PitYeivnces among copyright.

trademarks and
patents............................................................ 206
SiiHpcniiion or removal of director or officer... 162 206
Dissolution of banka............................................ . 162 Definition................................................................
Scope or object....................................................... 207
Anti-Money Laundering Law Term of protection................................................. 208
(R.A. No. 9160, as amended) . 163 Modes of acquiring the various rights................ 208
Policy of the law............................................................ 163 Patents............................................................................ 210
Covered institutions/persons and their obligations 163 Patentable invention...................................................... 212
Covered and suspicious transactions........................ 166 217
Non-patentable invention..............................................
Money laundering-how committed and unlawful
168 Ownership of a patent................................................... 218
activities.......................................................
Functions of the AMLC............................................... 173 Right to a patent................................................... 218
Application for a freeze order..................................... 175 First-to-file rule..................................................... 220
Safe harbor provision................................................... 180 Invention created pursuant to a commission.... 220
Forfeiture provisions..................................................... 181 Right of Priority.................................................... 221
Mutual assistance among states................................ 182 Grounds for cancellation of a patent.......................... 222
Remedy of the true and actual inventor.................... 223
Philippine Deposit Insurance Corporation............. 183
Rights conferred by a patent........................................ 224
Basic Policy..................................................................... 183
Powers and functions of PDIC................................... 184 Limitations of patent rights......................................... 225
Concept of insured deposit.......................................... 184 Patent infringement...................................................... 231
Liability to depositors.................................................. 185 Tests in patent infringement............................... 233
Deposit liabilities required to be insured Civil and criminal action..................................... 235
with PDIC........................................... 186 Prescriptive period............................................... 238
Commencement of liability................................ 187 Defenses in action for infringement................... 238
Deposit accounts not entitled to payment..... 187 Licensing................................................................ 240
Extent of liability 187 Assignment and transmission of rights............ 247
Determination of insured deposits and Trademarks............................................................................. 247
calculation of liability...................... 188 Definition of Marks, Collective Marks,
Mode of payment................................................. 191 Trade Names................................................. 247
Effect of payment of insured deposit/
Acquisition of ownership of mark................................ 250
preferred credit................................. 191
Failure of depositor to claim insured
Acquisition of ownership of trade name.................... . 253
deposits............................................... 192 Non-registrable marks.................................................. 253
Examination of banks and deposit accounts. 192 Immoral, deceptive, scandalous matter or
Splitting of deposits............................................ 193 falsely suggesting a connection with
Prohibition against issuances of temporary person, belief, institution or symbol. 255
restraining order.............................. 194 Name, portrait, signature of living individual 256
Concept of bank resolution......................................... 195 Identical mark...................................................... 256
Role of PDIC in relation to banks in distress........ 197 Tests to determine confusing similarity
Truth in Lending Act (RA No. 3765)........................ 199 between marks.................................... 257
Idem sonans.......................................................... 267
Well-known marks................................................ 273
VII. INTELLECTUAL PROPERTY CODE
Rights conferred by registration.................................. 285
Intellectual property rights in general................................ 202 Trademark Infringement.............................................. 289
202
Intellectual property rights........................................... Remedies......................................................................... 291
xxiii
xxiv

J9JC9B0M

J9JC9B0M
 1
Registration of nmrku under the Madrid Protocol 300
Coverage ...................................... 303
Rights conferred .............................. 303
Term of protection 305
Copyright............................................................................................. 305
Basic Principles ......... 305
Copyrightable Works 307
Rights of the copyright owner 315 VII. INTELLECTUAL PROPERTY CODE
Reproduction 318
Derivative right 320
First public distribution 320 A. Intellectual property rights in general
Rental right 322
Right of public display 322 a. Intellectual property rights
Right of public performance 323
Right of communication to the public 323 1. What are intellectual property rights?
Rules on Ownership of Copyright 325 Intellectual property rights (IPR) are rights given to persons
Limitations on Copyright 331 O' er creation of their minds. It has two (2) categories:
Private Performance of a work 334 a. Industrial property which includes inventions (patents),
Making of quotations 335 trademarks, industrial design, and geographic indications
Information purposes 337 of source; and,
Under the direction and control of the government 338
b. Copyright and related rights. Copyright includes literary
Judicial proceedings or professional advice 339
340 and artistic works. Rights related to copyright include
Doctrine of fair use
those of performing artists in their performances,
Copyright Infringement 343 producers of phonograms in their recordings, and those of
broadcasters in their radio and television programs.1
VIII. CREDIT TRANSACTIONS 2. What are the kinds of intellectual property rights under the
Guaranty 357 Intellectual Property Code of the Philippines ("IPC")?
Surety 368 Under the IPC,2 the term Intellectual Property Rights under
Real Estate Mortgage Law 372 the Intellectual Property Code consist of:
Personal Property Security Act (R.A. No. 11057) 378
a. Copyright and related rights - Exist over original and
derivative intellectual creations in the literary and
IX. SPECIAL LAWS artistic domain protected from the moment of creation.3
Foreign Investment Act of 1991 b. Trademark and service marks—Any visible sign capable of
R.A. No. 7042, as amended by RA. No. 8179 distinguishing the goods (trademark) or services (service
mark) of an enterprise and shall include a stamped or
Policy of Law A.............................. 403 marked container of goods.4
Definition of Terms 408
Registration of Investments of Non-Philippine
Nationals 430 ’Gepty: Intellectual Property Compendium citing WIPO, p. 25, 2019 edition.
Foreign Investments in Export Enterprises 430 2Section 4.1, R.A. No. 8293, or the Intellectual Property Code of the Philippines.
Section 172, R.A. No. 8293.
Foreign Investments in Domestic Market Enterprises 431 ‘Section 121.1, R.A. No. 8293.
Foreign Investment Negative List 432
202
XXV

J9JC9B0M

J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
Geographic indications - Indications which identify a good
C.
as originating from a given territory, a region or locality
where a given quality, reputation or other characteristic
of the good is essentially attributable to its geographic
indication.6
Examples: Bordeaux (for wine), Grasse (for perfume) and
Tuscany (for olive oil).
d. Industrial designs — Any composition of line or colors or
any three-dimensional form, whether or not associated
with lines or colors; provided that such composition or
form gives a special appearance to and can serve as a
pattern for an industrial product or handicraft.6
e. Patents — Any technical solution of a problem with any
field of human activity which is new, involves an inventive
step and is industrially applicable.7
f. Lay out designs — Synonymous with topography, and
it means the three-dimensional disposition, however
expressed, of the elements, at least one of which is an
active element and of some or all of the interconnections
of an integrated circuit, or such a three-dimensional
disposition prepared for an integrated circuit intended for
manufacture.8
g. Integrated circuit — A product, in its final form or an
intermediate form, in which the elements are integrally
formed in and/or on a piece of material and which is
intended to perform an electronic function.9
h. Protection of undisclosed information - Means protection
of information lawfully held from being disclosed to,
acquired by, or used by others without their consent in a
manner contrary to honest commercial practices so long
as such information: i) is secret in the sense that it is not,
as a body or in the precise configuration and assembly
of its components, generally known among or readily
'Article 22, TRIPS Agreement.
'Section 112, R.A. No. 8293.
’Section 21, R.A. No. 8293.
'Section 112.3, R.A. No. 8293, as amended by R.A. No. 9150; Section 112.3,
IPC.
’Section 112.2, R.A. No. 8293, as amended.
J9JC9B0M
203
204 PIVINAON COMMERCIAL LAW:
ACOMPREHENSIVE GUIDE VOLUME II
accessible to persons within the circles that normally
deal with the kind of information in question; ii) has
commercial value because it is a secret; and iii) has been
subject to reasonable steps under the circumstances, by
the person lawfully in control of the information, to keep
it secret.10
3. Describe intellectual property as a right.
Intellectual Property right is statutory in nature. The rights
conferred on Intellectual Property must be provided by law and can
only be enjoyed on the terms specified by statute.
It is also an incorporeal right which exists separate and distinct
from the material object to which it is attached. Thus, ownership in
one does not necessarily vest ownership in the other. The transfer
of assignment of the Intellectual Property will not constitute a
conveyance of the thing it covers, nor would a conveyance of the
latter imply the transfer of the Intellectual Property Right.11
It is a private right, and as such, when it comes to enforcement
there is a need from the rights holder or the owner of the Intellectual
Property to participate or cooperate in any and all investigations
and prosecutions involving violations of Intellectual Property Rights
for purposes of establishing ownership of intellectual property and
determining the lack of consent or authority in the commission of
any act that is deemed an infringement.12
The right is also not absolute. It is subject to certain limitations
and exceptions as may be provided by law depending on the kind of
Intellectual Property Rights involved.13
4. Is hoarding or collection of empty bottles so that they can be
withdrawn from circulation and thus impede the circulation of
the bottled products a violation of IPR under the IPC?
It is not a violation of the IPC. While it is contrary to good
faith, hoarding does not constitute an act within the contemplation
of the IPC. It does not relate to any patent, trademark, trade name,
'“Article 39, TRIPS Agreement, as cited in Gepty: Intellectual Property Law
Compendium, ibid., p. 26.
"Distilleria Washington, Inc. v. Court of Appeals, G.R. No. 120961, October
17, 1996, cited in Gepty, ibid., p. 16.
12Gepty, ibid., p 16.
13Gepty, ibid., p. 17.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
or service mark that may have been invaded, intruded into, or used
without proper authority from the registered owner of the bottles.
Neither does it amount to unfair competition or pertain to mean
fraudulently “passing off’ products or services as those of another
or undertaking any representation or misrepresentation that would
confuse or tend to confuse the goods of one with those of another, or
vice versa.
In this light, hoarding for purposes of destruction is closer to
what another law [R.A. No. 623] covers. The latter makes it unlawful
for any person, without the written consent of the manufacturer,
bottler, or seller who has successfully registered the marks of
ownership in accordance with Section 1 of the said law, to fill such
bottles, boxes, kegs, barrels, or other similar containers so marked
or stamped, for the purpose of sale, or to sell, dispose of, buy, or
traffic in, or wantonly destroy the same, whether filled or not, or to
use the same for drinking vessels or glasses or for any other purpose
than that registered by the manufacturer, bottler or seller.14
5. Are trade secrets protected under the 1PC?
The IPC protects trade secrets in the sense that the law
covers protection of undisclosed information. In Air Philippines v.
Pennswell,16 the Supreme Court ruled that trade and industrial
secrets (pursuant to the IPC and other related laws) are exempted
from compulsory disclosure.
In this case, Pennswell, a corporation engaged in the business of
manufacturing and selling industrial chemicals, solvents and special
lubricants, filed an action for collection against Air Philippines. In
its Answer, Air Philippines contended that its refusal to pay was
due to the fraud that Pennswell committed on its previous sale of
certain items which were accordingly misrepresented as belonging
to a new line, but were in truth and in fact, identical with products
Air Philippines had previously purchased from Pennswell, and that
the latter merely altered the names and labels of such goods. During
the pendency of the trial, Air Philippines filed a motion to compel
Pennswell to give a detailed list of the ingredients and chemical
components of its products for comparison. The RTC initially
"Coca Cola Bottlers Philippines, Inc. Naga Plant v. Quintin Gomez, G.R. No.
154491, November 14, 2008; BAR 2016.
“G.R. No. 172835, December 13, 2007.
=
J9JC9B0M
205
2lW DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
granted the motion but reconsidered itself. The Court of Appeals
affirmed the RTC. The Supreme Court eventually held that a trade
secret is defined as a plan or process, tool, mechanism or compound
known only to its owner and those of his employees to whom it is
necessary to confide it. The definition also extends to a secret formula
or process not patented, but known only to certain individuals
using it in compounding some article of trade having a commercial
value. A trade secret may consist of any formula, pattern, device,
or compilation of information that: (1) is used in one’s business;
and (2) gives the employer an opportunity to obtain an advantage
over competitors who do not possess the information. Generally, a
trade secret is a process or device intended for continuous use in
the operation of the business, for example, a machine or formula,
but can be a price list or catalogue or specialized customer list. It
is indubitable that trade secrets constitute proprietary rights.
The inventor, discoverer, or possessor of a trade secret or similar
innovation has rights therein which may be treated as property, and
ordinarily an injunction will be granted to prevent the disclosure of
the trade secret by one who obtained the information “in confidence”
or through a “confidential relationship.”
The chemical composition, formulation, and ingredients
of Pennswell’s special lubricants are trade secrets within the
contemplation of the law. In the creation of its lubricants,
Pennswell expended efforts, skills, research, and resources. What
it had achieved by virtue of its investments may not be wrested on
the mere pretext that it is necessary for Air Philippines defense
against a collection for a sum of money. To compel its disclosure is to
cripple its business, and to place it at an undue disadvantage. If the
chemical composition of its lubricants is opened to public scrutiny,
it will stand to lose the backbone on which its business is founded.
b. Differences among copyright, trademarks and
patents
6. Distinguish trademark, trade name, patent and copyright from
one another.
a. Definition
A trademark is 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.16 In relation
■'Section 121.1, IPC; Section 121.1, IPC, as amended.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
thereto, a trade name means the name or designation identifying or
distinguishing an enterprise.”
A patent is an exclusive right granted to an inventor over an
invention or a utility model or industrial design to sell, use, and
make the same for commerce and industry.
The Supreme Court defined copyright as an intangible,
incorporeal right granted by statute to the author or originator
of certain literary or artistic productions, whereby he or she is
invested, for a specific period, with the sole and exclusive privilege
of multiplying copies of the same and publishing and selling them.18
The rights granted by copyright are, however, not limited to
multiplying copies of the literary or artistic work, publishing, and
selling, but also include any form of communication to the public,
as well as right of attribution, right to carry out derivative work,
and other moral rights. Copyright is likewise not confined to literary
and artistic work but also extend to scientific and scholarly works
similar to those works enumerated in Section 172.1 of the IPC.
Copyright should therefore be defined then as an incorporeal
and intangible property granted by law to the originator or creator of
certain literary, artistic, scientific and scholarly works whereby he
or she is invested for a specific period of time a collection of economic
and moral rights on the terms specified by statute.
b. Scope or object
Trademark attaches to goods or services of an enterprise and
stamped or marked containers.
Copyright is confined to literary, artistic and scientific works
which are original intellectual creations in the literary and artistic
domain protected from the moment of their creation. On the other
hand, patentable inventions refer to any technical solution of a
problem in any field of human activity which is new, involves an
inventive step and is industrially applicable.
’’Section 121.3, IPC, as amended.
l8Kensonic v. Uni-Line Multi Resources, Inc., supra and Fernando Juan v.
Roberto Juan, G.R. No. 221372, August 23, 2017 both citing Black's Law Dictionary,
Centennial Edition. 6th ed. West Group, St. Paul Minnesota, USA, 1990, p. 336.
J9JC9B0M
207
208 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
C. Term of protection
A patent is valid for 20 years from filing of the application for
the grant of patent. Copyright is generally valid for 50 years.”
For trademarks, a certificate of registration shall remain in
force for 10 years, provided, that the registrant shall file a declaration
of actual use and evidence to that effect, or shall show valid reasons
based on the existence of obstacles to such use, within one (1) year
from the fifth anniversary of the date of the registration of the mark.
Otherwise, the mark shall be removed from the Register by the
Office.20
d. Modes of acquiring the various rights
Trademark is acquired solely through registration in accordance
with the provisions of the Intellectual Property Code (“IPC ).21
Patent is likewise acquired through application with, and grant by,
foe IPO. Copyright is acquired from the moment of ci’eation.
7. Are trademark, copyright and patent interchangeable?
Trademark, copyright and patents are different intellectual
property rights thatcannot be interchanged with another. These three
are completely distinct and separate from one another
an t e protection afforded by one cannot be used interchangeably
to cover items or works that exclusively pertain to the others.22 Thus,
e upreme Court ruled that the name and container of a beauty
cream product are proper subjects of a trademark inasmuch as the
same alls squarely within its definition. In order to be entitled to
exc usively use the same in the sale of the beauty cream product,
e user must sufficiently prove that she registered or used it before
any ody else did. The owner’s copyright and patent registration of
e name and container would not guarantee her the right to the
’’Section 54, IPC, as amended.
“Section 145, IPC, as amended.
21In Zuneca Pharmaceutical v. Natrapharm, G.R. No. 211850, September 8,
2020, the Supreme Court, in an en banc decision, abandoned its previous ru ings t at
registration does not confer ownership of the trademark and that the first user in
good faith defeats the right of the first filer in good faith; and ruled that trademark is
acquired through registration and not prior use.
“Elidad Kho v. Court of Appeals, G.R. No. 115758, March 19, 2002.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
exclusive use of the same for the reason that they are not appropriate
subjects of the said intellectual rights.23
In another case, eye leaf bushing is a useful article but it
has no artistic value. Even though it was covered by a certificate
of registration of copyright coupled with notice of deposit with
the National Library, no copyright is obtained. There can be no
copyright infringement despite sale by another of the same product.
The owner should have obtained instead a patent for utility model.24
It was also held that light boxes which utilize specially printed
posters sandwiched between plastic sheets and illuminated with
backlights are not literary or artistic pieces with could be copyrighted.
What is copyrightable is the pictorial or drawing contained in the
light boxes. The light boxes would have been appropriate for patent,
but because copyright and not patent was obtained, then, the first
manufacturer of the light box could not sue another manufacturer
for patent infringement.26
8, Roberto has been using the name and mark "Lavandera Ko"
in his laundry business since 1994. He has a certificate of
copyright over said name and mark. Overtheyears, his business
expanded with numerous franchise outlets in the Philippines.
Roberto then formed a corporation to handle the said business.
He called it Laundromatic Corporation (Laundromatic) and it
was incorporated in 1997, while "Lavandera Ko" was registered
as a business name in 1998 with the Department of Trade and
Industry (DTI). Later on, Roberto discovered that his brother,
Fernando, was able to register the name and mark "Lavandera
Ko" with the Intellectual Property Office (IPO) in 2010, the
registration of which was filed in 1995. He also discovered that
Fernando had been selling Roberto's franchises. Thus, Roberto
filed a petition for injunction, unfair competition, infringement
of copyright, cancellation of trademark and name before the
RTC. The RTC dismissed the action, finding that neither party
was the originator of the subject mark. The judge ruled that the
mark was created by a certain Santiago Suarez in 1942 in his
musical composition "Lavandera Ko.” Is the RTC correct?
“Kho, supra.
24Jessie G. Ching v. William Salinas, Sr., et al., G.R. No. 161295, June 29,2005.
“Pearl & Dean Phil. v. Shoemart, Inc., G.R. No. 148222, August 15, 2003.
Section 109, IPC, as amended.
J9JC9B0M
209
210 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
No. The RTC’s riding is erroneous as it confused trade or
business name with copyright. “Lavandera Ko,” the mark in question
in this case is being used as a trade name or specifically, a service
name since the business in which it pertains involves the rendering
of laundry services. As such, the basic contention of the parties is
who between them has the better right to use “Lavandera Ko” as a
service name, given that the law guarantees the protection of trade
names and business names prior to or even without registration,
against any unlawful act committed by third parties. A cause of
action arises when the subsequent use of any third party of such
trade name or business name would likely mislead the public as
such act is considered unlawful. Hence, the RTC erred in denying
the parties the proper determination as to who has the ultimate
right to use the said trade name by ruling that neither of them has
the right or a cause of action since ‘Lavandera Ko” is protected by
i copyright. The case was remanded to the RTC to determine who
letween Roberto and Fernando has a better right over “Lavandera
Co.”«
9. Can an article of commerce serve as a trademark and at the
same time enjoy patent and copyright protection? Explain and
give an example.
A stamped or marked container of goods can be registered as
a trademark. An original ornamental design or model for articles
of manufacture can be copyrighted if the design can be separated
from the utilitarian aspect of the product. An ornamental design
cannot be patented, because aesthetic creations cannot be patented.
However, it can be registered as an industrial design. Thus, a
container of goods which has an original ornamental design on it
can be registered as a trademark, copyrighted, and registered as an
industrial design.27
B. Patents
10. What is a patent?
It is an exclusive right granted to an inventor over an invention
or a utility model or industrial design to sell, use, and make the
same for commerce and industry.
“Fernando Juan v. Roberto Juan, G.R. No. 221372, August 23, 2017.
2,BAR 2010.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
II. What are the various types of patents?
The following are the types of Patents: a) patentable inventions;
b) industrial designs; and c) utility models.
12. What is the purpose of the patent law?
The Patent law has a three-fold purpose: first, it seeks to foster
and reward invention; second, it promotes disclosure of inventions
to stimulate further innovation and to permit the public to practice
the invention once the patent expires; and third, the stringent
requirements for patent protection seek to ensure that ideas in
the public domain remain there for the free use of the public and
it is only after an exhaustive examination by the patent office that
patent is issued.28
13. What is a utility model?
It is any model of implements or tools or any industrial product,
or of part of the same which is of practical utility by reason of its form,
configuration or composition. An invention qualifies for registration
as a utility model if it is new and industrially applicable. The same
rules on patentable inventions apply to registration of utility model
except the requirement of inventive step. A utility model cannot be
renewed. It can only be registered for a period of seven (7) years
after date of the filing of the application, without any possibility of
renewal.28
The law expressly acknowledges that any new model of
implements or tools of any industrial product even if not possessed
of the quality of invention but which is of practical utility is entitled
to a patent for utility model.30
14. Cite examples of a utility model.
a. Being plain automotive spare parts that must conform
to the original structural design of the components
they seek to replace, the Leaf Spring Eye Bushing and
Vehicle Bearing Cushion are not ornamental; they lack
the decorative quality or value that must characterize
“Pearl & Dean (Phil.) Inc. v. Shoemart, Inc., G.R. No. 148222, August 15,
2003.
“Section 109, IPC, as amended.
’"Roberto Del Rosario v. Court of Appeals and Janito Corporation.
J9JC9B0M
211
212 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
authentic works of applied art nnd in actuality, they
are utility models, useful articles, albeit with no artistic
design or value.31
b. Audio equipment or commonly known as the sing along
system or karaoke.32
a. Patentable invention
15. What may be patented?
Any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially
applicable shall be patentable. It may be, or may relate to, a product,
or process, or an improvement of any of the foregoing.33
16. Cite examples of recently patented inventions.
The drone, the iPhone, locomotion assisting device, 3D printer,
retinal prosthesis (or bionic eye), global position system, CRISPR
ene Editing, brain implant, peer-to-peer information exchange for
mobile communication (or Bluetooth), self-driving car, apparatus
or utilizing solar radiant energy (or solar panel), third generation
wireless mobile communications, and virtual reality generator.34
17. Cite an example of patent involving improvement of a process.
In Aguas u. De Leon,35 the Supreme Court ruled that an
improvement of the old process of mosaic tile making is patentable.
In this case, De Leon had been granted and issued a patent for his
invention of certain new and useful improvements in the process
of making mosaic precast tiles. He filed a complaint for patent
infringement against Aguas who claimed in his answer that the
patent of De Leon was secured through misrepresentation as the
latter’s invention is neither inventive nor new and hence, not
patentable. It was ruled that the patent of De Leon was legally issued.
His process is an improvement of the old process of tile-making. The
tiles produced from De Leon’s process are suitable for construction
31Jessie Ching v. William Salinas, et al., G.R. No. 161295, June 29, 2005.
32Rosario v. Court of Appeals, supra.
“Section 21, IPC, as amended.
“15 Patents that changed the world: Jay Bennett, April 27, 2018.
“G.R. No. L-32160, January 30,1982.
J9JC9B0M

VII. INTELLECTUAL PROPERTY CODE 213
and ornamentation, which previously had not been achieved by tiles
made out of the old process of tile-making. De Leon’s invention has
therefore brought about a new and useful kind of tile. The old type
of tiles was usually intended for floors although there is nothing to
prevent one from using them for walling purposes. These tiles are
neither artistic nor ornamental. They are heavy and massive. The
improvement is indeed inventive and goes beyond the exercise of
mechanical skill. De Leon has improved the old method of making
tiles and precast articles which were not satisfactory because of
an intolerable number of breakages, especially if deep engravings
are made on the tile. He has overcome the problem of producing
decorative tiles with deep engraving, but with sufficient durability.
The Court also found Aguas liable for patent infringement.
18. What are the requisites for the patentability of an invention?
The requisites are derived from the definition of a patentable
invention itself. They are: a) novelty or newness; b) an inventive
step; and c) industrial applicability.
19. Define novelty as an element of patentability.
It is best defined in the negative: an invention shall not be
considered new if it forms part of a prior art. Prior art, on the other
hand, shall consist of:
a. Everything which has been made available to the public
anywhere in the world, before the filing date or the priority
date of the application claiming the invention; and,
b. The whole contents of a published application for a
patent, utility model, or industrial design registration,
filed or effective in the Philippines, with a filing or priority
date that is earlier than the filing or priority date of the
application.36
Thus, if the inventor makes his invention available to the public
but without obtaining a patent, he cannot restrain others from using
his invention. The use of the invention does not constitute patent
infringement. The rule is, no patent no protection. Neither can
anyone, however, from the public apply for and obtain a patent over
^Section 23, IPC, as amended.
J9JC9B0M
J9JC9B0M
21-1 niVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
same invention because the application for patent will no longer
satisfy the element of novelty.
It was held that a utility model shall not be considered “new"
if before the application for a patent it has been publicly known
or publicly used in this country or has been described in a printed
publication or publications circulated within the country, or if it is
substantially similar to any other utility model so known, used or
described within the country.37
It has been repeatedly held that an invention must possess the
essential elements of novelty, originality, and precedence; and for
the patentee to be entitled to protection, the invention must be new
to the world. When it was established by evidence that the powder
puffs identical with that of petitioner’s patents existed and were
publicly known and used as early as 1963 long before petitioner was
issued the patent in question, then the presumption of correctness
and validity of the patent should be set aside.38
20. What is the doctrine of prejudicial disclosure?
Under the doctrine of non-prejudicial disclosure, the disclosure
of information contained in the application during the 12 months
preceding the filing date or priority date of the application shall
not prejudice the applicant on the ground of lack of novelty if such
disclosure was made by the inventor himself.39
21. Yosha was able to put together a mechanical water pump in his
garage consisting of suction systems capable of drawing water
from the earth using less human effort than what was then
required by existing models. The water pump system provides
for a new system which has the elements of novelty and
inventive steps. Yosha, while preparing to have his invention
registered with the IPO, had several models of his new system
fabricated and sold in his province.
Is Yosha's invention no longer patentable by virtue of the
fact that he had sold several models to the public before the
formal application for registration of patent was filed with the
IPO?40
3'Angelita Manzano v. Court of Appeals, G.R. No. 113388, September 5,1997.
“Rosario Maguan v. Court of Appeals, G.R. L-45101, November 28, 1986.
"Section 25, IPC, as amended.
40BAR 2018.

VII. INTELLECTUAL PROPERTY CODE 215
Yosha's invention is still patentable despite the fact he had
sold several models to the public before the formal application for
registration of the patent was filed with the IPO. It is true that
an invention shall not be considered new if it forms part of a prior
art and that prior art shall consist of everything which has been
made available to the public anywhere in the world, before the filing
date or the priority date of the application claiming the invention.
This, however, presupposes that the one who has made available
the patentable invention to the public is a person other than the
applicant for patent.
Under the doctrine of non-prejudical disclosure, the disclosure
of information contained in the application during the 12 months
preceding the filing date or priority date of the application shall
not prejudice the applicant on the ground of lack of novelty if such
disclosure was made by the inventor himself.41
22. What is "inventive step" as an element of patentability?
An invention involves an inventive step if, having regard to
prior art, it is not obvious to a person skilled in the art at the time
of the filing date or priority date of the application claiming the
invention.42
Only prior art made available to the public before the filing
date or priority date is considered in assessing inventive step. Thus,
subsequent development in technologies or invention cannot be used
to discard the element of inventive step.
The phrase “skilled in the art” means the criterion is only
limited to a person with an average level of skill in the concerned
field. It excludes the best expert available.43
In the case of drugs and medicines, there is no inventive step
if the invention results from the mere discovery of a new form or
new property of a known substance which does not result in the
enhancement of the known efficacy of that substance, or the mere
discovery of any new property or new use for a known substance, or
the mere use of a known process unless such known process results
in a new product that employs at least one new reactant.44
‘'Section 25, IPC, as amended.
“Section 26.1, IPC, as amended.
"Gepty, ibid., p. 258.
“Section 26.2, IPC, as amended.
L
J9JC9B0M
J9JC9B0M
216 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
23. X Pharmaceuticals, Inc. has been manufacturing the antibiotic
ointment Marvelopis, which is covered by a patent expiring in
the year 2020. In January 2019, the company filed an application
for a new patent for Disilopis, which although constituting
the same substance as Marvelopis, is no longer treated as an
antibiotic but is targeted and marketed for a new use, i.e., skin
whitening.
Should X Pharmaceuticals, Inc.'s patent application for
Disilopis be granted? Explain.46
No, the patent application for Disilopis should not be granted.
The use of the existing patent although for a different purpose will
not satisfy the elements of novelty and inventive step.
Moreover, under Section 22 of the Intellectual Property Code,
as amended, discoveries, scientific theories and mathematical
methods, and in the case of drugs and medicines, the mere discovery
»f a new form or new property of a known substance which does not
esult in the enhancement of the known efficacy of that substance,
r the mere discovery of any new property or new use for a known
substance, or the mere use of a known process unless such known
process results in a new product that employs at least one new
reactant, are non-patentable inventions.
24. What is industrial applicability as an element of patentability?
An invention that can be produced and used in any industry
shall be industrially applicable.46
25. Cezar works in a car manufacturing company owned by Joab.
Cezar is quite innovative and loves to tinker with things. With
the materials and parts of the car, he was able to invent a
gas-saving device that will enable cars to consume less gas.
Francis, a co-worker, saw how Cezar created the device and
likewise came up with a similar gadget, also using scrap
materials and spare parts of the company. Thereafter, Francis
filed an application for registration of his device with the
Bureau of Patents. Eighteen (18) months later, Cezar filed his
application for the registration of his device with the Bureau of
Patents. Is the gas-saving device patentable? Explain.
45BAR 2019.
46Section 27, IPC, as amended.

VII. INTELLECTUAL PROPERTY CODE 217
Yes, it is patentable because it is new, it involves an inventive
step, and it is industrially applicable.47
b. Non-patentable invention
26. What are the non-patentable inventions?
These are inventions that are excluded from patent protection,
to wit:
a. Discoveries, scientific theories and mathematical
methods, and in the case of drugs and medicines, the
mere discovery of a new form or new property of a known
substance which does not result in the enhancement of the
known efficacy of that substance, or the mere discovery
of any new property or new use for a known substance,
or the mere use of a known process unless such known
process results in a new product that employs at least one
new reactant;
b. Schemes, rules and methods of performing mental acts,
playing games or doing business, and programs for
computers;
c. Methods for treatment of the human or animal body by
surgery or therapy and diagnostic methods practiced on
the human or animal body;
d. Plant varieties or animal breeds or essentially biological
process for the production of plants or animals;
e. Aesthetic creations; and
f. Anything which is contrary to public order or morality.48
27. Supposing Albert Einstein were alive today and he filed with
the Intellectual Property Office (IPO) an application for patent
for his theory of relativity expressed in the formula E = me2.
The IPO disapproved Einstein's application on the ground that
his theory of relativity is not patentable. Is the IPO's action
correct?
Yes. The IPO’s action is correct because the theory of relativity
is not patentable. Under Section 22.1 of the IPC, “discoveries,
scientific theories and mathematical methods” are non-patentable.49
"BAR 2005.
’’Section 22, IPC, as amended.
’’BAR 2006.
J9JC9B0M
J9JC9B0M
218 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME 11
28. X invented a method of improving the tenderness of meat by
injecting an enzyme solution into the live animal shortly before
a slaughter. Is the invention patentable?
No. A process or improvement of process that is related to
any field of human activity, having an inventive activity and is
industrially applicable may be patented. While the elements of
novelty and inventive step are present, the element of industrial
applicability is lacking. To be patentable, the processes must be
directed to making or improving a commercial or industrial product.50
29. X invented a bogus coin detector which can be used exclusively
on self-operating gambling devices otherwise known as one-
armed bandits. Can X apply for a patent? Reasons.
No. X may not apply for a patent since the gambling device
referred to in the problem is itself prohibited and against public
order. But if the machine is used in legalized gambling, such device
can be patented.51
C. Ownership of a patent
i. Right to a patent
30. Who has a right to a patent?
The right to a patent belongs to the inventor, his heirs,
or assigns. When two (2) or more persons have jointly made an
invention, the right to a patent shall belong to them jointly.52
31. Che-che invented a device that can convert rainwater to
automobile fuel. She asked Macon, a lawyer, to assist in
getting her invention patented. Macon suggested that they
form a corporation with other friends and have the corporation
apply for a patent, 80% of the shares of stock thereof to be
subscribed by Che-che and 5% by Macon. The corporation was
formed and the patent application was filed. However, Che-che
died three (3) months later of a heart attack.
“BAR 1989.
5IBAR 1989.
“Section 28, IPC, as amended.

