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PATENTS
(Republic Act 8293, IP Code)

Historical Background of patents

The Romans introduced the concept of ownership of movable or immovable property but rarely recognized the
exclusive rights of authors or inventors with respect to their creations or inventions. It took the Venetians to enact in
1474 the first statute providing for patents for inventions.

England enacted the landmark Statute of Monopolies in 1624 which took away from the Monarchy the exclusive rights
to exploit inventions and lodged them on the first inventor.

The United States adopted a patent system based on the Statute of Monopolies which was in turn adopted by the
Philippines later on.

Republic Act No. 165, the Patent Law, Which Took effect on June 20, 1947, established an independent patent
system for the country. The Philippines acceded to the Paris Convention for the protection of industrial property as
revised in Lisbon on September 27, 1965. On December 14, 1994, the Philippines ratified the WTO Agreement On the
Trade Related Aspects of intellectual Property Rights (TRIPS) On January 1, 1998, Republic Act 8293 (The IP Code)
took effect.

Definitions

2.1 Intellectual property rights

The term "intellectual property rights" consists of:

a) Copyright and Related Rights;
b) Trademarks and Services Marks;
c) Geographic Indications;
d) Industrial Designs;
e) Patents;
f) Layout-Designs (Topographies) of Integrated Circuits; and
g) Protection of Undisclosed Information.

What are the purposes of the patent law?

A patent is granted to protect an article that is essentially better in same way than what was made before, or for a
better way of making it. The monopoly a patent gives can also extend to any other improved article or process which is
better for the same reasons as that on which the patent is based. In an extreme case, a patent can be wide enough
and represent a big enough advance over earlier ideas to give its owner a complete monopoly of an industry. For
instance, there have been patents giving, for a time, a monopoly of telephones, a monopoly of pneumatic tyres or a
monopoly of transistors. Very few patents are as important as that, but the existence of almost any patent will make it
necessary for a competitor to do costly design work or even major research of his own rather than copy the actual
product he wishes to imitate.
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What is the importance of the patent to the businessman?

A patent is granted to protect an article that is essentially better in same way than what was made before, or for a
better way of making it. The monopoly a patent gives can also extend to any other improved article or process which is
better for the same reasons as that on which the patent is based. In an extreme case, a patent can be wide enough
and represent a big enough advance over earlier ideas to give its owner a complete monopoly of an industry. For
instance, there have been patents giving, for a time, a monopoly of telephones, a monopoly of pneumatic tyres or a
monopoly of transistors. Very few patents are as important as that, but the existence of almost any patent will make it
necessary for a competitor to do costly design work or even major research of his own rather than copy the actual
product he wishes to imitate.

What are the paris convention?

The Paris Convention for the Protection of Industrial Property (Paris Convention) came into force in 1883. It lays down
certain provisions to which each member must conform (154 countries are members as of April 1, 1999)

How do we benefit from the paris convention?

6.1 Pursuant to the national treatment principle, Filipinos, as regards industrial property rights, enjoy the same
rights and remedies granted by a member country of the Paris Convention to its nationals.

6.2 A Filipino inventor who files an application for a patent in the Philippines, for example, on December 12, 1997, and
also files within twelve (12) months from December 12, 1997 a second application for the same invention in a member-
country of the Paris Convention, for example, on December 1, 1998, may claims as the priority date of the second
application the filing date of his Philippine application which is December 12, 1997. A publication or use of the
invention that takes place within twelve (12) months from December 12, 1997 does not destroy the novelty of the
second application.

6.3 Using the example in the preceding paragraph, pursuant to the principle of independence of patents , if the
second application is rejected in that country, it does not affect the validity of the patent granted in the Philippines.

What is the trips agreement?

The TRIPS Agreement, one of the many agreements concluded during the Uruguay Round of Negotiations of the
World Trade Organization (WTO), provides minimum standards for intellectual property rights, including patents, which
each member of the WTO must incorporate into its national laws (the Philippines has until January 1, 2000 to do this).
It also mandates those set by the Paris Convention (1967) as regards patents and trademarks and the Berne
Convention (1971) as regards copyright. The WTO came into effect on January 1, 1995. With the enactment of the IP
Code, the Philippines complied with its commitments under the TRIPS as regards the protection of patents, industrial
designs, trademarks and copyright.

