registration: Industrial designs that are dictated essentially by technical or functional considerations to obtain a technical result; Industrial designs which are mere schemes of surface ornamentations existing separately from the industrial product or handicraft; and Industrial designs which are contrary to public order, health, or morals. (WIPO Handbook, Chapter 2, “Fields of Intellectual Property Protection”, WIPO Publication No. 489 (E), 2nd Edition, pp. 98-106.)
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Basic Differences between Patent, Utility Model and Industrial Design Categories Subject Matter of Protection
Patent (Invention) Apparatus (Product) & Method (Process)
Novelty
YES
Inventive Step
YES
Industrial Applicability
YES
Claim
Ornamental Features of shape, configuration, form, or a combination thereof Term of Protection
More than one (1) generic claim is allowed and dependent claims
NO Twenty (20) years from the date of filing with payment of annuities
Utility Model Apparatus (Product) & Method (Process)
YES NO YES Only one (1) generic claim is allowed. No limit on the number of dependent claims.
NO Seven (7) years from the date of filing without renewal
Industrial Design Article of manufacture (Over-all aesthetic and pleasing appearance of the article of manufacture.) YES NO YES Omnibus type of claim
YES
Five (5) years from the date of filing with 2 five year term renewals upon payment of fees
2010 BAR QUESTION: Dr. Nobel discovered a new method of treating Alzheimer’s involving a special method of diagnosing the disease, treating it with a new medicine that has been discovered after long experimentation and field testing, and novel mental isometric exercises. He comes to you for advice on how he can have his discoveries protected. Can he legally protect his new method of diagnosis, the new medicine, and the new method of treatment? If no, why? If yes, how?
2006 BAR QUESTION: Supposing Albert Einstein were alive today and he filed with the Intellectual Property Office (IPO) an application for patent for his theory of relativity expressed in the formula E=mc2. The IPO disapproved Einstein's application on the ground that his theory of relativity is not patentable. Is the IPO's action correct?
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2010 BAR EXAMINATION For years, Y has been engaged in the parallel importation of famous brands including shoes carrying the foreign brand MAGIC. Exclusive distributor X demands that Y cease importation because of his appointment as exclusive distributor of MAGIC shoes in the Philippines. Y counters that the trademark MAGIC is not registered with the Intellectual Property Office as a trademark, and therefore no one has the right to prevent its parallel importation. Suppose the shoes are covered by a Philippine patent issued to the brand owner, what would your answer be? Explain.
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2010 BAR QUESTION A. What contractual stipulations are required in all technology transfer agreements? (2%) [Refer to Section 88 of IP Code on Mandatory Provisions.] B.
Enumerate three (3) stipulations that are prohibited in technology transfer agreements. (3%) [Refer to Section 87 of IP Code on Prohibited Provisions.]
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2005 BAR EXAMINATION Cezar works in a car manufacturing company owned by Joab. Cezar is quite innovative and loves to tinker with things. With the materials and parts of the car, he was able to invent a gas-saving device that will enable cars to consume less gas. Francis, a co-worker, saw how Cezar created the device and likewise, came up with a similar gadget, also using scrap materials and spare parts of the company. Thereafter, Francis filed an application for registration of his device with the Bureau of Patents. Eighteen months later, Cezar filed his application for the registration of his device with the Bureau of Patents. (a) Is the gas-saving device patentable? Explain. (b) Assuming that it is patentable, who is entitled to the patent? What, if any, is the remedy of the losing party? (c) Supposing Joab got wind of the inventions of his employees and also laid claim to the patents, asserting that Cezar & Francis were using his materials and company time in making the devices, will his claim prevail over those of his employees? Explain
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JURISDICTIONS and PROCEDURES
JURISDICTION OF IPOPHL’S BUREAU OF LEGAL AFFAIRS SEC.10. The Bureau of Legal Affairs. - The Bureau of Legal Affairs shall have the following functions: 10.1. Hear and decide opposition to the application for registration of marks; cancellation of trademarks; subject to the provisions of Section 64, cancellation of patents, utility models, and industrial designs; and petitions for compulsory licensing of patents; 10.2. (a) Exercise original jurisdiction in administrative complaints for violations of laws involving intellectual property rights: Provided, That its jurisdiction is limited to complaints where the total damages claimed are not less than Two hundred thousand pesos (Php 200,000): Provided further, That availment of the provisional remedies may be granted in accordance with the Rules of Court. The Director of Legal Affairs shall have the power to hold and punish for contempt all those who disregard orders or writs issued in the course of the proceedings.