VII. INTELLECTUAL PROPERTY CODE
Franco, the estranged husband of Che-che, contested
the application of the corporation and filed his own patent
application as the sole surviving heir of Che-che. Decide the
issue with reasons.
The estranged husband can successfully contest the application.
There is really no assignment here but subscription to shares of
stock of the corporation with the patent as the consideration. Patent
can only be issued to the inventor, heirs or assigns. There being
no assignment in accordance with the provisions of the IPC, the
husband, as heir, is entitled to the patent.
32. What happens if the inventor never secured a patent on a
patentable product but a copyright was secured instead?
In one case, a corporation was engaged in the manufacture of
advertising display units simply referred to as light boxes. These
units utilize specially printed posters sandwiched between plastic
sheets and illumined by back lights. The manufacturer was able to
secure a certificate of copyright registration over these illuminated
display units. On the issue of whether there is a patent infringement
if another person manufactures the same light boxes, it was held that
(assuming these fight boxes are patentable)when an inventor never
secured a patent for the fight boxes, it therefore acquired no patent
rights which could have protected its invention. The ultimate goal
of a patent system is to bring new designs and technologies into the
public through disclosure; hence, ideas, once disclosed to the public
without protection of a valid patent, are subject to appropriation
without significant restraint.63
And so, in that case, the Court ruled that the copyright
protection extended only to the technical drawings and not to the
light box itself as the latter does not fall under the category of
“prints, pictorial illustrations, advertising copies, labels, tags and
box wraps.” The light box was not a literary or artistic piece which
could be copyrighted under the copyright law; and no less clearly,
neither could the lack of statutory authority to make the light box
copyrightable be remedied by the simplistic act of entitling the
copyright certificate issued by the National Library as “Advertising
Display Units.”
“Pearl & Dean (Phil.) v. Shoemart, Inc., G.R. No. 148222, August 15, 2003.
J9JC9B0M
220 DIVINA ON COMMERCIAL LAW:
219 A COMPREHENSIVE GUIDE VOLUME 11
ii. First-to-file rule
33. What is the "First to File Rule" under the law on patent?
If two (2) or more persons have made the invention separately
and independently of each other, the right to the patent shall belong
to the person who filed an application for such invention, or where
two or more applications are filed for the same invention, it shall
belong to the applicant who has the earliest filing date or, the
earliest priority date.54
iii. Invention created pursuant to a commission
34. Who owns inventions created pursuant to a commission but
not under an employer-employee relationship?
The person who commissions the work shall own the patent,
unless otherwise provided in the contract.56
This is different from copyright where the work is owned by the
one who commissioned it but the copyright belongs to the author or
creator.
35. How about those inventions created by an employee?
In case the employee made the invention in the course of his
employment contract, the patent shall belong to: a) the employee,
if the inventive activity is not a part of his regular duties even if the
employee uses the time, facilities and materials of the employer; b)
the employer, if the invention is the result of the performance of
his regularly-assigned duties, unless there is an agreement, express
or implied, to the contrary.60
36. Cezar works in a car manufacturing company owned by Joab.
Cezar is quite innovative and loves to tinker with things. With
the materials and parts of the car, he was able to invent a
gas-saving device that will enable cars to consume less gas.
Francis, a co-worker, saw how Cezar created the device and
“Section 29, IPC, as amended.
55Section 30.1, IPC, as amended.
“Section 30.2, IPC, as amended.
J9JC9B0M

VII. INTELLECTUAL PROPERTY CODE 221
likewise came up with a similar gadget, also using scrap
materials and spare parts of the company. Thereafter, Francis
filed an application for registration of his device with the Bureau
of Patents. Eighteen months later, Cezar filed his application
for the registration of his device with the Bureau of Patents.
Assuming that it is patentable, who is entitled to the patent?
What, if any, is the remedy of the losing party?57
Francis is entitled to the Patent, because he had the earlier
filing date under the “First to File Rule.”68 The remedy of Cezar is to
file a petition in court for the cancellation of the patent of Francis on
the ground that he is the true and actual inventor, and ask for his
substitution as patentee.59
37. Supposing in the same question above, Joab got wind of the
inventions of his employees and also laid claim to the patents,
asserting that Cezar and Francis were using his materials and
company time in making the devices, will his claim prevail over
those of his employees? Explain.
No. The claim of Joab will not prevail over those ofhis employees,
even if they used his materials and company time in making the gas­
saving device. The invention of the gas-saving device is not part of
their regular duties as employees of a car manufacturing company.60
iv. Right of Priority
38. What is the "Right of Priority"?
An application for patent filed by any person who has previously
applied for the same invention in another country which by treaty,
convention or law affords similar privileges to Filipino citizens,
shall be considered as filed as of the date of the filing of the foreign
application; provided, that: a) the local application expressly claims
priority; b) it is filed within 12 months from the date of the earliest
foreign application was filed; and c) certified copy of the foreign
"BAR 2005.
“Section 29, IPC, as amended.
“Sections 67 and 68, IPC, as amended.
“Section 30.2, IPC, as amended.
J9JC9B0M
J9JC9B0M
1
222 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
application together with an English translation is filed within six
(6) months from the date of filing in the Philippines.61
A patent applicant with the right of priority is given preference
in the grant of a patent when there are two or more applicants for the
same invention. Since both the United States and the Philippines are
signatories to the Paris Convention for the Protection of Industrial
Property, an applicant who has filed a patent application in the
United States may have a right of priority over the same invention
in a patent application in the Philippines. However, this right of
priority does not immediately entitle a patent applicant the grant of
a patent. A right of priority is not equivalent to a patent. Otherwise,
a patent holder of any member-state of the Paris Convention need
not apply for patents in other countries where it wishes to exercise
its patent. It was, therefore, inaccurate for petitioner to argue
that its prior patent application in the United States removed the
invention from the public domain in the Philippines. It should have
complied with the other requirements of the actual grant of the
patent. In this case, the applicant for patent was declared abandoned
by’ the Intellectual Property Office for failure to comply with strict
procedural rules. The right of priority of the patent applicant was
therefore lost.62
d. Grounds for cancellation of a patent
39. What are the grounds for cancellation of patents?
The following are the grounds for the cancellation of a patent,
a) the invention is not new or patentable; b) the patent does not
disclose the invention in a manner sufficiently clear and complete
for it to be carried out by any person skilled in the art; or c) the
patent is contrary to public order or morality,63 or granted when the
product or the process is non-patentable.
Once cancelled, the rights conferred by the patent shall
terminate.
That the patent is granted not in favor of the true and actual
inventor is not a ground for cancellation of patent.
61Section 31, IPC, as amended.
“E.I. Dupont De Nemours and Co. v. Director Emma C. Francisco, et al., G.R.
No. 174379, August 31, 2016.
“Section 61.1, IPC.
 VII. INTELLECTUAL PROPERTY CODE
e. Remedy of the true and actual inventor
40. What are the remedies of a person declared by final court order
as having the right to the patent?
If a person referred to in Section 29 [First to File Rule] other
than the applicant, is declared by final court order or decision
as having the right to the patent, such person may, within three
(3) months after the decision has become final: a) prosecute the
application as his own application in place of the applicant; b) file a
new patent application in respect of the same invention; c) request
that the application be refused; or d) seek cancellation of the patent,
if one has already been issued.64
41. What are the remedies of the true and actual inventor deprived
of the patent?
If a person, who was deprived of the patent without his consent
or through fraud, is declared by final court order or decision to be the
true and actual inventor, the court shall order for his substitution
as patentee, or at the option of the true inventor, cancel the patent,
and award actual and other damages in his favor if warranted by
the circumstances.65
Even the true and actual inventor, who is not a patent holder,
cannot file an action for patent infringement. Such remedy is
available only to the patentee or his successors-in-interest.“
The remedy available to the inventor who is not issued the
patent is not to file a petition for cancellation of patent with the IPO
but institute the appropriate court action to be declared the patentee
and only after he has obtained judgment that he can ask the IPO to
cancel the patent of the holder. If the inventor was deprived of patent
through fraud or without his consent, he can ask for the cancellation
of patent of the holder upon finality of the favorable court decision;
whereas, if the patent is issued not to the first filer but no fraud
attended the patent issuance, the inventor must wait for three (3)
“Section 67, IPC.
“Section 68, IPC, as amended.
“Creser Precision Systems, Inc. Court of Appeals and Floro International
Group, G.R. No. 118708, February 2, 1998.
J9JC9B0M
223
224 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
months from finality of the favorable court decision before he can
seek for the cancellation of patent.
42. "I" has invented a certain device, which when attached to
the engine of a motor vehicle would cut the consumption of
gasoline by 50%. Without securing a patent therefor, he started
manufacturing the gadget in large quantities and promoted
its sales. An ingenious "J” bought one gadget, dismantled
and studied it, and in due time was himself manufacturing an
identical device. Before offering it for sale, "J" secured a patent
for his device which he called "Gasopid" "I" learns of the patent
and desires to secure his own patent but fearing that he might
be sued for infringement of patents, seeks your legal advice.
How can you help him? Explain briefly.67
T, being the first, true and actual inventor, may file an action
in court to be declared as the one entitled to the patent and upon
finality of the favorable judgment, ask the IPO to have the patent
granted to “J” cancelled and T be issued the patent. I may also
ask for actual and other damages as may be warranted under the
circumstances.
f. Rights conferred by a patent
43. What are the rights conferred by a patent?
A patent shall confer on its owner the following exclusive rights:
a) where the subject matter of a patent is a product, to restrain,
prohibit and prevent any unauthorized person or entity from making,
using, offering for sale, selling or importing that product; b) where
the subject matter of a patent is a process, to restrain, prevent or
prohibit any unauthorized person or entity from using the process,
and from manufacturing, dealing in, using, selling or offering for
sale, or importing any product obtained directly or indirectly from
such process.68
Patent owners shall also have the right to assign, or transfer
by succession the patent, and to conclude licensing contracts for the
same.69
G,BAR 1981.
“Section 71.1, IPC, as amended.
“Section 71.2 IPC, as amended.
J9JC9B0M J
 226
VII. INTELLECTUAL PROPERTY CODE 225
44. What is the term of patent?
The term of a patent shall be 20 years from the filing date of
the application. The term is not subject to extension.
45. What is the significance of the term of patent?
A patentee shall have the exclusive right to make, use and sell
the patented machine, article or product, and to use the patented
process for the purpose of industry or commerce, throughout the
territory of the Philippines for the term of the patent; and such
making, using, or selling by any person without the authorization of
the patentee constitutes infringement of the patent.70 The patentee’s
exclusive rights exist only during the term of the patent, hence, after
the cut-off date, the exclusive rights no longer exist.71
g- Limitations of patent rights
46. What are the limitations to patent rights?
The owner of a patent has no right to prevent third parties
from performing without his authorization the acts of making,
using, offering to sell, selling and importing the patented product or
process in the following circumstances:72
a. Using a patented product which has been put on the
market in the Philippines by the owner of the product, or
with his express consent, insofar as such use is performed
after that product has been so put on the said market:
provided, that, with regard to drugs and medicines,
the limitation on patent rights shall apply after a drug
or medicine has been introduced in the Philippines or
anywhere else in the world by the patent owner, or by
any party authorized to use the invention: provided,
further, that the right to import the drugs and medicines
contemplated in this section shall be available to any
government agency or any private third party.73
’“Roberto del Rosario v. Court of Appeals, G.R. No. 115106, March 15,1996.
’'Philippine Pharmawealth, Inc. v. Pfizer, Inc., G.R. No. 167715, November
17,2010.
’’Section 72, IPC, as amended
’“Section 72.1, IPC, as amended.
J9JC9B0M
J9JC9B0M
D1V1NA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
b. Where the act. is done privately and on a non-commercial
scale or for a non-commercial purpose: Provided, that it
does not significantly prejudice the economic interests of
the owner of the patent;”
c. Where the act consists of making or using exclusively for
experimental use of the invention for scientific purposes
or educational purposes and such other activities directly
related to such scientific or educational experimental
use;’5
d. In the case of drugs and medicines, where the act includes
testing, using, making or selling the invention including
any data related thereto, solely for purposes reasonably
related to the development and submission of information
and issuance of approvals by government regulatory
agencies required under any law of the Philippines or
of another country that regulates the manufacture,
construction, use or sale of any product: Provided, That,
in order to protect the data submitted by the original
patent holder from unfair commercial use provided in
Article 39.3 of the Agreement on Trade-Related Aspects
of Intellectual Property Rights (TRIPS Agreement),
the Intellectual Property Office, in consultation with
the appropriate government agencies, shall issue the
appropriate rules and regulations necessary therein not
later than 120 days after the enactment of this law;76
e. Where the act consists of the preparation for individual
cases, in a pharmacy or by a medical professional, of a
medicine in accordance with a medical prescription or
acts concerning the medicine so prepared;77 and
f. Where the invention is used in any ship, vessel, aircraft,
or land vehicle of any other country entering the territory
of the Philippines temporarily or accidentally: provided,
’’Section 72.2, IPC, as amended.
’‘Section 72.3, IPC, as amended.
’‘Section 72.4, IPC, as amended.
’’Section 72.5, IPC, as amended.

VII. INTELLECTUAL PROPERTY CODE 227
that such invention is used exclusively for the needs of
the ship, vessel, aircraft, or land vehicle and not used
for the manufacturing of anything to be sold within the
Philippines.78
Any prior user, who, in good faith, was using the invention
g-
or has undertaken serious preparations to use the
invention in his enterprise or business, before the filing
date or priority date of the application on which a patent
is granted, shall have the right to continue the use thereof
as envisaged in such preparations within the territory
where the patent produces its effect.79
h. A government agency or third person authorized by the
Government may exploit the invention even without
agreement of the patent owner where:80
i. The public interest, in particular, national security,
nutrition, health or the development of other sectors,
as determined by the appropriate agency of the
government, so requires;81 or
ii. Mere determination of an appropriate government
agency on the existence of a ground based on public
interest would suffice for the exploitation of the
invention.82 This is different from the situation
of national emergency or extreme urgency where
the determination is made by the President of the
Philippines.83
iii. A judicial or administrative body has determined
that the manner of exploitation, by the owner of the
patent or his licensee, is anti-competitive;84 or
’’Section 72.6, IPC, as amended.
’’Section 73.1, IPC, as amended.
“Section 74, IPC, as amended.
•'Section 74.1(a), IPC, as amended.
“Gepty, ibid., p. 303.
“Section 74.2(g), IPC, as amended.
“Section 74.1(b), IPC, as amended.
L
J9JC9B0M
J9JC9B0M
228 PIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
iv. In the case of drugs and medicines, there is a national
emergency or other circumstance of extreme urgency
requiring the use of the invention;"’ or
In the case of drugs and medicines, there is a public
non-commercial use of the patent by the patentee,
without satisfactory reason.86
47. Yosha was able to put together a mechanical water pump in his
garage consisting of suction systems capable of drawing water
from the earth using less human effort than what was then
required by existing models. The water pump system provides
for a new system which has the elements of novelty and
inventive steps. Yosha, while preparing to have his invention
registered with the IPO, had several models of his new system
fabricated and sold in his province.
If Yosha is able to properly register his patent with the
IPO, can he prevent anyone who has possession of the earlier
models from using them?87
Yosha can no longer prevent anyone who has possession of the
earlier models from using them even if Yosha is able to properly
register the patent with the IPO. One of the limitations of patent
rights is the use of the patented product which has been put on the
market in the Philippines by the owner of the product insofar as
such use is performed after the product has been so put on the said
market.88
48. Under what conditions can the government, or third person
authorized by the government, exploit the invention?
The use by the Government, or third person authorized by the
Government shall be subject, mutatis mutandis, to the conditions
“Section 74.1(c), IPC, as amended.
“Section 74.1(d), IPC, as amended.
“’BAR 2018.
“Section 72, IPC.
 VII. INTELLECTUAL PROPERTY CODE 229
specified in Sections 95 to 97H9 and 100 to 1O290 of the IPC.01 In
particular —
89Section 95. Requirement to Obtain a License on Reasonable Commercial
Terms. 95.1. The license will only be granted after the petitioner has macle efforts
to obtain authorization from the patent owner on reasonable commercial terms and
conditions but such efforts have not been successful within a reasonable period of
time.
95.2. The requirement under Subsection 95.1 shall not apply in any of the fol­
lowing cases:
(a) Where the petition for compulsory license seeks to remedy a practice deter­
mined after judicial or administrative process to be anti-competitive;
(b) In situations of national emergency or other circumstances of extreme ur­
gency;
(c) In cases of public non-commercial use; and
(d) In cases where the demand for the patented drugs and medicines in the
Philippines is not being met to an adequate extent and on reasonable terms, as deter­
mined by the Secretary of the Department of Health.
95.3. In situations of national emergency or other circumstances of extreme
urgency, the right holder shall be notified as soon as reasonably practicable.
95.4. In the case of public non-commercial use, where the government or con­
tractor, without making a patent search, knows or has demonstrable grounds to
know that a valid patent is or will be used by or for the government, the right holder
shall be informed promptly, (n)
95.5. Where the demand for the patented drugs and medicines in the Philip­
pines is not being met to an adequate extent and on reasonable terms, as determined
by the Secretary of the Department of Health, the right holder shall be informed
promptly.
Section 96. Compulsory Licensing of Patents Involving Semi-Conductor Tech­
nology. In the case of compulsory licensing of patents involving semi-conductor tech­
nology, the license may only be granted in case of public non-commercial use or to
remedy a practice determined after judicial or administrative process to be anti-com­
petitive. (n)
Section 97. Compulsory License Based on Interdependence of Patents. If the
invention protected by a patent, hereafter referred to as the “second patent,” within
the country cannot be worked without infringing another patent, hereafter referred
to as the “first patent,” granted on a prior application or benefiting from an earlier
priority, a compulsory license may be granted to the owner of the second patent to the
extent necessary for the working of his invention, subject to the following conditions:
97.1. The invention claimed in the second patent involves an important
technical advance of considerable economic significance in relation to the first patent;
97.2. The owner of the first patent shall be entitled to a cross-license on
reasonable terms to use the invention claimed in the second patent;
97.3. The use authorized in respect of the first patent shall be non-assignable
except with the assignment of the second patent; and
97.4. The terms and conditions of SECTION s 95, 96 and 98 to 100 of this Act.
(Section 34-C, R.A. No. 165a)
“Section 100. Terms and Conditions of Compulsory License. The basic terms
and conditions including the rate of royalties of a compulsopr license shall be fixed by
the Director of Legal Affairs subject to the following conditions:
100.1. The scope and duration of such license shall be limited to the purpose
for which it was authorized;
J9JC9B0M
J9JC9B0M
230 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
1. The scope and duration of the such use shall be limited to
the purpose for which it was authorized;92
2. Such use should be non-exclusive;93
3. The right holder shall be informed promptly whenever
any of the foregoing circumstances occurs;94
100.2. The license shall be non-exclusive;
100.3. The license shall be non-assignable, except with that part of the
enterprise or business with which the invention is being exploited;
100.4. Use of the subject matter of the license shall be devoted predominantly
for the supply of the Philippine market: Provided, That this limitation shall not apply
where the grant of the license is based on the ground that the patentee’s manner of
exploiting the patent is determined by judicial or administrative process, to be anti­
competitive.
100.5. The license may be terminated upon proper showing that circumstances
which led to its grant have ceased to exist and are unlikely to recur: Provided, That
adequate protection shall be afforded to the legitimate interest of the licensee; and
100.6. The patentee shall be paid adequate remuneration taking into account
the economic value of the grant or authorization, except that in cases where the
license was granted to remedy a practice which was determined after judicial or
administrative process, to be anti-competitive, the need to correct the anti-competitive
practice may be taken into account in fixing the amount of remuneration. (Section 35-
B, R.A. No. 165a)
Section 101. Amendment, Cancellation, Surrender of Compulsory License.
101.1. Upon the request of the patentee or the licensee, the Director of Legal Affairs
may amend the decision granting the compulsory license, upon proper showing of
new facts or circumstances justifying such amendment.
101.2. Upon the request of the patentee, the said Director may cancel the
compulsory license:
(a) If the ground for the grant of the compulsory license no longer exists and
is unlikely to recur;
(b) If the licensee has neither begun to supply the domestic market nor made
serious preparation therefor;
(c) If the licensee has not complied with the prescribed terms of the license;
101.3. The licensee may surrender the license by a written declaration
submitted to the Office.
101.4. The said Director shall cause the amendment, surrender, or cancellation
in the Register, notify the patentee, and/or the licensee, and cause notice thereof to be
published in the IPO Gazette. (Section 35-D, R.A. No. 165a)
Section 102. Licensee’s Exemption from Liability. Any person who works a
patented product, substance and/or process under a license granted under this
Chapter, shall be free from any liability for infringement: Provided, however, That
in the case of voluntary licensing, no collusion with the licensor is proven. This is
without prejudice to the right of the rightful owner of the patent to recover from the
licensor whatever he may have received as royalties under the license. (Section 35-E,
I
RA. No. 165a)
91Section 74, IPC, as amended.
92Section 74.2(d), IPC, as amended.
93Section 74.2(e), IPC, as amended.
91Section 74.2(b), IPC, as amended.
 VII. INTELLECTUAL PROPERTY CODE
4. The right holder shall be paid adequate remuneration in
the circumstances of each case, taking into account the
economic value of the authorization."1'
h. Patent infringement
49. What constitutes civil action for patent infringement?
Intellectual property infringement basically means performing
any act in violation of the rights granted by law to the owner or
holder of the intellectual property right.
The making, using, offering for sale, selling, or importing a
patented product or a product obtained directly or indirectly from
a patented process, or the use of a patented process without the
authorization of the patentee constitutes patent infringement:
provided, that, this shall not apply to instances covered by Sections
72.1 and 72.4 (Limitations of Patent Rights); Section 74 (Use of
Invention by Government); Section 93.6 (Compulsory Licensing);
and Section 93-A (Procedures on Issuance of a Special Compulsory
License under the TRIPS Agreement) of the IPC.96
There can be no infringement of a patent until a patent has
been issued, since whatever right one has to the invention covered
by the patent arises alone from the grant of patent. An inventor has
no common law right to a monopoly of his invention. He has the right
to make use of and vend his invention, but if he voluntarily discloses
it, such as by offering it for sale, the world is free to copy and use
it with impunity. A patent, however, gives the inventor the right
to exclude all others. To be able to effectively and legally preclude
others from copying and profiting from the invention, a patent is a
primordial requirement. No patent, no protection.97
50. When will importation of the patented product not amount to
patent infringement?
Generally, importation of the patented product without the
patentee’s authorization amounts to infringement. However, with
regard to drugs and medicines, the law allows importation by the
“Section 74.2(f), IPC, as amended.
“Section 76.1, IPC, as amended.
"Creser Precision Systems, Inc. v. Court of Appeals, G.R, No. 118708,
February 2,1998; Pearl & Dean (Phil.) Incorporated v. Shoemart Incorporated, G.R.
No. 148222, August 15, 2003.
L
J9JC9B0M
231
232 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
government or any private third party once the drug or medicine
has been introduced in the Philippines or anywhere else in the world
by the patent owner, or by any party authorized to use the invention
in the Philippines.”
51, Who may file an action for patent infringement?
Any patentee, or anyone possessing any right, title or interest
in and to the patented invention, whose rights have been infringed,
may bring an action for patent infringement before a court of
competent jurisdiction."
Only the patent holder can file an action for infringement. The
inventor, who was not issued the patent, cannot file such action nor
even apply for injunction to enjoin the use or making or sale of the
patented product.100
The Supreme Court further ruled that the phrase “anyone
possessing any right, title or interest in and to the patented
invention, whose rights have been infringed” may bring an action
for infringement does not refer to the inventor not issued the patent
but to the patentee’s successors-in-interest and assignee.101
The remedy of the inventor but who was deprived of the patent
is to file an action in court that he be declared the patentee and not
to file an action for infringement.102
52. Who has the burden of proof in an action for infringement?
The burden of proof to substantiate a charge of infringement
is with the plaintiff. But where the plaintiff introduces the patent
in evidence, and the same is in due form, there is created a prima
facie presumption of its correctness and validity. The decision
of the Director of Patent (now, of the IPO) in granting the patent
is presumed to be correct. The burden of going forward with the
evidence (burden of evidence) then shifts to the defendant to
overcome by competent evidence this legal presumption.103
"Section 72.1, IPC, as amended.
"Section 76, IPC, as amended.
‘“Creser, supra.
’“‘Creser, supra.
>02Supra.
'"Rosario Maguan v. Court of Appeals, G.R. No. L-45101, November 28,1986.
J9JC9B0M 1
 VII. INTELLECTUAL PROPERTY CODE
i. Tests in patent infringement
53. What are the tests to determine infringement of patent?
The tests to determine infringement of patent are: a) literal
infringement; and b) the doctrine of equivalents.
54. How is the literal infringement test used vis-a-vis the doctrine
of equivalents?
In using literal infringement as a test, resort must be had, in
the first instance, to the words of the claim. If accused matter clearly
falls within the claim, infringement is made out and that is the end
of it. The Court must juxtapose the claims of the patent and the
accused product within the context of the claims and specifications
to determine whether there is exact identity of all material elements.
Under the doctrine of equivalents, infringement also occurs when a
device appropriates a prior invention by incorporating its innovative
concept and albeit with some modifications and change, performs
substantially the same function in substantially the same way to
achieve substantially the same result. It requires satisfaction of the
function-means-and-result test.10,1
Applying both tests, the Supreme Court held in one case that
viewed from any perspective or angle, the floating power tiller of
petitioner is identical and similar to that of the turtle power tiller
of defendant in form, configuration, design and appearance. In
operation, the floating power tiller operates also in similar manner
as the turtle power tiller. The patent issued by the Patent Office
referred to a “farm implement but more particularly to a turtle hand
tractor having a vacuumatic housing float on which the engine drive
is held in place, the operating handle, the harrow housing with
its operating handle and the paddy wheel protective covering.” It
appears from the foregoing observation of the trial court that these
claims of the patent and the features of the patented utility model
were copied by petitioner. The Supreme Court is compelled to arrive
at no other conclusion but that there was infringement.105
In applying this test in another case, the Supreme Court ruled
that while both compounds have the effect of neutralizing parasites
101Pascua Godines v. Court of Appeals and SV-Agro Enterprises, Inc., G.R. No.
97343, September 13, 1993; BAR 2015.
105Godines, supra.
J9JC9B0M
233
234 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
in animals, identity of result does not amount to infringement of
patent unless the accused product operates in substantially the same
way or by substantially the same means as the patented compound,
even though it performs the same function and achieves the same
result. In other words, the principle or mode of operation must be
the same or substantially the same. The doctrine of equivalents thus
requires satisfaction of the function-means-and result test. In the
case at bar. apart from the fact the Albendozole is an anthelmintic
agent like methyl5propylthio-2-benzimidazole carbamate, nothing is
more asserted regarding the method or means by which Albendozole
weeds out parasites in animals, thus giving no information on
whether that method is substantially the same as the manner by
which the accused’s compound works.106
In Del Rosario v. Court of Appeals,107 a case involving patent
for utility model covering an audio equipment, commonly known as
the sing along system or karaoke, the Supreme Court, in ruling that
there was patent infringement under the doctrine of equivalents,
observed: (a) both are used by a singer to sing a amplify his voice;
(b) both are used to sing with a minus-one or multiplex tapes, or
that both are used to play minus-one or standard cassette tapes for
singing or for listening to; (c) both are used to sing a minus-one tape
and multiplex tape and to record the singing and the accompaniment;
(d) both are used to sing with live accompaniment; (d) both are used
to sing with live accompaniment and to record the same; (e) both are
used to enhance the voice of the singer using echo effect, treble, bass
and other controls; (g) both are equipped with cassette tape decks
which are installed with one being used for playback and the other,
for recording the singer and the accompaniment, and both may also
be used to record a speaker’s voice or instrumental playing, like
the guitar and other instruments; (h) both are encased in box-like
cabinets; and (i) both can be used with one or more microphones.
Clearly, therefore, both models involve substantially the
same modes of operation and produce substantially the same if not
identical results when used.
55. What’s the rationale of the doctrine of equivalents?
The reason for the doctrine of equivalents is that to permit the
imitation of a patented invention which does not copy any literal
laiSmith Kline Beckman Corporation V. Court of Appeals, G.R. No. 126627,
August 14, 2003.
mSupra.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 235
detail would be to convert the protection of the patent grant into a
hollow and useless thing. Such imitation would leave room for, and
indeed encourage, the unscrupulous copyist to make unimportant
and insubstantial changes and substitutions in the patent which,
though adding nothing, would be enough to take the copied matter
outside the claim, and hence outside the reach of the law.108
ii. Civil and criminal action
56. What are the remedies of the patent owner in case of patent
infringement?
The remedies of the patentee in case of patent infringement
are as follows:
a. Civil action
Any patentee, or anyone possessing any right, title or interest
in and to the patented invention, whose rights have been infringed,
may bring a civil action before a court of competent jurisdiction, to
recover from the infringer such damages sustained thereby, plus
attorney’s fees and other expenses of litigation, and to secure an
injunction for the protection of his rights.'"9
If the damages are inadequate or cannot be readily ascertained
with reasonable certainty, the court may award by way of damages
a sum equivalent to reasonable royalty."0
The court may, according to the circumstances of the case,
award damages in a sum above the amount found as actual damages
sustained: provided, that the award does not exceed three (3) times
the amount of such actual damages.'"
Anyone who actively induces the infringement of a patent or
provides the infringer with a component of a patented product or
of a product produced because of a patented process knowing it
to be especially adopted for infringing the patented invention and
not suitable for substantial non-infringing use shall be liable as a
contributory infringer and shall be jointly and severally liable with
the infringer."2
'“’Godines, supra.
■“Section 76.2, IPC, as amended.
■‘“Section 76.3, ibid.
'“Section 76.4, ibid.
■“Section 76.6, IPC, as amended.
J9JC9B0M
J9JC9B0M
236 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
b. Criminal action
If infringement is repeated by the infringer or by anyone in
connivance with him after finality of the judgment of the court
against the infringer, the offender shall, without prejudice to the
institution of a civil action for damages, be criminally liable."3
Unlike trademark and copyright infringement, the first act of
patent infringement does not give rise to criminal liability. A person
can only be held criminally liable if he repeats the commission of
the same infringing acts after finality of the court judgment (in
a civil action for infringement) against him. The repeated acts of
infringement will then give rise to both criminal and civil liabilities.
c. Provisional remedies
The patent holder may secure a preliminary injunction to
restrain acts of infringement during the pendency of the action for
patent infringement?"
Relevantly, under the 2020 Rules of Procedure for Intellectual
Property Cases, at any time after the filing of the complaint, a motion
for the disposal and/or destruction of the seized infringing goods, or
materials and implements predominantly used in the infringement,
may be filed by the right-holder before the court?16
There is destruction when the infringing goods are completely
destroyed and are put beyond further use. There is disposal when
the infringing goods are effectively prohibited from re-entry into
the channels of commerce but may be reused for some other lawful
purpose.116
The court may, in its discretion, order that the infringing goods,
materials and implements predominantly used in the infringement
be disposed of outside the channels of commerce or destroyed,
without compensation.11’
Generally, unless restrained by the Supreme Court or the
Court of Appeals, any order issued by the court in cases involving
intellectual property rights is immediately executory except, among
"“Section 84.IPC, as amended.
‘"Section 76.2, IPC, as amended.
'"Rule 20, Section 1.
mIbid.
"’Section 76.5, ibid.
 1
VII. INTELLECTUAL PROPERTY CODE 237

238 DIVINA ON COMMERCIAL LAW:

others, an order of destruction where a motion for reconsideration A COMPREHENSIVE GUIDE VOLUME II
is filed.118
If the infringer commits the same acts of infringement, I will
57. Nestor Dionisio invented a space age revolutionary mini file criminal and civil actions for the repeated acts of infringement,
room air-conditioner and was able to secure the registration
patent and issuance of patent certificate for said invention iii. Prescriptive period
by the Philippines' Patent Office. He immediately went into
58. What is the prescriptive period of a patent infringement suit?
commercial production and sale of his invention. Later, Carlos
Asistio, who used to be Nestor's plant manager, organized his No damages can be recovered for acts of infringement
own company, and engaged in the manufacture of exactly the committed more than four (4) years before the institution of the
same mini-room air-conditioners for his own outfit and which action for infringement.120
he sold for his own benefit. The IPC, as amended, provides: Damages cannot be recovered
for acts of infringement committed before the infringer had known,
As counsel of Dionisio, what legal steps would you take to or had reasonable grounds to know of the patent. It is presumed that
protect his rights and interests? Discuss.1,9 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
As counsel for Dionisio, I will take the following legal steps:
the public, or on the advertising material relating to the patented
Within four (4) years from the commission of acts of infringement, I product or process, are placed the words “Philippine Patent” with
will bring a civil action for infringement of patent before the proper the number of the patent.121
court to recover from the infringer damages sustained by reason of
the infringement. The amount of damages is based on the profits iv. Defenses in action for infringement
which he would have made without the infringement and if the
59. What are the defenses that can be asserted in a patent
same cannot be determined, reasonable royalty. If the circumstances
infringement suit?122
warrant, I will also ask for other damages but not to exceed three
times (3x) the amount of actual damages. The following are defenses that can be asserted in a patent
infringement suit:
In the same civil action, I will also pray for attorney’s fees, costs
of suit and the issuance of writ of preliminary injunction to restrain a. The patent or any claim thereof is invalid;
further acts of infringement during the pendency of the case. An b. Any of the grounds on which petition for cancellation can
order to seize and impound tools, equipment and paraphernalia be brought;
used in connection with the infringement may also be prayed for. c. The patent is not new or patentable;123
If after a final judgment is rendered by the Court against the d. Specification of the invention does not comply with the
infringer, he repeated the infringement, I will again institute a civil law;
action for damages with the same above stated provisional remedies, e. The patent was issued not to the true and actual inventor,
as well as criminal action for the repetition of infringement. or the plaintiff did not derive his rights from the true and
actual inventor; and
After finality of the court judgment, the preliminary
injunction shall be converted into a final injunction and the seized f. Prescription.
tools, equipment and paraphernalia used to commit the acts of
infringement may be destroyed and declared outside the channels
of commerce. l20Section 79, IPC, as amended.
‘“‘Section 80, IPC, as amended.
‘“BAR 1993.
118Rule 1, Section 4 of the 2020 Rules of Procedure for Intellectual Property "“Section 81 in relation to Section 161, IPC, as amended.
Cases.
1,9BAR 1985; 1977; 1993.