How do we benefit from the trips agreement?

For one, considering that the Philippines has in place one of the more comprehensive IP regimes in the Asia-Pacific
region before the WTO Agreement came into force, the adoption by Asian countries of TRIPS norms and standards
would contribute to bringing about a level playing field in our trade relations with them because their IP laws are now
(or soon will be) at par with the IP Code. Indonesia, for example, will have until January 1, 2000 to enact a legislation
protecting industrial designs which will benefit many of our exports to that country.

Are all inventions patentable?

No. Only a product or a process or improvement thereof that provides for a technical solution to a problem which is
new, involves an inventive step and is industrially applicable are patentable.
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Are scientific principles such as the pythagorean theorem or einstein's law of relativity patentable?

No. They are basic principles in science and mathematics with a broad range of applications which cannot be
appropriated by one individual enterprise because of its high costs and its fundamental interest to the entire
community. It becomes appropriable only once it has been reduced to a specific practical application, that is, to the
invention of a specific technological teaching which is industrially applicable.

Is the computer software patentable?

Computer programs are, in general copyright. In other countries, programming techniques, as distinct from actual
programs, are also not supposed to be patentable, but there are ways in which they can be made patentable.

Are life forms patentable?

12.1 Micro organisms

In the Chakrabarty case (1980), the U.S. Supreme Court had to decide the patentability of certain micro-organisms
(which Dr. Chakrabarty had engineered to give them an appetite for eating oil slicks). By a majority decision the Court
held that a patent could be granted, stating that "anything under the sun that is made by man" was potentially
patentable. Accordingly, while there is no denying that living material can be patented, the fundamental principle,
which holds equally true in Philippines is that one cannot patent "nature": one can only patent a product of human
invention .

12.2 Animal varieties

The "oncomouse" (a mouse into which has been introduced a cancer-forming gene, making it a valuable experimental
animal for testing anti-cancer drugs) is "man-made" and is clearly patentable under U.S. law. Our IP Code, however,
has the so-called "morality provision" and also a provision which bars the patenting of animal breeds per se , which
should make the oncomouse unpatentable here.

12.3 Plant varieties

In the Philippines, they are not patentable but will be the subject of sui generis protection. At present, the proposed
plant varieties legislation is pending consideration by the Philippine Congress.

Are natural products patentable?

A question that often arises in the biotechnology is whether a natural molecule can be patented. The answer is "no"! it
is not possible to patent a molecule in exactly the same form in which it is known in nature - as the product would then
lack novelty. However, a long history of patent case law in Europe and the U.S., which is consistent with Philippine
law, shows that it is possible to patent a product originating from natural sources in a form in which it does not occur
naturally for example, in a highly purified form. Thus, an antibiotic isolated from a micro-organism present in a soil
sample is regarded as novel and, provided it exhibits a technical effect capable of industrial application', is not
regarded as an unpatentable 'discovery' either.

What are the conditions of patentability?

They are novelty, inventive step and industrial applicability

When is an invention not new?

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An invention is not new if it has been disclosed or used in public, or sold in the market before the patent application for
the market before the patent application for the invention is filed. Most often, written disclosures of inventions are
found in earlier filed and published patent applications or issued patents, utility models or industrial designs. Patent
examiners carry out a search of these disclosures to determine if the invention is new.
The most common mistake is to be unaware that premature disclosure or use of an invention before the filing of any
patent application would destroy the novelty of an invention and thus completely prejudice the chances of obtaining
valid protection.

What disclosures do not prejudice the invention?

The IP Code provides that the following disclosures done within twelve (12) months preceding the filing date or priority
date of the application will not prejudice the novelty of the invention:
disclosure or use by the inventor (e.g. demonstrating the use of the invention in a trade fair), or

when a Patent Office publishes the application by mistakes, or

where the application that was published was filed without the consent of the inventor.

What is meant by the requirement of inventive step or non-obviousness?