(b) After formal investigation, the Director for Legal Affairs may impose one (1) or more of the following administrative penalties: (i) The issuance of a cease and desist order which shall specify the acts that the respondent shall cease and desist from and shall require him to submit a compliance report within a reasonable time which shall be fixed in the order; (ii) The acceptance of a voluntary assurance of compliance or discontinuance as may be imposed. Such voluntary assurance may include one or more of the following: (1) An assurance to comply with the provisions of the intellectual property law violated; (2) An assurance to refrain from engaging in unlawful and unfair acts and practices subject of the formal investigation; (3) An assurance to recall, replace, repair, or refund the money value of defective goods distributed in commerce; and (4) An assurance to reimburse the complainant the expenses and costs incurred in prosecuting the case in the Bureau of Legal Affairs.
The Director of Legal Affairs may also require the respondent to submit periodic compliance reports and file a bond to guarantee compliance of his undertaking (iii) The condemnation or seizure of products which are subject of the offense. The goods seized hereunder shall be disposed of in such manner as may be deemed appropriate by the Director of Legal Affairs, such as by sale, donation to distressed local governments or to charitable or relief institutions, exportation, recycling into other goods, or any combination thereof, under such guidelines as he may provide; (iv) The forfeiture of paraphernalia and all real and personal properties which have been used in the commission of the offense; (v) The imposition of administrative fines in such amount as deemed reasonable by the Director of Legal Affairs, which shall in no case be less than Five thousand pesos (Php 5,000) nor more than One hundred fifty thousand pesos (Php 150,000). In addition, an additional fine of not more than One thousand pesos (Php 1,000) shall be imposed for each day of continuing violation;
(vi) The cancellation of any permit, license, authority, or registration which may have been granted by the Office, or the suspension of the validity thereof for such period of time as the Director of Legal Affairs may deem reasonable which shall not exceed one (1) year; (vii) The withholding of any permit, license, authority, or registration which is being secured by the respondent from the Office; (viii) The assessment of damages; (ix) Censure; and (x) Other analogous penalties or sanctions. (Sec. 6, 7, 8, and 9, Executive Order No. 913 [1983] a) 10.3. The Director General may by Regulations establish the procedure to govern the implementation of this Section.
Does IPOPHL have jurisdiction over infringement and unfair competition cases? While Section 163 thereof vests in civil courts jurisdiction over cases of unfair competition, nothing in the said section states that the regular courts have sole jurisdiction over unfair competition cases, to the exclusion of administrative bodies. On the contrary, Sections 160 and 170, which are also found under Part III of the Intellectual Property Code, recognize the concurrent jurisdiction of civil courts and the IPO over unfair competition cases. These two provisions read: Section 160. Right of Foreign Corporation to Sue in Trademark or Service Mark Enforcement Action.—Any foreign national or juridical person who meets the requirements of Section 3 of this Act and does not engage in business in the Philippines may bring a civil or administrative action hereunder for opposition, cancellation, infringement, unfair competition, or false designation of origin and false description, whether or not it is licensed to do business in the Philippines under existing laws. x x x x Section 170. Penalties.—Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from xxx xxx
Based on the foregoing discussion, the IPO Director of Legal Affairs had jurisdiction to decide the petitioner’s administrative case against respondents and the IPO Director General had exclusive jurisdiction over the appeal of the judgment of the IPO Director of Legal Affairs. (In and Out Burger Inc., vs. Sehwani, Inc. and/or Benita Fries, Inc., GR NO. 179127, December 24, 2008)
RA No. 8293 SEC. 7. The Director General and Deputies Director General. 7.1. Functions. - The Director General shall exercise the following powers and functions: xxx b) Exercise exclusive appellate jurisdiction over all decisions rendered by the Director of Legal Affairs, the Director of Patents, the Director of Trademarks, the Director of Copyright and Other Related Rights, and the Director of the Documentation, Information and Technology Transfer Bureau. The decisions of the Director General in the exercise of his appellate jurisdiction in respect of the decisions of the Director of Patents, the Director of Trademarks and the Director of Copyright and Other Related Rights shall be appealable to the Court of Appeals in accordance with the Rules of Court; and those in respect of the decisions of the Director of Documentation, Information and Technology Transfer Bureau shall be appealable to the Secretary of Trade and Industry;