J9JC9B0M

J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
In one case, when a patent is sought to be enforced, the
questions of invention, novelty or prior use, and each of them, are
open to judicial examination; in cases of infringement of patent no
preliminary injunction will be granted unless the patent is valid and
infringed beyond question and the record conclusively proves the
defense is sham. In other words, the competent court has jurisdiction
to declare a patent invalid. Upon certification that the judgment has
become final, it is the ministerial duty of the Patent Office (now the
IPO) to execute the judgment.124
In fact, under the IPC, in an action for infringement, if the
court shall find the patent or any claim to be invalid, it shall cancel
the same, and the Director of Legal Affairs upon receipt of the final
judgment of cancellation by the court, shall record that fact in the
register of the Office and shall publish a notice to that effect in the
IPO Gazette.126
60. In an action for infringement of patent, the alleged infringer
defended himself by stating (1) that the patent issued by
the Patent Office was not really an invention which was
patentable; (2) that he had no intent to infringe so that there
was no actionable case for infringement; and (3) that there was
no exact duplication of the patentee’s existing patent but only
a minor improvement.
With those defenses, would you exempt the alleged
violator from liability? Why?120
I would not exempt the alleged violator from liability for the
following reasons:
a. A patent once issued by the Patent Office raises a
presumption that the article is patentable. The validity
of the patent and the question over the inventiveness,
novelty and usefulness of the product are matters which
are better determined by the Patent Office. There is
a presumption that the Philippine Patent Office has
correctly determined the patentability of the model and
such action must not be interfered with in the absence of
'“Rosario Maguan v. Court of Appeals, G.R. L-45101, November 28,1986.
'“Section 82, IPC, as amended.
'“BAR 1992.
J9JC9B0M
239
240 DlVINzV ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
competent evidence to the contrary.127 A mere statement
or allegation is not enough to destroy that presumption;
b. An intention to infringe is not necessary nor an element
in a case for infringement of a patent;
c. There is no need of exact duplication of the patentee’s
existing patent such as when the improvement made by
another is merely minor. Under the doctrine of equivalents,
infringement is committed if the accused product
introduced only minor innovations or improvement but
performs the same function in the same way to accomplish
the same result. Exact duplication of the patentee’s
existing patent is not necessary for infringement to lie.
v. Licensing
61. What are the kinds of licensing agreements?
a. Voluntary Licensing
b. Compulsory Licensing
62. What is voluntary license in patent?
A voluntary license is an authorization given by the patent
holder to another person allowing him to produce the patented
article. The license usually fixes the amount of royalties, sets quality
requirements and defines the markets in which the licensee can sell
the product.
The licensee shall be entitled to exploit the subject matter of
the technology transfer arrangement during the whole term of the
technology transfer arrangement.128
To encourage the transfer and dissemination of technology,
prevent or control practices and conditions that may in particular
cases constitute an abuse of intellectual property rights having an
adverse effect on competition and trade, all technology transfer
arrangements shall comply with the provisions of voluntary licensing
under the IPC.129
|
12,Manzano v. Court of Appeals, G.R. No. 113388, September 5, 1997. -
I28Section 90, IPC, as amended.
129Section 85, IPC, as amended.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 241
63. Enumerate three (3) stipulations that are prohibited in
technology transfer agreements.1 “
The following stipulations are prohibited in technology transfer
agreements:
Those which impose upon the licensee the obligation to
a.
acquire from a specific source capital goods, intermediate
products, raw materials, and other technologies, or
of permanently employing personnel indicated by the
licensor;
b. Those pursuant to which the licensor reserves the right to
fix the sale or resale prices of the products manufactured
on the basis of the license; and,
c. Those that contain restrictions regarding the volume and
structure of production.
Other prohibited clauses are as follows:131
a. Those that prohibit the use of competitive technologies in
a non-exclusive technology transfer agreement;
b. Those that establish a full or partial purchase option in
favor of the licensor;
c. Those that obligate the licensee to transfer for free to
the licensor the inventions or improvements that may be
obtained through the use of the licensed technology;
d. Those that require payment of royalties to the owners of
patents for patents which are not used;
e. Those that prohibit the licensee to export the licensed
product unless justified for the protection of the legitimate
interest of the licensor such as exports to countries where
exclusive licenses to manufacture and/or distribute the
licensed product(s) have already been granted;
f. Those which restrict the use ofthe 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;
1MBAR 2010.
131Section 87.4 to 87.15, IPC, as amended.
J9JC9B0M
J9JC9B0M
242 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
E- Those which require payments for patents and other
industrial property rights after their expiration,
termination arrangement;
h. Those which require that the technology recipient shall
not contest the validity of any of the patents of the
technology’ supplier;
i. Those which restrict the research and development
activities of the licensee designed to absorb and adapt the
transferred technology to local conditions or to initiate
research and development programs in connection with
new products, processes or equipment;
Those which prevent the licensee from adapting the
j.
imported technology to local conditions, or introducing
innovation to it, as long as it does not impair the quality
standards prescribed by the licensor;
k. 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
product or the licensed technology; and
1. Other clauses with equivalent effects.
64. What contractual stipulations are required in all technology
transfer agreements?
The following stipulations are required in all technology
transfer agreements:
a. The laws of the Philippines shall govern its interpretation
and in the event of litigation, the venue shall be the proper
court in the place where the licensee has its principal
place of business;
b. Continued access to improvements in techniques and
processes related to the technology shall be made available
during the period of the technology transfer arrangement;
c. In case it shall provide for arbitration, the Procedure of
Arbitration of the Arbitration Law of the Philippines or
the Arbitration Rules of the International Chamber of
Commerce (ICC) shall apply and the venue of arbitration
shall be the Philippines or any neutral country;
 VII. INTELLECTUAL PROPERTY CODE 243
d. The Philippine taxes on all payments relating to the
technology transfer agreement shall be borne by the
licensor. 132
65. What is compulsory licensing?
Compulsory licensing is when the government allows another
person to produce the patented product or process without the
consent of the patent owner or plans to use the patented invention
itself.
66. What are the grounds for compulsory licensing of a patent?
The Director General of the Intellectual Property Office may
grant a license to exploit a patented invention, even without the
agreement of the patent owner, in favor of any person who has shown
his capability to exploit the invention, under any of the following
circumstances:133
a. National emergency or other circumstances of extreme
urgency;134
b. 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;135 or
c. Where a judicial or administrative body has determined
that the manner of exploitation by the owner of the patent
or his licensee is anti-competitive;136 or
d. In case of public non-commercial use of the patent by the
patentee, without satisfactory reason;'37
e. If the patented invention is not being worked in the
Philippines on a commercial scale, although capable of
being worked, without satisfactory reason: provided, that
■“Section 88, IPC, as amended; BAK 2010.
'“Section 93, IPC, as amended.
■’■Section 93.1, ibid.
'“Section 93.2, ibid.
'“Section 93.3, ibid.
'“Section 93.4, ibid.
J9JC9B0M
J9JC9B0M
2-1-1 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
the importation of the patented article shall constitute
working or using the patent;'"" and
f. Where the demand for patented drugs and medicines is
not being met to an adequate extent and on reasonable
terms, as determined by the Secretary of the Department
of Health.'39
A compulsory license shall also be available for the manufacture
and export of drugs and medicines to any country having insufficient
or no manufacturing capacity in the pharmaceutical sector to address
public health problems: provided, that, a compulsory license has
been granted by such country or such country has, by notification or
otherwise, allowed importation into its jurisdiction of the patented
drugs and medicines from the Philippines in compliance with the
TRIPS Agreement.140
67. Super Biology Corporation (Super Biology) invented and
patented a miracle medicine for the cure of AIDS. Being the
sole manufacturer, Super Biology sold the medicine at an
exorbitant price. Because of the sudden prevalence of AIDS
cases in Metro Manila and other urban areas, the Department
of Health (DOH) asked Super Biology for a license to produce
and sell the AIDS medicine to the public at a substantially
lower price. Super Biology, citing the huge costs and expenses
incurred for research and development, refused. Assuming you
are asked your opinion as the legal consultant of DOH, discuss
how you will resolve the matter.
DOH may file a petition for compulsory license with the
Director of Legal Affairs of the Intellectual Property Office to exploit
the patented medicine even without the agreement of the patent
owner on the ground of public interest, in particular, health.141 Once
granted, the DOH may then produce and sell the AIDS medicines
for a cheaper price subject to payment of reasonable royalties to
Super Biology.142
‘"“Section 93.5; Sections 34, 34-A, 34-B, R.A. No. 165a, ibid.
‘“Section 93.6, ibid.
'“Section 93-A.2, ibid.
"'Section 193, R.A. No. 8293, as amended.
‘“BAR 2017.
 VII. INTELLECTUAL PROPERTY CODE 245
68. What is the period to file a petition for compulsory license?
A compulsory license may not be applied for before the
expiration of a period of four (4) years from the date of filing of the
application or three (3) years from the date of the patent whichever
period expires last.1'13
Compulsory license may be applied for at any time after the
grant of the patent in the following cases:144
a. 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; or
b. Where a judicial or administrative body has determined
that the manner of exploitation by the owner of the patent
or his licensee is anti-competitive; or
In case of public non-commercial use of the patent by the
c.
patentee, without satisfactory reason; and,
d. If the invention protected by a patent, hereafter referred
to as the “second patent,” within the country cannot be
worked without infringing another patent, hereafter
referred to as the “first patent,” granted on a prior
application or benefiting from an earlier priority, a
compulsory license may be granted to the owner of the
second patent to the extent necessary for the working of
his invention.
69. What are the terms and conditions of compulsory license?
The basic terms and conditions including the rate of royalties
of a compulsory license shall be fixed by the Director of Legal Affairs
subject to the following conditions:
a. The scope and duration of such license shall be limited to
the purpose for which it was authorized;
b. The license shall be non-exclusive;
‘“Section 94, IPC, as amended.
“‘Section 94.2, IPC, as amended.
J9JC9B0M
J9JC9B0M
2-16 D1VINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
C. The license shall be non-assignable, except with that part
of the enterprise or business with which the invention is
being exploited;
d. Use of the subject matter of the license shall be devoted
predominantly for the supply of the Philippine market:
provided, that this limitation shall not apply where
the grant of the license is based on the ground that the
patentee’s manner of exploiting the patent is determined
by judicial or administrative process, to be anti­
competitive; r
e. The license may be terminated upon proper showing
that circumstances which led to its grant have ceased to
exist and are unlikely to recur: provided, that adequate
protection shall be afforded to the legitimate interest of
the licensee; and
f. The patentee shall be paid adequate remuneration
taking into account the economic value of the grant or
authorization, except that in cases where the license was
granted to remedy a practice which was determined after
judicial or administrative process, to be anti-competitive,
the need to correct the anti-competitive practice may be
taken into account in fixing the amount of remuneration.1”
Relevantly, in Price v. United Laboratories,146 the Supreme
Court held that a compulsory license may be granted over the entire
patented invention for there is no law requiring that the license be
limited to a specific embodiment of the invention or to a particular
claim.
70. Does compulsory licensing amount to deprivation of the
property right of the patent holder without due process of law?
There is no deprivation of property without due process of law
because the compulsory license acknowledges the patentee as the
owner of the patent and he will be paid reasonable royalties for the
exploitation of his invention by the licensee.147
■‘‘Sections 100,100.1 to Section 100.6, IPC, as amended.
,,6Barry John Price V. United Laboratories, G.R. No. 82542, September 29,
1988.
1,1Ibid.

VII. INTELLECTUAL PROPERTY CODE 247
vi. Assignment and transmission of rights
71. How are rights, title or interest in and to patents and invention
assigned?
Inventions and any right, title or interest in and to patents
and inventions covered thereby, may be assigned or transmitted by
inheritance or bequest or may be the subject of a license contract.'*’
72. What are the formalities prescribed by the IPC for the
assignment of rights over a patent?
The law prescribes the following formalities for the assignment
of rights over a patent and the invention to which the patent relates:
a. The assignment must be in writing, acknowledged before
a notary public or other officer authorized to administer
oath or perform notarial acts, and certified under the
hand and official seal of the notary or such other officer.'*9
b. The IPO shall record assignments, licenses and other
instruments relating to the transmission of any right, title
or interest in and to inventions, and patents or application
for patents or inventions to which they relate.160
c. Such instruments shall be void as against any subsequent
purchaser or mortgagee for valuable consideration and
without notice, unless, it is so recorded in the Office,
within three (3) months from the date of said instrument,
or prior to the subsequent purchase or mortgage.161
C. Trademarks
a. Definition of Marks, Collective Marks, Trade Names
73. What is a trademark?
A “trademark” is any word, name, symbol, emblem, sign
or device or any combination thereof adopted and used by a
manufacturer or merchant to identify his goods and distinguish
'“Section 104, IPC, as amended.
‘“Section 105, IPC, as amended.
'“Section 106.1, ibid.
“'Section 106.2, ibid.
J9JC9B0M
J9JC9B0M
248 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
them from those manufactured, sold or dealt in by others; it is any
visible sign capable of distinguishing goods.162
74. What is a collective mark?
"Collective Mark” means any visible sign designated as such
in the application for registration and capable of distinguishing the
origin or any other common characteristic, including the quality of
goods or services of different enterprises which use the sign under
the control of the registered owner of the collective mark.163
75. Differentiate a trademark from a service mark.
“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.164 Thus, the
name and container of a beauty cream product and LPG cylinder
tank bearing a stamp or mark are proper subjects of a trademark.
76. What is a trade name?
A trade name means the name or designation identifying or
distinguishing an enterprise.165
A name or designation may not be used as a trade name if by
its nature or the use to which such name or designation may he
put, it is contrary to public order or morals and if, in particular, it
is liable to deceive trade circles or the public as to the nature of the
enterprise identified by that name.166
In one case, it was ruled that while “San Francisco” is just
a proper name referring to the famous city in California and that
“coffee” is simply a generic term, the respondent in that case has
acquired an exclusive right to the use of the trade name “SAN
FRANCISCO COFFEE & ROASTERY, INC.” since the registration
of the business name with the Department of Trade and Industry.
Thus, respondent’s use of its trade name from then on must be free
from any infringement by similarity.167
‘“Pribhdas J. Marpuri v. Court of Appeals, G.R. No. 114508, November 19,
1999.
‘“Section 121.2, IPC, as amended.
'“Section 121.1, IPC, as amended
‘“Section 121.3, IPC, as amended.
‘“Section 165.1, IPC, as amended.
167Coffee Partners v. San Francisco Coffee and Roastery, Inc., G.R. No. 169504,
March 3, 2010.

VII. INTELLECTUAL PROPERTY CODE
77. Is registration with the IPO a prerequisite in an infringement
suit of a trade name?
No. A trade name previously used in trade or commerce
in the Philippines need not be registered with the IPO before an
infringement suit may be filed by its owner against the owner of an
infringing trademark. The IPC eliminated such requirement.158
78. What is the objective of the law in protecting trademarks?
The purpose of the law in protecting trademarks has a two­
fold objective; to protect the owner of his property and to protect the
public from being deceived by reason of a misleading claim.169
Trademarks have several functions: they indicate the origin
or ownership of the articles or services in which they are used;
they guarantee that the articles or services comes up to a certain
standard of quality; and they advertise the articles and services
they symbolize.160
79. What are the territorial limits of a trademark?
Trademarks acknowledge no territorial boundaries of states or
nations, but extend to every market where the trader’s goods have
become known and identified by his use of the mark.161
80. Does the owner of a trademark have a right of property to
prevent others from manufacturing, producing, or selling the
same article to which it is attached?
No. The owner of a trademark has no right of property to
prevent others from manufacturing, producing or selling the same
article to which it is attached. In other words, the trademark
confers no exclusive rights in the goods to which the mark has been
applied.162 The owner of the trademark can have it registered with
'“Coffee Partners v. San Francisco Coffee and Roastery, Inc., G.R. No. 169504,
March 3, 2010.
'“63 C.J. Section 5; BAR 1982.
'“Zuneca Pharmaceutical v. Natrapharm, Inc., G.R. No. 211850, September
8,2020.
16163 C.J. Section 12; BAR 1982.
IK63 J.C. Section 12.
J9JC9B0M
250 DIVINA ON COMMERCIAL LAW:
249
A COMPREHENSIVE GUIDE VOLUME II
the IPO and after registration, preclude others from adopting the
same trademark for same and similar goods.163
b. Acquisition of ownership of mark
81. How is trademark acquired?
The rights in a mark shall be acquired through registration
made validly in accordance with the provisions of the law. The
applicant or the registrant shall file a declaration of actual use
of the mark with evidence to that effect, within three (3) years
from the filing date of the application. Otherwise, the application
shall be refused or the mark shall be removed from the Register
by the Director unless non-use is caused by circumstances arising
independently of the will of the trademark owner. Lack of funds
shall not excuse non-use of a mark.164
In Zuneca Pharmaceutical v. Natrapharm, Inc.,'65 the Supreme
Court abandoned its previous rulings166 that registration does not
confer ownership of the trademark and that the first user in good
faith defeats the right of the first filer in good faith. Instead, it was
held that trademarks are acquired solely through registration.
In this case, the two competing marks involved were
“ZYNAPS” and “ZYNAPSE.” They were admitted by both parties to
be confusingly similar with each other. “ZYNAPS” (without an E)
is owned by Zuneca. It is a drug for the treatment of seizures like
epilepsy. On the other hand, Natrapharm owns “ZYNAPSE” (with
an E), which is also a medicine, but for stroke.
Zuneca never registered its trademark “ZYNAPS” with the
Intellectual Property (IP) Office, but it has been using it since 2004.
Meanwhile, Natrapharm has registered its trademark “ZYNAPSE”
on September 24, 2007.
163BAR 1982.
16iSection 152.1, IPC, as amended.
™Ibid.
166These are the cases of: Mattel, Inc. v. Emma Francisco, etal., G.R. No. 166886,
July 30, 2008; E.Y. Industrial Sales v. Shien Dar Electricity and Machinery Co., G.R.
No. 184850, October 20, 2010; Berris Agricultural Co., Inc v. Norvy Abyadang, G.R.
No. 183404, October 13, 2010; Birkenstock Orthopaedia GMBH v. Philippine Shoe
Expo Marketing Corporation, G.R. No. 194307, November 20, 2013; Ecole de Cuisine
Manille v. Renaud Cointreau, G.R. No. 185830, June 5, 2013.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 251
With that, Natrapharm sued Zuneca for trademark
infringement for using a confusingly similar trademark in the same
field of drugs or medicine. Zuneca counter-sued and alleged that
Natrapharm was the one in bad faith since it (Natrapharm) knows
Zuneca’s usage of “ZYNAPS” as a mark since 2004 considering that
they both presented their products in the same pharmaceutical
convention years prior.
The trial court found Zuneca liable for trademark infringement,
essentially saying that Natrapharm was the first one to register
the trademark in good faith. The trial court found no bad faith on
the part of Natrapharm either since Zuneca failed to prove that
Natrapharm actually knew the existence of Zuneca’s “ZYNAPS.”
The Court of Appeals affirmed this decision.
The Supreme Court partly affirmed the lower courts’ decision.
It definitively ruled that the only mode of acquiring ownership of a
trademark is through registration (and not use). According to the
Supreme Court: “(i) the language of the IP Code provisions clearly
conveys the rule that ownership of a mark is acquired through
registration; (ii) the intention of the lawmakers was to abandon
the rule that ownership of a mark is acquired through use; and
(iii) the rule on ownership used in Berris and E. Y. Industrial Sales,
Inc. [cases] is inconsistent with the IP Code regime of acquiring
ownership though registration.”
Indeed, Section 122 of the IP Code states “[t]he rights in a mark
shall be acquired through registration made validly in accordance
with, the provisions of this law. ”
In short, the Supreme Court held that Natrapharm’s
“ZYNAPSE” must prevail over Zuneca’s “ZYNAPS” since the former
was first registered. The Supreme Court, however, absolved Zuneca
from being liable for trademark infringement because it found
Zuneca to be a prior user in good faith. Accordingly, the IP Code
contemplates that a prior user in good faith may continue to use
its mark even after the registration of the mark by the first to file
registrant in good faith.
82. Did the Supreme Court abandon the first-to-file rule?
By ruling that trademark is acquired solely through
registration, the Supreme Court did not, nevertheless, abandon the
first the file rule. While it is the fact of registration which confers
ownership of the mark and enables the owner thereof to exercise
J9JC9B0M
J9JC9B0M
252 BIVINA ON COMMERCIAL IAW:
A COMPREHENSIVE GUIDE VOLUME II
the rights expressed in the IP Code, the first to file rule nevertheless
prioritizes the first filer of the trademark application and operates
to prevent any subsequent applicant from registering the mark.1,1
83. Is the registrant still required to declare actual use of the
trademark?
Yes, the applicant or registrant must declare actual use of the
trademark. The applicant or the registrant shall file a declaration
of actual use of the mark with evidence to that effect within three
(3) years from the filing date of the application. Otherwise, the
application shall be refused or the mark shall be removed from the
Register by the Director.108
In Mattel v. Francisco,169 it was held that an admission in a
pleading (Comment and Memorandum) that the party has not filed
declaration of actual use within three (3) years from application
may be construed as an abandonment or withdrawal of any right or
interest in his trademark.
The registrant is also required to file a declaration of actual
use and evidence to that effect within one (1) year from the fifth
anniversary of the date of the registration of the mark.170
The Supreme Court, however, held that while the registrant
should declare actual use, this does not imply that actual use is
the recognized mode of acquisition of ownership. Rather, it must be
understood as provision requiring actual use of the mark in order for
the registered owner of a mark to maintain his ownership.171
84. What is the significance of the certificate of registration of a
trademark?
A certificate of registration of a mark shall be prima facie
evidence of the validity of the registration, the registrant’s ownership
of the mark, and of the registrant’s exclusive right to use the same
in connection with the goods or services and those that are related
thereto specified in the certificate.172
lo'Zuneca Pharmaceuticals, supra.
’“Section 124.2, IPC, as amended.
169G.R. No. 166886, July 30, 2008.
1'"Section 145, IPC, as amended.
’’’Zuneca Pharmaceuticals, supra.
172Section 138, IPC, as amended.
 VII. INTELLECTUAL PROPERTY CODE 253
The rule on the prima facie validity of a certificate of registration
is merely meant to recognize the instances when such certificate is
not reflective of ownership such as when the registration was done
contrary to the IP Code.173
C. Acquisition of ownership of trade name
Trade name is acquired by use.
Notwithstanding any laws or regulations providing for any
obligation to register trade names, such names shall be protected,
even prior to or without registration, against any unlawful act
committed by third parties.174 In particular, any subsequent use of
the trade name by a third party, whether as a trade name or a mark
or collective mark, or any such use of a similar trade name or mark,
likely to mislead the public, shall be deemed unlawful.176
The remedies provided for infringement of trademark in shall
apply mutatis mutandis in case of trade name infringement.176
d. Non-registrable marks
85. What are the so-called "unregistrable marks"?
A mark cannot be registered if it:
a. Consists of immoral, deceptive or scandalous matter,
or matter which may disparage or falsely suggest a
connection with persons, living or dead, institutions,
beliefs, or national symbols, or bring them into contempt
or disrepute;
b. Consists of the flag or coat of arms or other insignia of the
Philippines or any of its political subdivisions, or of any
foreign nation, or any simulation thereof;
c. Consists of a name, portrait or signature identifying a
particular living individual except by his written consent,
or the name, signature, or portrait of a deceased President
of the Philippines, during the life of his widow, if any,
except by written consent of the widow;
l73Zuneca Pharmaceuticals, supra.
174Section 165.2, (a) IPC, as amended.
176Section 165.2 (b), IPC, as amended.
l76Section 165.3, IPC, as amended.
J9JC9B0M
J9JC9B0M
254 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
d. Is identical with a registered mark belonging to a different
proprietor or a mark with an earlier filing or priority date,
in respect of:
i. The same goods or services; or
ii. Closely related goods or services, or
iii. If it nearly resembles such a mark as to be likely to
deceive or cause confusion (confusing similarity);
Is identical with, or confusingly similar to, or constitutes
e.
a translation of a mark which is considered by the
competent authority of the Philippines to be well-known
internationally and in the Philippines, whether or not it
is registered here, as being already the mark of a person
other than the applicant for registration, and used for
identical or similar goods or services: provided, that in
determining whether a mark is well-known, account
shall be taken of the knowledge of the relevant sector of
the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as
a result of the promotion of the mark;
f. Is identical with, or confusingly similar to, or constitutes a
translation of a mark considered well-known in accordance
with the preceding paragraph, which is registered in the
Philippines with respect to goods or services which are
not similar to those with respect to which registration
is applied for: provided, that use of the mark in relation
to those goods or services would indicate a connection
between those goods or services, and the owner of the
registered mark: provided, further, that the interests of
the owner of the registered mark are likely to be damaged
by such use;
S- Is likely to mislead the public, particularly as to the
nature, quality, characteristics or geographical origin of
the goods or services;
h. Consists exclusively of signs that are generic for the goods
or services that they seek to identify;
L Consists exclusively of signs or of indications that have
become customary or usual to designate the goods
or services in everyday language or in bona fide and
established trade practice;
 255
VII. INTELLECTUAL PROPERTY CODE
Consists exclusively of signs or of indications that may
j.
serve in trade to designate the kind, quality, quantity,
intended purpose, value, geographical origin, time or
production of the goods or rendering of the services, or
other characteristics of the goods or services;
k. Consists of shapes that may be necessitated by technical
factors or by the nature of the goods themselves or factors
that affect their intrinsic value;
1. Consists of color alone, unless defined by a given form; or
m. Is contrary to public order or morality.1”
Immoral, deceptive, scandalous matter or falsely suggesting a
connection with person, belief, institution or symbol
86. Fredco Manufacturing Corporation (Fredco), filed a Petition
for Cancellation of Registration No. 56561 before the Bureau
of Legal Affairs of the Intellectual Property Office (IPO)
against President and Fellows of Harvard College (Harvard
University), a corporation organized and existing under the
laws of Massachusetts, United States of America.
Fredco alleged that Registration No. 56561 was issued
to Harvard University for the mark "Harvard Veritas Shield
Symbol” for decals, tote bags, serving trays, sweatshirts,
t-shirts, hats and flying discs under Classes 16, 18, 21, 25
and 28 of the Nice International Classification of Goods and
Services. Fredco alleged that the mark "Harvard" for t-shirts,
polo shirts, sandos, briefs, jackets and slacks was first used
in the Philippines by New York Garments Manufacturing &
Export Co., Inc. (New York Garments), Fredco's predecessor­
in-interest.
Harvard University, on the other hand, alleged that it is
the lawful owner of the name and mark "Harvard" in numerous
countries worldwide, including the Philippines.
Fredco made use of the mark "Harvard" for jeans coupled
with a claim that it originated in Cambridge. Was Fredco's
registration of such mark valid?
’’’Section 123.1, IPC, as amended.
J9JC9B0M
J9JC9B0M
256 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME 11
No. Fredco’s registration of the mark “Harvard” should not
have been allowed because the law prohibits the registration of
a mark "which may disparage or falsely suggest a connection
with persons, living or dead, institutions, beliefs. Fredco’s use of
the mark “Harvard,” coupled with its claimed origin in Cambridge,
Massachusetts, obviously suggests a false connection with Harvard
University. On this ground alone, Fredco’s registration of the mark
"Harvard” should have been disallowed.
Moreover, the Philippines and the United States of America
are both signatories to the Paris Convention for the Protection of
Intellectual Property.”8 The Philippines is obligated to assure
nationals of countries of the Paris Convention that they are afforded
an effective protection against violation of their intellectual property
rights in the Philippines in the same way that their own countries
are obligated to accord similar protection to Philippine nationals.
Thus, under Philippine law, a trade name of a national of a State
that is a party to the Paris Convention, whether or not the trade
name forms part of a trademark, is protected “without the obligation
of filing or registration.””9
Name, portrait, signature of living individual
87. Can the name of spouses of deceased Presidents be registered
as a trademark?
Yes. What the law prohibits is the registration of marks that
consist of a name, portrait or signature identifying a particular living
individual except by his written consent, or the name, signature, or
portrait of a deceased President of the Philippines, during the life of
his widow, if any, except by written consent of the widow.180
Identical mark
88. What is the first to file rule in trademarks?
The first to file rule in trademarks means that the filing of the
application for registration of trademark in good faith precludes
registration of the same trademark for the same goods or services or
closely related goods and services.
’’’Paris Convention.
1,9Fredco Manufacturing Corporation President and Fellows of Harvard
College, G.R. No. 185917, June 1,2011.
'“Section 123.1(c), IPC, as amended.
 VII. INTELLECTUAL PROPERTY CODE
89. Under the first to file rule in trademarks, a mark that nearly
resembles a previously registered mark, such that it is likely
to deceive or cause confusion, cannot be registered. How may
confusion arise?
There are two types of confusion arising from the use of similar
or colorable imitation marks, namely confusion of goods (product
confusion) and confusion of business (source of origin confusion).
Thus, while there is confusion of goods when the products are
competing, confusion of business exists when the products are non­
competing but related enough to produce confusion of affiliation.
Thus, while there is confusion of goods when the products are
competing, confusion of business exists when the products are non­
competing but related enough to produce confusion of affiliation.'81
In one case,182 the Supreme Court held that confusion of
business or source may also include confusion of reputation. Thus:
“similarity in the general appearance of respondent’s trademark and
that of petitioner would evidently create a likelihood of confusion
among the purchasing public. But even assuming, arguendo, that
the trademark sought to be registered by respondent is distinctively
dissimilar from those of the petitioner, the likelihood of confusion
would still subsist, not on the purchaser’s perception of the goods
but on the origins thereof. By appropriating the word “CONVERSE,”
respondent’s products are likely to be mistaken as having been
produced by petitioner. The risk of damage is not limited to a possible
confusion of goods but also includes confusion of reputation if
the public could reasonably assume that the goods of the parties
originated from the same source.”
Tests to determine confusing similarity between marks
90. What are the tests in determining likelihood of confusion?
Likelihood of confusion is the gravamen of the' offense of
trademark infringement. In determining likelihood of confusion,
jurisprudence has developed two tests, the dominancy test and the
'“'McDonald’s Corporation v. L.C. Big Mak Burger, Inc., G.R. No. 143993,
August 18,2004.
'““Converse Rubber Corporation v. Universal Rubber Products, Inc., G.R. No.
1-27906, January 8, 1987.
J9JC9B0M
257
258 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
holistic test. As to what test should be applied depends entirely
on the set of facts availing in each case. That is the reason why in
trademark cases, jurisprudential precedents should be applied only
to a case if they are specifically in point. In determining likelihood
of confusion, jurisprudence has developed two tests, the dominancy
test and the holistic test.
91. What is the dominancy test?
The test of dominancy focuses on the similarity of the prevalent
features of the competing trademarks which might cause confusion or
deception. It is explicitly incorporated into law under Section 155.1
of the IPC which defines infringement as the “colorable imitation
of a registered mark or the same container or a dominant feature
thereof.” Under the dominancy test, if the competing trademark
contains the main or essential or dominant features of another, and
confusion and deception is likely to result, infringement takes place.
As the Supreme Court asserted time and again, actual confusion
is not required. Duplication or imitation is not necessary; nor is
it necessary that the infringing label should suggest an effort to
imitate. Similarity in size, form and color, while relevant, is not
conclusive. Only likelihood of confusion on the part of the buying
public is necessary so as to render two marks confusingly similar so
as to deny the registration of the junior mark.183
92. What is the holistic test?
The Holistic Test entails a consideration of the entirety of the
marks as applied to the products, including labels and packaging,
in determining confusing similarity. The scrutinizing eye of the
observer must focus not only on the predominant words but also on
the other features appearing in both labels so that a conclusion may
be drawn as to whether one is confusingly similar to the other.181
93. Cite jurisprudence where the Supreme Court applied the
dominancy test.
Yes. The Supreme Court applied the dominancy test in the
following cases:
le8UFC Philippines, Inc. (Now Merged with Nutri-Asia, Inc., with Nutri-Asia,
Inc. as the Surviving Entity) v. Fiesta Barrio Manufacturing Corporation, G.R. No.
198889, January 20, 2016; BAR 1996.
1&1Dermaline, Inc. v. Myra Pharmaceuticals, G.R. No. 190065, August 1,2010.
J9JC9B0M