Even if the invention is new, to be patentable, it should meet the requirement of inventive step. It should meet the
requirement of inventive step. It should not be obvious to a person who is familiar with (not a special knowledge of) the
technology taught by the application at the time the application is filed. It does not have to be a product of genius. Our
courts, for example considered patentable an improvement in the process of tile-making which has overcome the
problem of producing decorative tiles with deep engraving but with sufficient durability.

To determine if the invention involves an inventive step, patent examiners compare it with related inventions disclosed
in earlier filed and published applications.

When is the invention industrially applicable?

When it can be applied for practical purposes. The invention cannot be purely theoretical. If the invention is intended
to be a product, the product must be capable of being made. And if the invention is intended to be a process, that
process must be capable of being carried out-"used", as it is generally said - in practice.

Who is entitled to a patent?

THE FIRST TO FILE RULE

19.1 In general .

The patent belongs to the inventor, his heir or assigns. When two or more persons have made an invention, they will
own the patent proportionately (i.e. if there are two inventors, each is entitled to one-half share).

19.2 If two (2) or more persons have made the invention separately and independently of each other
(i.e. one did not copy the invention of the other)...
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...the right to the patent shall belong to the person who files an application for such invention, or where two or more
applications are filed for the same invention, to the application who has the earliest filing date (please refer to
paragraph 35) or, the earliest priority date (please refer to paragraph 6.2). This is known as the first to file rule.

19.3 Inventions pursuant to a commission

The person who commissions the work shall own the patent unless otherwise provided in the contract.

19.4 Employee's inventions

In case the employee made the invention in the course of his employment contract, the patent shall belong to:

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

19.4.2 the employer, if the invention is the result of the performance of the employee's regularly-assigned duties,
unless there is an agreement, express or implied, to the contrary.

Is the first to file system unfair to the true inventor? If he was cheated of his right to a patent, what are his
remedies?

The objective of the first to file system is to encourage inventors to file system is to encourage inventors to file an
application for a patent as early as possible. Coupled with the fact that the IP Code also mandates the publication of
the application in the IPO Gazette eighteen (18) months from its filing date, this system facilitates the earlier transfer of
technology. Until an application for the invention is filed and published, the invention does not enjoy any protection and
society is unaware of its importance and benefits. Another objective of this system is to simplify resolving a dispute
between two or more applicants claiming the same invention on the basis of determining which application has the
earlier filing date.
While the true inventor who was cheated of his right to a patent under the system may not enjoin the IPO from
processing the questioned application, he may ask the court, once the application granted, either to substitute him as
patentee or to cancel the patent and ask for damages.

Why apply for a patent? why not keep the invention secret?

In general, it is better and safer to try and obtain a patent for the invention that to try to keep the invention secret. The
chances of not being able to keep the invention secret are generally much greater than the risk of not getting a patent
for an invention that is patentable.

How to check if the invention is patentable before deciding to file a patent application for it?

Through a search of the IPO records of published patent applications and issued patents or by accessing patent
databases through the internet to determine if his invention has already been patented or the subject of earlier filed and
published applications. To do this, it is suggested that he seek the assistance of a patent attorney.

In which countries should patent protection be sought?

A consideration in determining in which countries to seek patent protection is whether are potential competitors likely to
try to exploit the invention if it is not patented there. If the answer is in the affirmative, patent protection should be
sought.

Who may file an application in the Philippines?

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24.1 as to nationality

- Filipino nationals

- Foreign nationals or those domiciled or have a real and effective commercial establishment in a country which is
bound establishment in a country which is bound by treaty (such as the Paris Convention and the TRIPS Agreement)
to grant Filipinos the same rights it grants its own nationals

- Foreign nationals whose country also accepts the patent applications of Filipinos

24.2 as to the legal personality of the applicant

- the inventor or his attorney-in-act

- the assignee of the inventor

Who may represent the applicant before the bureau of patents?

25.1 If the applicant is a Philippine resident.

The applicant himself. He may also delegate this task to an authorized representative. Considering that he
prosecution of patent applications constitutes "practice of law", only lawyers are authorized to represent applications to
do this.