Can IPOPHL cancel a trademark registration motu propio? The fact that no petition for cancellation was filed against the COR issued to Shen Dar does not preclude the cancellation of Shen Dar’s COR. It must be emphasized that, during the hearing for the cancellation of EYIS’ COR before the BLA, Shen Dar tried to establish that it, not EYIS, was the true owner of the mark “VESPA” and, thus, entitled to have it registered. Shen Dar had more than sufficient opportunity to present its evidence and argue its case, and it did. It was given its day in court and its right to due process was respected. The IPO Director General’s disregard of the procedure for the cancellation of a registered mark was a valid exercise of his discretion. E.Y. Industrial Sales, Inc. v. Shen Dar Electricity and Machinery Co., Ltd. (G.R. No. 184850, 20 Oct. 2010)
PHIL. Pharmawealth, Inc. v. Pfizer, Inc. (G.R. No. 167715, 17 November 2010) Justice D. Peralta On the issue of injunctive relief Two requisites must exist to warrant the issuance of an injunctive relief, namely: (1) the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious damage. In the instant case, it is clear that when the CA issued its January 18, 2005 Resolution approving the bond filed by respondents, the latter no longer had a right that must be protected, considering that Philippine Letters Patent No. 21116 which was issued to them already expired on July 16, 2004. Hence, the issuance by the CA of a temporary restraining order in favor of the respondents is not proper.
PHIL. Pharmawealth, Inc. v. Pfizer, Inc. (G.R. No. 167715, 17 November 2010) On Jurisdiction RA 8293 is silent with respect to any remedy available to litigants who intend to question an interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property Rights simply provides that interlocutory orders shall not be appealable. The said Rules and Regulations do not prescribe a procedure within the administrative machinery to be followed in assailing orders issued by the BLA-IPO pending final resolution of a case filed with them. Hence, in the absence of such a remedy, the provisions of the Rules of Court shall apply in a suppletory manner, as provided under Section 3, Rule 1 of the same Rules and Regulations. Hence, in the present case, respondents correctly resorted to the filing of a special civil action for certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot appeal therefrom and they have no other plain, speedy and adequate remedy in the ordinary course of law.
PHIL. Pharmawealth, Inc. v. Pfizer, Inc. (G.R. No. 167715, 17 November 2010) Justice D. Peralta This Court has held that: [i]n cases involving specialized disputes, the practice has been to refer the same to an administrative agency of special competence in observance of the doctrine of primary jurisdiction. The Court has ratiocinated that it cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute administered. The objective of the doctrine of primary jurisdiction is to guide a court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court. It applies where the claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative body; in such case, the judicial process is suspended pending referral of such issues to the administrative body for its view. [citing Fabia v. Court of Appeals, 437 Phil. 389, 402-403 (2002).]
PHIL. Pharmawealth, Inc. v. Pfizer, Inc. (G.R. No. 167715, 17 November 2010) Justice D. Peralta Based on the foregoing, the Court finds that respondents' initial filing of their complaint with the BLA-IPO, instead of the regular courts, is in keeping with the doctrine of primary jurisdiction owing to the fact that the determination of the basic issue of whether petitioner violated respondents' patent rights requires the exercise by the IPO of sound administrative discretion which is based on the agency's special competence, knowledge and experience. However, the propriety of extending the life of the writ of preliminary injunction issued by the BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within the jurisdiction of the said administrative agency, particularly that of its Director General. The resolution of this issue which was raised before the CA does not demand the exercise by the IPO of sound administrative discretion requiring special knowledge, experience and services in determining technical and intricate matters of fact. It is settled that one of the exceptions to the doctrine of primary jurisdiction is where the question involved is purely legal and will ultimately have to be decided by the courts of justice. This is the case with respect to the issue raised in the petition filed with the CA.