VII. INTELLECTUAL PROPERTY CODE
a. “Philippine Planters Cordial Peanuts” brand as opposed
to “Planters Cocktail Peanuts”, confusingly similar with
respect to their dominant word “Planters.”185
b. The Sunshine Tomato catsup label was a colorable
imitation of the Del Monte trademark due to prominent
similarities in their general design although there
are some differences. It is not difficult to see that the
Sunshine label is a colorable imitation of the Del Monte
trademark; the predominant colors used in the Del Monte
label are green and red-orange, the same with Sunshine;
the word “catsup” in both bottles is printed in white and
the style of the print/letter is the same; and although the
logo of Sunshine is not a tomato, the figure nevertheless
approximates that of a tomato.186
c. “Universal Converse and Device” and “Converse Chuck
Taylor” and “All Star Device” where Converse was held to
be the dominant word.187
d. CFC’s FLAVOR MASTER and Nestle’s MASTER ROAST
and MASTER BLEND188 where the word “Master” was
held to be the dominant feature of the competing marks.
e. Gold Toe v. Gold Top.189
It was held that a resort to either the Dominancy Test
or the Holistic Test shows that colorable imitation
exists between respondent’s “Gold Toe” and petitioner’s
“Gold Top.” A glance at petitioner’s mark shows that
it definitely has a lot of similarities and in fact looks
like a combination of the trademark and devices that
respondent has already registered; namely, “Gold Toe,”
the representation of a sock with a magnifying glass, the
“Gold Toe” representation and “linenized.”
’“Philippine Nut Industry v. Standard Brands, G.R. No. L-23035, July 31,
1975.
Court of
’“Del Monte Corporation and Philippine Packing Corporation
Appeals, G.R. No. L-78325, January 25, 1990.
mSupra.
188Societe Des Produits Nestle, S.A. and Nestle Philippines v. Court of Appeals,
G.R. No. 112012, April 4, 2001, 356 SCRA 207 (2001).
'“Amigo Manufacturing, Inc. v. Cluett Peabody Co., Inc., G.R. No. 139300,
March 14, 2001.
J9JC9B0M
260 DIVINA ON COMMERCIAL LAW:
259 A COMPREHENSIVE GUIDE VOLUME II
f. "Big Milk" mark for hamburger of LC Big Mak Burger, Inc.
is confusingly similar with the registered “Big Mac” mark
for the same food product of McDonald’s Corporation.191
Applying the dominancy test, the Court finds that
respondents’ use of the “Big Mak” mark results in
likelihood of confusion. First, “Big Mak” sounds exactly
the same as "Big Mac.” Second, the first word in “Big
Mak" is exactly' the same as the first word in “Big Mac.”
Third, the first two letters in “Mak” are the same as the
first two letters in “Mac.” Fourth, the last letter in “Mak”
while a “k” sounds the same as “c” when the word “Mak”
is pronounced. Fifth, in Filipino, the letter “k” replaces “c”
in spelling, thus “Caloocan” is spelled “Kalookan.”
The Court also noted that respondents have adopted in
“Big Mak” not only the dominant but also almost all the
features of “Big Mac.” Applied to the same food product
of hamburgers, with both marks aurally and visually the
same, it will likely result in confusion in the public.
g- “MCDONALD’S” and “MACJOY”.191
Applying the dominancy test, the Court finds that
herein petitioner’s “MCDONALD’S” and respondent's
“MACJOY’ marks are confusingly similar with each
other such that an ordinary purchaser can conclude an
association or relation between the marks.
To begin with, both marks use the corporate “M” design
logo and the prefixes “Me” and/or “Mac” as dominant
features. The first letter “M” in both marks puts emphasis
on the prefixes “Me” and/or “Mac” by the similar way in
which they are depicted i.e., in an arch-like, capitalized
and stylized manner. For sure, it is the prefix “Me,” an
abbreviation of “Mac,” which visually and aurally catches
the attention of the consuming public. Verily, the word
“MACJOY’ attracts attention the same way as did
“McDonalds,” “MacFries,” “McSpaghetti,” “McDo,” “Big
Mac” and the rest of the MCDONALD’S marks which all
use the prefixes Me and/or Mac.
'“McDonalds’ Corporation v. L.C. Big Mak Burger, G.R. No. 143993, August
18, 2004.
""McDonald’s Corporation v. MacJoy Fastfood Corporation, G.R. No. 166115,
February 2, 2007.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 261
Besides and most importantly, both trademarks are used
in the sale of fastfood products.
h. Pcynogenol v. PCO-GENOLS.102
Both the word[s] PYCNOGENOL and PCO-GENOLS have
the same suffix “GENOL” which on evidence, appears to be
merely descriptive and furnish no indication of the origin
of the article and hence, open for trademark registration
by the plaintiff thru combination with another word or
phrase such as PYCNOGENOL, Furthermore, although
the letters “Y” between P and C, “N” between O and C
and “S” after L are missing in the [petitioner’s] mark
PCO-GENOLS, nevertheless, when the two words are
pronounced, the sound effects are confusingly similar
not to mention that they are both described by their
manufacturers as a food supplement and thus, identified
as such by their public consumers.
i. Dermaline and Dermalin.103
Dermaline’s insistence that its applied trademark
“DERMALINE, INC.” had differences “too striking
to be mistaken” from Myra’s “DERMALIN’ cannot
be sustained. While it is true that the two marks are
presented differently — Dermaline’s mark is written
with the first “DERMALINE” in script going diagonally
upwards from left to right, with an upper case “D”
followed by the rest of the letters in lower case, and the
portion “DERMALINE, INC.” is written in upper case
letters, below and smaller than the long-hand portion;
while Myra’s mark “DERMALIN’ is written in an
upright font, with a capital “D” and followed by lower
case letters — the likelihood of confusion is still apparent.
This is because they are almost spelled in the same way,
except for Dermaline’s mark which ends with the letter
“E,” and they are pronounced practically in the same
manner in three (3) syllables, with the ending letter “E”
in Dermaline’s mark pronounced silently. Thus, when an
ordinary purchaser, for example, hears an advertisement
192Prosource International v. Horphag Research, G.R. No. 180073, November
25,2009.
193Dermaline, Inc. v. Myra Pharmaceuticals, G.R. No. 190065, August 1, 2010.
J9JC9B0M
J9JC9B0M
262 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
of Dermaline’s applied trademark over the radio, chances
are he will associate it with Myra’s registered mark.
j. "NANNY’ is confusingly similar to “NAN.”19J
Applying the dominancy test in the present case, the
Court finds that “NANNY’ is confusingly similar to
"NAN.” “NAN” is the prevalent feature of Nestle’s line
of infant powdered milk products. It is written in bold
letters and used in all products. The line consists of PRE-
NAN, NAN-H.A., NAN-1, and NAN-2. Clearly, “NANNY
contains the prevalent feature “NAN.” The first three
letters of “NANNY’ are exactly the same as the letters of
“NAN.” When “NAN” and “NANNY’ are pronounced, the
aural effect is confusingly similar.
k. Comparing Berris’ mark D-10 80 WP with Abyadang’s
mark NS D-10 PLUS, as appearing on their respective
packages, one cannot but notice that both have a common
component which is D-10. Admittedly, D-10 is the
dominant feature of the mark.195
1. The use of the stylized “S” in Strong Rubber shoes infringes
on the mark already registered by Sketchers. While it is
undisputed that Sketcher’s stylized “S” is with an oval
design and the other party did not use the oval design, the
dominant feature of the trademark is the stylized “S” as it
is the one that catches the eye of the purchaser.196
m. OK Hotdog Inasal Cheese Hotdog Flavor Mark for curl
snack product is a colorable imitation of the Mang Inasal
mark for marinated chicken.19’
It is undisputed that the OK Hotdog Inasal mark
copied and adopted as one of its dominant features the
“INASAL” element of the Mang Inasal mark. Given that
the “INASAL”element is, at the same time, the dominant
191Societe Des Produits Nestle, SA v. Dy, G.R. No. 172276, August 8, 2010.
195Berris Agricultural Co., Inc. v. Norvy Abyadang, G.R. No. 183404, October
13,2010.
196Sketchers USA Inc. v. Inter Pacific Industrial Trading, G.R. No. 164321,
March 23, 2011; BAR 2014.
197Mang Inasal Philippines, Inc. v. IFP Manufacturing Corporation, G.R No.
221717, June 19, 2017.
 VII. INTELLECTUAL PROPERTY CODE
and most distinctive feature of the Mang Inasal mark,
the said elements incorporation in the OK Hotdog Inasal
mark, thus, has the potential to project the deceptive and
false impression that the latter mark is somehow linked
or associated with the former mark.
n. PHILIPS v. PHILITES for fluorescent bulb, incandescent
light, starter and ballast.'98
Applying both the dominancy and holistic test, the
Supreme Court ruled that the consuming public does not
have the luxury of time to ruminate the phonetic sounds
of the trademarks, to find out which one has a short or
long vowel sound. At bottom, the letters “PHILI” visually
catch the attention of the consuming public and the use
of respondent’s trademark will likely deceive or cause
confusion. Most importantly, both trademarks are used
in the sale of the same goods, which are light bulbs. A
comparison between petitioner’s registered trademark
“PHILIPS” as used in the wrapper or packaging of its
light bulbs and that of respondent’s applied for trademark
“PHILITE” as depicted in the container or actual wrapper/
packaging of the latter’s light bulbs will readily show that
there is a strong similitude and likeness between the two
trademarks that will likely cause deception or confusion to
the purchasing public. The fact that the parties’ wrapper
or packaging reflects negligible differences considering the
use of a slightly different font and hue of the yellow is of
no moment because taken in their entirety, respondent’s
trademark “PHILITES” will likely cause confusion or
deception to the ordinary purchaser with a modicum of
intelligence.
0. The word “Metro” for magazine publication.199
It was held that “the dominant feature of the applicant
mark is the word “METRO” which is identical, both
visually and aurally, to the cited marks already registered
198Dy v. Koninklijke Philips Electronics, N.V., G.R. No. 186088, March 22,
2017.
199ABS-CBN v. Director of the Bureau of Trademarks, G.R. No. 217916, June
20,2018.
L
J9JC9B0M
263
264 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
with the IPO. Even if the second cited mark owned by
Metro International contains an accompanying device,
and the third cited mark contains the terms “Philippine
Daily Inquirer", (sic) the dominant feature of the subject
and cited marks is still clearly the word “Metro”, (sic)
spelled and pronounced in exactly the same way. The
identity between the marks would indubitably result in
confusion of origin as well as goods.”
P- “CITY CASH WITH GOLDEN LION’S HEAD” for Bank
ATM service and “CITI” marks for various banking
services.2®
The Supreme Court said that applying the dominancy test,
the prevalent feature of CITYSTATE SAVING’S BANK’S
mark, the golden lion’s head device, is not present at all
in any of CITIGROUP’S marks. The only similar feature
between respondent’s mark and petitioner’s collection of
marks is the word “CITY” in the former, and the “CITI”
prefix found in the latter. The Court concluded that this
similarity alone is not enough to create a likelihood of
confusion.
94. Cite jurisprudence where the Supreme Court applied the
holistic test.
a. When it comes to pants/jeans, the Supreme Court has
consistently applied the holistic test. Thus, it was held
that the trademark “Stylistic Mr. Lee” for maong pants
cannot be deemed confusingly similar with the trademark
“Lee.” The test of fraudulent simulation is to be found in
the likelihood of the deception of some persons in some
measure acquainted with an established design and
desirous of purchasing the commodity with which that
design has been associated. When the casual buyer is
predisposed to be more cautious in his purchase, as in this
case where the products concerned are not inexpensive,
the likelihood of confusion is absent. Further, maong pants
and jeans are not inexpensive and as the casual buyer
is predisposed to be more cautious and discriminating in
“‘’Citigroup, Inc. Citystate Savings Bank, Inc., G.R. No. 205409, June 13,
2018.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
and would prefer to mull over his/her purchase, confusion
and deception is less likely.201
The Court also ruled that the jeans trademarks of Levi’s
b.
Philippines and Diaz’s “made-to-order” ones must be
considered as a whole in determining the likelihood of
confusion between them. The consuming public could
easily discern if the jeans were original or fake or were
manufactured by other brands of jeans. Confusion and
deception were remote since maong jeans are expensive
and the casual buyer is predisposed to be more cautious
and discriminating in and would prefer to mull over his
purchase. Further, Diaz used the trademark “LS JEANS
TAILORING” for the jeans he produced and sold. His
trademark was visually and aurally different from the
trademark “LEVI STRAUSS & CO” appearing on the
patch of original jeans. Diaz also aptly noted that the
design used by LEVIS was an image of two horses but
the evidence will show that there was no such design
in the seized jeans, instead, what is shown is a ‘buffalo
design.”202
C. The trademarks FRUIT OF THE LOOM and FRUIT
FOR EVE, for hang tags do not resemble each other as
to confuse or deceive an ordinary purchaser, who must
be thought of as having, and credited with, at least
a modicum of intelligence to be able to see the obvious
differences between the two trademarks in question.203
d. Based on the distinct visual and aural differences
between LOLANE and ORLANE, there is no confusing
similarity between the two marks. The suffix LANE is not
the dominant feature of petitioner’s mark. Neither can it
be considered as the dominant feature of ORLANE which
would make the two marks confusingly similar. First, an
examination of the appearance of the marks would show
that there are noticeable differences in the way they are
“'Emerald Garment Manufacturing Corporation v. Court of Appeals, G.R. No.
100098, December 29, 1995.
“2Diaz v. People of the Philippines and Levi Strauss (Phil.), G.R. No. 180677,
February 18, 2013.
203Fruit of the Loom, Inc. v. Court of Appeals, G.R. No. L-32747, November 29,
1984.
J9JC9B0M
265 266 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
written or printed. There are visual differences between
LOLANE and ORLANE since the mark ORLANE is in
plain block upper case letters while the mark LOLANE
was rendered in stylized word with the second letter “L”
and the letter “A" co-joined. Second, as to the aural aspect
of the marks, LOLANE and ORLANE do not sound alike.
Appeals to the ear in pronouncing ORLANE and LOLANE
are dissimilar. The first syllables of each mark, i.e., OR
and LO do not sound alike, while the proper pronunciation
of the last syllable LANE — “LEYN” for LOLANE and
“LAN” for ORLANE, being of French origin, also differ.2"
e. Although the perceived offending word “MARK’ is itself
prominent in petitioner’s trademarks “MARK VII”
and “MARK TEN,” the entire marking system should
be considered as a whole and not dissected, because a
discerning eye would focus not only on the predominant
word but also on the other features appearing in the
labels; only then would such discerning observer draw his
conclusion whether one mark would be confusingly similar
to the other and whether or not sufficient differences
existed between the marks.205
It should be noted that the Supreme Court has often
applied the dominancy test when it comes to “inexpensive
and common” household items bought off the shelf by
“undiscerningly rash” purchasers. As such, if the ordinary
purchaser is “undiscerningly rash”, then he would not
have the time nor the inclination to make a keen and
perceptive examination of the physical discrepancies
in the trademarks of the products in order to exercise
his choice.200 When it comes to products that require
discernment or mulling things over, like jeans, the
Supreme Court has applied the holistic test. The Philip
Morris case is a rare exception.
f. There are distinct visual and aural differences between
Great White Shark’s Greg Norman Logo and Caralde’s
Shark and Logo Mark. There being no confusing
2<MSeri Somboonsakdikul v. Orlane S.A., G.R. No. 188996, February 1, 2017.
““Philip Morris, Inc. v. Fortune Tobacco Corporation, G.R. No. 158589, June
27, 2006.
““Societe Des Produits Nestle v. Court of Appeals, April 4, 2001, supra.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
similarity between the subject marks, the matter of Great
White Shark’s mark has gained recognition becomes
necessary.207
Idem sonans
95. What is the idem sonans rule in trademark?
The rule on idem sonans is also a test to resolve the confusing
similarity of trademarks. A mark with a different spelling but is
similar in sound with a registered trademark when read may be
ruled as being confusingly similar with the said registered mark.
96. Is there a clear-cut rule in the use of both dominancy and
holistic tests?
None. There is no objective test for determining whether the
confusion is likely. Likelihood of confusion must be determined
according to the particular circumstances of each case.208 In the
history of trademark cases in the Philippines, there are no hard
and fast rules in ascertaining whether one trademark is confusingly
similar to or is a colorable imitation of another. While Section 155.1
of the IPC explicitly refers to the dominancy test in determining
trademark infringement, still, each case must be decided on its own
merits. In fact, in certain cases, the Supreme Court applied both
dominancy and holistic tests to determine likelihood of confusion.209
The ultimate question in cases of trademark infringement is “whether
the use of the marks involved would be likely to cause confusion
or mistakes in the mind of the public or deceive purchasers”,
regardless of whether the dominancy or the holistic test is applied.
The universal test has been said to be whether the public is likely
to be deceived.
2O7Great White Shark Enterprises v. Caralde, G.R. No. 192294, November 21,
2012.
““CITIGROUP v. Citystate, supra.
““Berris Agricultural Co., Inc. v. Norvy Abyadang, G.R. No. 183404, October
13,2010 involving the trademark D-10 80 WP and NS D-10 PLUS for fungicide; Amigo
Manufacturing, Inc. v. Cluett Peabody Co., Inc., G.R. No. 139300, March 14, 2001
involving the trademark Gold Toe and Gold Top for socks; Prosource International,
Inc. v. Horphag Research Management SA, G.R. No. 180073, November 25, 2009
involving the trademarks PYCNOGENOL and PCO-GENOLS for food supplement;
Coffee Partners v. San Francisco Coffee and Roastery, Inc., G.R. No. 169504, March 3,
2010 involving the trademarks SAN FRANCISCO COFFEE and SAN FRANCISCO
COFFEE & ROASTERY for coffee products.
J9JC9B0M
267
268 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
In another case, the Court also prevented the registration of
a trademark based on similarity of sound, explaining that both the
words PYCNOGENOL and PCO-GENOLS have the same suffix
"GENOL" which appears to be merely descriptive and furnish no
indication of the origin of the article and hence, open for trademark
registration by the plaintiff thru combination with another word or
phrase such as PYCNOGENOL. Although there were dissimilarities
in the trademark due to the type of letters used as well as the size,
color, and design employed on their individual packages/bottles, still
the close relationship of the competing products’ name in sounds as
they were pronounced, clearly indicates that purchasers could be
misled into believing that they are the same and/or originates from
a common source and manufacturer.210
Similarly, the Court also used the aural effect of a trademark
when it ruled that ‘NANNY1 is confusingly similar to ‘NAN,’ the
prevalent feature of Nestle’s fine of infant powdered milk products
which is written in bold letters and used in all products. The first
three letters of‘NANNY1 are exactly the same as the letters of‘NAN’
and when ‘NAN’ and ‘NANNY1 are pronounced, the aural effect is
confusingly similar.211
97. What is the scope of protection afforded to registered
trademark owners?
The scope of protection afforded to registered trademark owners
is not limited to protection from infringers with identical goods. It
also extends to protection from infringers with related goods, and
to market areas that are the normal expansion of business of the
registered trademark owners.
This means that the registered trademark owner may use his
mark on the same or similar products, in different segments of the
market, and at different price levels depending on variations of the
products for specific segments of the market. The Supreme Court has
recognized that the registered trademark owner enjoys protection in
product and market areas that are the normal potential expansion
of his business.2'2
210Prosource International, Inc. v. Horphag Research Management SA, G.R.
No. 180073, November 25, 2009.
211Societe Des Produits Nestle, S.A. v. Dy, Jr., G.R. No. 172276, August 8, 2010.
212Sketchers USA, Inc. v. Inter Pacific Industrial Trading, G.R. No. 164321,
March 23, 2011; Societe Des Produits Nestle, SA v. Dy, G.R. No. 172276, August 8,
2010.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 269
In Societe Des Produits Nestle, S.A. u Martin Dy, Jr.,m the
Supreme Court held that while there are differences between NAN
and NANNY, (1) NAN is intended for infants while NANNY is
intended for children past their infancy and for adults; and (2) NAN
is more expensive than NANNY, the registered owner of the “NAN”
mark, Nestle should be free to use its mark on similar products, in
different segments of the market, and at different price levels.
The same principle was applied in Sketchers, U.S.A., Inc. v.
Inter Pacific Industrial Trading Corporation.2" The use of the
stylized “S” by the manufacturer of its Strong rubber shoes infringes
on the mark of Sketchers. It is no defense that the Strong rubber
shoes are cheaper and cater to different market segments. Sketchers
should be free to expand its product offering in different segments
of the market.
In a relevant case, it was held that “PAPA BOY& DEVICE”
is confusingly similar with the previously registered mark “PAPA”
even though they refer to different products, PAPA BOY is for
lechon sauce while PAPA is for catsup. The Supreme Court stated
that since petitioner’s product, catsup, is also a household product
found on the same grocery aisle, in similar packaging, the public
could think that petitioner had expanded its product mix to include
lechon sauce, and that the “PAPA BOY’ lechon sauce is now part of
the “PAPA” family of sauces. Thus, if allowed registration, confusion
of business may set in, and petitioner’s hard-earned goodwill may be
associated to the newer product introduced by respondent.215
In Mang Inasal Philippines v. IFP Manufacturing Corpora­
tion,2'6 the Supreme Court ruled that the mark “Ok Hotdog Inasal
Cheese Flavor” for curl snack product is confusingly similar with the
mark “Mang Inasal” for marinated chicken. The Supreme Court also
conclude that average buyer who comes across the curls marketed
under the OK Hotdog Inasal mark is likely to be confused as to the
true source of such curls. To our mind, it is not unlikely that such
buyer would be led into the assumption that the curls are of petitioner
and that the latter has ventured into snack manufacturing or, if
mSupra.
2"Supra.
2ISUFC Philippines, Inc. (Now Merged with Nutri-Asia, Inc., with Nutri-Asia,
Inc. as the Surviving Entity) v. Fiesta Barrio Manufacturing Corporation, G.R. No.
198889, January 20, 2016.
1,6 Supra.
J9JC9B0M
J9JC9B0M
270 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
not. that the petitioner has supplied the flavorings for respondent’s
product. Either way, the reputation of petitioner would be taken
advantage of and placed at the mercy of respondent.217
98. What is the doctrine of unrelated goods?
One who has adopted, used and registered a trademark on his
goods cannot prevent the adoption, use and registration of the same
trademark by others on unrelated articles of a different kind.
99. What is the basis of the doctrine?
The certificate of registration entitles the registrant to use the
trademark only for the goods specified in the certificate or goods
related thereto. Therefore, the registrant cannot preclude others
from adopting and registering the trademark for totally unrelated
goods.
It was also held that the prohibition under Section 123 of the
Intellectual Property Code extends to goods that are related to the
registered goods, not to goods that the registrant may produce in
the future. To allow the expansion of coverage is to prevent future
registrants of goods from securing a trademark on the basis of
mere possibilities and conjectures that may or may not occur at all.
Surely, the right to a trademark should not be made to depend on
mere possibilities and conjectures.218
100. Cite jurisprudence where the Supreme Court applied the
doctrine of unrelated goods.
a. The registered owner of the trademark “Brut” for toilet
articles cannot oppose the registration of the trademark
“Brute” for briefs, since the two products are unrelated,
even if the former has a pending application for the
registration. A purchaser who is out in the market for
the purposes of buying Brute brief would definitely be not
mistaken or misled into buying BRUT after shave lotion
or deodorant.219
21,Mang Inasal Philippines, Inc. v. IFP Manufacturing Corporation, G.R. No.
221717, June 19, 2017.
2iaKenaonic, Inc. v. Uni-Line Multi Resources, Inc., G.R. Nos. 211820-21 and
211834-35, June 6, 2018.
219Faberge, Inc. v. Intermediate Appellate Court, 215 SCRA 316 (1992); BAR
1994.
 VII. INTELLECTUAL PROPERTY CODE
b. The owner of the registered trademark “Hickok” for its
diverse articles of men’s wear such as wallets, belts and
men’s briefs which are all manufactured here in the
Philippines by a licensee Quality House, Inc. but are so
labeled as to give the misimpression that the said goods
are of foreign (stateside) manufacture cannot preclude
the registration of the same trademark exclusively for
shoes.220
c. There is no infringement when the trademark “CANON”
is used for paints, chemical products, toner and dyestuff
while it is used by another for footwear (sandals).221
d. The trademark registration of LOTUS for soy sauce was
granted and upheld, although the trademark LOTUS
is already registered in favor of another for its product,
edible oil.222
e. The GALLO trademark registration certificates in the
Philippines and in other countries expressly state that
they cover wines only, without any evidence or indication
that registrant Gallo Winery expanded or intended to
expand its business to cigarettes. Thus, Gallo Winery,
as registered owner of the trademark GALLO, cannot
prevent the registration of the trademark GALLO for
tobacco products.223
f; Kolin Electronics, the registered owner of the mark “Kolin”,
for goods falling under Class 9 of the Nice Classification,
such as amplifier, booster, converter, voltage regulator
and similar electronic products, can not preclude the
adoption, use and registration of the trademark “Kolin”
on a combination of goods, including colored televisions,
refrigerators, window-type and split-type air conditioners,
electric fans and water dispensers with Taiwan Kolin
even though they belong to the same Class 9, because they
are unrelated products. The Supreme Court held that
whether or not the products covered by the trademark
““Hickok Manufacturing, Co., Inc. v. Court of Appeals, G.R. No. L-44707,
August 31, 1982.
“'Canon Kabushiki Kaisha Court of Appeals, G.R, No. 120900, July 20,
2004.
“Acoje Mining Co., Inc. v. Director of Patents, 38 SCRA 480; BAR 1978.
“’Mighty Corporation v. E.& J Gallo Winery, G.R. No. 154342, July 14, 2004.
J9JC9B0M
271
272 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
sought to be registered by Taiwan Kolin, on the one
hand, and those covered by the prior issued certificate of
registration in favor of Kolin Electronics, on the other, fall
under the same categories in the NCL is not the sole and
decisive factor in determining a possible violation of Kolin
Electronics’ intellectual property right should Taiwan
Koiin’s application be granted. It is hornbook doctrine
that emphasis should be on the similarity of the products
involved and not on the arbitrary classification or general
description of their properties or characteristics.
Reiterating the doctrine in Mighty Corporation v. E & J Gallo
Winery,224 the Supreme Court ruled that the goods should be tested
against several factors before arriving at a sound conclusion on the
question of relatedness. Among these are: (a) the business (and
its location) to which the goods belong; (b) the class of product to
which the goods belong; (c) the product’s quality, quantity, or size,
including the nature of the package, wrapper or container; (d)
the nature and cost of the articles; (e) the descriptive properties,
physical attributes or essential characteristics with reference to
their form, composition, texture or quality; (f) the purpose of the
goods; (g) whether the article is bought for immediate consumption,
that is, day-to-day household items; (h) the fields of manufacture;
(i) the conditions under which the article is usually purchased; and
(j) the channels of trade through which the goods flow, how they are
distributed, marketed, displayed and sold.
The Supreme Court then gave credence to the arguments of
Taiwan Kohn that —
• Taiwan Koiin’s goods are classified as home appliances
as opposed to Kohn Electronics’ goods which are power
supply and audio equipment accessories;
• Taiwan Kohn’s television sets and DVD players perform
a distinct function and purpose from Kolin Electronics’
power supply and audio equipment; and
• Taiwan Kohn sells and distributes its various home
appliance products on wholesale and to accredited
dealers, whereas Kohn Electronics’ goods are sold and
flow through electrical and hardware stores.226
22<G.R. No. 154342, July 14, 2004.
226Taiwan Kolin Corporation, LTD. v. Kolin Electronics Co., Inc., G.R. No.
209843, March 15, 2015.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 273
g. Television sets, stereo components, DVD and VCD players
as against voltage regulators, portable generators, switch
breakers and fuses because the latter’s registration only
covered electronic audio-video products, not electrical
home appliances. The two classifications of goods are
unrelated. For one, the first pertained to goods which
belong to the information technology and audiovisual
equipment subclass while the latter pertained to the
apparatus and devices for controlling the distribution of
electricity sub-class. Also, the goods of the first registrant
were final products but the latter’s products were spare
parts.226
Author’s note. When does one apply the doctrine of unrelated
goods and doctrine of normal or potential expansion of business? For
sure, jurisprudence which applied the doctrine of unrelated goods
could have been arguably ruled as falling under the opposite doctrine
of normal expansion of business, and vice-versa. For academic
discussion, your answer to any such bar question will depend on the
similarity of facts to the foregoing jurisprudence.
Well-known marks
101. What is a well-known mark?
A well-known mark is a mark which is considered by
the competent authority of the Philippines to be well-known
internationally and in the Philippines, whether or not it is registered
here, as being already the mark of a person other than the applicant
for registration.
If the well-known mark is registered in the Philippines,
any mark identical with, confusingly similar to, or constitutes a
translation of such well-known mark, cannot be used for identical
goods or services or be registered in the Philippines with respect to
goods or services which are not similar to those with respect to which
registration is applied for: provided, that use of the mark in relation
to those goods or services would indicate a connection between those
goods or services, and the owner of the registered mark: provided
further, that the interests of the owner of the registered mark are
likely to be damaged by such use.227
226Kensonic, supra.
“’Section 123.1(e), IPC.
J9JC9B0M
J9JC9B0M
27-1 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
If the well-known mark is not registered in the Philippines, the
scope of protection only extends to marks used for identical goods or
services."'8
102. What are the remedies of the owner of a well-known mark that
is not registered in the Philippines?
Without prejudice to other remedies under the law, the owner
of the well-known mark may:
a. Oppose the application for registration of a mark which
is identical with or confusingly similar or constitutes a
translation of such well-known mark;
b. Petition for cancellation of the registration, if one has
been granted; and,
c. Unfair competition if the goods are being passed off by
another as the goods of the owner of the well-known mark.
103. Is the knowledge of the general public of the mark taken into
account in determining whether it is a well-known mark?
No, in determining whether a mark is well-known, account shall
be taken of the knowledge of the relevant sector of the public, rather
than of the public at large, including knowledge in the Philippines
which has been obtained as a result of the promotion of the mark.
The power to determine whether a trademark is well-known
lies in the “competent authority of the country of registration or use.”
This competent authority would be either the registering authority
if it has the power to decide this, or the courts of the country in
question if the issue comes before a court.229
104. What is the role of the Paris Convention on the protection of
trademarks?
Under the IPC and the Paris Convention, any foreign national
or juridical person has the legal capacity to sue for the protection of
its trademarks, albeit he or it is not doing business in the Philippines.
^Supra.
229Sehwani Incorporated v. In-N-Out Burger, Inc., G.R. No. 171053, October
15, 2007; Fredco Manufacturing Corporation v. President and Fellows of Harvard
College, G.R. No. 185917, June 1, 2011.
 VII. INTELLECTUAL PROPERTY CODE
Article 6 of the Paris Convention which governs the protection of
well-known trademarks, is a self-executing provision and does
not require legislative enactment to give it effect in the member
country. It may be applied directly by the tribunals and officials of
each member country by the mere publication or proclamation of
the Convention, after its ratification according to the public law of
each state and the order for its execution. The essential requirement
under this Article is that the trademark to be protected must be
“well-known” in the country where protection is sought.230
Applying this principle in one case, the Court ruled that in
upholding the right of the petitioner to maintain a suit for unfair
competition or infringement of trademarks of a foreign corporation
before the Philippine courts, the duties and rights of foreign states
under the Paris Convention for the Protection of Industrial Property
to which the Philippines and France Eire parties are upheld.231
105. Does the protection afforded by the Paris Convention extend to
trade names?
Yes. The Philippines is obligated to assure nationals of
countries of the Paris Convention that they are afforded an effective
protection against violation of their intellectual property rights
in the Philippines in the same way that their own countries are
obligated to accord similar protection to Philippine nationals. Thus,
under Philippine law, a trade name of a national of a State that is a
party to the Paris Convention, whether or not the trade name forms
part of a trademark, is protected “without the obligation of filing or
registration.”232
This ruling is reiterated by the Court in a later case, explaining
that under the Paris Convention to which the Philippines is a
signatory, a trade name of a national of a State that is a party to
the Paris Convention, whether or not the trade name forms part
of a trademark, is protected without the obligation of fifing or
registration.233
“Sehwani Incorporated v. In-N-Out Burger. Inc., 536 SCRA 227 (2007).
2,lMelbarose R. Sasot and Allandale R. Sasot v. People of the Philippines, G.R.
No. 143193, June 29, 2005.
232Fredco Manufacturing Corporation v. President and Fellows of Harvard
CoDege, G.R. No. 185917, June 1, 2011.
233Ecole De Cuisine Manille (Cordon Bleu of the Philippines), Inc. v. Renaud
Cointreau & Cie and Le Cordon Bleu Inti, B.V., G.R. No. 185830, June 5, 2013.
J9JC9B0M
275 276 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
106. Cite examples of cases involving well-known marks.
a. The word "Barbizon” cannot be registered as a trademark
for ladies’ underwear, since it is an internationally well-
known trademark for lingerie.234
b. In the case of Sehwani v. In-N-Out Burger, the Supreme
Court held that “In-N-Out Burger” is a well-known mark,
given its registration in various countries around the
world and comprehensive advertisements. As such, the
mark is entitled to protection even though there is no
actual use of such mark in the Philippines.235
c. “Harvard” is the trade name of the world-famous Harvard
University, and it is also a trademark of Harvard
University. Under the Paris Convention, Harvard
University is entitled to protection in the Philippines
of its trade name “Harvard” even without registration
of such trade name in the Philippines. This means that
no educational entity in the Philippines can use the
trade name “Harvard” without the consent of Harvard
University. “Harvard” is a well-known name and mark
not only in the United States but also internationally,
including the Philippines. It is internationally known as
one of the leading educational institutions in the world.
As such, even before Harvard University applied for
registration of the mark “Harvard” in the Philippines, the
mark was already protected under the Paris Convention.“
It should be noted though in that in the case of Fredco, the
“Harvard” mark was not for the use of an educational institution
but for t-shirts, polo shirts, sandos, briefs, jackets and slacks. Fredco
filed a petition for cancellation of the mark “Harvard” against the
President and Fellows of Harvard College alleging that the mark
Harvard for said merchandise was first used in the Philippines by
the New York Garments, Fredco’s predecessor-in-interest.
The Supreme Court, as previously pointed out, ruled that it was
a mistake to register in favor of Fredco’s predecessor-in-interest the
trademark “Harvard” for slacks and similar merchandise because it
suggested a connection with Harvard University.
^Pribhdas J. Mirpuri Court of Appeals, G.R. No. 114508, November 19,
1999.
a5Ibid.
^Fredco Manufacturing Corporateion v. President and Fellows of Harvard
College, G.R. No. 185917, June 1, 2011.
J9JC9B0M