25.2 If the applicant is not a Philippine resident.

An applicant who is qualified to file a patent application in the Philippines but is not a resident of the Philippines must
appoint and maintain a resident agent or representative, usually a legal practitioner.

Who should the inventor disclose in his patent application?

26.1 In general

He should disclose in the "description" the title of the invention relates, the technical field to which the invention relates,
and the background art. The description must state solution to a technical problem and must clearly show the novel
features of the invention compared with the background art. It should be sufficiently clear and complete for it to be
carried out by a person skilled in the art without extensive experimentation. It usually indicates the experiments
conducted and their results. The presentation of models of the inventions is not essential. He may provide drawings
for a better understanding of the invention.

26.2 Micro-organisms

Where the application concerns a microbiological process or the products thereof involves the use of a micro-
organism, because a written disclosure may not be enough to enable a person skilled in the art to carry out this kind of
invention, the application should be supplemented by a deposit of such material with an international depositary
institution.

Which part of the application states the boundaries of the patent?

The claims. The application may contain one or more claims which shall define clearly the scope of the exclusive
rights provided by the patent. It should be consistent with or supported by the description. The claims cannot be
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broader than the description. Much thought and skill is necessary in drafting claims to ensure that they protect the
inventor's rights in the broadest possible way. The claims must be drafted in technical terms and should not contain
any reference to commercial advantages.

What is the abstract of the application?

The abstract presents a short summary of the invention as contained in the description, claims and drawings. It should
be able to give a clear understanding of the technical problem, the gist of the solution of that problem through the
invention. The abstract facilitates the work of researchers or the public of retrieving patent information and plays an
important role in the international exchange of patent information.

In what languange must the application for a patent be presented?

The application for a patent must be in Filipino or in English.

Can the application file one application to cover several inventions?

No. The application shall relate to one invention only or to a group of inventions forming a single general inventive
concept; if it does not, the applicant will be required to retain only one and file a separate application for each one of
the other inventions.

Who should assist the applicant prepare the patent application?

The applicant should engage the services of an attorney or a patent agent who possesses legal and the technical
competence and experience to prepare the patent application.

Who can provide the information on patent attorneys or agents in the country?

The Documentation, Information and Technology Transfer Bureau (DITTB) of the IPO at telephone number 890-49-39,
the Intellectual Property Foundation (IPF) at telephone number 891-1316 or the Intellectual Property Association of the
Philippines (IPAP) at telephone number 631-6171.

How much are the government's filing fees or charges?

The amount of the filing fees for patent applications would depend on the number of claims of the application; and
whether the application is a small entity (total assets of P15 million) or a big entity (total assets of P15 million or more).
At present, the fees payable by a big entity for an application with five (5) claims amounts to P 2,323.00 and that of the
small entity for the same application amounts to P 848.40.

Where to file the patent application?

The patent application must be filed with the Bureau of Patents (BP) of the IPO which is located at 351 Sen. Gil Puyat
Avenue, Makati City, Philippines with telephone no. 897-1737. The application may be handed in personally at the BP
or sent by mail or fax.

What are the requirements to get a filing date?

On receipt of the application, an examiner checks if the application includes the following requirements to get the filing
date: the request for a Philippine patent; name and address of the applicant; description and claims of the invention in
Filipino or English. Note: payment of the filing fee is not included.

The date of filing is very important under the current "first to file system" because it serves to determine, in case of a
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dispute with another applicant for the same invention, who has the right to the patent.

Classification of the application according to the field of technology; novelty search?

If the application contains all the formality requirements and the prescribed fee is paid, the BP will determine in which
field of technology the invention applied for belongs. A search is then conducted among earlier filed and published
applications, issued patents and other publications to determine if the invention has already been disclosed.

Publication of the application; why is the application published?

The application, together with the results of the search (which contains a list of published patent applications or issued
patents for inventions, which are identical or equivalent to those claimed by the application), will then be published in
the IPO Gazette. Making the invention known to the public serves several purposes viz:

(a) Enable R&D institutions to re-orient or avoid unnecessary research activities on similar technology;

(b) Allow the public to submit observations on the patentability of the invention (which will be noted by the Bureau of
Patent).

