Ma. Carla P.

Mapalo (2005-22630)

Professor Susan Villanueva July 12, 2013

______________________________________________________________ INTELLECTUAL PROPERTY LAW 1) Is an assignment involving copyright required to comply with Sec. 87 and 88 of the IP Code? What's the basis for your answer? Answer: No, not all assignments involving copyright is required to comply with sec. 87 and 88 of the IP Code. Basis: Sec. 85 of the IP code requires that all technology transfer arrangement comply with the provisions of Chapter IX (Voluntary Licensing) of IP Code. The provision states: Section 85. Voluntary License Contract. - To encourage the transfer and dissemination of technology, prevent or control practices and conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition and trade, all technology transfer arrangements shall comply with the provisions of this Chapter. Pursuant to this rule, all technology transfer arrangements must meet the terms provided for in Sec. 87 and 88 of the IP code. The applicability of the provision, however, is dependent on the definition of Technology Transfer Arrangement. Sec. 4.2 of the IP code defines technology transfer arrangment as follows: The term "technology transfer arrangements" refers to contracts or agreements involving the transfer of systematic knowledge for the manufacture of a product, the application of a process, or rendering of a service including management contracts; and the transfer, assignment or licensing of all forms of intellectual property rights, including licensing of computer software except computer software developed for mass market. Although the above-cited provision seem to imply that any assignment or transfer of copyright is considered as technology transfer arrangement, the Rules and Regulations on Voluntary Licensing Agreement, which is the implementing rule of the provisions of Chapter IX of the IP code, provides a more restrictive definition to wit: (n) Technology Transfer Arrangements shall mean contracts or agreements involving the transfer of systematic knowledge for the manufacture of a product, the application of a process, or

rendering of a service including management contracts; and the transfer, assignment or licensing of all forms of intellectual property rights, including licensing of computer software except computer software developed for mass market The licensing of copyright is considered a technology transfer arrangement only if it involves the transfer of systematic knowledge. In light of the above-cited definition, an assignment of copyright is required to comply with the provisions of sec. 87 only if it involves a transfer of systematic knowledge. Therefore, not all assignments of copyright require compliance with the Chapter of Voluntary Licensing of the IP Code. 2) Why is it that the IP Code requires parties to a contract to agree to provide for mandatory provisions under Sec. 88 and to agree not to provide for prohibited clauses under Sec. 87? Answer: As provided for by Sec. 87, the prohibited clauses are considered to have an adverse effect on competition and trade. The prohibited clauses are therefore, contrary to the 1987 Constitution, which mandates that The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed.1 The rule was, thus imposed to prevent unfair competition and encourage trade and commerce. This provision is made to accomplish the State policy of the IP code to promote the diffusion of knowledge and information for the promotion of national development and progress and the common good.2. The mandatory provisions of the IP code on the other hand, is necessary to ensure that the State has the power to regulate these transfers to further advance the avowed policies of the State. It is essential to strengthen the intellectual property rights protection in the Philippines. Indeed, the use of intellectual property bears a social function, and the State has the right to regulate the transfer of knowledge and flow of information for the benefit of the public 3) Are TTAs required to be registered with the Documentation, Information and Technology Transfer Bureau? Answer: No, According to Sec. 92, TTAs that conform to the provisions of Sections 87 and 88 of the IP Code need not be registered with the Documentation, Information, and Technology Transfer Bureau (DITTB) However, an agreement that does not conform to the aforementioned relevant provisions, to be enforceable, is required to be approved and registered with the DITTB but only in limited exceptional cases provided in sec. 91: Section 91. Exceptional Cases. - In exceptional or meritorious cases where substantial benefits will accrue to the economy, !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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Art. XII, Sec. 19 of the 1987 Constitution. RA 8293, Sec. 2

such as high technology content, increase in foreign exchange earnings, employment generation, regional dispersal of industries and/or substitution with or use of local raw materials, or in the case of Board of Investments, registered companies with pioneer status, exemption from any of the above requirements may be allowed by the Documentation, Information and Technology Transfer Bureau after evaluation thereof on a case by case basis. 4) What's the effect if the TTA doesn't comply with Secs. 87-88 of the Code? What's the status of the contract? When the law uses the word "unenforceable" does it mean in the civil law sense? 92 Answer: Non-conformance with any of the provisions of Sections 87 and 88 shall automatically render the technology transfer arrangement unenforceable, unless said technology transfer arrangement is approved and registered with the Documentation, Information and Technology Transfer Bureau under the provisions of Section 91 on exceptional cases abovementioned. Neither the Intellectual property code nor the Rules and Regulations on Voluntary Licensing Agreement define the term unenforceable. The term is different from the Civil Code concept. Unenforceable contracts, in the Civil law sense, produce no legal effect unless ratified. Under 1403 of the Civil Code, an unenforceable contract will be deemed effective if ratified by a person of competent authority. However, the Intellectual Property Code and related statutes make no mention of a person who has the authority to ratify the contract. Sec. 91 in relation to 92 only pertains to exceptions to the rule but doesnt provide for ratification of the agreement. The mandatory wording of the provision seem to imply that the word unenforceable means void. Moreover, Pursuant to 1403 of the civil code, contracts are inexistent and void from the beginning if the cause, object or purpose is contrary to law, morals, good customs, public order or public policy. As earlier discussed, the prohibited provisions of Sec. 88 are deemed to have an adverse effect on competition and trade, and thus, violative of the constitutional mandate against restraint of trade or unfair competition. Since the agreement containing the prohibited clauses is contrary to public policy or law, it should be declared void.

5) If copyright vests from the very moment of creation, why would you advise a person to make a deposit? What's the advantage to the copyright holder? Answer: Although deposit is not a requirement for the vesting of copyright, the deposit establishes that the work was already created and existing at the time the deposit was made. The deposit certificate may be helpful or useful to the creator when he or she deals with other person since it gives an assurance that a work is in existence at the time of the transaction. Even though

registration and deposit is not conclusive as to copyright ownership. The certificate of deposit gives the holder a sense of authority over the work and gives an impression to the public that the holder is the appropriate person to transact with. Another advantage to the owner of the copyright is that he is exempted from making additional deposit of the works with the National Library and the Supreme Court Library under other laws, as provided by Sec. 193 of the IP Code. Moreover, based on the same provision, a person may also be held liable for a fine if there is failure to deposit the work after demand was made by the Director to deposit the creation. Sec. 193 states that If, within three (3) weeks after receipt by the copyright owner of a written demand from the directors for such deposit, the required copies or reproductions are not delivered and the fee is not paid, the copyright owner shall be liable to pay a fine equivalent to the required fee per month of delay and to pay to the National Library and the Supreme Court Library the amount of the retail price of the best edition of the work.