VII. INTELLECTUAL PROPERTY CODE 277
It is interesting to note that in one case, the Supreme Court did
not consider “GALLO” a “well-known” mark within the contemplation
and protection of the Paris Convention.2'”
107. What is the theory of dilution?
Trademark dilution is the lessening of the capacity of a famous
mark to identify and distinguish goods or services, regardless of the
presence or absence of competition between the owner of the famous
mark and other parties; or likelihood of confusion, mistake or
deception. Subject to the principles of equity, the owner of a famous
mark is entitled to injunction against another person’s commercial
use in commerce of a mark or trade name, if such use begins after
the mark has become famous and causes dilution of the distinctive
quality of the mark. This is intended to protect famous marks from
subsequent uses that blur distinctiveness of the mark or tarnish
or disparage it. Applying this theory, it was held that Dockers and
Design has not acquired a strong degree of distinctiveness yet to be
able to get an injunction against the use of the trademark Paddocks
and Design.238
108. What are generic marks?
Generic marks are those which constitute “the common
descriptive name of an article or substance,” or comprise the “genus
of which the particular product is a species,” or are “commonly used
as the name or description of a kind of goods,” or “imply reference
to every member of a genus and the exclusion of individuating
characters,” or “refer to the basic nature of the wares or services
provided rather than to the more idiosyncratic characteristics of a
particular product,” and are not legally protectable.239
109. Is generic mark prohibited?
Section 123(h) of the Intellectual Property Code prohibits the
registration of a trademark that consists exclusively of signs that are
“’Mighty Corporation and La Campana Fabrica De Tabaco, Inc. v. E. & J.
Gallo Winery and the Andresons Group, Inc., G.R. No. 154342, July 14, 2004.
“Levi Strauss & Co v. Clinton Apparelle, G.R. No. 138900, September 20,
2005.
“Societe Des Produits Nestle v. Court of Appeals, April 4, 2001 citing Federal
Unfair Competition: Lanham Act s 43 (a), p. 3-22.1; See De La Salle Montessori
International of Malolos v. De La Salle Brothers, el al., G.R. No. 205548, February
U018.
J9JC9B0M
J9JC9B0M
278 D1V1NA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
generic for the goods or services that they seek to identify. It is clear
from the law itself, therefore, that what is prohibited is not having
a generic mark but having such generic mark being identifiable to
the good or service. In one case, it was held that although SAKURA
refers to the Japanese flowering cherry and is, therefore, of a generic
nature, the manufacturer’s DVD or VCD players and other products
could not be identified with cherry blossoms. Hence, the mark can
be appropriated.-’10
110. What is a descriptive mark?
A term is descriptive and therefore invalid as a trademark if,
as understood in its normal and natural sense, it “forthwith conveys
the characteristics, functions, qualities or ingredients of a product
to one who has never seen it and does not know what it is,” or “if it
forthwith conveys an immediate idea of the ingredients, qualities or
characteristics of the goods,” or if it clearly denotes what goods or
services are provided in such a way that the consumer does not have
to exercise powers of perception or imagination.241
Under the IPC, these are marks that consist exclusively of
signs or of indications that may serve in trade to designate the kind,
quality, quantity, intended purpose, value, geographical origin,
time or production of the goods or rendering of the services, or other
characteristics of the goods or services.242
Under the IPC, descriptive marks are those that consist
exclusively of signs or of indications that may serve in trade to
designate the kind, quality, quantity, intended purpose, value,
geographical origin, time or production of the goods or rendering of
the services, or other characteristics of the goods or services.213
111. Are the following terms generic or descriptive and as such,
non-registrable?
a) Lyceum (for school)
The word “Lyceum” generally refers to a school or an institution
of learning. While the Latin word “lyceum” has been incorporated
210Kensonic, Inc. v. Uni-Line Multi-Resources, Inc., G.R. Nos. 211820-21 and
211834-35, June 6, 2018.
21,Societe Des Produits Nestle, ibid.
212Section 123.1(j), IPC, as amended.
“Section 123.l(j), IPC, as amended.
 VII. INTELLECTUAL PROPERTY CODE
into the English language, the word is also found in Spanish (liceo)
and in French (lycee). “Lyceum” is in fact as generic in character
as the word “university.” Since “Lyceum” or “Liceo” denotes a
school or institution of learning, it is not unnatural to use this
word to designate an entity which is organized and operating as an
educational institution.214
b) Master (for coffee)
The word MASTER is neither generic nor descriptive and
as such, it cannot be invalidated as a trademark. It is instead a
suggestive term brought about by the advertising scheme of Nestle.
Suggestive terms are those which, in the phraseology of one court,
require “imagination, thought and perception to reach a conclusion
as to the nature of the goods.” Such terms, “which subtly connote
something about the product,” are eligible for protection in the
absence of secondary meaning. While suggestive marks are capable
of shedding “some light” upon certain characteristics of the goods
or services in dispute, they nevertheless involve “an element of
incongruity,” “figurativeness,” or “imaginative effort on the part of
the observer.”
This is evident from the advertising scheme adopted by Nestle
in promoting its coffee products. In this case, Nestle has, over time,
promoted its products as “coffee perfection worthy of masters.”245
c) Marlboro (for cigarette)
The trademark “Marlboro” is not only valid for being neither
generic nor descriptive, but because it is also owned exclusively
by PMPI as evidenced by the certificate of registration issued by
the IPO. It was held that the counterfeit cigarettes seized from
petitioner’s possession were intended to confuse and deceive the
public as to the origin of the cigarettes intended to be sold, as they
not only bore PMPI’s mark, but they were also packaged almost
exactly as PMPI’s products.246
d) Papa (for catsup)
It is not a generic mark. The Merriam-Webster dictionary
defines “Papa” simply as “a person’s father.” True, a person’s father
2,,Lyceum of the Philippines v. Court of Appeals, G.R. No. 101897, March 5,
1993.
2,5Societe Des Produits Nestle, S.A. v. Court of Appeals and CFC Corporation,
G.R. No. 112012, April 4, 2001.
2,80ng v. People of the Philippines, G.R. No. 169440, November 23, 2011.
L
J9JC9B0M
279 280 D1V1NA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
has no logical connection with catsup products, and that precisely
makes "PAPA" as an arbitrary mark capable of being registered, as
it is distinctive, coming from a family name that started the brand
several decades ago. What was registered was not the word “Papa”
as defined in the dictionary, but the word “Papa” as the last name
of the original owner of the brand. In fact, being part of several
of petitioner's marks, there is no question that the IPO has found
"PAPA" to be a registrable mark.24’
e) La Salle (for educational institution)
The word salle only means “room” in French. The word la,
on the other hand, is a definite article (“the”) used to modify salle.
Thus, since salle is nothing more than a room, the use of the tennis
actually suggestive.
A suggestive mark is therefore a word, picture, or other symbol
that suggests, but does not directly describe something about the
goods or services in connection with which it is used as a mark and
gives a hint as to the quality or nature of the product. Suggestive
trademarks therefore can be distinctive and are registrable.
The appropriation of the term “la salle" to associate the words
with the lofty ideals of education and learning is in fact suggestive
because roughly translated, the words only mean “the room.” Thus,
the room could be anything—a room in a house, a room in a building,
or a room in an office.
In fact, the appropriation by the De La Salle Brothers is fanciful,
whimsical and arbitrary because there is no inherent connection
between the words la salle and education, and it is through their
painstaking efforts that the term has become associated with one
of the top educational institutions in the country. Even assuming
arguendo that la salle means “classroom” in French, imagination
is required in order to associate the term with an educational
institution and its particular brand of service. The phrase “De La
Salle” is not merely a generic term. De La Salle Brothers’ use of the
phrase being suggestive and may properly be regarded as fanciful,
arbitrary and whimsical, it is entitled to legal protection.248
Z4’UFC Philippines Fiesta Barrio Manufacturing Corporation, G.R. No.
198889, January 20, 2016.
z4BDe La Salle Montessori, supra.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
f) San Francisco Coffee (for coffee products)
In one case, the petitioner’s argument that “San Francisco” is
just a proper name referring to the famous city in California and
that “coffee” is simply a generic term was held by the Court to be
untenable. The respondent has acquired an exclusive right to the
use of the trade name “SAN FRANCISCO COFFEE & ROASTERY,
INC.” since the registration of the business name with the DTI in
1995. Thus, respondent’s use of its trade name from then on must
be free from any infringement by similarity. Of course, this does not
mean that the respondent has exclusive use of the geographic word
“San Francisco” or the generic word “coffee.” Geographic or generic
words are not, per se, subject to exclusive appropriation. It is only
the combination of the words “SAN FRANCISCO COFFEE,” which
is respondent’s trade name in its coffee business, that is protected
against infringement on matters related to the coffee business to
avoid confusing or deceiving the public.219
g) COFFEE-MATE (for coffee)
112. Puregold filed an application for the registration of the
trademark "COFFEE MATCH" for use on coffee, tea, cocoa,
sugar, artificial coffee, flour and preparations made from
cereals, bread, pastry and confectionery, and honey. However,
Nestle opposed the same alleging that it is the exclusive owner
of the "COFFEE-MATE" trademark and that there is confusing
similarity between its "COFFEE-MATE" trademark and
Puregold's "COFFEE MATCH" application. Nestle alleged that
"COFFEE-MATE" has been declared an internationally well-
known mark and Puregold’s use of "COFFEE MATCH" would
indicate a connection with the goods covered in Nestle's
"COFFEE-MATE" mark because of its distinct similarity. Is there
confusing similarity between COFFEE MATCH and COFFEE­
MATE?
No. The word “COFFEE” is the common dominant feature
between Nestle’s mark “COFFEE-MATE” and Puregold’s mark
“COFFEE MATCH.” However, following the IPC’s prohibition
of registration of generic marks, the word “COFFEE” cannot
be exclusively appropriated by either Nestle or Puregold since
it is generic or descriptive of the goods they seek to identify.
The distinctive features of both marks are sufficient to warn the
219Coffee Partners, Inc. v. San Francisco Coffee and Roastery, G.R. No. 169504,
March 3,2010.
J9JC9B0M
281
282 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
purchasing public which are Nestle’s products and which are
Puregold's products. While both “-MATE” and “MATCH” contain
the same first three letters, the last two letters in Puregold’s mark,
“C” and “H,” rendered a visual and aural character that made it
easily distinguishable from Nestle’s mark. Also, the distinctiveness
of Puregold's mark with two separate words with capital letters “C"
and “M" made it distinguishable from Nestle’s mark which is one
word with a hyphenated small letter “-m” in its mark. In addition,
there is a phonetic difference in pronunciation between Nestle’s
“-MATE” and Puregold’s “MATCH.” As a result, the eyes and ears
of the consumer would not mistake Nestle’s product for Puregold's
product. Hence, likelihood of confusion between Nestle’s product
and Puregold’s product does not exist.250
h) PALE PILSEN (for beer)
The words pale pilsen as part of Asia Brewery’s (ABI) trademark
does not constitute an infringement of San Miguel Corporation’s
(SMC)trademark: SAN MIGUEL PALE PILSEN, for “pale pilsen”
are generic words descriptive of the color (“pale”), of a type of beer
(“pilsen”), which is a light bohemian beer with a strong hops flavor
that originated in the City of Pilsen in Czechoslovakia and became
famous in the Middle Ages. Moreover, ABI’s use of the steinie bottle,
similar but not identical to the SAN MIGUEL PALE PILSEN bottle,
is not unlawful as SMC did not invent but merely borrowed the
steinie bottle from abroad and it has not claimed neither patent nor
trademark protection for that bottle shape and design.251
Author’s note: In the case of Coffee Partners, the Supreme Court
held that while generic and descriptive terms are not registrable,
a combination of such terms to refer to a product is registrable.
Yet, the Supreme Court ruled differently in the Puregold and Asia
Breuiery/San Miguel Corporation cases. Indeed, there is no hard and
fast rule in trademark cases.
i) Sakura (for cherry flowers)
Sakura is the generic term for Japanese cherry blossom flowers
and as such, cannot be registered as a trademark for flowers but it
can be registered as a trademark for electronic appliances.252
250Societe Des Produits, Nestle, S.A. Puregold Price Club, Inc., G.R. No.
217194, September 6, 2017.
251 Asia Brewery, Inc. v. Court of Appeals and San Miguel Corporation, G.R.
No. 103543, July 5, 1993.
^Sakura, supra.
J9JC9B0M