What protection is granted to the invention before the patent application is published in the ipo gazette?

None. It is however the obligation of the BP to keep it confidential. A patent application, which has not yet been
published, and all related documents, shall not be made available for inspection without the consent of the applicant.

The inventor may indicate in the product that incorporates the invention a notice to the public that the application for a
patent for it is still pending by the use of the words "Patent Pending". This does not, however, confer any exclusive
right to the applicant.

What protection is granted to the invention after the publication of the patent application?

The applicant shall have all the rights of the patentee against any person who uses the invention without his
authorization right after it has been published if the said person has actual knowledge that the invention he was using
was the subject matter of a published application. The action may not be filed, however, until after the grant of the
patent and not beyond four (4) years from the commission of the acts complained of.

Can opposition proceedings be instituted after the application has been published?

No. After the patent application is published in the IPO Gazette, only observations by third parties on the patentability
of the invention sought to be patented may be submitted to the BP and communicated to the applicant who may file his
comments thereto. The patent examiner will only take note of those observations and comments.

After its publication, is the application examined automatically to determine if it is patentable?

No. Within six (6) months from the date of the aforesaid publication, the applicant
must decide whether to request for examination of the application to determine
patentability. Usually, his decision would depend on the existence of patent
applications or issued patents for similar inventions indicated in the search report
published in the IPO Gazette.
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The application is considered withdrawn if no request is made within that period.

Is the applicant allowed to amend the application after it has been published?

If the BP determines that the application is not new, inventive or industrially applicable, it would refuse to grant the
patent. The applicant has several occasions to amend the application either on his own initiative or following the
suggestion of the BP to correct its detects or supply any omissions. In doing description to include new features or
elements which are not covered by the description of the invention he disclosed at the time he filed the application.

Appeal from a decision of the director of patents rejecting the application?

If the Director of the BP refuses the grant of a patent for the invention, the applicant may appeal against the decision
with the Director General of the IPO.

When does the patent become effective?

In the event the patent is granted, the grant of the patent together with other related information are published in the
IPO Gazette. It shall take effect on the date of the publication of the grant of the patent in the IPO Gazette.

What are the exclusive rights confered to the owner of the patent?

Under the IP Code, these exclusive rights consist of:

(a) 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.

(b) to assign or transfer by succession the patent and to conclude licensing contracts for the sale.

What are the exceptions to these exclusive rights?

First , where the exploitation of the patent is done privately and on a non-commercial scale or for a non-commercial
purposes.

Second , where the act of making or using the patent is for the sole purpose of scientific research and experiment.

Third , where the patented product was put on the market in the Philippines by the owner of the patent or with his
authorization. Putting on the market means sale (includes renting and gift). By this sale, the buyer may use the
product or possibly resell it within the Philippines without violating the exclusive right of the owner of the patent. Sale
outside of the Philippines of the patented product does not "exhaust" the patent rights in the Philippines. Therefore,
the owner of the patent may prohibit the importation into the country of the patented products (known as parallel
imports).

Fourth , 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.

Fifth , where the use of the patented product occurs in vehicles in transit in the country.

What are the rights of a prior user of the invention in good faith?

A person other than the applicant, who had started using in good faith the invention in the Philippine, or undertaken
serious preparations to use the same, before the filing date or priority date of the application shall have the right to
continue the use thereof but this right may only be transferred or assigned further with his enterprise or business.
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May the government use the patent without the authority of the patent owner?

Yes, subject to the same conditions for the grant of a compulsory license (please refer to paragraphs 69 to 73):

(i) on public interest grounds; for example, importation under the Generics Act by the Department of Health of the raw
materials for the manufacture of pharmaceuticals during periods of critical shortage and absolute necessity for use of
Filipino-owned drug establishments to be sold under generic nomenclature; or

(ii) where the manner of exploitation by the owner of the patent is anti-competitive.

Does a philippine patent have effect in other countries?

No. The exclusive rights of a patentee have effect only within the territorial limits of the country which granted the
patent.

To obtain protection in other countries, an application for a patent must be filed in each country.

Term of patent

The term of a patent shall be twenty (20) years from the filing date of the application.

