up 2008 commercial law (intellectual property code)

8/12/2019 UP 2008 Commercial Law (Intellectual Property Code)

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INTELLECTUAL PROPERTY CODE COMMERCIAL LAW

1 U P L AW U P B A R O P S 2 0 0 8 Page 327 of 351

INTELLECTUAL PROPERTY CODE

(RA 8293, as amended by RA 9150)

Chapter I.

INTELLECTUAL PROPERTY RIGHTS IN

GENERAL

1. State Policies

Sec. 2. Declaration of State Policy. - The Staterecognizes that an effective intellectual andindustrial property system is vital to thedevelopment of domestic and creative activity,facilitates transfer of technology, attracts foreigninvestments, and ensures market access for ourproducts. It shall protect and secure the exclusiverights of scientists, inventors, artists and othergifted citizens to their intellectual property and

creations, particularly when beneficial to thepeople, for such periods as provided in this Act.The use of intellectual property bears a socialfunction. To this end, the State shall promote thediffusion of knowledge and information for thepromotion of national development and progressand the common good.It is also the policy of the State to streamlineadministrative procedures of registering patents,trademarks and copyright, to liberalize theregistration on the transfer of technology, and toenhance the enforcement of intellectual propertyrights in the Philippines.

2. Intellectual Property Rights

Sec. 4.1 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; and7. Protection of Undisclosed Information

[TRIPS].

Kho v. CA, et al., 379 SCRA 410 [2002]

Trademark, copyright and patents are differentintellectual property rights that cannot beinterchanged with one another. A trademark is anyvisible sign capable of distinguishing the goods(trademark) or services (service mark) of anenterprise and shall include a stamped or markedcontainer of goods.

In relation thereto, a trade name means the nameor designation identifying or distinguishing an

enterprise. Meanwhile, the scope of a copyright isconfined to literary and artistic works which areoriginal intellectual creations in the literary andartistic domain protected from the moment of theircreation. Patentable inventions, on the other hand,refer to any technical solution of a problem in anyfield of human activity which is new, involves aninventive step and is industrially applicable.

3. Reverse Reciprocity

Sec. 231. Reverse Reciprocity of Foreign Laws. -Any condition, restriction, limitation, diminution,requirement, penalty or any similar burdenimposed by the law of a foreign country on aPhilippine national seeking protection of intellectualproperty rights in that country, shall reciprocally beenforceable upon nationals of said country, within

Philippine jurisdiction.

Chapter II.

PATENTS

1. What are Patentable

1.1. Inventions

Sec. 21. Patentable Inventions. - Any technicalsolution of a problem in any field of human

activity which is new, involves an inventivestep and is industrially applicable shall bepatentable. It may be, or may relate to, aproduct, or process, or an improvement of anyof the foregoing. (Sec. 7, RA 165a)

Sec. 23. Novelty. - An invention shall not beconsidered new if it forms part of a prior art.(Sec. 9, RA 165a)

Sec. 24. Prior Art. - Prior art shall consist of:

24.1. Everything which has been madeavailable to the public anywhere in the

world, before the filing date or the prioritydate of the application claiming theinvention; and

24.2. The whole contents of an applicationfor a patent, utility model, or industrialdesign registration, published in accordancewith this Act, filed or effective in thePhilippines, with a filing or priority date thatis earlier than the filing or priority date ofthe application: Provided, That theapplication which has validly claimed thefiling date of an earlier application underSection 31 of this Act, shall be prior art

with effect as of the filing date of suchearlier application: Provided further, That

the applicant or the inventor identified inboth applications are not one and thesame. (Sec. 9, RA 165a)

Sec. 26. Inventive Step. - An inventioninvolves an inventive step if, having regard toprior art, it is not obvious to a person skilled inthe art at the time of the filing date or prioritydate of the application claiming the invention.

Sec. 27. Industrial Applicability. - An inventionthat can be produced and used in any industry

shall be industrially applicable.

1.2. Utility Model

Sec. 109.1 (a) An invention qualifies forregistration as a utility model if it is new andindustrially applicable.(b) Section 21, "Patentable Inventions", shall

apply except the reference to inventive step asa condition of protection.


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1.3. Industrial Designs

Sec. 112.1 An Industrial Design is anycomposition of lines or colors or any three-dimensional form, whether or not associatedwith lines or colors: Provided, That suchcomposition or form gives a special appearanceto and can serve as pattern for an industrialproduct or handicraft;

1.4. Lay-out Designs (Topographies) ofIntegrated Circuits

Sec. 112.2 Integrated Circuit m eans aproduct, in its final form, or an intermediateform, in which the elements, at least one ofwhich is an active element and some or all ofthe interconnections are integrally formed inand/or on a piece of material, and which isintended to perform an electronic function; and

Sec. 112.3 Layout-Design is synonymous with'Topography'and means the three-dimensionaldisposition, however expressed, of theelements, at least one of which is an activeelement, and of some or all of theinterconnections of an integrated circuit, orsuch a three-dimensional disposition preparedfor an integrated circuit intended formanufacture.

2. Exclusions from Patent Protection

Sec. 22. Non-Patentable Inventions. - Thefollowing shall be excluded from patent

protection:

22.1. Discoveries, scientific theories andmathematical methods;22.2. Schemes, rules and methods ofperforming mental acts, playing games ordoing business, and programs forcomputers;

22.3 Methods for treatment of the humanor animal body by surgery or therapy anddiagnostic methods practiced on the humanor animal body. This provision shall notapply to products and composition for use

in any of these methods;

22.4. Plant varieties or animal breeds oressentially biological process for theproduction of plants or animals. Thisprovision shall not apply to micro-organisms and non-biological andmicrobiological processes.

Provisions under this subsection shallnot preclude Congress to consider theenactment of a law providing suigeneris protection of plant varieties andanimal breeds and a system of community intellectual rights

protection:

22.5. Aesthetic creations; and

22.6. Anything which is contrary to publicorder or morality. (Sec. 8, RA 165a)

3. First-To-File Rule

Sec. 29. First to File Rule. - If two (2) or morepersons have made the invention separatelyand independently of each other, the right tothe patent shall belong to the person who filedan application for such invention, or where twoor more applications are filed for the sameinvention, to the applicant who has the earliestfiling date or, the earliest priority date. (3rdSentence, Sec. 10, RA 165a.)

4. Right of Priority

Sec. 31. Right of Priority. - An application forpatent filed by any person who has previouslyapplied for the same invention in another countrywhich by treaty, convention, or law affords similarprivileges to Filipino citizens, shall be considered asfiled as of the date of filing the foreign application:Provided, That: (a) the local application expresslyclaims priority; (b) it is filed within twelve (12)months from the date the earliest foreign

application was filed; and (c) a certified copy of theforeign application together with an Englishtranslation is filed within six (6) months from thedate of filing in the Philippines. (Sec. 15, RA 165a)

5. Contents of the Application for Patent

Sec. 32. The Application. -

32.1. The patent application shall be in Filipinoor English and shall contain the following:

(a) A request for the grant of a patent;(b) A description of the invention;(c) Drawings necessary for the

understanding of the invention;(d) One or more claims; and(e) An abstract.

32.2. No patent may be granted unless theapplication identifies the inventor. If theapplicant is not the inventor, the Office mayrequire him to submit said authority. (Sec. 13,RA 165a)

Sec. 34. The Request. - The request shall contain apetition for the grant of the patent, the name andother data of the applicant, the inventor and theagent and the title of the invention.

Sec. 35. Disclosure and Description of theInvention.-

35.1. Disclosure. - The application shalldisclose the invention in a manner sufficientlyclear and complete for it to be carried out by aperson skilled in the art. Where the applicationconcerns a microbiological process or theproduct thereof and involves the use of amicro-organism which cannot be sufficientlydisclosed in the application in such a way as toenable the invention to be carried out by aperson skilled in the art, and such material isnot available to the public, the application shallbe supplemented by a deposit of such materialwith an international depository institution.

35.2. Description. - The Regulations shallprescribe the contents of the description andthe order of presentation. (Sec. 14, RA 165a)

Sec. 36. The Claims. -


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amendment shall not include new matteroutside the scope of the disclosure contained inthe application as filed.

6.6. Grant or Refusal of Application

Sec. 50. Grant of Patent. -

50.1. If the application meets therequirements of this Act, the Office shall

grant the patent: Provided, That all thefees are paid on time.50.2. If the required fees for grant andprinting are not paid in due time, theapplication shall be deemed to bewithdrawn.

50.3. A patent shall take effect on the dateof the publication of the grant of the patentin the IPO Gazette. (Sec. 18, RA 165a)

Sec. 51. Refusal of the Application. -

51.1. The final order of refusal of theexaminer to grant the patent shall beappealable to the Director in accordancewith this Act.