PHIL. Pharmawealth, Inc. v. Pfizer, Inc. (G.R. No. 167715, 17 November 2010) Justice D. Peralta On Forum Shopping It is clear from the foregoing that the ultimate objective which respondents seek to achieve in their separate complaints filed with the RTC and the IPO, is to ask for damages for the alleged violation of their right to exclusively sell Sulbactam Ampicillin products and to permanently prevent or prohibit petitioner from selling said products to any entity. Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a decision in one case will necessarily amount to res judicata in the other action. It bears to reiterate that what is truly important to consider in determining whether forum shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule on the same or related causes and/or to grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issue. Thus, the Court agrees with petitioner that respondents are indeed guilty of forum shopping.
RULES OF PROCEDURE FOR INTELLECTUAL PROPERTY RIGHTS CASES A.M. No. 10-3-10 SC, October 18, 2011
Rule I SEC. 3. Applicability of the regular rules. – When the court determines that the civil or criminal action involves complex issues, it shall issue a special order that the regular procedure prescribed in the Rules of Court shall apply, stating the reason therefor. Where applicable, the Rules of Court shall apply suppletorily to proceedings under these Rules. SEC. 4. Executory nature of orders. – Any order issued by the court under these Rules is immediately executory unless restrained by a superior court. SEC. 5. Verification and supporting documents. -- Any pleading, motion, opposition, defense or claim filed by any interested party shall be supported by verified statements that the affiant has read the same and that the factual allegations therein are true and correct of his personal knowledge or based on authentic records, and shall contain as annexes such documents as may be deemed by the party submitting the same as supportive of the allegations in the affidavits.
CIVIL PROCEDURE Rule 2 NATURE OF PROCEEDINGS SECTION 1. Scope. – Rules 2 to 9 shall apply to all civil actions for violations of intellectual property rights provided for in Republic Act 8293 or the Intellectual Property Code, as amended, including civil actions for Infringement of Patent (Section 76), Utility Model (Section 108) and Industrial Design (Section 119), Trademark Infringement (Section 155 in relation to Section 163), Unfair Competition (Section 168 in relation to Section 163), actions concerning trademark license contracts (Section 150 in relation to Section 163), actions concerning imported merchandise or4goods bearing infringing marks or trade names (Section 166 in relation to Section 163), actions for cancellation of the registration of a collective mark (Section 167 in relation to Section 163), False Designations of Origin; False Description or Representation (Section 169 in relation to Section 163), Breach of Contract (Section 194), civil actions for infringement of copyright, moral rights, performers’ rights, producers’ rights, and broadcasting rights (Sections 177, 193, 203, 208, 211, and 216), and other violations of intellectual property rights as may be defined by law.
RULE 2, SEC. 2. Special Commercial Courts in the National Capital Judicial Region with authority to issue writs of search and seizure enforceable nationwide. – Special Commercial Courts in Quezon City, Manila, Makati, and Pasig shall have authority to act on applications for the issuance of writs of search and seizure in civil actions for violations of the Intellectual Property Code, which writs shall be enforceable nationwide. The issuance of these writs shall be governed by the rules prescribed in Re: Proposed Rule on Search and Seizure in Civil Actions for Infringement of Intellectual Property Rights (A.M. No. 02-1-06-SC, which took effect on February 15, 2002). Within their respective territorial jurisdictions, the Special Commercial Courts in the judicial regions where the violation of intellectual property rights occurred shall have concurrent jurisdiction to issue writs of search and seizure.
Anton Piller Order – an order of the Court that gives right to search premises and seize evidence without prior warning. This prevents destruction of evidence particularly in cases involving IPR violations.
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 2. The writ of search and seizure. - Where any delay is likely to cause irreparable harm to the intellectual property right holder or where there is demonstrable risk of evidence being destroyed, the intellectual property right holder or his duly authorized representative in a pending civil action for infringement or who intends to commence such an action may apply ex parte for the issuance of a writ of search and seizure directing the alleged infringing defendant or expected adverse party to admit into his premises the persons named in the order and to allow the search, inspection, copying, photographing, audio and audiovisual recording or seizure of any document and article specified in the order.