Requirements to pay annual fees to maintain a patent application or patent

To maintain the patent application or patent, an annual fee shall be paid upon the expiration of four (4) years from the
date the application of four (4) years from the date the application was published and on each subsequent anniversary
of such date, otherwise, the application is deemed withdrawn or that patent considered lapsed.

Petition for cancellation of patents, where to file the same

Any interested person may file with the Bureau of Legal Affairs of the IPO a verified petition to cancel the patent on any
of the following grounds:

(a) The invention is not a patentable subject matter;

(b) That what is claimed as the invention is not new, does not involve an inventive step or is not industrially applicable;

(c) That the patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out
by a person skilled in the art;

(d) That the patent is contrary to public order or morality; or

(e) The patent already lapsed for no-payment of annual fees.

In cases involving highly technical issues, any party may request that the case be heard by a committee chaired by the
Director of Legal Affairs and two (2) members (who can be from the private sector) who have expertise in the field of
technology to which the patent sought to be cancelled relates.

What constitutes infringement of a patent?

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 patent, constitutes patent
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infringement.

What are the remedies of the owner of the patent against infringers?

54.1 Civil action for infringement

He may bring a civil action with an appropriate Regional Trial Court to recover from the infringer the damages he
sustained because of the infringement, plus attorney's fees and other expenses of litigation, and to secure an injunction
for the protection for the protection of his rights.

54.1.1 Damages; Requirement of Notice

Damages cannot be recovered for acts of infringement committed before the infringer had known 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 "Philippine Patent" with the number of the patent.

54.1.2 Limitation of Action for Damages

No damages can be recovered for acts of infringement committed more than four (4) years before the institution of the
action for infringement.

54.2 Criminal action for repetition of infringement

If the infringement is repeated, the infringer shall be criminally liable therefore, and upon conviction, shall suffer
imprisonment of not less than six (6) months but not more than three (3) years and/or a fine not less than P100,000.00
but not more than P300,000.00. The criminal action shall prescribed in three (3) years from the commission of the
crime.

54.3 Administrative Remedy

If the amount of damages claimed is not less than P200,000.00, the patentee may choose to seek redress against the
infringer by filing an administrative action against the infrigner with the BLA.

The patentee may likewise ask the BLA for an order directing the infringer to immediately stop the manufacture and
administrative case is being heard. The finding that infringement has been the patentee damages and to permanently
stop from using the infringing mark. In addition, the BLA may also impose a fine which the infringer will pay to the
government.

Unlike the courts, the BLA may not issue search and seizure warrants or warrants of arrest.

What falls within the scope of protection of a patent?

This normally is the decisive point in any patent litigation. The extent of protection conferred by the patent is
determined by the claims. The claims are to be interpreted in the light of the description and drawings and due
account shall be taken of the elements which are "equivalent" to those expressed in the claims.

What are considered "equivalents" of the invention?

This often-quoted definition of the doctrine of equivalents states: if two devices do the same work in substantially the
same way and produce substantially the same result, they are the same even though they differ in name, form or
shape.
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Guidelines to determine whether there is infringement of a patent?

To answer the question as to whether the patent is infringed, the claims should be broken down into its individual
elements, and then compared with the elements alleged in the infringing structure. In making this comparison, the
following questions have to be answered:

(a) Are all the elements of the claim present in the infringing structure?

(b) Do all the elements have the same form?

(c) Do all the elements perform the same function?

(d) Do all the elements have the same relationship to the other elements?

(e) Would the combination of these elements in the infringing structure produce the same result as that of the
patented invention?

If all the answers are "yes" - there is an infringement, notwithstanding that there are differences in form, non-essential
elements, sequence of steps, the location or position of parts, number of minor parts, etc.

When does contributory or indirect infringement take palace?

Contributory or indirect infringement occurs where a person does not do the infringing act per se but rather
encourages, or incites or abets, another person to commit infringing acts. The contributory infringer shall be liable in
the same way and extent as the infringer himself.

When does the defendant have the burden to show that there is no infringement of a process patent?