51.2. The Regulations shall provide for theprocedure by which an appeal from the

order of refusal from the Director shall beundertaken.

6.7. Publication of the Grant of Patent

Sec. 52. Publication Upon Grant of Patent. -

52.1. The grant of the patent together withother related information shall be publishedin the IPO Gazette within the timeprescribed by the Regulations.

52.2. Any interested party may inspect thecomplete description, claims, and drawingsof the patent on file with the Office. (Sec.18, RA 165a)

7. Rights Conferred by Patent

Sec. 71. Rights Conferred by Patent. -

71.1.A patent shall confer on its owner the followingexclusive rights:

(a) Where the subject matter of a patentis a product, to restrain, prohibit andprevent any unauthorized person orentity from making, using, offering forsale, selling or importing thatproduct;

(b) Where the subject matter of a patentis a process, to restrain, prevent or

prohibit any unauthorized person orentity from using the process, and

from manufacturing, dealing in,using, selling or offering for sale, orimporting any product obtaineddirectly or indirectly from suchprocess.

71.2. Patent owners shall also have theright to assign, or transfer by succession

the patent, and to conclude licensingcontracts for the same. (Sec. 37, RA 165a)

Pearl and Dean, Inc v. Shoemart Inc (2003)

To be able to effectively and legally preclude othersfrom copying and profiting from the invention, apatent is a primordial requirement. No patent, noprotection. The ultimate goal of a patent system isto bring new designs and technologies into the

public domain through disclosure. Ideas, oncedisclosed to the public without the protection of avalid patent, are subject to appropriation withoutsignificant restraint.

8. Term

Sec. 54. Term of Patent. - The term of a patentshall be twenty (20) years from the filing date ofthe application. (Sec. 21, RA 165a)

Sec. 109.3. A utility model registration shallexpire, without any possibility of renewal, at theend of the seventh year after the date of the filingof the application.

Sec. 118. The Term of Industrial Design or Layout-Design Registration. - 118.1. The registration of anindustrial design shall be for a period of five (5)years from the filing date of the application.

118.2. The registration of an industrial designmay be renewed for not more than two (2)consecutive periods of five (5) years each, bypaying the renewal fee. xxx xxx xxx

118.5. Registration of a layout-design shall bevalid for a period often (10) years, withoutrenewal, and such validity to be counted fromthe date of commencement of the protectionaccorded to the layout-design. The protectionof a layout-design under this Act shallcommence:

a) on the date of the first commercialexploitation, anywhere in the world, ofthe layout-design by or with theconsent of the right holder: Provided,That an application for registration is

filed with the Intellectual PropertyOffice within two (2) years from suchdate of first commercial exploitation;

orb) on the filing date accorded to the

application for the registration of thelayout-design if the layout-design hasnot been previously exploitedcommercially anywhere in the world.

9. Limitations on Rights of Patentees

Sec. 72. Limitations of Patent Rights. - The ownerof a patent has no right to prevent third partiesfrom performing, without his authorization, the actsreferred to in Section 71 hereof in the followingcircumstances:

72.1. Using a patented product which has beenput on the market in the Philippines by theowner of the product, or with his expressconsent, insofar as such use is performed afterthat product has been so put on the saidmarket;


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72.2. Where the act is done privately and on anon-commercial scale or for a non-commercialpurpose:Provided, That it does not significantlyprejudice the economic interests of the ownerof the patent;

72.3. Where the act consists of making orusing exclusively for the purpose of experiments that relate to the subject matter of

the patented invention;

72.4. Where the act consists of the preparationfor individual cases, in a pharmacy or by amedical professional, of a medicine inaccordance with a medical prescription or actsconcerning the medicine so prepared;

72.5. Where the invention is used in any ship,vessel, aircraft, or land vehicle of any othercountry entering the territory of the Philippines

temporarily or accidentally: Provided, That suchinvention is used exclusively for the needs ofthe ship, vessel, aircraft, or land vehicle andnot used for the manufacturing of anything tobe sold within the Philippines. (Secs. 38 and39, RA 165a)

Sec. 73. Prior User. -

73.1. Notwithstanding Section 72 hereof, anyprior user, who, in good faith was using theinvention or has undertaken seriouspreparations to use the invention in hisenterprise or business, before the filing date or

priority date of the application on which apatent is granted, shall have the right tocontinue the use thereof as envisaged in suchpreparations within the territory where thepatent produces its effect.

73.2. The right of the prior user may only betransferred or assigned together with his

enterprise or business, or with that part of hisenterprise or business in which the use orpreparations for use have been made. (Sec. 40,RA 165a)

Sec. 74. Use of Invention by Government. -

74.1. A Government agency or third personauthorized by the Government may exploit theinvention even without agreement of the patentowner where:

(a) the public interest, in particular,national security, nutrition, health orthe development of other sectors, asdetermined by the appropriate agencyof the government, so requires; or

(b) A judicial or administrative body hasdetermined that the manner of exploitation, by the owner of the

patent or his licensee, is anti-competitive.

74.2. The use by the Government, or thirdperson authorized by the Government shall besubject, mutatis mutandis, to the conditions setforth in Sections 95 to 97 and 100 to 102.(Sec. 41, RA 165a)

10. Notice Requirement

Sec. 80. Damages; Requirement of Notice. -Damages cannot be recovered for acts ofinfringement committed before the infringer hadknown; or had reasonable grounds to know of thepatent. It is presumed that the infringer had knownof the patent if on the patented product, or on thecontainer or package in which the article is suppliedto the public, or on the advertising material relatingto the patented product or process, are placed thewords "Philippine Patent" with the number of the

patent. (Sec. 44, RA 165a)

11. Patent Infringement

11.1. Civil Action

Sec. 76. Civil Action for Infringement. -

76.1. The making, using, offering for sale,selling, or importing a patented product ora product obtained directly or indirectly

from a patented process, or the use of apatented process without the authorizationof the patentee constitutes patentinfringement.

76.2. Any patentee, or anyone possessingany right, title or interest in and to thepatented invention, whose rights have beeninfringed, may bring a civil action before acourt of competent jurisdiction, to recoverfrom the infringer such damages sustained

thereby, plus attorneys fees and otherexpenses of litigation, and to secure aninjunction for the protection of his rights.

76.3. If the damages are inadequate orcannot be readily ascertained withreasonable certainty, the court may awardby way of damages a sum equivalent toreasonable royalty.

76.4. The court may, according to thecircumstances of the case, award damagesin a sum above the amount found as actualdamages sustained: Provided, That theaward does not exceed three (3) times theamount of such actual damages.

76.5. The court may, in its discretion,order that the infringing goods, materialsand implements predominantly used in the

infringement be disposed of outside thechannels of commerce or destroyed,without compensation.

76.6. Anyone who actively induces theinfringement of a patent or provides theinfringer with a component of a patentedproduct or of a product produced becauseof a patented process knowing it to beespecially adopted for infringing thepatented invention and not suitable for

substantial non-infringing use shall beliable as a contributory infringer and shall

be jointly and severally liable with theinfringer. (Sec. 42, RA 165a)

11.2. Criminal Action


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Sec. 84. Criminal Action for Repetition ofInfringement. - If infringement is repeated bythe infringer or by anyone in connivance withhim after finality of the judgment of the courtagainst the infringer, the offenders shall,without prejudice to the institution of a civilaction for damages, be criminally liable thereforand, upon conviction, shall suffer imprisonmentfor the period of not less than six (6) monthsbut not more than three (3) years and/or a fine

of not less than One hundred thousand pesos(P100,000) but not more than Three hundredthousand pesos (P300,000), at the discretion ofthe court. The criminal action herein providedshall prescribe in three (3) years from date ofthe commission of the crime. (Sec. 48, RA165a)

Sony Computer v Supergreen, Inc. (2007)

Supergreen is engaged in reproduction and

distribution of counterfeit PlayStation gamesoftware, consoles and accessories, violative ofSonys intellectual property rights. NBI servedsearch warrants on subject premises [Cavite] andseized a replicating machine and several units ofcounterfeit PlayStation consoles, joy pads,housing, labels and game software. Respondent filedMotion to Quash which was granted by RTC alleging impropriety of venue/lack of jurisdiction.

SC: The alleged acts constitute a transitory orcontinuing offense under Section 168, IPC [RA8293] in relation to Art. 189(1) RPC on unfaircompetition. Respondents imitation of the generalappearance of petitioners goods was done

allegedly in Cavite, but sold such in MandaluyongCity, Metro Manila.