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 4. Verified application and affidavits. - The applicant shall file a verified application alleging the ground upon which it is based and the specific description and location of the documents and articles to be searched, inspected, copied or seized and their value. It shall also state the names of the applicant, his representative, witnesses and counsel who will attend the search in the event that the application is granted. The application shall be supported by affidavits of witnesses who personally know the facts and by authenticated or certified documents. The application shall contain a certification against forum shopping as prescribed by Section 5, Rule 7 of the 1997 Rules of Civil Procedure. The applicant shall undertake in his application that he will not use any of the documents, articles or information obtained by reason of the search and seizure for any purpose other than in the action in which the writ is issued
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 5. Examination of applicant; record; confidentiality of proceedings. The application shall be acted upon within twenty-four (24) hours from its filing; The judge must, before issuing the writ, examine in the form of searching questions and answers, in writing and under oath or affirmation, the applicant and the witnesses he may produce on facts personally known to them. The examination of the applicant and his witnesses shall be recorded. Their sworn statements and their affidavits shall form part of the record of the case. The hearing on the application for the writ shall be held in the chambers of the judge. Court personnel shall maintain the confidentiality of the application proceeding. The court may require the applicant to give other information necessary for the identification of the articles and documents to be searched, inspected, copied or seized and the premises to be searched. Where feasible, it may direct the applicant to submit copies and photographs of the documents or articles to be seized and impounded.
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 6. Grounds for the issuance of the order. - Before the Order can be issued, the evidence proffered by the applicant and personally evaluated by the judge must show that: (a) the applicant is the right holder or his duly authorized representative; (b) there is probable cause to believe that the applicant's right is being infringed or that such infringement is imminent and there is a prima facie case for final relief against the alleged infringing defendant or expected adverse party; (c) damage, potential or actual, likely to be caused to the applicant is irreparable; (d) there is demonstrable risk of evidence that the alleged infringing defendant or expected adverse party may destroy, hide or remove the documents or articles before any application inter partes can be made; and (e) the documents and articles to be seized constitute evidence of the alleged infringing defendant's or expected adverse party's infringing activity or that they infringe upon the intellectual property right of the applicant or that they are used or intended to be used as means of infringing the applicant's intellectual property right.
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 7. When writ may issue. - If the judge is satisfied with the proof of facts upon which the application is based, he shall issue the writ requiring the search, inspection or copying of the subject documents or articles or commanding the sheriff to take them into his custody subject to the control of the court. The enforcement of the writ shall be supervised by an independent Commissioner to be appointed by the court. Section 9. Bond and its conditions. - The applicant shall be required to post a cash bond, surety bond or other equivalent security executed in favor of the defendant or expected adverse party in a reasonable amount to be fixed by me court in its order granting me issuance of a writ of search and seizure. The bond shall be conditioned on the undertaking of the applicant that he will pay all the costs which may be adjudged to defendant or expected adverse party and all damages which me latter may sustain by reason of the issuance of the writ.
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 11. To whom writ shall be served. - The writ shall be served on the alleged infringing defendant or expected adverse party in the place to be searched. If the alleged infringing defendant or expected adverse party cannot be found in the premises, the writ shall be served on his agent or representative. In the absence of an agent or representative, it shall be served on the person in charge or in control of the premises, or residing or working therein who is of sufficient age and discretion. If such person is absent, the sheriff or proper officer shall post the papers on the premises and proceed with the enforcement of the writ.
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 12. Commissioner, duties, qualifications and fees. - The enforcement of the writ shall be supervised by the independent Commissioner appointed by the court. In the performance of his duty, the Commissioner shall: (a) give impartial advise to the alleged infringing defendant, expected adverse party or to the person in charge of the premises to be searched as to the meaning and coverage of the writ; (b) attempt to achieve agreement on a suitable search procedure; (c) assess what documents or articles come within the terms of the writ; (d) ensure the accuracy of the list of documents and articles searched, inspected, copied or seized by the sheriff; (e) prepare his own report on the search and seizure and verify and sign the return prepared by the sheriff; and (f) generally, assist in the proper execution of the writ. The Commissioner shall be a member of the Philippine Bar and of proven competence, integrity and probity. He shall receive such reasonable compensation as may be determined by the court which can be charged as cost of suit.