If the subject matter of a patent is a process for obtaining a product, any identical product shall be presumed to have
been obtained through the use of the patented process if the product is new or there is substantial likehood that the
identical product was made by the process and the owner of the patent has been unable despite reasonable efforts, to
determine the process and the owner of the patent has been unable despite reasonable efforts, to determine the
process actually used.

Can the court, in an action for infringement, cancel the patent?

Yes. In addition to denying that an act of infringement has occured, a defendant a defendant may seek the
cancellation of the patent which is claimed to be infringed on any grounds mentioned in paragraph 52. In addition, he
may claim that the patent was obtained fraudulently or through false representation.

What is a technology transfer arrangement (tta)?

The term "technology transfer arrangements" refers to contracts 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.

What you should know about the tta?

62.1 Is a TTA between Filipino nationals covered by the IP Code?

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Yes. The nationality of the parties to the agreement is no longer relevant in determining if an agreement is a TTA that
is covered by the IP Code.

62.2 Does the TTA to be registered with IPO or any government agency?

No. The IP Code no longer requires the registration of TTAs.

62.3 Does this mean that the parties to the agreement are not subject to any restriction in fixing the
terms of the TTA?

The IP Code has liberalized the regulations of TTAs. It no longer imposes any restriction of the TTA. It, however,
provides that the TTA will be considered unenforceable if it contains any "prohibited" clause or one which is
inconsistent with the provisions mandated by law to be included in the agreement.

What are some of the prohibited clauses?

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;

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;

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

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

Those that prohibit the licensee to export the licensed product unless justified for the protection of
the legitimate interest of the licensor;

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;

Those which require that the technology recipient shall not contest the validity of any of the patents
of the technology supplier;

Those which 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 products or the licensed technology.

What are mandated to be included in the tta?

That the laws of the Philippines shall govern the TTA and the venue of litigation shall be the proper
court in the place where the licensee has its principal office;

Licensee shall have access to improvements to the licensed technology;

Any arbitration Law of the Philippines or the Arbitration Rules of the United Nations Commission on
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International Trade Law (UNCITRAL) or the Rules on Conciliation and Arbitration of the
International Chamber of Commerce (ICC) and the venue shall be the Philippines or any neutral
country;

The Philippine taxes on all payments relating to the TTA shall be borne by the licensor.
When may a tta inconsistent with mandatory provisions or contains prohibited clauses be enforceable?

If it is considered by the Documentation, Information and Technology Transfer Bureau (DITTB) of the IPO as an
exceptional case because the benefits it gives to the economy is substantial such as it generates substantial foreign
exchange earnings, jobs, or involves technology vital to our industries, etc.

When may the dittb fix the rate of royalty?

In the exercise of its quasi-judicial jurisdiction to settle disputes between parties to the TTA arising from technology
transfer payments.

Can one exploit a patent without the authorization of the owner of the patent?

No. An exceptions is through a compulsory license.

What is the reason for compulsory licenses of patents?

To the extent that foreign inventors do not make available patented technology at reasonable terms and unwholesome
economic dependencies actually arise resort to this remedy is justified.

Grounds for the grant of compulsory licenses

69.1 Public interest grounds

National emergency or other circumstances of extreme urgency;

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.

69.2 Grounds to prevent abuse of the exclusive rights of the patentee

Where a judicial or administrative body has determined that the manner of exploitation by the owner of the
patent is anti-competitive;
In case of non-commercial use of the patent without satisfactory reason;
If the patented invention is not being worked in the Philippines on a commercial scale provided that the
importation of the patented article shall constitute working of the patent (the expiration of four (4) years from
three (3) years from the date of the patent whichever expires last).

69.3 Compulsory license based on inter-dependence 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, a compulsory license may be granted to the owner of the second
patent if: first, the second patent involves an important technical advance of considerable economic significance;
second, the owner of the first patent shall be entitled to a cross-license of the second patent and third , the use of the
first patent shall be non-assignable except with the assignment of the second patent.

What is required of the petitioner in a compulsory licensing case?

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He has to show his capability to exploit the invention.