12. Tests of infringement

Godines v. CA, 226 SCRA 576 [1993]

Tests have been established to determineinfringement. These are [a] literal infringement;and [b] the doctrine of equivalents. In using literalinfringement as a test, resort must be had in thefirst instance to the words of the claim. Todetermine whether the particular item falls withinthe literal meaning of the patent claims, the court

must juxtapose the claims of the patent and theaccused product within the overall context of theclaims and specifications, to determine whether

there is exact identity of all material elements. Onthe other hand, under the doctrine of equivalents,an infringement also occurs when a deviceappropriates a prior invention by incorporating itsinnovative concept and, albeit with somemodification and change, performs substantially thesame function in substantially the same way toachieve substantially the same result.

13. Patent infringement

Del Rosario v CA (1996)

It is elementary that a patent may be infringedwhere the essential or substantial features of thepatented invention are taken or appropriated, orthe device, machine or other subject matter allegedto infringe is substantially identical with the patentinvention. In order to infringe a patent, a machineor device must perform the same function, oraccomplish the same result by identical or

substantially identical means and the principle ormode of operation must be substantially the same.

Creser Precision Systems, Inc. v. CA, et al.,286 SCRA 13 [1998]

Only the patentee or his successor-in-interest mayfile an action for infringement. Moreover, there canbe no infringement of a patent until a patent hasbeen issued, since whatever right one has to the

invention covered by the patent arises alone fromthe grant of patent. In short, a person or entitywho has not been granted letter of patent over aninvention and has not acquired any rights or titlethereto either as an assignee or a licensee, has nocause of action for infringement because the rightto maintain an infringement suit depends upon theexistence of a patent.

SMITH KLINE BECKMAN CORPORATION vCA (2003)

The doctrine of equivalents provides that aninfringement also takes place when a deviceappropriates a prior invention by incorporating itsinnovative concept and, although with somemodification and change, performs substantially thesame function in substantially the same way toachieve substantially the same result Theprinciple or mode of operation must be thesame or substantially the same.

The doctrine of equivalents thus requiressatisfaction of the function-means-and-result test,the patentee having the burden to show that allthree components of such equivalency test are

met.

14. Voluntary Licensing

Sec. 85. Voluntary License Contract. - Toencourage the transfer and dissemination oftechnology, prevent or control practices andconditions that may in particular cases constitutean abuse of intellectual property rights having anadverse effect on competition and trade, alltechnology transfer arrangements shall complywith the provisions of this Chapter.

Sec. 88. Mandatory Provisions. - The following

provisions shall be included in voluntary licensecontracts:

88.1. That the laws of the Philippines shallgovern the interpretation of the same and inthe event of litigation, the venue shall be theproper court in the place where the licenseehas its principal office;

88.2. Continued access to improvements intechniques and processes related to thetechnology shall be made available during theperiod of the technology transfer arrangement;

88.3. In the event the technology transferarrangement shall provide for arbitration, the

Procedure of Arbitration of the Arbitration Lawof the Philippines or the Arbitration Rules of theUnited Nations Commission on InternationalTrade Law (UNCITRAL) or the Rules ofConciliation and Arbitration of the InternationalChamber of Commerce (ICC) shall apply andthe venue of arbitration shall be the Philippines

or any neutral country; and


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97.3. The use authorized in respect of the firstpatent shall be non-assignable except with theassignment of the second patent; and

97.4. The terms and conditions of Sections 95,96 and 98 to 100 of this Act. (Sec. 34-C, RA165a)

16. Assignment and Transfer of Patent

Sec. 104. Assignment of Inventions. - Anassignment may be of the entire right, title orinterest in and to the patent and the inventioncovered thereby, or of an undivided share of theentire patent and invention, in which event theparties become joint owners thereof. Anassignment may be limited to a specified territory.(Sec. 51, RA 165)

Sec. 105. Form of Assignment. - The assignmentmust be in writing, acknowledged before a notary

public or other officer authorized to administer oathor perform notarial acts, and certified under thehand and official seal of the notary or such otherofficer. (Sec. 52, RA 165)

Sec. 106. Recording. -

106.1. The Office shall record assignments,licenses and other instruments relating to thetransmission of any right, title or interest inand to inventions, and patents or application

for patents or inventions to which they relate,which are presented in due form to the Officefor registration, in books and records kept for

the purpose. The original documents togetherwith a signed duplicate thereof shall be filed,and the contents thereof should be keptconfidential. If the original is not available, anauthenticated copy thereof in duplicate may befiled. Upon recording, the Office shall retain theduplicate, return the original or theauthenticated copy to the party who filed thesame and notice of the recording shall bepublished in the IPO Gazette.

106.2. Such instruments shall be void asagainst any subsequent purchaser ormortgagee for valuable consideration and

without notice, unless, it is so recorded in theOffice, within three (3) months from the date ofsaid instrument, or prior to the subsequent

purchase or mortgage. (Sec. 53, RA 165a)

17. Cancellation of Patent

Sec. 61. Cancellation of Patents. -

61.1. Any interested person may, uponpayment of the required fee, petition to cancelthe patent or any claim thereof, or parts of theclaim, on any of the following grounds:

(a) That what is claimed as the invention isnot new or patentable;

(b) That the patent does not disclose theinvention in a manner sufficiently clearand complete for it to be carried out byany person skilled in the art; or

(c) That the patent is contrary to publicorder or morality.

61.2. Where the grounds for cancellation relateto some of the claims or parts of the claim,cancellation may be effected to such extentonly. (Secs. 28 and 29, RA 165a)

Sec. 62. Requirement of the Petition. - The petitionfor cancellation shall be in writing, verified by thepetitioner or by any person in his behalf who knowsthe facts, specify the grounds upon which it isbased, include a statement of the facts to be relied

upon, and filed with the Office. Copies of printedpublications or of patents of other countries, andother supporting documents mentioned in thepetition shall be attached thereto, together with thetranslation thereof in English, if not in Englishlanguage. (Sec. 30, RA 165)

Sec. 63. Notice of Hearing. - Upon filing of apetition for cancellation, the Director of LegalAffairs shall forthwith serve notice of the filingthereof upon the patentee and all persons having

grants or licenses, or any other right, title orinterest in and to the patent and the inventioncovered thereby, as appears of record in the Office,and of notice of the date of hearing thereon onsuch persons and the petitioner. Notice of the filingof the petition shall be published in the IPOGazette. (Sec. 31, RA 165a)

Sec. 66. Effect of Cancellation of Patent or Claim. -The rights conferred by the patent or any specifiedclaim or claims cancelled shall terminate. Notice ofthe cancellation shall be published in the IPOGazette. Unless restrained by the Director General,the decision or order to cancel by Director of Legal

Affairs shall be immediately executory evenpending appeal. (Sec. 32, RA 165a)

Chapter III.

INDUSTRIAL DESIGNSAND LAY-OUT

DESIGNS (TOPOGRAPHIES) OF

INTEGRATED CIRCUITS

1. Substantive Conditions for Protection

Sec. 113. Substantive Conditions for Protection. -113.1. Only industrial designs that are new orornamental shall benefit from protection under thisAct.

113.2. Industrial designs dictated essentiallyby technical or functional considerations toobtain a technical result or those that arecontrary to public order, health or morals shallnot be protected.

113.3. Only layout -designs of integratedcircuits that are original shall benefit fromprotection under this Act. A layout-design shall

be considered original if it is the result of itscreator's own intellectual effort and is notcommonplace among creators of layout-designsand manufacturers of integrated circuits at thetime of its creation.

113.4. A layout-design consisting of acombination of elements and interconnectionsthat are commonplace shall be protected only ifthe combination, taken as a whole, is original.


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1.1. Rights Conferred on Registered Owner ofLay-out Design

Sec. 119.4. Rights Conferred to the Owner of aLayout-Design Registration. - The owner of alayout-design registration shall enjoy the followingrights:

(1) to reproduce, whether by incorporation inan integrated circuit or otherwise, the

registered layout-design in its entirety orany part thereof, except the act ofreproducing any part that does notcomply with the requirement of originality; and

(2) to sell or otherwise distribute forcommercial purposes the registeredlayout design, an article or an integratedcircuit in which the registered layout-design is incorporated.