VII. INTELLECTUAL PROPERTY CODE 283
113. What are genericidal marks?
These are marks that consist exclusively of signs or of
indications that have become customary or usual to designate the
goods or services in everyday language or in bona fide and established
trade practice.253
114. What is a descriptively misleading mark?
It is a mark that is likely to mislead the public, particularly as
to the nature, quality, characteristics or geographical origin of the
goods or services.264
115. In 1988, the FDA approved the labels submitted by Turbo
Corporation for its new drug brand name, "Axilon." Turbo is
now applying with the Bureau of Patents, Trademarks and
Technology Transfer for the registration of said brand name.
It was subsequently confirmed that "Accilonne" is a generic
term for a class of anti-fungal drugs and is used as such by
the medical professional and the pharmaceutical industry, and
that it is used as generic chemical name in various scientific
and professional publications. A competing drug manufacturer
asks you to contest the registration of the brand name "Axilon"
by Turbo. What will be your advice?
The application for registration by Turbo Corporation may be
contested. The Trademark Law would not allow the registration
of a trademark which, when applied to or used in connection with
his products, is merely descriptive or deceptively mis-descriptive of
them. Confusion can result from the use of “Axilon” as the generic
product itself.255
116. What is the doctrine of secondary meaning?
Under the doctrine of secondary meaning, a word or phrase
originally incapable of exclusive appropriation with reference to
an article in the market, because it is geographical or otherwise
descriptive, might nevertheless have been used so long and so
exclusively by one producer with reference to his article that, in
^Section 123. l(i), IPC, as amended.
“'Section 123.1(g), IPC, as amended.
“BAR 1990.
J9JC9B0M
J9JC9B0M
284 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
the trade and to that branch of the purchasing public, the word or
phrase has come to mean that the article was his produce.250
Thus, a generic or descriptive term which has acquired a
secondary meaning may be appropriated and registered as a
trademark. For instance, Ang Tibay is a descriptive mark. It means
durable in English. But, Ang Tibay had been used so long and the
public had associated the mark with the manufacturer of combat
shoes. Thus, it was held that the descriptive mark can be registered
as trademark for shoes.
However, in another case, the Court considered “Lyceum” as a
generic name but the number alone of institutions using “Lyceum” as
part of their school name suggests strongly that the use of the word
"Lyceum” has not been attended with exclusivity for applicability of
the doctrine of secondary meaning.257
117. What is the basis of the doctrine of secondary meaning?
Section 123.2 of the IPC. It provides that nothing shall prevent
the registration of a device (such as color, shape, signs, generic
marks) which has become distinctive in relation to the goods for
which registration is requested as a result of the use that have been
made of it in commerce in the Philippines. The Office may accept as
prima facie evidence that the mark has become distinctive, as used
in connection with the applicant’s goods or services in commerce,
proof of substantially exclusive and continuous use thereof by the
applicant in commerce in the Philippines for five (5) years before the
date on which the claim of distinctiveness is made.
118. St. Francis Development Corporation (SFDC), a domestic
corporation engaged in the real estate business and the
developer of St. Francis Square Commercial Center in Ortigas
Center, filed complaint for trademark infringement against
Shang Properties Realty Corporation (Shang) before the
IPO - Bureau of Legal Affairs due to Shang’s use and filing of
applications for the registration of the marks "THE ST. FRANCIS
TOWER" and "THE ST. FRANCIS SHANGRILA PLACE" for use
relative to Shang’s business, particularly the construction of
2SGAna Ang v. Toribio Teodoro, 74 Phil. 56, as cited in Lyceum of the Philippines
v. Court of Appeals, 219 SCRA 610 (1993).
“’Lyceum of the Philippines v. Court of Appeals, 219 SCRA 610 (1993).
 VII. INTELLECTUAL PROPERTY CODE 285
permanent buildings or structures for residential and office
purposes.
SFDC alleged that (1) it used "ST. FRANCIS" to identify
numerous property development projects in Ortigas Center;
and (2) as a use of its continuous projects in Ortigas Center
and real estate business, it has gained substantial goodwill
with the public that consumers and traders closely identify the
mark with its property development projects.
On the other hand, Shang contended that the mark with
its property cannot be exclusively owned by SFDC since the
mark is geographically descriptive of the goods or services for
which it is intended to be used.
Has SFDC acquired a secondary meaning and, thereby,
an exclusive right to the ST. FRANCIS mark?
While it is true that SFDC had been using the mark “ST.
FRANCIS” since 1992, its use thereof has been merely confined to its
realty projects within the Ortigas Center. As its use of the mark is
clearly limited to a certain locality, it cannot be said that there was
substantial commercial use of the same recognized all throughout
the country. Neither is there any showing of a mental recognition
in buyers’ and potential buyers’ minds that products connected with
the mark “ST. FRANCIS” are associated with the same source —
that is, the enterprise of SFDC. Thus, absent any showing that there
exists a clear goods/service-association between the realty projects
located in the aforesaid area and SFDC as the developer thereof, the
latter cannot be said to have acquired a secondary meaning as to its
use of the “ST. FRANCIS” mark.258
e. Rights conferred by registration
119. What rights are conferred by the registration of trademark?
Except in cases of importation of drugs and medicines which
has been introduced in the Philippines or anywhere else in the world
by the patent owner, or by any party authorized to use the invention
and of off-patent drugs and medicines, the owner of a registered
mark shall have the exclusive right to prevent all third parties
258Shang Properties Realty Corporation St. Francis Development Corpora-
tion, G.R. No. 190706, July 21, 2014.
J9JC9B0M
286 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
not having the owner's consent from using in the course of trade
identical or similar signs or containers for goods or services which
are identical or similar to those in respect of which the trademark is
registered, where such use would result in a likelihood of confusion.
In case of the use of an identical sign for identical goods or services,
a likelihood of confusion shall be presumed.
There shall be no infringement of trademarks or trade names
of imported or sold patented drugs and medicines allowed under the
IPC, as well as imported or sold off-patent drugs and medicines:
provided, hat, said drugs and medicines bear the registered marks
that have not been tampered, unlawfully modified, or infringed
upon.259
120. When do these rights terminate?
The rights conferred by trademark registration end upon
cancellation of the certificate of registration by the IPO in the cases
allowed by law.
121. When may the IPO cancel the certificate of trademark
registration?
The certificate of registration may be cancelled in the following
cases:
a. Failure to file declaration of actual use within one (1) year
from the fifth anniversary of the trademark registration;260
b. Failure to file declaration of actual use within three
(3) years from filing of the application for trademark
registration;261
A petition to cancel a registration of a mark may also be
filed with the Bureau of Legal Affairs of the IPO by any
person who believes that he is or will be damaged by the
registration of a mark under the IPC as follows:
i. Within five (5) years from the date of the registration
of the mark;
ii. At any time, if the registered mark becomes
the generic name for the goods or services, or a
“’Section 147, in relation to Section 72.1, IPC, as amended.
““Supra.
“'Supra. I
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 287
portion thereof, for which it is registered, or has
been abandoned, or its registration was obtained
fraudulently or contrary to the provisions of the IPC,
or if the registered mark is being used by, or with the
permission of, the registrant so as to misrepresent
the source of the goods or services on or in connection
with which the mark is used.
C. At any time, if the registered owner of the mark without
legitimate reason fails to use the mark within the
Philippines, or to cause it to be used in the Philippines by
virtue of a license during an uninterrupted period of three
(3) years or longer.262
122. In 2005, W Hotels, Inc., a multinational corporation engaged in
the hospitality business, applied for and was able to register
its trademark "W" with the Intellectual Property Office of the
Philippines (IPO) in connection with its hotelsfound in different
parts of the world.
In 2009, a Filipino corporation, RST Corp., filed before the
IPO a Petition for cancellation of W Hotels, Inc.'s "W" trademark
on the ground of non-use, claiming that W Hotels, Inc. failed to
use its mark in the Philippines because it is not operating any
hotel in the country which bears the "W" trademark.
In its defense, W Hotels, Inc. maintained that it has
used its "W" trademark in the Philippine commerce, pointing
out that while it did not have any hotel establishment in
the Philippines, it should still be considered as conducting
its business herein because its hotel reservation services,
albeit for its hotels abroad, are made accessible to Philippine
residents through its interactive websites prominently
displaying the "W" trademark. W Hotels, Inc also presented
proof of actual booking transactions made by the Philippine
residents through such websites.
Is W Hotels, Inc.'s defense against the petition for
cancellation of trademark tenable? Explain.263
The defense of W Hotel is tenable. Having a hotel establishment
in the Philippines with the trademark W is not the only way to
^Section 151.1, IPC.
!S3BAR 2019.
L
J9JC9B0M
J9JC9B0M
288 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
prove actual use of the trademark. In one case, the Supreme Court
ruled that the use of the mark on an interactive website sufficiently
showing an intent towards realizing a within-State commercial
activity or interaction is considered actual use to keep the trademark
registration in force. That W Hotel was able to present proof of
actual booking transactions made by the Philippine residents
though such website proves that the use of its “W” mark through its
interactive website is intended to produce a discernible commercial
effect or activity within the Philippines, or at the very least, seeks
to establish commercial interaction with local consumers. This is
enough to keep it trademark registration in force.264
In the WLand Holdings case, Starwood filed before the IPO an
application for registration of the trademark “W” for use in its hotel
business which was eventually granted. However, W Land applied
for the registration of its own “W” mark which thereby prompted
Starwood to oppose the same. The BLA ruled that W Land’s “W"
mark is confusingly similar with Starwood’s mark, which had an
earlier filing date. Unperturbed, on May 29, 2009, W Land filed
a Petition for Cancellation of Starwood’s mark for non-use under
Section 151.1 of the Intellectual Property Code of the Philippines,
claiming that Starwood has failed to use its mark in the Philippines
because it has no hotel or establishment in the Philippines rendering
the services covered by its registration.
In ruling against the cancellation of Starwood’s “W” mark, the
Supreme Court held:
“Use” as contemplated by law is genuine use - that is, a
bona fide kind of use tending towards a commercial transaction
in the ordinary course of trade. Since the internet creates a
borderless marketplace, it must be shown that the owner has
actually transacted, or at the very least, intentionally targeted
customers of a particular jurisdiction in order to be considered
as having used the trademark in the ordinary course of his
trade in that country. A showing of an actual commercial link
to the country is therefore imperative. The use of the mark
on an interactive website, for instance, may be said to target
local customers when they contain specific details regarding
or pertaining to the target State, sufficiently showing an
intent towards realizing a within-State commercial activity or
26,W Land Holdings, Inc. v. Starwood Hotels and Resorts Worldwide, Inc., G.R.
No. 222366, December 4, 2017.
 VII. INTELLECTUAL PROPERTY CODE
interaction. These details may constitute a local contact phone
number, specific reference being available to local customers,
a specific local webpage, whether domestic language and
currency is used on the website, and/or whether domestic
payment methods are accepted.
In this case, Starwood has proven that it owns Philippine
registered domain names, provides a phone number for
Philippine consumers, the prices for its hotel accommodations
and/or services can be converted into the local currency or the
Philippine Peso, among others. Taken together, these facts and
circumstances show that Starwood’s use of its “W” mark through
its interactive website is intended to produce a discernable
commercial effect or activity within the Philippines, or at the
very least, seeks to establish commercial interaction with local
consumers. Accordingly, Starwood’s use of the “W” mark in its
reservation services through its website constitutes use of the
mark sufficient to keep its registration in force.
Finally, it deserves pointing out that Starwood submitted
in 2008 its DAU with evidence of use which the IPO, through
its Director of Trademarks and later by the IPO DG in the
January 10, 2014 Decision, had accepted and recognized as
valid. The Court finds no reason to disturb this recognition.265
f. Trademark Infringement
123. What is and when is there trademark infringement?
Any person who shall, without the consent of the owner of the
registered mark:266
1. Use in commerce any reproduction, counterfeit, copy,
or colorable imitation of a registered mark or the same
container or a dominant feature thereof in connection
with the sale, offering for sale, distribution, advertising
of any goods or services including other preparatory steps
necessary to carry out the sale of any goods or services
on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive;267 or
2MW Land Holdings, Inc. v. Starwood Hotels and Resorts Worldwide, Inc., G.R.
No. 222366, December 4, 2017, Second Division, Perlas-Bernabe, J.
“’'Section 155, IPC, as amended.
“’Section 155.1, ibid.
J9JC9B0M
289 290 DIVINA ON COMMERCIAL LAW:
COMPREHENSIVE GUIDE VOLUME II
2. Reproduce, counterfeit, copy or colorably imitate a
registered mark or a dominant feature thereof and
apply such reproduction, counterfeit, copy or colorable
imitation to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used in
commerce upon or in connection with the sale, offering
for sale, distribution, or advertising of goods or services
on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be
liable in a civil action for infringement by the registrant
for the remedies hereinafter set forth: provided, that
the infringement takes place at the moment any of the
acts stated in Subsection 155.1 or this subsection are
committed regardless of whether there is actual sale of
goods or services using the infringing material.268
124. What are the elements of trademark infringement?
There are five (5) elements, to wit:
a. The trademark being infringed is registered in the
Intellectual Property Office;
b. The trademark is reproduced, counterfeited, copied, or
colorably imitated by the infringer;
c. The infringing mark is used in connection with the sale,
offering for sale, or advertising of any goods, business or
services; or the infringing mark is applied to labels, signs,
prints, packages, wrappers, receptacles or advertisements
intended to be used upon or in connection with such goods,
business or services;
d. The use or application of the infringing mark is likely to
cause confusion or mistake or to deceive purchasers or
others as to the goods or services themselves or as to the
source or origin of such goods or services or the identity of
such business; and
e. The use or application of the infringing mark is without
the consent of the trademark owner or the assignee
thereof.269
26BSection 155.2, ibid.
269Diaz v. People of the Philippines and Levi Strauss (Phil.), G.R. No. 180677,
February 18, 2013.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
In the case of Pearl & Dean,™ it was held that assuming
arguendo that “Poster Ads” could validly qualify as a trademark,
the failure of Pearl & Dean to secure a trademark registration for
specific use on the light boxes meant that there could not have been
any trademark infringement since registration was an essential
element thereof.271
g- Remedies
125. What are the rights of the trademark owner?
a. He may use the trademark in trade and commerce.
If he is the first user, he cannot be sued for trademark
infringement even though the trademark is registered by
the first filer.
b. He may register the trademark.
c. He may sue for infringement in case of unauthorized
use of his registered mark in connection with the sale of
the same goods or similar goods which is likely to cause
confusion to the public.
126. What are the remedies of the owner of the registered trademark
if his rights to the trademark are infringed?
He may file a civil action for trademark infringement to recover
damages from any person who infringes his rights, and the measure
of the damages suffered shall be either the reasonable profit which
the complaining party would have made, had the defendant not
infringed his rights, or the profit which the defendant actually made
out of the infringement, or in the event such measure of damages
cannot be readily ascertained with reasonable certainty, then the
court may award as damages a reasonable percentage based upon
the amount of gross sales of the defendant or the value of the services
in connection with which the mark or trade name was used in the
infringement of the rights of the complaining party.272
In cases where actual intent to mislead the public or to defraud
the complainant is shown, in the discretion of the court, the damages
may be doubled.273
™Supra.
^'Pearl & Dean (Phil.), Inc. Shoemart, Inc., G.R. No. 148222, August 15,
2003.
^Section 156.1, IPC, as amended.
^Section 156.3, IPC, as amended.
..
J9JC9B0M
291
292 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
He may also recover attorney's fees and the costs of suit.
The civil action for trademark infringement may include an
application with the court for the issuance of an order to impound
during the pendency of the action, sales invoices and other documents
evidencing sales274 and to grant a preliminary injunction to restrain
acts of infringement while the action is pending.276
He may also ask the court to issue an order that goods found
to be infringing be, without compensation of any sort, disposed of
outside the channels of commerce in such a manner as to avoid any
harm caused to the right holder, or destroyed; and all labels, signs,
prints, packages, wrappers, receptacles and advertisements in the
possession of the defendant, bearing the registered mark or trade
name or any reproduction, counterfeit, copy or colorable imitation
thereof, all plates, molds, matrices and other means of making the
same, shall be delivered up and destroyed.276
He may also file a criminal action for trademark infringement.
127. Is the issuance of an order granting provisional reliefs to the
complainant in a trademark infringement suit immediately
executory?
Under the 2020 Revised Rules of Procedure for Intellectual
Property Rights Cases,277 unless restrained by the Supreme Court
or the Court of Appeals, as the case may be, any order issued by
the court under said Rules is immediately executory, except in the
following:
a. Order of destruction where a motion for reconsideration
is filed; and
b. Order of release of seized goods where a search warrant is
quashed.
128. What rules govern the issuance of a search and seizure order
in cases of trademark or trade name infringement?
Court Administrative Matter A.M. No. 02-1-06-SC (TheRuleon
Search and Seizure in Civil Actions for Infringement of Intellectual
274Section 156.2, IPC, as amended.
z76Section 156.4, IPC, aa amended.
2,6Section 157.1., IPC, as amended.
277A.M. No. 10-3-10-SC.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 293
Property Rights) governs the issuance of a writ of search and seizure
in a civil action for infringement filed by an intellectual property
right owner against the supposed infringer of his trademark or
name.
The Rules on the Issuance of the Search and Seizure in Civil
Actions for Infringement of Intellectual Property Rights are not
applicable in a case where the search warrants were applied in
anticipation of criminal actions for violation of intellectual property
rights under R.A. No. 8293. Rule 126 of the Revised Rules of Court
would apply and a warrant shall be validly issued upon finding the
existence of probable cause.278
129. What is the remedy of the owner of the goods in case of
wrongful and illegal seizure of goods and materials?
The owner may recover damages. The claim for damages
should be filed with the same court that issued the writ of search
and seizure. However, if the goods were seized pursuant to a search
and seizure warrant under the Rules on Criminal Procedure, in
anticipation of a criminal offense, the owner has the right to seek
damages, if the circumstances warranted, by a separate civil action
for the wrong inflicted on them by an improperly obtained or enforced
search warrant. The proceeding under Rule 126, a limited criminal
one, does not provide for the filing of counterclaims for damages
against those who may have improperly sought the issuance of the
search warrant.279
130. What are the other remedies available the owner of the
registered mark to protect his rights to the trademark?
He may oppose any other application for registration of the
same trademark, or a dominant feature thereof, for the same goods
and services or good and services related thereto.
In case of issuance of a certificate of trademark registration in
favor of another, he may file a petition for cancellation of trademark
with the IPO.
2"Century Chinese Medicine Co., et al. v. People of the Philippines, G.R. No.
188526, November 11, 2013.
2,8Del Rosario, et al. v. Doanto, Jr., et al., G.R. No. 180595, March 4, 2010.
J9JC9B0M
J9JC9B0M
294 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
131. Does the application for administrative cancellation of a
registered trademark preclude the registrant from filing an
action for trademark infringement?
The application for administrative cancellation of a registered
trademark does not preclude the first registrant from filing an action
for trademark infringement. Such application cannot per se have
the effect of restraining or preventing the courts from the exercise
of their lawfully conferred jurisdiction. A contrary rule would
unduly expand the doctrine of primary jurisdiction which, simply
expressed, would merely behoove regular courts, in controversies
involving specialized disputes, to defer to the findings of resolutions
of administrative tribunals on certain technical matters.280
However, if the IPO cancels the registered trademark and
such resolution has attained finality, the action for trademark
infringement will have no more legal stand on. The cancellation of
registration of a trademark has the effect of depriving the registrant
of protection from infringement from the moment the judgment or
order of cancellation has become final.281
The first trademark registrant may however file an action
for trademark infringement independently of any application for
the administrative cancellation of the trademark of the second
registrant.
132. May the defendant in an action for trademark infringement file
a petition for administrative cancellation of the registrant's
trademark?
No, his remedy is to file an answer and invoke as a defense
that the plaintiff is not entitled to the trademark registration. This
is consistent with Section 151.2 of the IPC that the court or the
administrative agency vested with jurisdiction to hear and adjudicate
any action to enforce the rights to a registered mark shall likewise
exercise jurisdiction to determine whether the registration of said
mark may be cancelled in accordance with the Act. The filing of a
suit to enforce the registered mark with the proper court or agency
^Conrad and Company v. Court of Appeals, G.R. No. 115115, July 10, 1995;
Shangri-La International Hotel Management v. Court of Appeals, G.R. No. 111580,
June 21, 2001.
■“'Superior Commercial Enterprises, Inc. v. Kunnan Enterprises Ltd. and
Sports Concept & Distributor, Inc., G.R. No. 169974, April 20, 2010.
 VII. INTELLECTUAL PROPERTY CODE
shall exclude any other court or agency from assuming jurisdiction
over a subsequently filed petition to cancel the same mark. On the
other hand, the earlier filing of petition to cancel the mark with the
Bureau of Legal Affairs shall not constitute a prejudicial question
that must be resolved before an action to enforce the rights to same
registered mark may be decided.
133. What are the limitations to an action for infringement?
a. The owner shall not be entitled to recover profits or
damages unless the acts were committed with knowledge
that such imitation is likely to cause confusion. Knowledge
is presumed when the registrant gives notice that his
mark is registered by displaying with the mark the word
“registered mark” or the letter “R” with a circle. Note that
good faith is not a defense in a criminal suit for trademark
infringement;
b. The registered mark shall have no effect against any
person who, in good faith before filing or priority date,
was using the mark for the purpose of his business;
c. Where the infringer who is engaged solely in the business
of printing the mark or other infringing materials for
others is an innocent infringer, the owner of the right
infringed shall only be entitled to injunction against
future printing;
d. Where the infringement is part of a paid advertisement
in a newspaper or magazine or similar periodical or in an
electronic communication, the remedy of the owner of the
right infringed as against the publishers or distributor
shall be limited to injunction against the presentation of
such advertising matter in future issues of such papers.
Such injunctive relief is not available where restraining
the dissemination would delay the delivery of such issue
or transmission of such electronic communication, if
customarily conduced in accordance with sound business
practice.282
h. Unfair Competition
“Section 159, IPC, as amended.
J9JC9B0M
295
296 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
134. Define unfair competition.
Unfair competition has been defined as the passing off (or
palming off) or attempting to pass off upon the public of the goods
or business of one person as the goods or business of another with
the end and probable effect of deceiving the public. Passing off (or
palming off) takes place where the defendant, by imitative devices
on the general appearance of the goods, misleads prospective
purchasers into buying his merchandise under the impression that
they are buying that of his competitors. Thus, the defendant gives
his goods the general appearance of the goods of his competitor with
the intention of deceiving the public that the goods are those of his
competitor.283
135. When is a person liable for unfair competition?
Any person who shall employ deception or any other means
contrary to good faith by which he shall pass off the goods
manufactured by him or in which he deals, or his business, or
services for those of the one having established such goodwill, or
who shall commit any acts calculated to produce said result, shall
be guilty of unfair competition, and shall be subject to an action
therefor.284
In particular, and without in any way limiting the scope of
protection against unfair competition, the following shall be deemed
guilty of unfair competition:
a. Any person, who is selling his goods and gives them the
general appearance of goods of another manufacturer
or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained,
or the devices or words thereon, or in any other feature
of their appearance, which would be likely to influence
purchasers to believe that the goods offered are those
of a manufacturer or dealer, other than the actual
manufacturer or dealer, or who otherwise clothes the
goods with such appearance as shall deceive the public
and defraud another of his legitimate trade, or any
subsequent vendor of such goods or any agent of any
vendor engaged in selling such goods with a like purpose;
2S3Republic Gas Corporation v. Patron Corporation, G.R. No. 194062, June 17,
2013; BAR 2019.
'^Section 168.2, IPC, as amended.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
b. Any person who by any artifice, or device, or who employs
any other means calculated to induce the false belief that
such person is offering the services of another who has
identified such services in the mind of the public; or
C. Any person who shall make any false statement in the
course of trade or who shall commit any other act contrary
to good faith of a nature calculated to discredit the goods,
business or services of another.286
It was held that unfair competition is a transitory or continuing
offense. Search warrant may be applied for in any court where any
element of the alleged offense was committed.286
136. St. Francis Development Corporation (SFDC), a domestic
corporation engaged in the real estate business and the
developer of St. Francis Square Commercial Center in Ortigas
Center, filed complaint for unfair competition against Shang
Properties Realty Corporation (Shang) before the IPO - Bureau
of Legal Affairs due to Shang's use and filing of applications
for the registration of the marks "THE ST. FRANCIS TOWER"
and "THE ST. FRANCIS SHANGRILA PLACE" for use relative to
Shang's business, particularly the construction of permanent
buildings or structures for residential and office purposes.
Is Shang Properties guilty of unfair competition?
Shang Properties is not guilty of unfair competition in using
the marks ‘THE ST. FRANCIS TOWERS” and THE ST. FRANCIS
SHANGRI-LA PLACE.” The “true test” of unfair competition has
thus been “whether the acts of the defendant have the intent of
deceiving or are calculated to deceive the ordinary buyer making
his purchases under the ordinary conditions of the particular trade
to which the controversy relates.” It is therefore essential to prove
the existence of fraud, or the intent to deceive, actual or probable,
determined through a judicious scrutiny of the factual circumstances
attendant to a particular case. Here, the element of fraud is wanting;
hence, there can be no unfair competition.287
’“Section 168.3, IPC, as amended.
’“Sony Computer Entertainment, Inc. Supergreen, Inc., 518 SCRA 750
(2007).
28,Shang Properties Realty Corporation St. Francis Development
Corporation, G.R. No. 190706, July 21, 2014.
J9JC9B0M
297 298 DIVINA (IN COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
137. X, a dealer of low-grade oil, to save on expenses, uses the
containers of different companies. Before marketing to the
public his low-grade oil, X totally obliterates and erases the
brands or marks stenciled on the containers. Y brings an action
against X for unfair competition upon its discovery that its
containers have been used by X for his low-grade oil. Is there
unfair competition? State briefly your reasons.
There is no unfair competition. Unfair competition is passing
off of one's goods as those of another and requires fraudulent intent
on the part of the user. These elements are not present in the
problem.288
138. Distinguish trademark infringement from unfair competition.
There are four basic distinctions, as follows:
a. Infringement of trademark is the unauthorized use of a
trademark whereas unfair competition is the passing off
one’s goods as those of another;
b. In infringement of trademark, fraudulent intent in
unnecessary, whereas in unfair competition fraudulent
intent is essential;289
In infringement of trademark, prior registration of the
trademark is a prerequisite to the action whereas in
unfair competition, registration is not necessary;290
d. There is no trademark infringement if the registered
trademark is used for totally unrelated to the goods
specified in the certificate of trademark registration but
there can be unfair competition even if two products are
not related if there is passing off of one’s product as that
of another manufacturer.
139. Does the act of refilling empty LPG gas cylinder tank bearing
a registered trademark amount to infringement or unfair
competition or BOTH?
The act of refilling empty LPG gas cylinder tank bearing a
registered trademark amounts to both trademark infringement and
unfair competition.
288BAR 1988.
“’BAR 2014.
“°Del Monte Corporation Court of Appeals, 181 SCRA 410 (1990); BAR
1996; BAR 2015.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
The mere unauthorized use of a container bearing a registered
trademark in connection with the sale, distribution or advertising
of goods or services which is likely to cause confusion, mistake or
deception among the buyers or consumers can be considered as
trademark infringement. The petitioners in this case actually
committed trademark infringement when they refilled, without the
respondents’ consent, the LPG containers bearing the registered
marks of the respondents.
There is likewise unfair competition. Petitioners’ acts will
inevitably confuse the consuming public, since they have no way
of knowing that the gas contained in the LPG tanks bearing
respondents’ marks is in reality not the latter’s LPG product after
the same had been illegally refilled. The public will then be led to
believe that petitioners are authorized refillers and distributors
of respondents’ LPG products, considering that they are accepting
empty containers of respondents and refilling them for resale.
Unfair competition has been defined as the passing off (or
palming off) or attempting to pass off upon the public of the goods
or business of one person as the goods or business of another with
the end and probable effect of deceiving the public. Passing off (or
palming off) takes place where the defendant, by imitative devices
on the general appearance of the goods, misleads prospective
purchasers into buying his merchandise under the impression that
they are buying that of his competitors. Thus, the defendant gives
his goods the general appearance of the goods of his competitor with
the intention of deceiving the public that the goods are those of his
competitor.
In the present case, respondents pertinently observed that by
refilling and selling LPG cylinders bearing their registered marks,
petitioners are selling goods by giving them the general appearance
of goods of another manufacturer. Obviously, the mere use of those
LPG cylinders bearing the trademarks “GASUL” and “SHELLANE”
will give the LPGs sold by REGASCO the general appearance of the
products of the petitioners.291
In another case, it has been established that the parties
conspired in the sale/distribution of counterfeit Greenstone products
to the public, which were even packaged in bottles identical to
’’’Republic Gas Corporation v. Petron Corporation, G.R. No. 194062, June 17,
2013.
J9JC9B0M
299
300 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
that of the original, thereby giving rise to the presumption of
fraudulent intent. Although there is unfair competition, there can
be no trademark infringement considering that the registration
of the trademark "Greenstone” - essential as it is in a trademark
infringement case - was not proven to have existed during the time
the acts complained of were committed.292
Note that in another case, the sale of counterfeit Fundador
products had been held to constitute trademark infringement.283
140. Is an action for cancellation of trademark a prejudicial
question in a criminal action for unfair competition?
It is not. An action for the cancellation of trademark is a remedy
available to a person who believes that he is or will be damaged by
the registration of a mark. On the other hand, the criminal actions for
unfair competition involved the determination of whether or not the
respondent had given his goods the general appearance of the goods
of the petitioner, with the intent to deceive the public or defraud
the petitioner as his competitor. In the suit for the cancellation of
trademark, the issue of lawful registration should necessarily be
determined, but registration is not a consideration necessary in
unfair competition. Indeed, unfair competition is committed if the
effect of the act is to pass off to the public the goods of one man as
the goods of another; it is independent of registration. One may be
declared an unfair competitor even if his competing trademark is
registered.294
h. Registration of marks under the Madrid Protocol
141. What is the Madrid Protocol?
It is a treaty that allows natural or juridical persons of
member countries to file international registrations through their
respective trademark offices (as office of origin) designating other
member countries to be covered by the international registration.
The Madrid System for the International Registration of Marks
(Madrid System), which is the centralized system providing a one-
zwRoberto Co v. Keng Huan, Jerry Yeung and Emma Yeung, G.R. No. 212705,
September 10, 2014.
2009.
a3Juno Batistis v. People of the Philippines, G.R. No. 181571, December 16,
zs’Caterpillar, Inc. v. Manolo P. Samson, G.R. No. 205972 and G.R. No. 164352,
November 9, 2016.
J9JC9B0M
 VIL INTELLECTUAL PROPERTY CODE
stop solution for registering and managing marks worldwide, allows
the trademark owner to file one application in one language, and
to pay one set of fees to protect his mark in the territories of up to
97 member-states. The Madrid System is governed by the Madrid
Agreement, concluded in 1891, and the Madrid Protocol, concluded
in 1989.
The Madrid Protocol, which was adopted in order to remove
the challenges deterring some countries from acceding to the
Madrid. Agreement, has two objectives, namely: (1) to facilitate
securing protection for marks; and (2) to make the management of
the registered marks easier in different countries.295
142. The Intellectual Property Office of the Philippines (IPOPHL)
recommended to the Department of Foreign Affairs (DFA) that
the Philippines should accede to the Madrid Protocol. After its
own review, the DFA endorsed to the President the country's
accession to the Madrid Protocol. Conformably with its
express authority under Section 9 of Executive Order No. 459
(Providing for the Guidelines in the Negotiation of International
Agreements and its Ratification) dated November 25,1997, the
DFA determined that the Madrid Protocol was an executive
agreement. President Benigno C. Aquino III ratified the Madrid
Protocol through an instrument of accession. The Madrid
Protocol entered into force in the Philippines on July 25,2012.
The Intellectual Property Association of the Philippines
(IPAP) filed a special civil action for certiorari and prohibition
to challenge the validity of the President's accession to the
Madrid Protocol without the concurrence of the Senate.
Furthermore, the IPAP argued that the implementation of
the Madrid Protocol, specifically the processing of foreign
trademark applications, conflicts with the IP Code considering
that Article 2 of the Madrid Protocol means that foreign
trademark applicants may file their applications through the
International Bureau or the WIPO, and their applications will
be automatically granted trademark protection without the
need for designating their resident agents in the country.
Was the President's ratification of the Madrid Protocol
valid and constitutional?
I
“Intellectual Property Association of the Philippines v. Hon. Paquito Ochoa,
In His capacity as Executive Secretary, et al., G.R. No. 204605, July 19,2016.
J9JC9B0M
301 302 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
The President's ratification was valid and constitutional
because the Madrid Protocol, being an executive agreement as
determined by the Department of Foreign Affairs, does not require
the concurrence of the Senate.-’91'
143. Is the Madrid Protocol in conflict with the IPC?
There is no conflict between the Madrid Protocol and the IP
Code.
The IPAP also rests its challenge on the supposed conflict
between the Madrid Protocol and the IP Code, contending that the
Madrid Protocol does away with the requirement of a resident agent
under Section 125 of the IP Code; and that the Madrid Protocol is
unconstitutional for being in conflict with the local law, which it
cannot modify.
The IPAP’s contentions stand on a faulty premise. The method
of registration through the IPOPHL, as laid down by the IP Code,
is distinct and separate from the method of registration through the
WIPO, as set in the Madrid Protocol. Comparing the two methods of
registration despite their being governed by two separate systems of
registration is thus misplaced
In arguing that the Madrid Protocol conflicts with Section 125 of
the IP Code, the IPAP highlights the importance of the requirement
for the designation of a resident agent. It underscores that the
requirement is intended to ensure that non-resident entities seeking
protection or privileges under Philippine Intellectual Property
Laws will be subjected to the country’s jurisdiction. It submits that
without such resident agent, there will be a need to resort to costly,
time consuming and cumbersome extraterritorial service of writs
and processes.
The IPAP misapprehends the procedure for examination under
the Madrid Protocol. The difficulty, which the IPAP illustrates,
is minimal, if not altogether inexistent. The IPOPHL actually
requires the designation of the resident agent when it refuses the
registration of a mark. Local representation is further required in
the submission of the Declaration of Actual Use, as well as in the
submission of the license contract. The Madrid Protocol accords
with the intent and spirit of the IP Code, particularly on the subject
of the registration of trademarks. The Madrid Protocol does not
2XSupra.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
amend or modify the IP Code on the acquisition of trademark rights
considering that the applications under the Madrid Protocol are still
examined according to the relevant national law. In that regard, the
IPOPHL will only grant protection to a mark that meets the local
registration requirements.297
1. Coverage
144. Who may use the Madrid System for the international
registration of trademarks?
An application for international registration (international
application) may be filed only by a natural person or legal entity
having a connection through establishment, domicile or nationality
with a Contracting Party to the Madrid Agreement or the Protocol.
A mark may be the subject of an international application
only if it has already been registered with the trademark office of
the Contracting Party with which the applicant has the necessary
connections (referred to as the office of origin). However, where all
the designations are effected under the Protocol (see below), the
international application may be based simply on an application
for registration filed with the office of origin. An international
application must be presented to the International Bureau of WIPO
through the intermediary of the office of origin.298
2. Rights conferred
145. What are the rights conferred upon international registration
of trademark under the Madrid Protocol?
From the date of the international registration (or, in the
case of a Contracting Party designated subsequently, from the
date of that designation), the protection of the mark in each of the
designated Contracting Parties is the same as if the mark had been
the subject of an application for registration filed directly with the
Office of that Contracting Party. If no provisional refusal is notified
to the International Bureau within the relevant time limit, or if any
such refusal is subsequently withdrawn, the protection of the mark
in each designated Contracting Party is the same as if it had been
registered by the Office of that Contracting Party.
2'J1Ibid.
“•Summary of the Madrid Agreement Concerning the International
Registration of Marks (1891) and the Protocol Relating to that Agreement (1989) as
prepared by the WIPO.
J9JC9B0M
303
304 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
An international registration is therefore equivalent to a
bundle of national registrations. Although it is a single registration,
protection may be refused by some of the designated Contracting
Parties, or the protection may be limited or renounced with respect
to only some of the designated Contracting Parties. Likewise an
international registration may be transferred to a new owner with
respect to only some of the designated Contracting Parties. An
international registration may also be invalidated (for example, for
non-use) with respect to one or more of the designated Contracting
Parties. Moreover, any action for infringement of an international
registration must be brought separately in each of the Contracting
Parties concerned.
146. What are the requirements for registration under the Madrid
Protocol?
An application for international registration must designate
one or more Contracting Parties in which protection is sought.
Further designations can be effected subsequently. A Contracting
Party may be designated only if it is party to the same treaty as
the Contracting Party whose office is the office of origin. The latter
cannot itself be designated in the international application.
The designation of a given Contracting Party is made either
under the Agreement or the Protocol, depending on which treaty is
common to the Contracting Parties concerned. If both Contracting
Parties are party to the Agreement and the Protocol, the designation
will be governed by the Protocol.
International applications can be filed in English, French
or Spanish, irrespective of which treaty or treaties govern the
application, unless the office of origin restricts that choice to one or
two of these languages.
Once the International Bureau receives an international
application, it carries out an examination for compliance with the
requirements of the Protocol and its Regulations. This examination
is restricted to formalities, including the classification and
comprehensibility of the list of goods and/or services. If there are no
irregularities in the application, the International Bureau records
the mark in the International Register, publishes the international
registration in the WIPO Gazette of International Marks and
notifies it to each designated Contracting Party. Any matter of
substance, such as whether the mark qualifies for protection or
whether it is in conflict with a mark registered previously in a
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 305
particular Contracting Party, is determined by that Contracting
Partyts trademark office under the applicable domestic legislation.
The office of each designated Contracting Party shall issue a
statement of grant of protection under the pertinent Regulations.
However, when designated Contracting Parties examine
the international registration for compliance with their domestic
legislation, and if some substantive provisions are not complied
with, they have the right to refuse protection in their territory.
Any such refusal, including an indication of the grounds on which
it is based, must be communicated to the International Bureau,
normally within 12 months from the date of notification. However,
a Contracting Party to the Protocol may declare that, when it is
designated under the Protocol, this time Emit is extended to 18
months. That Contracting Party may also declare that a refusal
based on an opposition may be communicated to the International
Bureau even after the 18-month time Emit.299
3. Term of protection
147. What is the term of protection of international registration
under the Madrid Protocol?
An international registration is effective for 10 years. It may be
renewed for further periods of 10 years on payment of the prescribed
fees.300
D. Copyright
1. Basic Principles
148. What is a copyright?
It is an intangible, incorporeal right granted by statute to
the author or originator of certain literary or artistic productions,
whereby he or she is invested, for a specific period, with the sole and
exclusive privilege of multiplying copies of the same and pubhshing
and selling them.301
mSupra.
mIbid.
“‘Kensonic v. Uni-Line Multi Resources, Inc., supra and Fernando Juan v.
Roberto Juan, G.R. No. 221372, August 23, 2017 both citing Black’s Law Dictionary,
Centennial Edition. 6th ed. West Group, St. Paul Minnesota, USA, 1990, p. 336.
J9JC9B0M
DIVINA ON COMMERCIAL LAW:
306
z\ COMPREHENSIVE GUIDE VOLUME II
The rights granted by copyright are, however, not limited to
multiplying copies of the literary or artistic work, publishing and
selling but also include any form of communication to the public,
as well as right of attribution, right to carry out derivative work
and other moral rights. Copyright is likewise not confined to literary
and artistic work but also extend to scientific and scholarly works
similar to those works enumerated in Section 172.1 of the IPC.
As previously mentioned, copyright should be defined then
as an incorporeal and intangible property granted by law to the
originator or creator of certain literary, artistic, scientific and
scholarly works whereby he or she is invested for a specific period of
time a collection of economic and moral rights on the terms specified
by statute.
149. What are the characteristics of a copyright?
a. It is granted to the creator or originator of the copyrightable
work. But being a right, copyright can be assigned;
b. The object is original intellectual creation in the literary,
artistic and scientific domains;
c. It is not indefinite. The economic and moral rights are
exclusive to the creator or originator of the work during
the term specified by law, except for the moral right of
attribution which is in perpetuity.
d. Being a statutory grant, the rights derived from such
grant may only be obtained and enjoyed with respect to
the works and on the terms and conditions, specified in
the statute. The “works” must fall within the statutory
enumeration or description.
For example, eye bushing is a useful article but it has no artistic
value. Even though it was covered by a certificate of registration and
there was notice of deposit with the National Library, no copyright is
obtained. There can be no infringement of copyright likewise despite
sale by others of such article.302 Other examples of items were there
is no copyright:
a. Light boxes. They are not in the nature of pictorials or
drawings. Light boxes—units which utilize specially
“Jessie G. Ching v. William M. Salinas, Sr., et al., G.R. No. 161295, June 29,
2005.
-
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
printed posters sandwiched between plastic sheets and
illuminated with backlights—are not literary or artistic
pieces which could be copyrighted under the copyright
law;303
b. Medical creams and the name and container of a beauty
cream product;30*
c. There is no copyright on goods because they are not
intellectual creations. They should be covered by
trademark instead.305
2. Copyrightable Works
150. When is the starting point of protection of a Copyright?
Works are protected by the sole fact of their creation,
irrespective of their mode or form of expression, as well as of their
content, quality and purpose.306
151. What are the classifications of protected works?
There are two:
a. Original and literary works; and
b. Derivative works.
152. What are considered original literary and artistic works?
Literary and artistic works are original intellectual creations
in the literary and artistic domain protected from the moment of
their creation and shall include in particular:
a. Books, pamphlets, articles and other writings;
b. Periodicals and newspapers;
c. Lectures, sermons, addresses, dissertations prepared for
oral delivery, whether or not reduced in writing or other
material form;307
“Pearl & Dean Phil. v. Shoemart, 409 SCRA 231 (2003).
“Elidad C. Kho, doing business under the name and style of KEC Cosmetics
Laboratory v. Court of Appeals, Summerville General Merchandising and Company,
andAngTiam Chay, G.R. No. 115758, March 19, 2002.
“Manly Sportwear Manufacturing, Inc. v. Dadodette Enterprises and/or
Hermes Sports Center, G.R. No. 165306, September 20, 2005.
“Section 172.2, IPC, as amended.
“BAR 2011.
!
J9JC9B0M
307
308 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
d. Letters:
e. Dramatic or dramatico-musical compositions; choreo­
graphic works or entertainment in dumb shows;
f. Musical compositions, with or without words;
Works of drawing, painting, architecture, sculpture,
g-
engraving, lithography or other works of art; models or
designs for works of art;
h. Original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial
design, and other works of applied art;
i. Illustrations, maps, plans, sketches, charts and three-
dimensional works relative to geography, topography,
architecture or science;
j. Drawings or plastic works of a scientific or technical
character;
k. Photographic works including works produced by a
process analogous to photography; lantern slides;
1. Audiovisual works and cinematographic works and works
produced by a process analogous to cinematography or
any process for making audio-visual recordings;
m. Pictorial illustrations and advertisements;
n. Computer programs; and
o. Other literary, scholarly, scientific, and artistic works.308
153. Diana and Piolo are famous personalities in show business
who kept their love affair secret. They use a special instant
messaging service which allows them to see one another's
typing on their own screen as each letter key is pressed.
When Greg, the controller of the service facility, found out
their identities, he kept a copy of all the messages Diana and
Piolo sent each other and published them. Is Greg liable for
copyright infringement? Reason briefly.
Yes, Greg is liable for copyright infringement. Under the
law, text messages are not expressly enumerated as among the
copyrightable works. In the context of the problem, however, these
messages are akin to letters or may at least fall under “other literary,
“’Section 172.1, IPC, as amended.