Previous jurisprudence on what constitutes "capability to work the patented product" as used in Section 34 (2) of
Republic Act 165 may be used as reference. In case involving the compulsory licensing of a patent for a
pharmaceutical product, the court ruled that the petitioner had that capability because it was staffed with adequate and
competent technicians, had several laboratories and machines to prepare and package medicine and facilities to test
their quality, safety and stability.

What condition should be met before the petition for compulsory licensing is filed?

Subject to certain exceptions, the license will only be granted after the would-be compulsory licensee has negotiated
seriously with right holders to obtain exclusive licenses on reasonable terms but such efforts are not successful.

How much royalty shall a compulsory licensee pay to the owner of the patent?

The patentee shall be paid adequate remuneration taking into account the economic value of the grant except that in
case the license was granted to remedy a practice which was determined to be anti-competitive, the need to correct
the anti-competitive practice may be taken into account in fixing the amount of remuneration.

Where is a petition for compulsory license filed?

With the Bureau of Legal Affairs (BLA) of the IPO.

Patent register?

On completion of the patent granting procedure, the application is entered in the Patent Register which is in the
custody of the Bureau of Patents and any transfers, licenses, or other rights relating to the patent must be entered in
the register to have effect on third parties.

Utility Models

The IP Code retains the features provided in R.A. 165 which distinguishes a Utility Model from an invention, that is, that
a utility model does not involve inventive steps to be registrable. It is enough that it has utility. The IP Code, however,
does not requires that the application for registration of a utility model undergo substantive examination to determine
novelty. The purpose of this rule is to hasten the processing of utility model. The registration may be cancelled,
however, by the Director of Patents at the instance of any person who may be damaged by the registration if it is found
lacking novelty.

As to the term of the utility model, the IP Code limits it to seven (7) years after teh date of the filing of application.

Aside from the foregoing, the provisions governing patent apply, all things being equal, to the registration of the utility
models.

Industrial Design

An industrial design is 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 or can serve as a pattern for an
industrial designs that are new or original shall benefit from protection. However, industrial designs dictated by
technical or functional considerations to obtain a technical result or those that are contrary to public order, health or
morals, shall not be protected.

As in utility models, industrial design applications are no longer examined to determine if it is new or original.

The term of the industrial design under the IP Code is five (5) years from the filing date of the application but may be
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renewed for not more than two (2) consecutive periods of five (5) years each, by paying the renewal fee.

As in utility models, aside from the foregoing the provisions governing patents apply, all things being equal, to the
registration of industrial designs.

TRADEMARKS
(Republic Act 8293, IP Code)

Definitions
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Republic Act 8293, the Intellectual Property Code (IP Code), defines "Marks", "Trademark" and "Service
Mark" as follows:

"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.

"Trade name"

- means the name or designation identifying or distinguishing an enterprise.

The value and functions of a mark

A mark is an indispensable instrument for communicating to the public the origin of goods and services.

Still, a mark is more than a label of identification. It also signifies a company's guarantee of consistent quality. It is a
symbol of a set of distinctive values associated with a product or service and is an essential instrument of
communication with consumers through advertising and publicity.

It carries with a company's reputation which it puts at stake in every product it manufactures or service it gives. A mark
also becomes a company's visual representation of its assets, enabling it to hold on to or acquire market shares.

How are rights to a mark acquired?

The rights to a mark are acquired through registration with the Bureau of Trademarks (BT) of the Intellectual Property
Office (IPO).

Which marks may be registered?

A mark must be: first, a visible sign (not sounds or scents), and second, capable of distinguishing one's goods and
services from those of another.

Example are:

words (invented or belonging to a known language);

names and first names;
signatures;
letters, numbers;
acronyms, combinations of letters, number and signs, logos;
slogans;
designs, figure and pictographs;
portraits of people;
collections of words and graphics and complex signs associating verbal and graphic signs, e.g. labels;
three-dimensional trademarks such as shapes of goods and their packaging; and
color or combination of colors defined by a given form.

Is prior use of the mark in commerce in the philippines before filing the application a requirement for its
registration?

It is not necessary to use the mark in commerce in the Philippines (or elsewhere) before filing the application with BT.
The use of a mark becomes necessary only after it has been filed.
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