Sec. 119.5. Limitations of Layout Rights. - T h eowner of a layout design has no right to preventthird parties from reproducing, selling or otherwisedistributing for commercial purposes the registeredlayout-design in the following circumstances:

(1) Reproduction of the registered layout-design for private purposes or for thesole purpose of evaluation, analysis,

research or teaching;(3) Where the act is performed in respect of a

layout-design created on the basis of suchanalysis or evaluation and which is itselforiginal in the meaning as provided

herein;(4) Where the act is performed in respect of aregistered lay-out-design, or in respect ofan integrated circuit in which such alayout-design is incorporated, that hasbeen put on the market by or with theconsent of the right holder;

(5) In respect of an integrated circuit where

the person performing or ordering suchan act did not know and had noreasonable ground to know whenacquiring the integrated circuit or thearticle incorporating such an integratedcircuit, that it incorporated an unlawfully

reproduced layout-design: Provided,however, That after the time that suchperson has received sufficient notice thatthe layout-design was unlawfullyreproduced, that person may perform anyof the said acts only with respect to thestock on hand or ordered before suchtime and shall be liable to pay to the rightholder a sum equivalent to at least 5% ofnet sales or such other reasonable royaltyas would be payable under a freelynegotiated license in respect of suchlayout-design; or

(6) Where the act is performed in respect of

an identical layout-design which is originaland has been created independently by athird party.

1.2. Grounds for Cancellation of Registration

Sec. 120. Cancellation of Design Registration.

120.1. At any time during the term of theindustrial design registration, any person uponpayment of the required fee, may petition the

Director of Legal Affairs to cancel the industrialdesign on any of the following grounds:

(a) If the subject matter of the industrialdesign is not registerable within theterms of Sections 112 and 113;

(b) If the subject matter is not new; or(c) If the subject matter of the industrial

design extends beyond the content ofthe application as originally filed.

120.2. Where the grounds for cancellationrelate to a part of the industrial design,cancellation may be effected to such extentonly. The restriction may be effected in theform of an alteration of the effected features ofthe design.

120.3. Grounds for Cancellation of Layout-Design of Integrated Circuits.- Any interestedperson may petition that the registration of a

layout-design be canceled on the ground that:

(a) the layout-design is not protectableunder this Act;

(b) the right holder is not entitled toprotection under this Act; or

(c) where the application for registrationof the layout-design, was not filedwithin two (2) years from its first

commercial exploitation anywhere inthe world.

Where the grounds for cancellation areestablished with respect only to a part of the

layout-design, only the corresponding part ofthe registration shall be canceled.Any canceled layout-design registration or partthereof, shall be regarded as null and void fromthe beginning and may be expunged from therecords of the Intellectual Property Office.Reference to all canceled layout-designregistration shall be published in the IPO

Gazette.

Chapter IV.

TRADEMARKS

1. Marks and Names

Sec. 121. Definitions. - As used in Part III, thefollowing terms have the following meanings:

121.1. "Mark" means any visible sign capableof distinguishing the goods (trademark) orservices (service mark) of an enterprise andshall include a stamped or marked container ofgoods; (Sec. 38, RA 166a)

121.2. "Collective mark" means any visible

sign designated as such in the application forregistration and capable of distinguishing theorigin or any other common characteristic,including the quality of goods or services ofdifferent enterprises which use the sign underthe control of the registered owner of thecollective mark; (Sec. 40, RA 166a)

121.3. "Trade name" means the name ordesignation identifying or distinguishing anenterprise; (Sec. 38, RA 166a)


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1.1. Product name and container not propersubjects of copyright and patent registration

Kho v. CA, et al., 379 SCRA 410 [2002]

The name and container of a beauty cream productare proper subjects of a trademark inasmuch asthe same falls squarely within its definition. Inorder to be entitled to exclusively use the same in

the sale of the beauty cream product, the usermust sufficiently prove that she registered or usedit before anybody else did. The petitionerscopyright and patent registration of the name andcontainer would not guarantee her right to theexclusive use of the same for the reason that theyare not appropriate subjects of the said intellectualrights. Consequently, a preliminary injunction ordercannot be issued for the reason that the petitionerhas not proven that she has a clear right over thesaid name and container to the exclusion of others,

not having proven that she has registered atrademark thereto or used the same before anyonedid.

2. Acquisition of Ownership

Sec. 122. How Marks are Acquired. - The rights ina mark shall be acquired through registration madevalidly in accordance with the provisions of thislaw. (Sec. 2-A, RA 166a)

Sec. 165. Trade Names or Business Names. -

165.1. A name or designation may not be used

as a trade name if by its nature or the use towhich such name or designation may be put, itis contrary to public order or morals and if, inparticular, it is liable to deceive trade circles orthe public as to the nature of the enterpriseidentified by that name.

165.2. (a) Notwithstanding any laws orregulations providing for any obligation toregister trade names, such names shall beprotected, even prior to or without registration,against any unlawful act committed by thirdparties.(b) In particular, any subsequent use of the

trade name by a third party, whether as atrade name or a mark or collective mark, orany such use of a similar trade name or mark,

likely to mislead the public, shall be deemedunlawful.

3. Use of Mark as a Requirement

Sec. 124.2. The applicant or the registrant shallfile a declaration of actual use of the mark withevidence to that effect, as prescribed by theRegulations within three (3) years from the filingdate of the application. Otherwise, the applicationshall be refused or the mark shall be removed fromthe Register by the Director.

4. Non-Registrable Marks

Sec. 123.1. A mark cannot be registered if it:

(a) Consists of immoral, deceptive orscandalous matter, or matter which maydisparage or falsely suggest a connectionwith persons, living or dead, institutions,

beliefs, or national symbols, or bring theminto contempt or disrepute;

(b) Consists of the flag or coat of arms orother insignia of the Philippines or any ofits political subdivisions, or of any foreignnation, or any simulation thereof;

(c) Consists of a name, portrait or signatureidentifying a particular living individualexcept by his written consent, or thename, signature, or portrait of a deceased

President of the Philippines, during the lifeof his widow, if any, except by writtenconsent of the widow;

(d) Is identical with a registered markbelonging to a different proprietor or amark with an earlier filing or priority date,in respect of:

1) The same goods or services, or2) Closely related goods or services,

or3) If it nearly resembles such a mark

as to be likely to deceive or causeconfusion;(e) Is identical with, or confusingly similar to,

or constitutes a translation of a markwhich is considered by the competentauthority of the Philippines to be well-known internationally and in thePhilippines, whether or not it is registeredhere, as being already the mark of a

person other than the applicant forregistration, and used for identical orsimilar goods or services: Provided, Thatin determining whether a mark is well-known, account shall be taken of the

knowledge of the relevant sector of thepublic, rather than of the public at large,including knowledge in the Philippineswhich has been obtained as a result of thepromotion of the mark;

(f) Is identical with, or confusingly similar to,or constitutes a translation of a markconsidered well-known in accordance with

the preceding paragraph, which isregistered in the Philippines with respectto goods or services which are not similarto those with respect to which registrationis applied for: Provided, That use of themark in relation to those goods or services

would indicate a connection betweenthose goods or services, and the owner ofthe registered mark: Provided further,That the interests of the owner of theregistered mark are likely to be damagedby such use;

(g) Is likely to mislead the public, particularlyas to the nature, quality, characteristics orgeographical origin of the goods orservices;

(h) Consists exclusively of signs that aregeneric for the goods or services that theyseek to identify;

(i) Consists exclusively of signs or of

indications that have become customaryor usual to designate the goods orservices in everyday language or in bonafide and established trade practice;

(j) Consists exclusively of signs or of indications that may serve in trade todesignate the kind, quality, quantity,intended purpose, value, geographicalorigin, time or production of the goods orrendering of the services, or othercharacteristics of the goods or services;


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(k) Consists of shapes that may benecessitated by technical factors or by thenature of the goods themselves or factorsthat affect their intrinsic value;

(l) Consists of color alone, unless defined bya given form; or

(m) Is contrary to public order or morality.

A mark is valid if it is distinctive and hence notbarred from registration under the Trademark

Law. However, once registered, not only themarks validity but also the registrants ownershipthereof is prima facie presumed.

5. Tests to Determine Confusing Similarity

Between Marks

5.1. Colorable imitation

Societe des Produits Nestl, S.A. v. CA, 356SCRA 207 [2001]

Colorable imitation denotes such a close oringenious imitation as to be calculated to deceiveordinary persons, or such a resemblance to theoriginal as to deceive an ordinary purchaser givingsuch attention as a purchaser usually gives, as tocause him to purchase the one supposing it to bethe other. In ascertaining whether one mark isconfusingly similar to or is a colorable imitation ofanother, no set rules can be deduced. Each casemust be decided on its own merits. Thecomplexities attendant to an accurate assessmentof likelihood of confusion require that the entirepanoply of elements constituting the relevant

factual landscape be comprehensively examined.