J9JC9B0M
 309
VII. INTELLECTUAL PROPERTY CODE
artistic, scientific and scholarly works.” They are therefore protected
from the moment of creation. ™ The publication of the messages
without the consent of their writers constitutes infringement of
copyright.310
154. Is the name "Charlie Brown" and its pictorial representation
copyrightable?
Yes, as provided for under Section 172.1 of the IPC. Since
copyright was obtained thereon, the owner can prevent its use as
trademark by somebody else.3”
155. Is a hatch door, which is defined as a small door, small gate or
an opening that resembles a window equipped with an escape
for use in case of fire or emergency, copyrightable?
Hatch door is not copyrightable. It is by nature, functional
and utilitarian serving as egress access during emergency. It is not
primarily an artistic creation but rather an object of utility designed
to have aesthetic appeal. It is intrinsically a useful article, which, as
a whole, is not eligible for copyright.
Thus, the first fabricator of the hatch door cannot sue for
copyright infringement all other fabricators of the same article.
What is copyrightable is the drawing or the sketch of the hatch door
itself. Reproduction of the drawing or sketch without the consent of
the creator constitutes copyright infringement.312
There is also no copyright infringement even if the hatch door
is fabricated based on the copyrighted drawing or- sketch. Unlike
a patent, a copyright gives no exclusive right to the art disclosed;
protection is given only to the expression of the idea not the idea
itself.”3
156. Isa useful article copyrightable?
A “useful article” defined as an article “having an intrinsic
utilitarian function that is not merely to portray the appearance
’“’Section 172.1, IPC, as amended; Columbia Pictures, Inc. v. Court of Appeals,
261 SCRA 144 (1996).
’’“BAR 2007.
’’’United Features v. Munsingwear Creation, 179 SCRA 260 (1989).
”2Sison Olano, et al. v. Lim Eng Co., G.R. No. 195835, March 14, 2016.
™Ibid.
J9JC9B0M
J9JC9B0M
310 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME 11
of the article or to convey information” is excluded from copyright
eligibility.
The only instance when a useful article may be the subject of
copyright protection is when it incorporates a design element that
is physically or conceptually separable from the underlying product.
This means that the utilitarian article can function without the
design element. In such an instance, the design element is eligible
for copyright protection.
The design of a useful article shall be considered a pictorial,
graphic, or sculptural work only if, and only to the extent that,
such design incorporates pictorial, graphic, or sculptural features
that can be identified separately from, and are capable of existing
independently of, the utilitarian aspects of the article.
A belt, being an object utility with the function of preventing
one’s pants from falling down, is in itself not copyrightable. However,
an ornately designed belt buckle which is irrelevant to or did not
enhance the belt’s function hence, conceptually separable from the
belt, is eligible for copyright. It is copyrightable as a sculptural work
with independent aesthetic value, and not as an integral element of
the belt’s functionality.
A table lamp is not copyrightable because it is a functional
object intended for the purpose of providing illumination in a room.
The general shape of a table lamp is likewise not copyrightable
because it contributes to the lamp’s ability to illuminate the reaches
of a room. But, a lamp base in the form of a statue of male and
female dancing figures made of semi vitreous china is copyrightable
as a work of art because it is unrelated to the lamp’s utilitarian
function as a device used to combat darkness.314
Based on this test, hatch doors may become copyrightable if
they bear design elements that are physically and conceptually
separable, independent and distinguishable from the hatch door
itself.
157. TRUE or FALSE. The Denicola Test in intellectual property law
states that if design elements of an article reflect a merger of
aesthetic and functional considerations, the artistic aspects of
the work cannot be conceptually separable from the utilitarian
aspects; thus, the article cannot be copyrighted.
3uIbid.
 VII. INTELLECTUAL PROPERTY CODE 311
True. Applying the Denicola Test in Brandir International, Inc.
v. Cascade Pacific Lumber Co.,™ the United State Court of Appeals
for the Second Circuit held that if there is any aesthetic element
which can be separated from the utilitarian elements, then the
aesthetic element may be copyrighted.316
158. What are derivative works?
The following are considered derivative works and shall also be
protected by copyright:
a. Dramatizations, translations, adaptations, abridgments,
arrangements, and other alterations of literary or artistic
works; and
b. Collections of literary, scholarly or artistic works, and
compilations of data and other materials which are
original by reason of the selection or coordination or
arrangement of their contents.317
159. What is the treatment over derivative works?
They shall be protected as new works: provided however, that
such new work shall not affect the force of any subsisting copyright
upon the original works employed or any part thereof, or be construed
to imply any right to such use of the original works, or to secure or
extend copyright in such original works.318
One of the economic rights of the author is to carry out,
prevent or authorize derivative work.319 Thus, no one carry out a
work derived from the original work except the author or without
his authorization.
160. Does a publisher have a right over the published edition of the
copyrighted work?
Yes. In addition to the right to publish granted by the author,
his heirs, or assigns, the publisher shall have a copyright consisting
merely of the right of reproduction of the typographical arrangement
of the published edition of the work.320
“834 F.2d 1142, 1988 Copr.L.Dec. p. 26.
“BAR 2009.
“Section 173.1, IPC, as amended.
“Section 173.2, IPC, as amended.
“Section 177, IPC, as amended.
“Section 174, IPC, as amended.
J9JC9B0M
J9JC9B0M
312 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
Typographical arrangement covers the layout, composition,
style and general appearance of a page of a published work.321 In other
words, the visual appearance of the printed page is independently
copyrightable from the contents of the published work.
161. What are considered as unprotected subject matter or non-
copyrightable work?
a. Idea, procedure, system, method or operation, concept,
principle, discovery or mere data as such, even if they are
expressed, explained, illustrated or embodied in a work;
b. News of the day and other miscellaneous facts having the
character of mere items of press information;
c. Any official text of a legislative, administrative or legal
nature, as well as any official translation thereof;322
d. Any work of the Government of the Philippines. However,
prior approval of the government agency or office wherein
the work is created shall be necessary for exploitation of
such work for profit. Such agency or office may, among
other things, impose as a condition the payment of
royalties;
e. Statutes, rules and regulations, and speeches, lectures,
sermons, addresses, and dissertations, pronounced, read
or rendered in courts of justice, before administrative
agencies, in deliberative assemblies and in meetings of
public character.323
However, the author of speeches, lectures, sermons, addresses,
and dissertations of these works shall have the exclusive right of
making a collection of his works.324
a. Idea, procedure, system, method or operation, concept,
principle, discovery or mere data as such, even if they
are expressed, explained, illustrated or embodied in such
work.
321Gepty, ibid., p. 155 citing Carol Tullo, Controller, HMSO Queen’s Printer,
Guidance-Copyright in Typographical Arrangement.
322Section 175, IPC, as amended.
“'‘Section 176.1, IPC, as amended.
324Section 176.2, IPC, as amended.
 VII. INTELLECTUAL PROPERTY CODE
The format or mechanics of a television show is not included
in the list of protected works in Section 2 of P.D. No. 49, which is
substantially the same as Section 172 of the Intellectual Property
Code (R.A. No. 8293). The subject of copyright refers to finished
works and not to concepts. For this reason, the protection afforded
by the law cannot be extended to cover format or mechanics of a
television show. The audio-visual recording of the show, however, is
copyrightable.325
While an idea is not copyrightable, the expression of an idea
is protected by copyright. Thus, there can be a copyright of a book
which expounded on a new accounting system the author had
developed but the system itself is not copyrightable.
162. An amateur astronomer, stumbled upon what appeared to be
massive volcanic eruption in Jupiter while peering at the planet
through his telescope. The following week, X, without notes,
presented a lecture on his findings before the Association of
Astronomers of the Philippines. To his dismay, he later read
an article in a science journal written by Y, a professional
astronomer, repeating exactly what X discovered without any
attribution to him. Has Y infringed on X's copyright, if any?326
a. No, since X did not reduce his lecture in writing or other
material form;
b. Yes, since the lecture is considered X’s original work;
c. No, since no protection extends to any discovery,
even if expressed, explained, illustrated, or embo­
died in a work;
d. Yes, since Y7s article failed to make any attribution to X.
163. X came up with a new way of presenting a telephone directory
in a mobile phone, which he dubbed as the "iTel" and which
uses lesser time for locating names and telephone numbers.
May X have his "iTel" copyrighted in his name?327
a. No. because it is a mere system or method;
’“Francisco Joaquin, Jr. v. Franklin Drilon, et al., G.R. No. 108946, January
28,1999.
“BAR 2011.
“BAR 2011.
J9JC9B0M
313
314 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
b. Yes. because it is an original creation;
C. Yes, because it entailed the application of X’s intellect;
d. No. because it did not entail any application of X’s
intellect.
b. News of the day
164. Overseas Filipino worker Angelo dela Cruz was kidnapped by
Iraqi militants and as a condition for his release, a demand
was made for the withdrawal of Filipino troops in Iraq. After
negotiations, he was released by his captors and was scheduled
to return to the country. Occasioned by said homecoming and
the public interest it generated, both GM A Network, Inc. and
ABS-CBN made their respective broadcasts and coverage of
the live event.
ABS-CBN conducted live audio-video coverage of and
broadcasted the event. ABS-CBN allowed Reuters Television
Service (Reuters) to air the footages it had taken earlier under
a special embargo agreement.
ABS-CBN alleged that under the special embargo
agreement, no other Philippine subscriber of Reuters would be
allowed to use ABS-CBN footage without the latter's consent.
GMA-7 subscribes to Reuters. It received a live video feed
of the coverage of Angelo dela Cruz's arrival from Reuters.
GMA-7 immediately carried the live newsfeed in its
program "Flash Report," together with its live broadcast.
Allegedly, GMA-7 did not receive any notice or was not aware
that Reuters was airing footages of ABS-CBN.
ABS-CBN filed the Complaint for copyright infringement
under Sections 177and 211 of the Intellectual Property Code
against Felipe Gozon and other officers of GMA 7.
Is the news footage of ABS CBN copyrightable?
The event itself is not copyrightable because that is the
newsworthy event. However, any footage created from the event
itself is an intellectual creation which is copyrightable. While news
of the day and other miscellaneous facts having the character
of “mere items of press information” are considered unprotected
subject matter, the Code does not state that expression of the news
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
of the day, particularly when it underwent a creative process, is not
entitled to protection.328
Stated otherwise, copyright protection does not extend to news
“events” or the facts or ideas which are the subject of news reports.
But it is equally well-settled that copyright protection does extend to
the reports themselves, as distinguished from the substance of the
information contained in the reports. Copyright protects the manner
of expression of news reports, “the particular form or collocation of
words in which the writer has communicated it.”329
3. Rights of the copyright owner
165. What is the scope of protection of a copyright?
It is immediate. The aforementioned literary and artistic works
are protected from the moment of their creation. Works are protected
by the sole fact of their creation, irrespective of their mode or form of
expression, as well as of their content, quality and purpose.330
Ownership of copyrighted material is shown by proof of
originality and copyrightability.331
166. What then is the effect of registration and deposit with the
National Library?
The certificates of registration and deposit issued by the
National Library serve merely as a notice of recording and
registration of the work but do not confer any right or title upon the
registered copyright owner or automatically put his work under the
protective mantle of the copyright law; it is not a conclusive proof of
copyright ownership. Hence, it was held that when there is sufficient
proof that the copyrighted products are not original creations but
are readily available in the market under various brands, as in one
case, validity and originality will not be presumed.332
’“ABS-CBN Corporation v. Felipe Gozon, el al., G.R. No. 195956, March 11,
2015.
’“Ibid.
““Section 172.1, IPC, as amended.
“'Sison Olano, ibid.
““Manly Sportwear Manufacturing, Inc. v. Dadodette Enterprises and/or
Hermes Sports Center, G.R. No. 165306, September 20, 2005.
J9JC9B0M
315
316 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
It was held that the Intellectual Property Code does not require
registration of the work to fully recover in an infringement suit.333
A copyright certificate nevertheless creates a presumption of
the validity and ownership of the copyright and as such, is useful in
support of the claim of infringement. This presumption, however, is
rebuttable and it cannot be sustained where other evidence in the
record casts doubt on the question of ownership.331
Moreover, the presumption of validity to a certificate of
copyright registration merely orders the burden of proof. The
applicant should not ordinarily be forced, in the first instance,
to prove all the multiple facts that underline the validity of the
copyright unless the respondent, effectively challenging them, shifts
the burden of doing so to the applicant.335
167. Rudy is a fine arts student in a university. He stays in a boarding
house with Bernie as his roommate. During his free time,
Rudy would paint and leave his finished works lying around
the boarding house. One day, Rudy saw one of his works, an
abstract painting entitled Manila Traffic Jamon display at the
university cafeteria. The cafeteria operator said he purchased
the painting from Bernie who represented himself as its painter
and owner. Rudy and the cafeteria operator immediately
confronted Bernie. While admitting that he did not do the
painting, Bernie claimed ownership of its copyright since he
had already registered it in his name with the National Library
as provided in the Intellectual Property Code. Who owns the
copyright to the painting? Explain.
Rudy owns the copyright to the painting because he was the
one who actually created it. His rights existed from the moment
of its creation. The registration of the painting by Bernie with the
National Library did not confer copyright upon him. The registration
is merely for the purpose of completing the records of the National
Library and creating a presumption of ownership and validity of the
copyright.336
333ABS-CBN v. Gozon, March 11, 2015.
331Sison Olano, ibid.
^Supra.
336BAR 2013.
J9JC9B0M
 V1L INTELLECTUAL PROPERTY CODE 317
168. Juan Xavier wrote and published a story similar to an
unpublished copyrighted story of Manoling Santiago. It was,
however, conclusively proven that Juan Xavier was not aware
that the story of Manoling Santiago was protected by copyright.
Manoling Santiago sued Juan Xavier for infringement of
copyright. Is Juan Xavier liable?
Yes. Juan is liable for infringement of copyright. It is not
necessary that Juan is aware that the story of Manoling was
protected by copyright. The work of Manoling is protected from the
time of its creation.337
169. What rights are derived from a Copyright?
There are two classifications of rights derived from a copyright:
a. Economic rights; and
b. Moral rights.
170. What are economic rights?
Copyright or economic rights shall consist of the exclusive right
to carry out, authorize or prevent the following acts:338
a. Reproduction of the work or substantial portion of the
work;
b. Dramatization, translation, adaptation, abridgment,
arrangement or other transformation of the work;
c. The first public distribution of the original and each copy
of the work by sale or other forms of transfer of ownership;
d. Rental of the original or a copy of an (i) audiovisual, or (ii)
cinematographic work, (iii) a work embodied in a sound
recording, (iv) a computer program, (v) a compilation of
data and other materials, or (vi) a musical work in graphic
form, irrespective of the ownership of the original or the
copy which is the subject of the rental;
e. Public display of the original or a copy of the work;
f. Public performance of the work; and
& Other communication to the public of the work.
337BAR 1998.
““Section 177, IPC, as amended.
J9JC9B0M
318 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
Reproduction
171. What is the test of substantiality?
To constitute infringement, it is not necessary that the whole
or even a large portion of the work shall have been copied. If so much
is taken that the value of the original is sensibly diminished, or the
labors of the original author are substantially and to an injurious
extent appropriated by another, that is sufficient in point of law
to constitute piracy. In cases of infringement, copying alone is not
what is prohibited. The copying must produce an injurious effect.3”
172. What are the instances when reproduction of the work is
legally permissible?
a. Quotations from a published work if they are compatible
with fair use and only to the extent justified for the
purpose, including quotations from newspaper articles
and periodicals in the form of press summaries: provided,
that the source and the name of the author, if appearing
on the work, are mentioned;340
b. The reproduction or communication to the public by mass
media of (i) articles on current political, social, economic,
scientific or religious topics; (ii) lectures, addresses and
other works of the same nature, which are delivered in
public if such use is for information purposes and has
not been expressly reserved: provided, that the source is
clearly indicated;341
c. The reproduction and communication to the public of
literary, scientific or artistic works as part of reports of
current events by means of photography, cinematography
or broadcasting to the extent necessary for the purpose;311
d. The private reproduction of a published work in a single
copy, where the reproduction is made by a natural
person exclusively for research and private study, shall
be permitted, without the authorization of the owner of
’’’Pacita, et al. ■ Felicidad Robles and Goodwill Trading Co., Inc., G.R. No.
131522, July 19, 1999.
^“Section 184.1(b), IPC, as amended.
’"Section 184.1(C), as amended.
’"Section 184.1(D), as amended. I
J9JC9B0M
r
VII. INTELLECTUAL PROPERTY CODE 319
copyright in the work. The permission granted under this
section shall not extend to the reproduction of:"’
i. A work of architecture in the form of building or
other construction;
ii. An entire book, or a substantial part thereof, or of
a musical work in graphic form by reprographic
means;
iii. A compilation of data and other materials;
iv. A computer program.
e. Any library or archive whose activities are not for profit
may, without the authorization of the author of copyright
owner, make a single copy of the work by reprographic
reproduction:344
i. Where the work by reason of its fragile character or
rarity cannot be lent to users in its original form;
ii. Where the works are isolated articles contained in
composite works or brief portions of other published
works and the reproduction is necessary to supply
them, when this is considered expedient, to persons
requesting their loan for purposes of research or
study instead of lending the volumes or booklets
which contain them; and
iii. Where the making of such a copy is in order to
preserve and, if necessary in the event that it is lost,
destroyed or rendered unusable, replace a copy, or
to replace, in the permanent collection of another
similar library or archive, a copy which has been
lost, destroyed or rendered unusable and copies are
not available with the publisher.
f.
Every library which, by law, is entitled to receive copies of
a printed work, shall be entitled, when special reasons so
require, to reproduce a copy of a published work which is
considered necessary for the collection of the library but
which is out of stock.346
“Section 187, IPC, as amended.
’"Section 188, IPC, as amended.
“Section 13, P.D. No. 49a.
J9JC9B0M
J9JC9B0M
320 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
g- The reproduction in one (1) back-up copy or adaptation
of a computer program shall be permitted, without the
authorization of the author of, or other owner of copyright
in. a computer program, by the lawful owner of that
computer program: provided, that the copy or adaptation
is necessary for:340
i. The use of the computer program in conjunction
with a computer for the purpose, and to the extent,
for which the computer program has been obtained;
and
ii. Archival purposes, and, for the replacement of the
lawfully owned copy of the computer program in the
event that the lawfully obtained copy of the computer
program is lost, destroyed or rendered unusable.
Derivative right
173. How many works are protected if the author, or another person
with the consent of the author, makes a transformation of the
original work?
There are two works protected and covered by copyright, the
original and the derivative work. However, if the transformation of
the original work was done after the term of the copyright, then,
only one copyright subsists—that of the derivative work.
174. Who can carry out derivative work on the original work of the
author?
The author has the exclusive privilege to carry out derivative
work of his original work. During the term of the copyright, the
author may authorize person to carry out the derivative work.
First public distribution
175. What is the first sale doctrine?
The first sale doctrine provides that an individual who
knowingly purchases a copy of a copyrighted work from the copyright
holder receives the right to sell, display or otherwise dispose of that
particular copy, notwithstanding the interests of the copyright
owner.
31cSection 189, IPC, as amended.
r
VII. INTELLECTUAL PROPERTY CODE 321
The copyright holder’s right to control the distribution of his
work goes away after the “first sale” of the work. The “First Sale
Doctrine” is codified in U.S. copyright law at 17 U.S.C. Section 109.
The doctrine is mirrored in our own copyright laws.
This principle is also called the “exhaustion” principle. It also
applies to patent.
176. KK is from Bangkok, Thailand. She studies medicine in the
Pontifical University of Santo Tomas (UST). She learned
that the same foreign books prescribed in UST are 40-50%
cheaper in Bangkok. So she ordered 50 copies of each book
for herself and her classmates and sold the books at 20% less
than the price in the Philippines. XX, the exclusive licensed
publisher of the books in the Philippines, sued KK for copyright
infringement. Decide.
KK did not commit copyright infringement. Under the “first
sale” doctrine, the economic rights of the author relevant to the
question extend only to the first public distribution of each original
copy. After the first sale of the original copies, the owner may use
and re-sell the same. Hence, there is no infringement by KK since
the said doctrine permitted resale without the publisher’s further
permission.347
177. What is the right of Droite de Suite?
Droite de Suite means right to follow. This means that in every
sale or lease of an original work of painting or sculpture or of the
original manuscript of a writer or composer, subsequent to the first
disposition thereof by the author, the author or his heirs shall have
an inalienable right to participate in the gross proceeds of the sale or
lease to the extent of five percent (5%). This right shall exist during
the lifetime of the author and for 50 years after his death.
178. May the purchaser of a copyrighted book reproduce it or create
a derivative work out of it?
No, the purchaser may only distribute the work, without
incurring liability, but cannot reproduce or carry out derivative
"’BAR 2014; Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S 319, 213 WL
1104736 (U.S Mar. 19, 2013), cited in Gepty, ibid., p. 179.
J9JC9B0M
J9JC9B0M
322 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
work out of it. The rights of reproduction and transformation are
distinct from the right of first public distribution.
Renta! right
179. May the buyerorassigneeofan audiovisual or cinematographic
work, work embodied in a sound recording, a computer
program, or musical work lease or rent such work without the
consent of its creator following the first sale doctrine?
No, the above-enumerated works cannot be rented out to others
without the consent of the copyright holder. The right of rental is a
distinct economic right which is not covered by the first sale doctrine.
However, works not covered by the foregoing enumeration, like
books, may be leased out for profit by the buyer, without the consent
of the copyright owner.
Right of public display
180. Raphael is an internationally well-known and award-winning
painter. Alvaro is the President of world-wide organization
devoted to works of charity and the spread of the norms of
hope, fortitude, and serenity in the face of a global pandemic
that has brought desolation to humanity. Alvaro's mother
Maricor is the Chairperson. Alvaro commissioned Raphael to
do a painting with a theme of inspiring mankind to be filled
with faith and hope amid difficulties. After eight (8) months,
he finished the work of art. Despite the painstaking effort that
went with it, he is not proud of his opus. He showed it to his
friends, Javier, Gabriel and Michael who were all in tremendous
awe and considered it a magnum opus-comparable to, if not
better than, the works of the Masters.
May Alvaro organize an open for all exhibit to display the
great work of Raphael?
Under Section 178.4 of the IPC, as amended, the person who
commissioned the work shall have ownership of the work but the
copyright thereto pertains to the creator unless there is stipulation
to the contrary. Therefore, while Alvaro owns the painting, the
copyright belongs to Raphael. The right to display is one of the
economic rights of the creator. Thus, unless Raphael allows it,
Alvaro cannot publicly display the painting of Raphael.
r
VII. INTELLECTUAL PROPERTY CODE
If Raphael did not transfer the copyright to Alvaro,
may Alvaro organize an exhibit among his close friends and
display the painting of Raphael?
Yes, Alvaro may display the painting to his close friends. What
is prohibited is the public display of the copyrighted work.
A public display is generally accepted to mean a display at a
place open to the public or where a substantial number of persons
outside of a normal circle of family or its social acquaintances are
gathered.348
flig/it of public performance
181. What is public performance?
“Public performance”, in the case of a work other than an
audiovisual work, is the recitation, playing, dancing, acting or
otherwise performing the work, either directly or by means of any
device or process; in the case of an audiovisual work, the showing of
its images in sequence and the making of the sounds accompanying
it audible; and, in the case of a sound recording, making the
recorded sounds audible at a place or at places where persons
outside the normal circle of a family and that family’s closest social
acquaintances are or can be present, irrespective of whether they
are or can be present at the same place and at the same time, or at
different places and/or at different times, and where the performance
can be perceived without the need for communication within the
meaning of Subsection 171.3 of the Intellectual Property Code.349
Right of communication to the public
182. What does communication to the public, as an economic right,
mean?
“Communication to the public” or “communicate to the public”
means the making of a work available to the public by wire or
wireless means in such a way that members of the public may access
these works from a place and time individually chosen by them.350
318Gepty, ibid., p.181 citing Nimmer on Copyright and Amador, Copyright
under the Intellectual Property Code.
“Section 171.6, IPC, as amended.
“Section 171.3, IPC, as amended.
J9JC9B0M
323
321 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
183. What are the so-called moral rights of a copyright holder?
The author of a work shall, independently of the economic
rights or the grant of an assignment or license with respect to such
right, have the following moral rights:361
a. To require that the authorship of the works be attributed
to him. in particular, the right that his name, as far
as practicable, be indicated in a prominent way on the
copies, and in connection with the public use of his work;
(“Right of attribution”)
b. To make any alterations of his work prior to, or to withhold
it from publication;
c. To object to any distortion, mutilation or other modification
of, or other derogatory action in relation to, his work which
would be prejudicial to his honor or reputation; (“Right of
integrity”) and
d. To restrain the use of his name with respect to any work
not of his own creation or in a distorted version of his
work.352 (“Right against false attribution”)
184. SJ, a computer genius, commissioned Wl, former managing
editor of the largest publishing company in the world, to write
SJ's autobiography. SJ, preoccupied by his overwhelming
ambition to grow his company to be able to offer technological
products that will benefit mankind, did not get to spend much
time with his children. His intention in having the autobiography
is for his children to get to know the real SJ—his virtues and
frailties. Wl accepted the engagement on one condition—it will
be a no holds barred account of SJ's life. SJ agreed. But after
the finishing the book, Wl is not happy with it and refuse to
publish it.
May SJ compel Wl to publish the book?
The copyright to the book belongs to Wl unless otherwise
stipulated. Therefore, it is within his moral rights to withhold the
book from publication.
Also, an author cannot be compelled to perform his contract to
create a work or for the publication of his work already in existence.
“‘Section 193, IPC, as amended.
““Section 34, P.D. No. 49; BAR 1995.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 325
However, he may be held liable for damages for breach of such
contract.3*3
185. May the moral rights to a copyright be waived?
An author may waive his rights by a written instrument, but
no such waiver shall be valid where its effect is to permit another:364
a) To use the name of the author, or the title of his work, or
otherwise to make use of his reputation with respect to
any version or adaptation of his work which, because of
alterations therein, would substantially tend to injure the
literary or artistic reputation of another author;356 or
b) To use the name of the author with respect to a work he
did not create.356
Also, when an author contributes to a collective work, his right
to have his contribution attributed to him is deemed waived unless
he expressly reserves it.367
186. What is the term of moral right?
All moral rights shall be coterminous with the economic rights
of the author or creator of the work except the right of attribution,
which is in perpetuity.358
4. Rules on Ownership of Copyright
187. What rules govern copyright ownership?
Copyright ownership shall be governed by the following
rules:
a. In the case of original literary and artistic works, copyright
shall belong to the author of the work;369
b. In the case of works of joint authorship, the co-authors
shall be the original owners of the copyright and in the
absence of agreement, their rights shall be governed by
’“Section 194, IPC, as amended.
35'Section 195, IPC, as amended.
“’Section 195.1, ibid.
“Section 195.2, ibid.
“’Section 196, IPC, as amended.
“’Section 198.1 as amended by R.A. No. 10372.
“’Section 178.1, IPC, as amended.
J9JC9B0M
326 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
the rules on co-ownership. If, however, a work of joint
authorship consists of parts that can be used separately
and the author of each part can be identified, the author
of each part shall be the original owner of the copyright in
the part that he has created;”0
c. In the case of work created by an author during and in the
course of his employment, the copyright shall belong to:
i. The employee, if the creation of the object of
copyright is not a part of his regular duties even if
the employee uses the time, facilities and materials
of the employer.
ii. The employer, if the work is the result of the
performance of his regularly-assigned duties, unless
there is an agreement, express or implied, to the
contrary.361
d. In the case of a work commissioned by a person other than
an employer of the author, and who pays for it, and the
work is made in pursuance of the commission, the person
who so commissioned the work shall have ownership of
the work, but the copyright thereto shall remain with
the creator, unless there is a written stipulation to the
contrary;”2
e. In the case of audiovisual work, the copyright shall
belong to the producer, the author of the scenario, the
composer of the music, the film director, and the author
of the work so adapted. However, subject to contrary
or other stipulations among the creators, the producer
shall exercise the copyright to an extent required for the
exhibition of the work in any manner, except for the right
to collect performing license fees for the performance of
musical compositions, with or without words, which are
incorporated into the work;363
f. In respect of letters, the copyright shall belong to the
writer subject to the provisions of Article 723 of the Civil
Code.364 The publishers shall be deemed to represent the
““Section 178.2, ibid.
“'Section 178.3, ibid.
“"Section 178.4, ibid.
“’Section 178.5, ibid.
“‘Section 178.6, ibid.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
authors of articles and other writings published without
the names of the authors or under pseudonyms, unless
the contrary appears, or the pseudonyms or adopted
name leaves no doubt as to the author’s identity, or if the
author of the anonymous works discloses his identity.366
188. Eloise, an accomplished writer, was hired by Petong to write
a bimonthly newspaper column for Diario de Manila, a newly-
established newspaper of which Petong was the editor-in-
chief. Eloise was to be paid P1,000 for each column that was
published. In the course of two (2) months, Eloise submitted
three (3) columns which, after some slight editing, were
printed in the newspaper. However, Diario de Manila proved
unprofitable and closed only after two (2) months. Due to the
minimal amounts involved, Eloise chose not to pursue any
claim for payment from the newspaper, which was owned by
New Media Enterprises:
a. Does Eloise have to secure authorization from New Media
Enterprises to be able to publish her Diario de Manila
columns in her own anthology? Explain fully.
b. Assume that New Media Enterprises plans to publish
Eloise's columns in its own anthology entitled, "The
Best of Diario de Manila" Eloise wants to prevent the
publication of her columns in that anthology since she
was never paid by the newspaper. Name one irrefutable
legal argument Eloise could cite to enjoin New Media
Enterprises from including her columns in its anthology.
Answer:
a. Eloise does not have to secure the authorization of New
Media, because as the author, she owns the copyright to
her columns.
b. Eloise could invoke that under the IPC, as the owner of
the copyright to the columns, she can either “authorize
or prevent” reproduction of the work, including the
public distribution of the original and each of the work
‘by sale or other forms of transfer of ownership”. While
the anthology as a derivative work is protected as a new
work, it does not affect the force of the copyright of Eloise
upon her columns and does not imply any right to New
’“Section 179, IPC, as amended.
J9JC9B0M
327
328 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
Media to use the columns without the consent of Eloise.
(Bar 2008)
189. While vacationing in Boracay, Valentino surreptitiously took
photographs of his girlfriend Monaliza in her skimpy bikini.
Two (2) weeks later, her photograph appeared in the Internet
and in a national celebrity magazine. Monaliza found out
that Valentino had sold the photograph to the magazine and,
adding insult to injury, uploaded them to his personal blog
on the Internet. Monaliza filed a complaint against Valentino
for damages based on, among other grounds, violation of
her intellectual property rights: a. Does she have any cause
of action? Explain; b. Valentino's friend Francesco stole the
photographs and duplicated them and sold them to a magazine
publication. Valentino sued Francesco for infringement and
damages. Does Valentino have any cause of action? Explain,
c. Does Monaliza have any cause of action against Franceso?
Explain.
a. No. Monaliza cannot sue Valentino for violation of her
intellectual property rights, because she was not the one
who took the pictures. She may sue Valentino instead for
violation of her right to privacy. He surreptitiously took
photographs of her and then sold the photographs to a
magazine and uploaded them to his personal blog in the
Internet.
b. No. Valentino cannot sue Francesco for infringement,
because he has already sold the photographs to a
magazine.
c. Yes. Monaliza can also sue Francesco for violation of her
right to privacy.366
190. T, an associate attorney in XYZ Law Office, wrote a newspaper
publisher a letter disputing a columnist's claim about an
incident in the attorney's family. T used the law firm's letterhead
and its computer in preparing the letter. T also requested the
firm's messenger to deliver the letter to the publisher. Who
owns the copyright to the letter?367
366BAR 2010.
“’BAR 2011.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 329
a. T, since he is the original creator of the contents of
the letter;
b. Both T and the publisher, one wrote the letter to the other
who has possession of it;
c. The law office since it was an employee and he wrote it on
the firm’s letterhead;
d. The publisher to whom the letter was sent.
191. BR and CT are noted artists whose paintings are highly prized
by collectors. Dr. DL commissioned them to paint a mural at
the main lobby of his new hospital for children. Both agreed to
collaborate on the project for a total fee of two million pesos
to be equally divided between them. It was also agreed that
Dr. DL had to provide all the materials for the painting and pay
for the wages of technicians and laborers needed for the work
on the project. Assume that the project is completed and both
BR and CT are fully paid the amount of P2M as artists' fee by
DL. Under the law on Intellectual Property, who will own the
mural? Who will own the copyright in the mural? Why? Explain.
Under Section 178.4 of the IPC, as amended, in case of
commissioned work, the creator (in the absence of a written
stipulation to the contrary) owns the copyright, but the work itself
belongs to the person who commissioned its creation. Accordingly,
the mural belongs to DL. However, BR and CT own the copyright,
since there is no stipulation to the contrary.368
192. The widow of a former President commissioned Matalino
to write a biography of her late husband for a fee. Upon
completion of the work, the widow paid Matalino the agreed
price. The biography was copyrighted. The widow, however,
changed her mind upon reading the book and decided not to
have it published. Can the President's widow sell the property
without the consent of Matalino? Explain.
The President’s widow can sell the property without the
consent of Matalino. The widow was the owner of the work that was
done by Matalino pursuant to their agreement.369
’“BAR 1995 and 2004.
“’BAR 1986.
J9JC9B0M
330 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
Can the President's widow transfer the copyright without the
consent of Matalino?
Under the law. in case of commissioned work, the work
belongs to the one who commissioned it but the copyright belongs
to the author, unless otherwise stipulated. Thus, unless otherwise
stipulated, the President’s widow cannot transfer the copyright
since it belongs to the author.
193. What is the general term of copyright protection?
Subject to the other rules below, the copyright of both original
and derivative works shall be protected during the life of the author
and for 50 years after his death. This rule also applies to posthumous
works.370
194. How about in cases of joint authorship?
In case of works of joint authorship, the economic rights shall
be protected during the life of the last surviving author and for 50
years after his death.371
195. If today a person is granted a copyright for a book, for how long
will the copyright be valid? If said person uses a pseudonym,
how would this affect the length of the copyright?
A copyright endures during the lifetime of the creator and for
50 years after his death. In case he uses a pseudonym, the copyright
shall last until the end of 50 years following the date of the first
publication of the work, unless the author is identified, in which
case, the copyright subsists during his lifetime and for 50 years after
his death.372
196. Are there other kinds of works with different terms of
protection?
Yes. In case of works of applied art, the protection shall be for
a period of 25 years from the date of making.373
37oSection 213.1, IPC, as amended.
371Section 213.2, IPC, as amended.
372BAR 1975.
373Section 213.4, IPC, as amended.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 331
In case of photographic works, the protection shall be for 50
years from publication of the work and, if unpublished, 50 years
from the making.374
In case of audio-visual works including those produced by
process analogous to photography or any process for making audio­
visual recordings, the term shall be 50 years from date of publication
and, if unpublished, from the date of making.376
The rights granted to performers and producers of sound
recordings under this law shall expire:
a. For performances not incorporated in recordings, 50 years
from the end of the year in which the performance took
place; and
b. For sound or image and sound recordings and for
performances incorporated therein, 50 years from the end
of the year in which the recording took place.376
For example, Juan dela Cruz composed a song. He asked Pedro
to sing the musical composition. Because of his excellent rendition
of the song, it became a hit. Juan has a copyright to the musical
composition. It subsists during his lifetime and 50years after his
death. Pedro has the copyright to his performance. This is an
example of a neighboring right to copyright. It has a term of 50 years
following the end of the year in which the performance took place.
In case of broadcasts, the term shall be 20 years from the date
the broadcast took place. The extended term shall be applied only to
old works with subsisting protection under the prior law.
197. Is there a special rule on the calculation of the term?
Yes. The term of protection subsequent to the death of the
author provided in the above rules shall run from the date of his
death or of publication, but such terms shall always be deemed to
begin on the first day of January of the year following the event
which gave rise to them.377
5. Limitations on Copyright
374Section 213.5, IPC, as amended.
^Section 213.6, IPC, as amended.
^Section 215, IPC, as amended.
^’Section 214, IPC, as amended.
J9JC9B0M
J9JC9B0M
332 niVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
198. What are the limitations on copyright?
Notwithstanding the provisions of Chapter V of the IPC, the
following acts shall not constitute infringement of copyright:™
a. The recitation or performance of a work, once it has been
lawfully made accessible to the public, (i) if done privately
and free of charge or (ii) if made strictly for a charitable or
religious institution or society;
Example: Students singing popular songs to entertain a
professor celebrating his birthday.
b. The making of quotations from a published work if they
are compatible with fair use and only to the extent justified
for the purpose, including quotations from newspaper
articles and periodicals in the form of press summaries:
provided, that the source and the name of the author, if
appearing on the work, are mentioned;
Example: Lifting an insignificant portion of a book and
incorporating it in another book, with proper attribution.
c. The reproduction or communication to the public by mass
media of (i) articles on current political, social, economic,
scientific or religious topic, (ii) lectures, addresses and
other works of the same nature, which are delivered in
public if such use is for information purposes and has
not been expressly reserved: provided, that the source is
clearly indicated;
Example: News story printing a substantial part of the
speech of a public official.
d. The reproduction and communication to the public of
literary, scientific or artistic works as part of reports of
current events by means of photography, cinematography
or broadcasting to the extent necessary for the purpose;
Example: Taking a photo of paintings in art gallery
exhibit as part of report of current events.
e. The inclusion of a work in a publication, broadcast, or
other communication to the public, sound recording
or film, if such inclusion is made by way of illustration
for teaching purposes and is compatible with fair use:
■’’“Section 184.1, IPC, as amended.
 VII. INTELLECTUAL PROPERTY CODE 333
provided, that the source and of the name of the author, if
appearing in the work, are mentioned;
Example: Slides presentation of comparative works of
architecture as illustration for teaching purposes of the
different types of architecture throughout the decades.
f. The recording made in schools, universities, or educational
institutions of a work included in a broadcast for the use
of such schools, universities or educational institutions;
provided, that such recording must be deleted within
a reasonable period after they were first broadcast:
provided, further, that such recording may not be made
from audiovisual works which are part of the general
cinema repertoire of feature films except for brief excerpts
of the work;
Example: The recording made in a university of UAAP
basketball games for the viewing of the university
students.
g- The making of ephemeral recordings by a broadcasting
organization by means of its own facilities and for use in
its own broadcast;
Example: The recording by a broadcasting organization of
current events as part of a newscast.
h. The use made of a work by or under the direction or
control of the Government, by the National Library or by
educational, scientific or professional institutions where
such use is in the public interest and is compatible with
fair use;
Example: The application of the must-carry rule of
the National Telecommunications Commission which
obligates cable provides to carry the signals and shows
of free TV stations to afford the public wider viewing
options.
i. The public performance or the communication to the public
of a work, in a place where no admission fee is charged in
respect of such public performance or communication, by
a club or institution for charitable or educational purpose
only, whose aim is not profit making, subject to such other
limitations as may be provided in the Regulations;
Example: Poetry reading competition among students
where no admission fee is charged in respect of such
public performance.
J9JC9B0M
J9JC9B0M
334 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
j- Public display of the original or a copy of the work not
made by means of a film, slide, television image or
otherwise on screen or by means of any other device
or process: provided, that either the work has been
published, or, that the original or the copy displayed has
been sold, given away or otherwise transferred to another
person by the author or his successor in title;
Example: Public display of a painting after its purchase
from the owner.
k. Any use made of a work for the purpose of any judicial
proceedings or for the giving of professional advice by a
legal practitioner.
Example: Copying portions of a book for inclusion in a
pleadings to be filed with the court or in an opinion to be
given to a client.
1. The reproduction or distribution of published articles
or materials in a specialized format exclusively for the
use of the blind, visually- and reading-impaired persons:
Provided, That such copies and distribution shall be made
on a nonprofit basis and shall indicate the copyright
owner and the date of the original publication; and,”9
Example: The non-commercial reproduction of books
under the Braille system for the use of the blind.
m. In case of fair use of the copyrighted work.380
Private Performance of a work
199. The Filipino Society of Composers (FCT) is a non-profit
association of authors, composers and publishers. Said
association is the owner of certain musical compositions
among which are the songs entitled: "Dahil Sa lyo," "Sapagkat
Ikaw Ay Akin," "Sapagkat Kami Ay Tao Lamang" and "The
Nearness Of You."
BT is the operator of a restaurant known as "Alex Soda
Foundation and Restaurant" where a combo with professional
singers, hired to play and sing musical compositions to
entertain and amuse customers therein, were playing and
_________
’’’Section 184, IPC, as amended.
’“Section 185, IPC, as amended.
 VII. INTELLECTUAL PROPERTY CODE
singing the above-mentioned compositions without any
license or permission from FCT to play or sing the same. It is
admitted that the patrons of the restaurant in question pay
only for the food and drinks and apparently not for listening to
the music.
Was the playing and singing of the musical compositions
of FCT inside the establishment of BT constitute a public
performance for profit within the meaning and contemplation
of the Copyright Law?
The music provided is for the purpose of entertaining and
amusing the customers in order to make the establishment more
attractive and desirable. It will be noted that for the playing and
singing the musical compositions involved, the combo was paid as
independent contractors. It is therefore obvious that the expenses
entailed thereby are added to the overhead of the restaurant which
are either eventually charged in the price of the food and drinks
or to the overall total of additional income produced by the bigger
volume of business which the entertainment was programmed to
attract. Consequently, it is beyond question that the playing and
singing of the combo in BT’s restaurant constituted performance for
profit contemplated by the Copyright Law.381
Incidentally, in a similar case, it was ruled that “(t)he
Performance in a restaurant or hotel dining room, by persons
employed by the proprietor, of a copyrighted musical composition,
for the entertainment of patrons, without charge for admission to
hear it, infringes the exclusive right of the owner of the copyright.”382
Making of Quotations
200. What are the criteria to be observed such that making
quotation from a published work does not amount to copyright
infringement?
The criteria are as follows:
a) It is compatible with fair use;
b) The extent of the use is justifiable for the purpose
intended; and,
“‘Filipino Society of Composers v Benjamin Tan, G.R. No. L-36402, Second
Division, March 16, 1987.
x2Ibid.
J9JC9B0M
335
336 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
c) The source and author of the work are mentioned
201, Johnny Cruz is a staunch conservative and a loyal member
of the Republican Party. He is pro-life, believes in the second
amendment that protects the right to keep and bear arms and
advocates former POTUS Trump’s basic philosophy—America
First. He wrote an 88-page thought-provoking article about the
second impeachment of Trump. Echoing many legal scholars,
he argued that the impeachment is unconstitutional because
the impeachment process only applies to a sitting President;
the objective of impeachment is to remove an incumbent
President and since Trump has left the POTUS office, the
impeachment has no legal leg to stand on. He concluded
that the impeachment is nothing but a hoax and part of the
continuing prosecution of Trump by the left and the media
mob.
Pearly Ivory is an avid fan of the Democratic Party. She
believes in all its liberal ideas and progressive policies. Anti­
abortion for her is really not against life but simply means
pro-choice. She gushes with admiration on the prominent
Democrats—Bill Clinton, Barack Obama, and the like. She
wrote a critique on the work of Johnny Cruz which literally
copied 90% of Johnny's article but made the proper attribution.
Ten percent (10%) of the article is in support of her conclusion
that Trump is a threat to society and democracy and should be
permanently barred from seeking elective office.383
Is Pearly Ivory liable for copyright infringement?
Yes, Pearly Ivory is liable for copyright infringement. Making
quotations from a published work is permissible. However, to
constitute as a valid limitation on copyright, the quotation must
be compatible with fair use. One of the factors to be considered in
determining whether the use made of a work in any particular case
is fair use is the amount and substantiality of the portion used in
relation to the copyrighted work as a whole. Copying 90% of the
work, even though with proper attribution, is not compatible with
fair use.
383Patterned after a 1989 Bar Exams but based on contemporary news as of
the date of writing.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 337
338 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II