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS Section 13. Search to be conducted in the presence of defendant, his representative, person in charge of the premises or witnesses. - The premises may not be searched except in the presence of the alleged infringing defendant, expected adverse party or his representative or the person in charge or in control of the premises or residing or working m therein who shall be given the opportunity to read the writ before its enforcement and seek its interpretation from the Commissioner. In the absence of the latter, two persons of sufficient age and discretion residing in the same locality shall be allowed to witness the search or in the absence of the latter, two persons of sufficient age and discretion residing in the nearest locality.
A.M. No. 02-1-06-SC
January 30, 2002
RULE ON SEARCH AND SEIZURE IN CIVIL ACTIONS FOR INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS
Section 20. Failure to file complaint. - The writ shall also. Upon motion of the expected adverse party, be set aside and the seized documents and articles returned to the expected adverse party if no case is filed with the appropriate court or authority within thirty-one (31) calendar days from the date of issuance of the writ.
Rule 3 SEC. 6. Failure to file complaint where a writ of search and seizure is issued. – Upon motion of the party whose goods have been seized, with notice to the applicant, the issuing court may lift its writ and order the return of the seized goods if no case is filed with the appropriate court and/or appropriate quasi-judicial agency, including the Intellectual Property Office of the Philippines, within thirty-one (31) calendar days from the date of issuance of the writ. If no motion for the return of the seized goods is filed within sixty (60) days from the issuance of the writ under the preceding paragraph, the court shall order the disposal of the goods, as may be warranted, after hearing with notice to the parties.
Rule 8 SEC. 5. Judgments executory pending appeal. – Unless restrained by a higher court, the judgment of the court shall be executory even pending appeal under such terms and conditions as the court may prescribe. Rule 9 APPEAL SECTION 1. Who may appeal. – Any party may appeal from a judgment or final order. SEC. 2. How appeal taken. – All decisions and final orders shall be appealable to the Court of Appeals through a petition for review under Rule 43 of the Rules of Court.
CRIMINAL PROCEDURE Rule 10 NATURE OF PROCEEDINGS SECTION 1. Scope. – Rules 10 to 15 shall apply to all criminal actions for violations of intellectual property rights provided for in Republic Act 8293 or the Intellectual Property Code, as amended, including Repetition of Infringement of Patent (Section 84), Utility Model (Section 108) and Industrial Design (Section 119), Trademark Infringement (Section 155 in relation to Section 170), Unfair Competition (Section 168 in relation to Section 170), False Designations of Origin; False Description or Representation (Section 169.1 in relation to Section 170), infringement of copyright, moral rights, performers’ rights, producers’ rights, and broadcasting rights (Section 177, 193, 203, 208 and 211 in relation to Section 217), and other violations of intellectual property rights as may be defined by law.
SEC. 2. Special Commercial Courts in the Na3onal Capital Judicial Region with authority to issue search warrants enforceable na3onwide. Special Commercial Courts in Quezon City, Manila, Maka@, and Pasig shall have authority to act on applica,ons for the issuance of search warrants involving viola,ons of the Intellectual Property Code, which search warrants shall be enforceable na,onwide. Within their respec,ve territorial jurisdic,ons, the Special Commercial Courts in the judicial regions where the viola,on of intellectual property rights occurred shall have concurrent jurisdic,on to issue search warrants. Accordingly, the Execu,ve Judges are hereby relieved of the duty to issue search warrants involving viola,ons of the Intellectual Property Code in criminal cases as stated in Sec. 12, Chapter V of A.M. No. 03-‐8-‐02-‐SC (Guidelines on the Selec0on and Appointment of Execu0ve Judges and Defining their Powers, Preroga0ves and Du0es).
PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION, v. ROMARS INTERNATIONAL GASES CORPORATION, G.R. No. 189669, February 16, 2015 Ø issue of the impropriety of filing the Application for Search Warrant at the RTC-Naga City when the alleged crime was committed in a place within the territorial jurisdiction of the RTC-Iriga City. Ø the application filed with the RTC-Naga failed to state any compelling reason to justify the filing of the same in a court which does not have territorial jurisdiction over the place of the commission of the crime, as required by Section 2 (b), Rule 126 of the Revised Rules of Criminal Procedure. Ø in Malaloan v. Court of Appeals, an application for a search warrant is a “special criminal process,” rather than a criminal action: The basic flaw in this reasoning is in erroneously equating the application for and the obtention of a search warrant with the institution and prosecution of a criminal action in a trial court….. It ignores the fact that the requisites, procedure and purpose for the issuance of a search warrant are completely different from those for the institution of a criminal action. Ø Venue is not jurisdictional in application for search warrant
Rule 11 SEC. 4. Disposi3on of goods seized pursuant to search warrant. –If a criminal ac,on has been ins,tuted, only the trial court shall rule on a mo,on to quash a search warrant or to suppress evidence obtained thereby or to release seized goods. It shall be the duty of the applicant or private complainant to file a mo,on for the immediate transfer of the seized goods to the trial court, which mo,on shall be immediately acted upon by the issuing court. If no criminal ac,on has been ins,tuted, the mo,on to quash a search warrant or to suppress evidence obtained thereby or to release seized goods may be filed in and resolved by the issuing court. If pending resolu,on of the mo,on, a criminal case is meanwhile filed in another court, the incident shall be transferred to and resolved by the laeer court.
Upon mo,on of the party whose goods have been seized, with no,ce to the applicant, the issuing court may quash the search warrant and order the return of the seized goods if no criminal complaint is filed within sixty (60) days from the issuance of the search warrant.
If no criminal ac,on is filed before the office of the prosecutor and no mo,on for the return of the seized goods is filed within sixty (60) days from the issuance of the search warrant, the issuing court shall require the par,es, including the private complainant, if any, to show cause why the search warrant should not be quashed.
SEC. 5. Prohibited mo0ons. – The following mo,ons shall not be allowed: a) Mo,on to quash the informa,on, except on the ground of lack of jurisdic,on; b) Mo,on for extension of ,me to file affidavits or any other papers; and c) Mo,on for postponement intended for delay.
Rule 20 ORDER OF DESTRUCTION SECTION 1. Order of destruc3on. – At any ,me a?er the filing of the complaint or informa,on, the court, upon mo,on and a?er due no,ce and hearing where the viola,on of the intellectual property rights of the owner is established, may order the destruc,on of the seized infringing goods, objects and devices, including but not limited to, sales invoices, other documents evidencing sales, labels, signs, prints, packages, wrappers, receptacles, and adver,sements and the like used in the infringing act. Such hearing shall be summary in nature with no,ce of hearing to the defendant or accused to his last known address to afford the defendant or accused the opportunity to oppose the mo,on.
SEC. 2. Condi3ons for order of destruc3on. – The court may only issue an Order of Destruc,on, subject to the following condi,ons:
a) An inventory and photographs of the seized infringing goods have been taken before destruc,on at the place where the seized infringing goods are stored; b) The taking of the inventory and photographs must be witnessed and aeested to by: (1) the accused or counsel or agent, or in their absence, an officer of the barangay where the seized infringing goods are stored; (2) the complainant, his representa,ve or counsel; (3) the public officer who seized the items or a representa,ve of his office; and (4) a court officer authorized by the court to supervise the destruc,on of the seized infringing goods; c) Representa,ve samples of the seized infringing goods have been retained in a number and nature as to suffice for eviden,ary purposes;
d) An inventory of the representa,ve samples has been made by the persons enumerated under (b) above; e) The court officer authorized to supervise the destruc,on has submieed a report thereon, within five (5) days from the date of destruc,on, to which is aeached (i) the inventory and photographs of the seized infringing goods and (ii) the inventory of the representa,ve samples; and f) The applicant has posted a bond in an amount fixed by the court. SEC. 3. Admissibility of representa3ve samples. – Representa,ve samples of the goods, objects and devices referred to in this Rule, together with the inventory and photographs of the same, shall be admissible in lieu of the actual items.
TAKE NOTE A.M. No. 10-3-10-SC or the Rules of Procedure for Intellectual Property Cases does not provide a provision on provisional remedies. However, under Rule 1, Section 33 of the same Rules, it explicitly states that, where applicable, the Rules of Court shall apply suppletorily to proceedings under A.M. No. 10-3-10-SC. Thus, the existing provisions on TRO/Preliminary Injunctions and other remedies under the Rules of Court shall be applied in intellectual property cases.
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