5.2. Holistic test

Del Monte Corporation, et al. v. CA, 181 SCRA410 [1990]

To determine whether a trademark has beeninfringed, we must consider the mark as a wholeand not as dissected. If the buyer is deceived, it isattributable to the marks as a totality, not usuallyto any part of it. The court therefore should beguided by its first impression, for the buyer acts

quickly and is governed by a casual glance, thevalue of which may be dissipated as soon as thecourt assumed to analyze carefully the respectivefeatures of the mark.

5.3. Test of dominancy

Asia Brewery v. CA and San Miguel, 224 SCRA437 [1993]

Infringement is determined by the test ofdominancy rather than by differences orvariations in the details of one trademark and ofanother. Similarity in size, form and color, while

relevant, is not conclusive. If the competingtrademark contains the main or essential ordominant features of another, and confusion islikely to result, infringement takes place.

Societe Des Produits Nestle, S.A. v. CA (2001)

The totality or holistic test is contrary to theelementary postulate of the law on trademarks andunfair competition that confusing similarity is to be

determined on the basis of visual, aural,connotative comparisons and overall impressionsengendered by the marks in controversy as theyare encountered in the marketplace. The totality orholistic test only relies on visual comparisonsbetween two trademarks whereas the dominancytest relies not only on the visual but also on theaural and connotative comparisons and overallimpressions between the two trademarks.

McDonalds Corporation v. L.C. Big MakBurger, Inc., et al., 437 SCRA 10 [2004]

This Court, xxx, has relied on the dominancy testrather than the holistic test. The dominancy testconsiders the dominant features in the competingmarks in determining whether they are confusinglysimilar. Under the dominancy test, courts givegreater weight to the similarity of the appearanceof the product arising from the adoption of thedominant features of the registered mark,

disregarding minor differences. Courts willconsider more the aural and visual impressionscreated by the marks in the public mind, givinglittle weight to factors like prices, quality, salesoutlets and market segments.

McDonalds Corp v MACJOY Fastfood Corp(2007)

Applying the dominancy test to the instant case,the Court finds that herein petitioners

MCDONALDS and respondents MACJOY marksare confusingly similar with each other such that anordinary purchaser can conclude an association or

relation between the marks.To begin with, both marks use the corporate Mdesign logo and the prefixes Mc and/or Mac asdominant features. The first letter M in bothmarks puts emphasis on the prefixes Mc and/or

Mac by the similar way in which they are depictedi.e. in an arch-like, capitalized and stylized manner.For sure, it is the prefix Mc, an abbreviation of

Mac, which visually and aurally catches theattention of the consuming public. Verily, the word

MACJOY attracts attention the same way as didMcDonalds, MacFries, McSpaghetti, McDo,Big Mac and the rest of the MCDONALDS markswhich all use the prefixes Mc and/or Mac.

Besides and most importantly, both trademarks areused in the sale of fastfood products. Indisputably,the respondents trademark application for the

MACJOY & DEVICE trademark covers goods underClasses 29 and 30 of the InternationalClassification of Goods, namely, fried chicken,chicken barbeque, burgers, fries, spaghetti, etc.Likewise, the petitioners trademark registration forthe MCDONALDS marks in the Philippines coversgoods which are similar if not identical to thosecovered by the respondents application.

6. Well-known Marks

Sec. 123.1. (e) Is identical with, or confusinglysimilar to, or constitutes a translation of a markwhich is considered by the competent authority ofthe Philippines to be well-known internationally andin the Philippines, whether or not it is registered

here, as being already the mark of a person otherthan the applicant for registration, and used foridentical or similar goods or services: Provided,That in determining whether a mark is well-known,account shall be taken of the knowledge of the


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relevant sector of the public, rather than of thepublic at large, including knowledge in thePhilippines which has been obtained as a result ofthe promotion of the mark;(f) Is identical with, or confusingly similar to, orconstitutes a translation of a mark considered well-known in accordance with the preceding paragraph,which is registered in the Philippines with respectto goods or services which are not similar to thosewith respect to which registration is applied for:

Provided, That use of the mark in relation to thosegoods or services would indicate a connectionbetween those goods or services, and the owner ofthe registered mark: Provided further, That theinterests of the owner of the registered mark arelikely to be damaged by such use;

Sec. 147.2. The exclusive right of the owner of awell-known mark defined in Subsection 123.1(e)which is registered in the Philippines, shall extendto goods and services which are not similar to

those in respect of which the mark is registered:Provided, That use of that mark in relation to thosegoods or services would indicate a connectionbetween those goods or services and the owner ofthe registered mark: Provided, further, That theinterests of the owner of the registered mark arelikely to be damaged by such use.

7. Registration

7.1. Requirements for Registration

Sec. 124. Requirements of Application. -

124.1. The application for the registra(a) A request for registration;

tion of the mark shall be in Filipino or in Englishand shall contain the following:

(b) The name and address of theapplicant;

(c) The name of a State of which theapplicant is a national or where hehas domicile; and the name of aState in which the applicant has areal and effective industrial orcommercial establishment, if any;

(d) Where the applicant is a juridicalentity, the law under which it is

organized and existing;(e) The appointment of an agent or

representative, if the applicant is

not domiciled in the Philippines;(f) Where the applicant claims the

priority of an earlier application, anindication of:1) The name of the State with

whose national office the earlierapplication was filed or it filedwith an office other than anational office, the name ofthat office,

2) The date on which the earlier

application was filed, and3) Where available, the application

number of the earlierapplication;

(g) Where the applicant claims color asa distinctive feature of the mark, astatement to that effect as well asthe name or names of the color orcolors claimed and an indication, in

respect of each color, of the

principal parts of the mark whichare in that color;

(h) Where the mark is a three-dimensional mark, a statement tothat effect;

(i) One or more reproductions of themark, as prescribed in theRegulations;

(j) A transliteration or translation of themark or of some parts of the mark,

as prescribed in the Regulations;(k) The names of the goods or services

for which the registration is sought,grouped according to the classes ofthe Nice Classification, together withthe number of the class of the saidClassification to which each group ofgoods or services belongs; and

(l) A signature by, or other self-identification of, the applicant or hisrepresentative.

124.2. The applicant or the registrant shallfile a declaration of actual use of the markwith evidence to that effect, as prescribedby the Regulations within three (3) yearsfrom the filing date of the application.Otherwise, the application shall be refusedor the mark shall be removed from theRegister by the Director.

124.3. One (1) application may relate toseveral goods and/or services, whetherthey belong to one (1) class or to severalclasses of the Nice Classification.

124.4. If during the examination of theapplication, the Office finds factual basis toreasonably doubt the veracity of anyindication or element in the application, itmay require the applicant to submitsufficient evidence to remove the doubt.(Sec. 5, RA 166a)

7.2. Priority Right

Sec. 131. Priority Right. -

131.1. An application for registration of a markfiled in the Philippines by a person referred toin Section 3, and who previously duly filed anapplication for registration of the same mark inone of those countries, shall be considered asfiled as of the day the application was first filedin the foreign country.

131.2. No registration of a mark in thePhilippines by a person described in this sectionshall be granted until such mark has beenregistered in the country of origin of theapplicant.

131.3. Nothing in this section shall entitle theowner of a registration granted under thissection to sue for acts committed prior to thedate on which his mark was registered in thiscountry: Provided, That, notwithstanding theforegoing, the owner of a well-known mark asdefined in Section 123.1(e) of this Act, that isnot registered in the Philippines, may, againstan identical or confusingly similar mark, opposeits registration, or petition the cancellation ofits registration or sue for unfair competition,


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without prejudice to availing himself of otherremedies provided for under the law.

131.4. In like manner and subject to the sameconditions and requirements, the right providedin this section may be based upon asubsequent regularly filed application in thesame foreign country: Provided, That anyforeign application filed prior to suchsubsequent application has been withdrawn,

abandoned, or otherwise disposed of, withouthaving been laid open to public inspection andwithout leaving any rights outstanding, and hasnot served, nor thereafter shall serve, as abasis for claiming a right of priority. (Sec. 37,RA 166a)

7.3. Classification of Goods and Services

Sec. 144. Classification of Goods and Services. -

144.1. Each registration, and any publicationof the Office which concerns an application orregistration effected by the Office shall indicatethe goods or services by their names, groupedaccording to the classes of the NiceClassification, and each group shall bepreceded by the number of the class of thatClassification to which that group of goods or

services belongs, presented in the order of theclasses of the said Classification.

144.2. Goods or services may not beconsidered as being similar or dissimilar to

each other on the ground that, in anyregistration or publication by the Office, theyappear in different classes of the NiceClassification. (Sec. 6, RA 166a)

7.4.Registration Procedure

Sec. 132. Application Number and Filing Date. -

132.1. The Office shall examine whether theapplication satisfies the requirements for thegrant of a filing date as provided in Section 127and Regulations relating thereto. If the

application does not satisfy the filingrequirements, the Office shall notify theapplicant who shall within a period fixed by theRegulations complete or correct the applicationas required, otherwise, the application shall beconsidered withdrawn.

132.2. Once an application meets the filingrequirements of Section 127, it shall benumbered in the sequential order, and theapplicant shall be informed of the applicationnumber and the filing date of the applicationwill be deemed to have been abandoned.

Sec. 133. Examination and Publication. -

133.1. Once the application meets the filingrequirements of Section 127, the Office shallexamine whether the application meets therequirements of Section 124 and the mark asdefined in Section 121 is registrable underSection 123.

133.2. Where the Office finds that theconditions referred to in Subsection 133.1 are

fulfilled, it shall, upon payment of theprescribed fee. Forthwith cause the application,as filed, to be published in the prescribedmanner.

133.3. If after the examination, the applicantis not entitled to registration for any reason,the Office shall advise the applicant thereof andthe reasons therefor. The applicant shall have aperiod of four (4) months in which to reply or

amend his application, which shall then be re-examined. The Regulations shall determine theprocedure for the re-examination or revival ofan application as well as the appeal to theDirector of Trademarks from any final action bythe Examiner.

133.4. An abandoned application may berevived as a pending application within three(3) months from the date of abandonment,upon good cause shown and the payment of

the required fee.

133.5. The final decision of refusal of theDirector of Trademarks shall be appealable tothe Director General in accordance with theprocedure fixed by the Regulations. (Sec. 7, RA166a)

Sec. 134. Opposition. - Any person who believesthat he would be damaged by the registration of amark may, upon payment of the required fee andwithin thirty (30) days after the publicationreferred to in Subsection 133.2, file with the Officean opposition to the application. Such opposition

shall be in writing and verified by the oppositor orby any person on his behalf who knows the facts,and shall specify the grounds on which it is basedand include a statement of the facts relied upon.Copies of certificates of registration of marksregistered in other countries or other supportingdocuments mentioned in the opposition shall befiled therewith, together with the translation in

English, if not in the English language. For goodcause shown and upon payment of the requiredsurcharge, the time for filing an opposition may beextended by the Director of Legal Affairs, who shallnotify the applicant of such extension. TheRegulations shall fix the maximum period of time

within which to file the opposition. (Sec. 8, RA165a)

Sec. 135. Notice and Hearing. - Upon the filing ofan opposition, the Office shall serve notice of thefiling on the applicant, and of the date of thehearing thereof upon the applicant and theoppositor and all other persons having any right,title or interest in the mark covered by theapplication, as appear of record in the Office. (Sec.9 RA 165)

Sec. 136. Issuance and Publication of Certificate. -When the period for filing the opposition has

expired, or when the Director of Legal Affairs shallhave denied the opposition, the Office uponpayment of the required fee, shall issue thecertificate of registration. Upon issuance of acertificate of registration, notice thereof makingreference to the publication of the application shallbe published in the IPO Gazette. (Sec. 10, RA 165)

Sec. 138. Certificates of Registration. - Acertificate of registration of a mark shall be primafacie evidence of the validity of the registration, the


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registrants ownership of the mark, and of theregistrants exclusive right to use the same inconnection with the goods or services and thosethat are related thereto specified in the certificate.(Sec. 20, RA 165)

7.5. Duration of Registration

Sec. 145. Duration.- A certificate of registrationshall remain in force for ten (10) years: Provided,That the registrant shall file a declaration of actualuse and evidence to that effect, or shall show validreasons based on the existence of obstacles to suchuse, as prescribed by the Regulations, within one(1) year from the fifth anniversary of the date ofthe registration of the mark. Otherwise, the markshall be removed from the Register by the Office.(Sec. 12, RA 166a)

Sec. 146. Renewal. -

146.1. A certificate of registration may berenewed for periods of ten (10) years at itsexpiration upon payment of the prescribed feeand upon filing of a request. The request shallcontain the following indications:

(a) An indication that renewal is sought;(b) The name and address of the

registrant or his successor-in-interest, hereafter referred to as the"right holder";

(c) The registration number of theregistration concerned;

(d) The filing date of the applicationwhich resulted in the registrationconcerned to be renewed;

(e) Where the right holder has arepresentative, the name andaddress of that representative;

(f) The names of the recorded goods orservices for which the renewal is

requested or the names of therecorded goods or services for whichthe renewal is not requested,grouped according to the classes ofthe Nice Classification to which thatgroup of goods or services belongs

and presented in the order of theclasses of the said Classification; and(g) A signature by the right holder or his

representative.

146.2. Such request shall be in Filipino or Englishand may be made at any time within six (6)months before the expiration of the period forwhich the registration was issued or renewed, or itmay be made within six (6) months after suchexpiration on payment of the additional fee hereinprescribed.

146.3. If the Office refuses to renew the

registration, it shall notify the registrant of hisrefusal and the reasons therefor.

146.4. An applicant for renewal not domiciled inthe Philippines shall be subject to and comply withthe requirements of this Act. (Sec. 15, RA 166a)

7.6. Rights Conferred by Registration

Sec. 147. Rights Conferred. -

147.1. The owner of a registered mark shallhave the exclusive right to prevent all thirdparties not having the owners consent fromusing in the course of trade identical or similarsigns or containers for goods or services whichare identical or similar to those in respect ofwhich the trademark is registered where suchuse would result in a likelihood of confusion. Incase of the use, of an identical sign for identical

goods or services, a likelihood of confusionshall be presumed.

147.2. The exclusive right of the owner of awell-known mark defined in Subsection123.1(e) which is registered in the Philippines,shall extend to goods and services which arenot similar to those in respect of which themark is registered: Provided, That use of thatmark in relation to those goods or serviceswould indicate a connection between those

goods or services and the owner of theregistered mark: Provided, further, That theinterests of the owner of the registered markare likely to be damaged by such use.

7.7. Protection limited to goods specified inregistration certificate

Faberge, Inc. v. IAC and Co Beng Kay, 215SCRA 316 [1992]

The certificate of registration can confer upon thepetitioner the exclusive right to use its own symbol

only to those goods specified in the certificate,subject to any conditions a limitations statedtherein. One who has adopted and used atrademark on his goods does not prevent theadoption and use of the same trademark by othersfor products which are of a different description.

8. Infringement and Remedies

Sec. 155. Remedies; Infringement. - Any personwho shall, without the consent of the owner of theregistered mark:

155.1. Use in commerce any reproduction,

counterfeit, copy, or colorable imitation of aregistered mark or the same container or adominant feature thereof in connection with the

sale, offering for sale, distribution, advertisingof any goods or services including otherpreparatory steps necessary to carry out thesale of any goods or services on or inconnection with which such use is likely tocause confusion, or to cause mistake, or todeceive; or

155.2. Reproduce, counterfeit, copy orcolorably imitate a registered mark or adominant feature thereof and apply such

reproduction, counterfeit, copy or colorableimitation to labels, signs, prints, packages,

wrappers, receptacles or advertisementsintended to be used in commerce upon or inconnection with the sale, offering for sale,distribution, or advertising of goods or serviceson or in connection with which such use islikely to cause confusion, or to cause mistake,or to deceive, shall be liable in a civil action for

infringement by the registrant for the remedieshereinafter set forth: Provided, That the


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infringement takes place at the moment any ofthe acts stated in Subsection

155.1. or this subsection are committedregardless of whether there is actual sale ofgoods or services using the infringing material.(Sec. 22, RA No 166a)

Sec. 156. Actions, and Damages and Injunction forInfringement.-

156.1. The owner of a registered mark mayrecover damages from any person whoinfringes his rights, and the measure of thedamages suffered shall be either thereasonable profit which the complaining partywould have made, had the defendant notinfringed his rights, or the profit which thedefendant actually made out of theinfringement, or in the event such measure ofdamages cannot be readily ascertained with

reasonable certainty, then the court may awardas damages a reasonable percentage basedupon the amount of gross sales of thedefendant or the value of the services inconnection with which the mark or trade namewas used in the infringement of the rights ofthe complaining party. (Sec. 23, First Par., RA166a)

156.2. On application of the complainant, thecourt may impound during the pendency of theaction, sales invoices and other documentsevidencing sales.156.3. In cases where actual intent to mislead

the public or to defraud the complainant isshown, in the discretion of the court, thedamages may be doubled. (Sec. 23, First Par.,RA 166)

156.4. The complainant, upon proper showing,may also be granted injunction. (Sec. 23,Second Par., RA 166a)

Sec. 157. Power of Court to Order InfringingMaterial Destroyed. -

157.1. In any action arising under this Act, inwhich a violation of any right of the owner of

the registered mark is established, the courtmay order that goods found to be infringing be,without compensation of any sort, disposed ofoutside the channels of commerce in such amanner as to avoid any harm caused to theright holder, or destroyed; and all labels, signs,prints, packages, wrappers, receptacles andadvertisements in the possession of thedefendant, bearing the registered mark ortrade name or any reproduction, counterfeit,copy or colorable imitation thereof, all plates,molds, matrices and other means of makingthe same, shall be delivered up and destroyed.

157.2. In regard to counterfeit goods, thesimple removal of the trademark affixed shallnot be sufficient other than in exceptional caseswhich shall be determined by the Regulations,to permit the release of the goods into thechannels of commerce. (Sec. 24, RA 166a).

Sec. 170. Penalties. - Independent of the civil andadministrative sanctions imposed by law, a criminalpenalty 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 isfound guilty of committing any of the actsmentioned in Section 155, Section 168 andSubsection 169.1. (Arts. 188 and 189, RevisedPenal Code)

Sec. 159. Limitations to Actions for Infringement. -Notwithstanding any other provision of this Act, theremedies given to the owner of a right infringed

under this Act shall be limited as follows:

159.1. Notwithstanding the provisions ofSection 155 hereof, a registered mark shallhave no effect against any person who, in goodfaith, before the filing date or the priority date,was using the mark for the purposes of hisbusiness or enterprise: Provided, That his rightmay only be transferred or assigned togetherwith his enterprise or business or with that partof his enterprise or business in which the mark

is used.

159.2. Where an infringer who is engagedsolely in the business of printing the mark orother infringing materials for others is aninnocent infringer, the owner of the rightinfringed shall be entitled as against suchinfringer only to an injunction against futureprinting.

159.3. Where the infringement complained ofis contained in or is part of paid advertisementin a newspaper, magazine, or other similarperiodical or in an electronic communication,

the remedies of the owner of the right infringedas against the publisher or distributor of suchnewspaper, magazine, or other similarperiodical or electronic communication shall belimited to an injunction against thepresentation of such advertising matter infuture issues of such newspapers, magazines,or other similar periodicals or in future

transmissions of such electroniccommunications. The limitations of thissubparagraph shall apply only to innocentinfringers: Provided, That such injunctive reliefshall not be available to the owner of the rightinfringed with respect to an issue of a

newspaper, magazine, or other similarperiodical or an electronic communicationcontaining infringing matter where restrainingthe dissemination of such infringing matter inany particular issue of such periodical or in anelectronic communication would delay thedelivery of such issue or transmission of suchelectronic communication is customarilyconducted in accordance with the soundbusiness practice, and not due to any methodor device adopted to evade this section or toprevent or delay the issuance of an injunctionor restraining order with respect to suchinfringing matter.

Mighty Corporation v. E. & J. Gallo Winery,434 SCRA 473 [2004]

A crucial issue in any trademark infringement caseis the likelihood of confusion, mistake or deceit asto the identity, source or origin of the goods oridentity of the business as a consequence of usinga certain mark. Likelihood of confusion isadmittedly a relative term, to be determined rigidly


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according to the particular (and sometimespeculiar) circumstances of each case. Indetermining likelihood of confusion, the court mustconsider: [a] the resemblance between thetrademarks; [b] the similarity of the goods towhich the trademarks are attached; [c] the likelyeffect on the purchaser; and [d] the registrantsexpress or implied consent and other fair andequitable considerations.


To establish trademark infringement, the followingelements must be shown: [1] the validity of themark; [2] the plaintiffs ownership of the mark;and [3] the use of the mark or its colorableimitation by the alleged infringer results in

likelihood of confusion. Of these, it is the elementof likelihood of confusion that is the gravamen oftrademark infringement. Two types of confusion

arise from the use of similar or colorable imitationmarks, namely, confusion of goods (productconfusion) and confusion of business (source ororigin confusion). While there is confusion of goodswhen the products are competing, confusion ofbusiness exists when the products are non-competing but related enough to produce confusionof affiliation.

Canon Kabushiki Kaisha v. CA, et al., 336SCRA 266 [2000]

The likelihood of confusion of goods or business is arelative concept, to be determined according to the

particular, and sometimes peculiar, circumstancesof each case. In cases of confusion of business ororigin, the question that usually arises is whetherthe respective goods or services of the senior userand the junior user are so related as to likely causeconfusion of business or origin, and thereby renderthe trademark or tradenames confusingly similar.Goods are related when they belong to the same

class or have the same descriptive properties;when they possess the same physical attributes oressential characteristics with reference to theirform, composition, texture or quality. They mayalso be related because they serve the samepurpose or are sold through the same channels of

distribution.

Samson v. Daway, 434 SCRA 612 [2004]

R.A. No. 8293 and R.A. No. 166 are special lawsconferring jurisdiction over violations of intellectualproperty rights to the Regional Trial Court. Theyshould therefore prevail over R.A. No. 7691, whichis a general law. Hence, jurisdiction is properlylodged with the Regional Trial Court even if thepenalty therefore is imprisonment of less than sixyears, or from 2 to 5 years and a fine ranging fromP50,000 to P200,000.

8.1. Notice Requirement

Sec. 158. Damages; Requirement of Notice. - Inany suit for infringement, the owner of theregistered mark shall not be entitled to recoverprofits or damages unless the acts have beencommitted with knowledge that such imitation islikely to cause confusion, or to cause mistake, or todeceive. Such knowledge is presumed if theregistrant gives notice that his mark is registered

by displaying with the mark the words "RegisteredMark" or the letter R within a circle or if thedefendant had otherwise actual notice of theregistration. (Sec. 21, RA 166a)

9. Unfair Competition

Sec. 168. Unfair Competition, Rights, Regulationand Remedies. -

168.1. A person who has identified in the mindof the public the goods he manufactures ordeals in, his business or services from those ofothers, whether or not a registered mark isemployed, has a property right in the goodwillof the said goods, business or services soidentified, which will be protected in the samemanner as other property rights.

168.2. Any person who shall employ deceptionor any other means contrary to good faith by

which he shall pass off the goods manufacturedby him or in which he deals, or his business, orservices for those of the one having establishedsuch goodwill, or who shall commit any actscalculated to produce said result, shall be guiltyof unfair competition, and shall be subject to anaction therefor.

168.3. In particular, and without in any waylimiting the scope of protection against unfaircompetition, the following shall be deemed

guilty of unfair competition:

(a) Any person, who is selling his goods

and gives them the generalappearance of goods of anothermanufacturer or dealer, either as tothe goods themselves or in thewrapping of the packages in whichthey are contained, or the devices orwords thereon, or in any other featureof their appearance, which would belikely to influence purchasers tobelieve that the goods offered arethose of a manufacturer or dealer,other than the actual manufacturer ordealer, or who otherwise clothes thegoods with such appearance as shall

deceive the public and defraudanother of his legitimate trade, or anysubsequent vendor of such goods or

any agent of any vendor engaged inselling such goods with a like purpose;

(b) Any person who by any artifice, ordevice, or who employs any othermeans calculated to induce the falsebelief that such person is offering theservices of another who has identifiedsuch services in the mind of thepublic; or

(c) Any person who shall make any falsestatement in the course of trade or

who shall commit any other actcontrary to good faith of a nature

calculated to discredit the goods,business or services of another.

168.4. The remedies provided by Sections156, 157 and 161 shall apply mutatismutandis. (Sec. 29, RA 166a)


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Del Monte Corporation, et al. v. CA, 181 SCRA410 [1990]

The following are the distinctions betweeninfringement of trademark and unfair competition:

1. Infringement of trademark is theunauthorized use of a trademark, whereasunfair competition is the passing off ofones goods as those of another.

2. In infringement of trademark, fraudulent

intent is unnecessary, whereas in unfaircompetition fraudulent intent is essential.

3. In infringement of trademark the priorregistration of the trademark is aprerequisite to the action, whereas in unfaircompetition registration is not necessary.

Mighty Corporation v. E. & J. Gallo Winery,434 SCRA 473 [2004]

The law on unfair competition is broader and moreinclusive than the law on trademark infringement.The latter is more limited but it recognizes a moreexclusive right derived from the trademarkadoption and registration by the person whosegoods or business is first associated with it. Hence,even if one fails to establish his exclusive propertyright to a trademark, he may still obtain relief onthe ground of his competitors unfairness or fraud.

Conduct constitutes unfair competition if the effectis to pass off on the public the goods of one man asthe goods of another.


The elements of an action for unfair competitionare: [1] confusing similarity in the generalappearance of the goods, and [2] intent to deceivethe public and defraud a competitor. The confusingsimilarity may or may not result from similarity in

the marks, but may result from other externalfactors in the packaging or presentation of thegoods. The intent to deceive and defraud may beinferred from the similarity in appearance of thegoods as offered for sale to the public. Actualfraudulent intent need not be shown.

Caterpillar, Inc v. Samson (2006)

An action for unfair competition is based on theproposition that no dealer in merchandise shouldbe allowed to dress his goods in simulation of thegoods of another dealer, so that purchasersdesiring to buy the goods of the latter would beinduced to buy the goods of the former. The mostusual devices employed in committing this crimeare the simulation of labels and the reproduction ofform, color and general appearance of the packageused by the pioneer manufacturer or dealer.

Chapter V.

COPYRIGHTS

1. Basic Principles

1. Works are protected by the sole fact of theircreation.Sec. 172.2. Works are protected by the solefact of their creation, irrespective of their modeor form of expression, as well as of theircontent, quality and purpose. (Sec. 2, PD No.49a)

2. Protection extends only to the expression of an

idea, not the idea itself.

Sec. 175. Unprotected Subject Matter. -Notwithstanding the provisions of Sections 172 and173, no protection shall extend, under this law, toany idea, procedure, system method or operation,concept, principle, discovery or mere data as such,even if they are expressed, explained, illustrated orembodied in a work; xxx xxx xxx

2. Definition

Sec. 177. Copy or Economic Rights. - Subject tothe provisions of Chapter VIII, copyright oreconomic rights shall consist of the exclusive rightto carry out, authorize or prevent the followingacts:

177.1. Reproduction of the work or substantialportion of the work;

177.2. Dramatization, translation, adaptation,abridgment, arrangement or othertransformation of the work;

177.3. The first public distribution of theoriginal and each copy of the work by sale orother forms of transfer of ownership;

177.4. Rental of the original or a copy of anaudiovisual or cinematographic work, a workembodied in a sound recording, a computerprogram, a compilation of data and othermaterials or a musical work in graphic form,irrespective of the ownership of the original orthe copy which is the subject of the rental;

177.5. Public display of the original or a copyof the work;

177.6. Public performance of the work; and

177.7. Other communication to the public ofthe work (Sec. 5, PD No. 49a)

3. Copyrightable Works

Sec. 172. Literary and Artistic Works.-

172.1. Literary and artistic works, hereinafterreferred to as "works", are original intellectualcreations in the literary and artistic domainprotected from the moment of their creationand shall include in particular:

(a) Books, pamphlets, articles and otherwritings;

(b) Periodicals and newspapers;(c) Lectures, sermons, addresses,

dissertations prepared for oraldelivery, whether or not reduced inwriting or other material form;

(d) Letters;


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(e) Dramatic or dramatico-musicalcompositions; choreographic worksor entertainment in dumb shows;

(f) Musical compositions, with or withoutwords;

(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 anindustrial design, and other works ofapplied art;

(i) Illustrations, maps, plans, sketches,charts and three-dimensional worksrelative to geography, topography,architecture or science;

(j) Drawings or plastic works of ascientific or technical character;

(k) Photographic works including works

produced by a process analogous tophotography; lantern slides;(l) Audiovisual works and

cinematographic works and worksproduced by a process analogous tocinematography or any process formaking audio-visual recordings;

(m) Pictorial illustrations andadvertisements;

(n) Computer programs; and(o) Other literary, scholarly, scientific

and artistic works.

Sec. 173. Derivative Works. -

173.1. The following derivative works shallalso be protected by copyright:

(a) Dramatizations, translations,adaptations, abridgments,arrangements, and other alterationsof literary or artistic works; and

(b) Collections of literary, scholarly orartistic works, and compilations ofdata and other materials which areoriginal by reason of the selection orcoordination or arrangement of theircontents. (Sec. 2, [P] and [Q], PD

No. 49)

173.2. The works referred to in paragraphs (a)and (b) of Subsection 173.1 shall be protectedas a new works: Provided however, That suchnew work shall not affect the force of anysubsisting copyright upon the original worksemployed or any part thereof, or be construedto imply any right to such use of the originalworks, or to secure or extend copyright in suchoriginal works. (Sec. 8, PD 49; Art. 10, TRIPS)

Sec. 174. Published Edition of Work. - In additionto the right to publish granted by the author, his

heirs or assigns, the publisher shall have a copyright consisting merely of the right of reproductionof the typographical arrangement of the publishededition of the work.

3.1. Format of a show not copyrightable

Joaquin, Jr., et al. v. Drilon, et al., 302 SCRA225 [1999]

The format of a show is not copyrightable. Section2 of PD No. 49, otherwise known as the Decree onIntellectual Property, enumerates the classes ofwork entitled to copyright protection. This provisionis substantially the same as Section 172 of theIntellectual Property Code (R.A. No. 8293). Theformat or mechanics of a television show is notincluded in the list of protected works. For thisreason, the protection afforded by the law cannotbe extended to cover them. Copyright, in the strict

sense of the term, is purely a statutory right.Being a statutory grant, the rights are only such asthe statute confers, and may be obtained andenjoyed only with respect to the subjects and bythe persons, and on terms and conditions specifiedin the statute.

4. Non-copyrightable Works (175, 176)

Sec. 175. Unprotected Subject Matter. -Notwithstanding the provisions of Sections 172 and

173, no protection shall extend, under this law, toany idea, procedure, system method or operation,concept, principle, discovery or mere data as such,even if they are expressed, explained, illustrated orembodied in a work; news of the day and othermiscellaneous facts having the character of mereitems of press information; or any official text of alegislative, administrative or legal nature, as wellas any official translation thereof.

Sec. 176. Works of the Government. -

176.1. No copyright shall subsist in any workof the Government of the Philippines. However,

prior approval of the government agency oroffice wherein the work is created shall benecessary for exploitation of such work forprofit. Such agency or office may, among otherthings, impose as a condition the payment ofroyalties. No prior approval or conditions shallbe required for the use of any purpose ofstatutes, rules and regulations, and speeches,lectures, sermons, addresses, anddissertations, pronounced, read or rendered incourts of justice, before administrativeagencies, in deliberative assemblies and inmeetings of public character. (Sec. 9, FirstPar., PD No. 49)

176.2. The Author of speeches, lectures,sermons, addresses, and dissertations

mentioned in the preceding paragraphs shallhave the exclusive right of making a collectionof his works.176.3. Notwithstanding the foregoingprovisions, the Government is not precludedfrom receiving and holding copyrightstransferred to it by assignment, bequest orotherwise; nor shall publication or republicationby the government in a public document of anywork in which copy right is subsisting be takento cause any abridgment or annulment of the

copyright or to authorize any use orappropriation of such work without the consent

of the copyright owners. (Sec. 9, Third Par., PDNo. 49)

5. Standard for Copyright Protection

Ching Kian Chuan v. Court of Appeals, 363SCRA 142 [2001]


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A person to be entitled to a copyright must be theoriginal creator of the work. He must have createdit by his own skill, labor, and judgment withoutdirectly copying or evasively imitating the work ofanother.

Ching v Salinas (2005)

Ownership of copyrighted material is shown byproof of originality and copyrightability. By

originality is meant that the material was notcopied, and evidences at least minimal creativity;that it was independently created by the authorand that it possesses at least same minimal degreeof creativity. Copying is shown by proof of accessto copyrighted material and substantial similaritybetween the two works. The applicant must thusdemonstrate the existence and the validity of hiscopyright because in the absence of copyrightprotection, even original creation may be freelycopied.

6. Economic Rights

Sec. 177. Copy or Economic Rights. - Subject tothe provisions of Chapter VIII, copyright oreconomic rights shall consist of the exclusive rightto carry out, authorize or prevent the followingacts:

177.1. Reproduction of the work or substantialportion of the work;

177.2. Dramatization, translation, adaptation,abridgment, arrangement or other

transformation of the work;

177.3. The first public distribution of theoriginal and each copy of the work by sale orother forms of transfer of ownership;

177.4. Rental of the original or a copy of anaudiovisual or cinematographic work, a workembodied in a sound recording, a computerprogram, a compilation of data and othermaterials or a musical work in graphic form,irrespective of the ownership of the original orthe copy which is the subject of the rental;

177.5. Public display of the original or a copyof the work;

177.6. Public performance of the work; and

177.7. Other communication to the public ofthe work (Sec. 5, PD No. 49a)

7. Droit de Suite

Sec. 200. Sale or Lease of Work. - In every sale orlease of an original

up 2008 commercial law (intellectual property code)

Documents