202. Does the lifting of a portion of a book by another author

Under the direction and control of the government
constitute copyright infringement?
The lifting of substantial portions of a book by the author 204. What do you understand by the must-carry rule?
constitutes infringement of the copyright of the authors of the first
The must-carry rule is a regulation of the National
book. If so much is taken that the value of the original works is
Telecommunications Commission which obligates cable TV networks
substantially diminished, there is an infringement of copyright and
to carry the signals of local TV stations and show in full the free-
to an injurious extent, the work is appropriated.™
local TV programs.
In cases of infringement, copying alone is not what is
The improved broadcast signals offered by a cable TV may
prohibited. The copying must produce an injurious effect. In the
infringe or encroach upon the audience or viewer market of the free-
Habana case, the Supreme Court held that the injury consists in
signal TV. This is so because the latter’s signal may not reach the
that the second author lifted from the first author’s book materials
remote areas or reach them with poor signal quality. To foreclose
that were the result of the latter’s research work and compilation
this possibility and protect the free-TV market (audience market),
and misrepresented them as her own. The infringer circulated the
the must-carry rule was adopted to level the playing field. This, in
book for commercial use and did not acknowledge the first author as
turn, benefits the public who would have a wide-range of choices of
her source.385
programs or broadcast to watch. This also benefits the free-TV signal
It should be noted that in the Habana case, the number of pages as their broadcasts are carried under cable TV’s much-improved
copied did not even account for more than 50% of the book. It seems broadcast signals thus expanding their viewer’s share.387
that had the second author made the proper author attribution,
Hence, it was ruled that the carriage by cable TV providers of
there would have been no infringement.
ABS-CBbTs signals and the showing in full of the local TV programs
do not constitute copyright infringement.388 This is based on
Information purposes
Sectionl84.1 (h) of the IPC, as amended, the use made of a work by
or under the direction or control of the Government, by the National
203. Cite example of "addresses and other works of the same
Library or by educational, scientific or professional institutions
nature” which can be reproduced to the public by mass media
where such use is in the public interest and is compatible with fair
without infringement.
use will not constitute copyright infringement.
In Rappier, Inc. v. Andres Bautista,366 it was held that
It was further held that while the Memorandum Circular of
presidential and vice presidential debates fall under “addresses and
the NTC on the must-carry rule refers to cable television, it should
other works of the same nature.” Thus, the copyright conditions for
be understood as to include direct-to-home via satellite TV (DTK)
the debates are: (1) the reproduction or communication to the public
which provides essentially the same services.
by mass media of the debates is for information purposes; (2) the
debates have not been expressly reserved by the copyright holders); In GMA Network v. Central CATV,339 the Supreme Court
and (3) the source is clearly indicated. further ruled that under the must-carry rule, the cable TV networks
are required to carry and show in full the free-local TVs programs,
The Supreme Court allowed the debates to be shown or live including advertisements, without alteration or deletion. The act of
streamed unaltered on Rappier’s and other websites subject to the showing advertisements does not constitute an infringement of the
foregoing copyright conditions. “television and broadcast markets” under Section 2 of E.O. No. 205.

™Pacita Habana, et al. v. Felicidad Robles and Goodwill Trading Co., Inc., 3B7GMA Network, Inc. v. Central CATV, Inc., G.R. No. 176694, July 18, 2014.
G.R. No. 131522, July 19, 1999.
388ABS-CBN Broadcasting Corporation v. Philippine Multi-Media System,
^Supra. Inc., G.R. Nos. 175769-70, January 19, 2009.
186G.R. No. 222702, April 5, 2016. 3ft9GMA Network, supra.

J9JC9B0M J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
205. Is carrying the signals of the local TV station as form of re­
broadcasting?
No, the cable TV provider is not the origin nor does it claim
to be the origin of the programs broadcasted by the ABS-CBN; the
former did not make and transmit on its own but merely carried the
existing signals of the latter and when the cable provider subscribers
new ABS-CBN’s programs in Channels 2 and 23, they know that
the origin thereof was the latter.390
Judicial proceedings or professional advice
206. May a person have photocopies of some pages of the book of
Professor Rosario made without violating the copyright law?
No, the private reproduction of a published work in a single copy,
where the reproduction is made by a natural person exclusively for
research and private study, is permitted, without the authorization
of the owner of the copyright in the work does not apply to a book.
Reproduction of a book is covered by a separate provision. If the
pages copied amount to a substantial portion, there is infringement
of copyright.
207. In a written legal opinion for a client on the difference
between apprenticeship and learnership, Liza quoted without
permission a labor law expert's comment appearing in his book
entitled "Annotations on the Labor Code." Can the labor law
expert hold Liza liable for infringement of copyright for quoting
a portion of his book without his permission?
No. The labor law expert cannot hold Liza liable for infringement
of copyright. Under Section 184. l(k) of the IPC, as amended, “Any
use made of a work for the purpose of any judicial proceeding or
for giving of professional advice by a legal practitioner” shall not
constitute infringement of a copyright.391 The use made of a work for
the purpose of giving professional advice is a limitation on copyright
and does not require the consent of the author.
3S0ABS-CBN Broadcasting Corporation Philippine Multi-Media System,
Ine.,G.R. Nos. 175769-70, January 19, 2009.
“'BAR 2006.
J9JC9B0M
339
310 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
208. May Liza be held criminally liable if she did not attribute the
portion of the work she quoted in her opinion to the labor law
author?
The law does not require attribution when it comes to the use of
the work for judicial proceeding or giving professional advice and as
such. Liza cannot be sued for copyright infringement despite lack of
attribution. However, Liza may be held liable for plagiarism which
is broader in scope than copyright. To plagiarize means to steal and
pass off the ideas or words of another as one’s own. It is basically a
literary theft.392
a. Doctrine of fair use
209. What is fair use?
Fair use is “a privilege to use the copyrighted material in a
reasonable manner without the consent of the copyright owner or as
copying the theme or ideas rather than their expression.”393 Fair use
is an exception to the copyright owner>s monopoly of the use of the
work to avoid stifling “the very creativity which that law is designed
to foster”.393
Under this doctrine, the fair use of a copyrighted work for: (1)
criticism and comment; (2) news reporting; (3) teaching, including
multiple copies for classroom use; and (4) scholarship, research, and
similar purposes is not an infringement of copyright.
210. What are the factors to be considered in determining fair use?
Determining fair use requires application of the four-factor
test. Section 185 of the Intellectual Property Code lists four (4)
factors to determine if there was fair use of a copyrighted work:
392Webster’s online dictionary.
393ABS CBN case citing Habana v. Robles, 369 Phil. 764 (1999) [Per J. Pardo,
First Division], citing 18 AM JUR2D §109, in turn citing Toksvig v. Bruce Pub. Co.,
(CA7Wis) 181 F2d 664 [1950]; Bradbury v. Columbia Broadcasting System, Inc.,
(CA9 Cal) 287 F2d 478, cert den 368 US 801, 7 L ed 2d 15, 82 S Ct 19 [1961]; Shipman
v. R.K.O. Radio Pictures, Inc., (CA2 NY) 100 F2d 533 [1938].
393ABS CBN case citing Matthew D. Bunker, TRANSFORMING THE NEWS:
COPYRIGHT AND FAIR USE IN NEWS-RELATED CONTEXTS, 52 J. COPYRIGHT
SOCY U.S.A. 309, 311 (2004-2005), citing Iowa St. Univ. Research Found., Inc. v.
Am. Broad. Cos., 621 F.2d 57, 60 (2d Cir. 1980). The four factors are similarly codified
under the United States Copyright Act of 1976, Section 107.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 341
a. The purpose and character of the use, including whether
such use is of a commercial nature or is for non-profit
educational purposes;
b. The nature of the copyrighted work;
c. The amount and substantiality of the portion used in
relation to the copyrighted work as a whole; and
d. The effect of the use upon the potential market for or
value of the copyrighted work.
First, the purpose and character of the use of the copyrighted
material must fall under those listed in Section 185, thus: “criticism,
comment, news reporting, teaching including multiple copies
for classroom use, scholarship, research, and similar purposes.”
The purpose and character requirement is important in view of
copyright’s goal to promote creativity and encourage creation of
works. Hence, commercial use of the copyrighted work can be
weighed against fair use.
The “transformative test” is generally used in reviewing the
purpose and character of the usage of the copyrighted work. The
court must look into whether the copy of the work adds “new
expression, meaning or message” to transform it into something
else. “Meta-use” can also occur without necessarily transforming the
copyrighted work used.
Second, the nature of the copyrighted work is significant in
deciding whether its use was fair. If the nature of the work is more
factual than creative, then fair use will be weighed in favor of the
user.
Third, the amount and substantiality of the portion used is
important to determine whether usage falls under fair use. An exact
reproduction of a copyrighted work, compared to a small portion of
it, can result in the conclusion that its use is not fan’. There may also
be cases where, though the entirety of the copyrighted work is used
without consent, its purpose determines that the usage is still fair.
For example, a parody using a substantial amount of copyrighted
work may be permissible as fair use as opposed to a copy of a work
produced purely for economic gain.
Lastly, the effect of the use on the copyrighted work’s market
is also weighed for or against the user. If this court finds that the
J9JC9B0M
342 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
use had or will have a negative impact on the copyrighted work's
market, then the use is deemed unfair.™5
Interestingly, in the ABS-CBN case, the respondents from
GMA-7 invoked as of one of their defenses the doctrine of fair use
since footage was only aired for five (5) seconds. It was held that
whether the alleged five-second footage may be considered fair use
is a matter of defense as the case involves determination of probable
cause at the preliminary investigation stage only.
GMA-7’s rebroadcast of ABS-CBN’s news footage without
the latter’s consent is not an issue. The mere act of rebroadcasting
without authority from the owner of the broadcast gives rise to
the probability that a crime was committed under the Intellectual
Property Code.
The fair use of a copyrighted work for (i) criticism and comment;
(ii) news reporting; (iii) teaching, including limited number of
copies for classroom use; and (iv) scholarship, research, and similar
purposes is not an infringement of copyright.
Decompilation, which is understood here to be the reproduction
of the code and translation of the forms of a computer program to
achieve the interoperability of an independently created computer
program with other programs may also constitute fair use to the
extent that such decompilation is done for the purpose of obtaining
the information necessary to achieve such interoperability.396
211. Virtucio was a composer of llocano songs who has been quite
popular in the llocos Region. Pascuala is a professor of music
in a local university with special focus on indigenous music.
When she heard the musical works of Virtucio, she purchased
a CD of his works. She copied the CD and sent the second copy
to her Music class with instructions for the class to listen to
the CD and analyze the works of Virtucio. Did Pascuala thereby
infringe Virtucio's copyright? Explain your answer.
Pascuala did not infringe on the rights of Virtucio. The fair
use of a copyrighted work for criticism, comment, news reporting,
teaching including limited number of copies for classroom use,
scholarship, research and similar purposes is not an infringement
395ABS-CBN, ibid.
396Section 185.1, IPC, as amended.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
of copyright.3” In this case, Pascuala’s reproduction of the limited
number of CDs was for classroom use and educational purposes thus
negating copyright infringement.398
212. KLM Printers, Inc. operated a mall outlet located at the ground
floor of university building in Quezon City. It possessed soft
copies of certain textbooks on file, and would print "book-
alikes" of these textbooks (or in other words, reproduced
the entire textbooks) upon order and for a fee. It would even
display samples of such "book-alikes" in its stall for sale to the
public.
Upon learning of KLM Printers, Inc.'s activities, the
authors of the textbooks filed a suit against it for copyright
infringement. In its defense, KLM Printers, Inc. invoked the
doctrine or fair use, contending that the "book-alikes" are
being used for educational purposes by those who avail of
them.
a. What is the doctrine of fair use?
Under this doctrine, the fair use of a copyrighted work for
(1) criticism, comment, (2) news reporting, (3) teaching including
multiple copies for classroom use, (4) scholarship, research, and
similar purposes is not an infringement of copyright.
b. Is KLM Printers, Inc.'s invocation of the doctrine of fair use
proper in this case? Explain.
No, the invocation is improper. In determining whether the use
made of a work in any particular case is fair use, the factors to be
considered shall include: a) the purpose and character of the use,
including whether such use is of a commercial nature or is for non­
profit educational purposes; b) The nature of the copyrighted work;
c) the amount and substantiality of the portion used in relation to
the copyrighted work as a whole; and d) the effect of the use upon
the potential market for or value of the copyrighted work.399
6. Copyright Infringement
“’Section 185, IPC, as amended.
“BAR 2017.
“Section 185.1, IPC, as amended.
J9JC9B0M
343 344 DIVINA ON COMMERCIAL IAW:
A COMPREHENSIVE GUIDE VOLUME II
213. What is copyright infringement?
Infringement of a copyright is a trespass on a private domain
owned and occupied by the owner of the copyright, and, therefore,
protected by law, and infringement of copyright, or piracy, which
is a synonymous term in this connection, consists in the doing by
any person, without the consent of the owner of the copyright, of
anything the sole right to do which is conferred by statute on the
owner of the copyright.400
The gravamen of copyright infringement is not merely the
unauthorized “manufacturing” of intellectual works but rather the
unauthorized performance of any of the rights exclusively granted
to the copyright owner. Hence, any person who performs any of such
acts without obtaining the copyright owner’s prior consent renders
himself civilly and criminally liable for copyright infringement.
It was held that the copying of the genuine Microsoft software to
produce computer system hard disk or read-only memory (CD-
ROMs) containing fake Microsoft software and their distribution
are illegal even if the copier or distributor is a Microsoft licensee."1
Absolute similarity of the purported pirated works to the
copyrighted works is not required. The essence of a copyright
infringement is the similarity or at least substantial similarity of
the purported pirated works to the copyrighted work.402
214. When is copyright infringement committed?
Copyright infringement is committed by any person who shall
use original literary or artistic works, or derivative works, without
the copyright owner’s consent in such a manner as to violate the
foregoing economic and moral rights of the author.
A person infringes a right protected under the IPC when one:
a. Directly commits an infringement;
b. Benefits from the infringing activity of another person
who commits an infringement if the person benefiting
has been given notice of the infringing activity and has
400ABS-CBN, supra.
401NBI-Microsoft Corporation v. Judy Hwang, et al., G.R. No. 147043, June 21,
2005.
402Francisco G. Joaquin, Jr., and BJ Productions, Inc. v. Honorable Franklin
Drilon, et al., G.R. No. 108946, January 28, 1999.
J9JC9B0M
r
VII. INTELLECTUAL PROPERTY CODE 345
the right and ability to control the activities of the other
person;
C. With knowledge of infringing activity, induces, causes
or materially contributes to the infringing conduct of
another.403
215. May the author or creator of the work sue for copyright
infringement if he fails to deposit a copy of his work to the
National Library (or the IPO as deputized by the National
Library)?
Yes, he may sue for copyright infringement notwithstanding
the lack of deposit and registration with the National Library.
Artistic and Literary works are now protected by its mere creation
under the new Copyright Law.
Under P.D, No. 49, failure to comply with registration and
deposit does not deprive the copyright owner of the right to sue
for infringement but merely limits the remedies available to him
because the copyright for a work is granted from the moment of
creation. This means that the author whose work was infringed can
only secure an injunction against infringement but cannot sue for
damages.404
However, under the IPC, the copyright owner may not only
obtain an injunction but may also ask for damages and exercise
other remedies provided by the law even though his work is not
deposited and registered with the IPO.
216. What are the elements of copyright infringement?
For a claim of copyright infringement to prevail, the evidence
on record must demonstrate:
a. Ownership of a validly copyrighted material by the
complainant; and
b. Infringement of the copyright by the respondent.405
‘“Section 216, IPC, as amended.
“'Columbia Pictures, Inc., el al. v. Court of Appeals, G.R. No. 110318, August
28,1996.
"“Ching v. Salinas, Sr., 500 Phil. 628, 639 (2005).
J9JC9B0M
346 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
217. May corporate officers be held liable for copyright
infringement?
Section 217 of the Intellectual Property Code states that “any
person" may be found guilty of infringement. It also imposes the
penalty of both imprisonment and fine.
It has been ruled that corporate officers and/or agents may be
held individually liable for a crime committed under the Intellectual
Property Code:106
The existence of the corporate entity does not shield from
prosecution the corporate agent who knowingly and intentionally
caused the corporation to commit a crime. A corporate officer cannot
protect himself behind a corporation where he is the actual, present
and efficient actor.107 However, the criminal liability of a corporation's
officers or employees stems from their active participation in the
commission of the wrongful act.
The principle applies whether or not the crime requires the
consciousness of wrongdoing. It applies to those corporate agents
who themselves commit the crime and to those, who, by virtue of their
managerial positions or other similar relation to the corporation,
could be deemed responsible for its commission, if by virtue of their
relationship to the corporation, they had the power to prevent the
act.
An accused’s participation in criminal acts involving violations
of intellectual property rights is the subject of allegation and proof.
The showing that the accused did the acts or contributed in a
meaningful way in the commission of the infringements is certainly
different from the argument of lack of intent or good faith. Active
participation requires a showing of overt physical acts or intention
to commit such acts. Intent or good faith, on the other hand, are
inferences from acts proven to have been or not been committed.
It was held in the ABS-CBN case that the Department of
Justice committed grave abuse of discretion when it resolved to file
the Information against certain respondents despite lack of proof of
their actual participation in the alleged crime.
“Republic Gas Corporation v. Petron Corporation, G.R. No. 194062, June 17,
2013, cited in ABS-CBN case.
,tnSupra.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE
218. In an action for damages on account of an infringement of a
copyright, the defendant (the alleged pirate) raised the defense
that he was unaware that what he had copied was a copyright
material. Would this defense be valid?
No. An intention to pirate is not an element of infringement.
Infringement under the Intellectual Property Code is malum
prohibitum. The Intellectual Property Code is a special law.
Copyright is a statutory creation: Malice or criminal intent is
completely immaterial. Hence, an honest intention is no defense to
an action for infringement.408
A copy of a piracy is an infringement of the original, and it is no
defense that the pirate, in such cases, did not know whether or not
he was infringing any copyright; he at least knew that what he was
copying was not his, and he copied at his peril.
Thus, unless clearly provided in the law, offenses involving
infringement of copyright protections should be considered malum
prohibitum. It is the act of infringement, not the intent, which
causes the damage. To require or assume the need to prove intent
defeats the purpose of intellectual property protection.
Nevertheless, proof beyond reasonable doubt is still the
standard for criminal prosecutions under the Intellectual Property
Code.409
In one case, however, the Supreme Court found no grave
abuse of discretion on the part of the Department of Justice when it
dismissed the complaint against the respondent who had possession
of a product after purchase from legitimate sources but which turned
out to be a counterfeit, without the knowledge of the purchaser/
possessor.410
219. What are the remedies of the copyright owner against an
infringer?
The copyright owner may exercise the following remedies in
case of infringement:
a. He may file a civil action for copyright infringement to
obtain any or all of the following reliefs:
“BAR 1988 and 1997.
“ABS-CBN supra, citing Habana v. Robles.
410Sanrio Company Ltd. v. Lim, G.R. No. 168662, February 19,2008.
J9JC9B0M
347
348 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
i. Damages. The court can order the defendant to pay
to the copyright proprietor or his assigns or heirs
such actual damages, including legal costs and
other expenses, as he may have incurred due to the
infringement as well as the profits the infringer may
have made due to such infringement, and in proving
profits the plaintiff shall be required to prove sales
only and the defendant shall be required to prove
every element of cost which he claims, or, in lieu of
actual damages and profits, such damages which to
the court shall appear to be just and shall not be
regarded as penalty.411
The amount of damages to be awarded shall be doubled against
any person who:
(i) Circumvents effective technological measures; or
(ii) Having reasonable grounds to know that it will induce,
enable, facilitate or conceal the infringement, remove
or alter any electronic rights management information
from a copy of a work, sound recording, or fixation of
a performance, or distribute, import for distribution,
broadcast, or communicate to the public works or copies
of works without authority, knowing that electronic rights
management information has been removed or altered
without authority.412
‘Technological measure’ means any technology, device or
component that, in the normal course of its operation, restricts
acts in respect of a work, performance or sound recording, which
are not authorized by the authors, performers or producers of
sound recordings concerned or permitted by law.413
‘Rights management information’ means information
which identifies the work, sound recording or performance;
the author of the work, producer of the sound recording or
performer of the performance; the owner of any right in the
work, sound recording or performance; or information about
the terms and conditions of the use of the work, sound recording
"■Section 216.1(b), IPC, as amended.
412Section 216.1(b), IPC, as amended.
"3Section 171.12, IPC, as amended.
J9JC9B0M
r
VII. INTELLECTUAL PROPERTY CODE 349
or performance; and any number or code that represent such
information, when any of these items is attached to a copy of
the work, sound recording or fixation of performance or appears
in conjunction with the communication to the public of a work,
sound recording or performance.111
Moral and exemplary damages may likewise be awarded
as court may deem proper, wise and equitable.116
However, no damages may be recovered after the lapse of
four years from the time the cause of action arose.1'6
ii. Preliminary injunction. The court may also order
the defendant to desist from committing any
infringement and/or to prevent the entry into
the channels of commerce of imported goods that
involve an infringement, immediately after customs
clearance of such goods.117
iii. Search and seizure order. This may include the
seizure and impounding of sales invoices and
other documents evidencing sales, all articles and
their packaging alleged to infringe a copyright and
implements for making them which may serve as
evidence in court proceedings in accordance with the
rules on search and seizure involving violations of
intellectual property rights issued by the Supreme
Court.118
iv. Order of Destruction. The court can also order the
destruction without any compensation all infringing
copies or devices, as well as all plates, molds, or
other means for making such infringing copies as
the court may order.119
The destruction of infringing copies of the work
may be ordered even in the event of acquittal in a
criminal case.120
‘■‘Section 171.13, IPC, as amended.
‘■’Section 216.1(e), IPC, as amended.
‘‘"Section 226, IPC, as amended.
‘■’Section 216.1(a), as amended.
‘■“Section 216.2, and 216.1(c), IPC, as amended.
‘■“Section 216.1(d), IPC, as amended.
‘“Section 216.1, IPC, as amended.
J9JC9B0M
350 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
The order of destruction is however not executory if
defendant files a motion for reconsideration.421
The foregoing remedies shall not preclude an
independent suit for relief by the injured party by
way of damages, injunction, accounts or otherwise.121
He may also file a criminal action for copyright
V.
infringement.423
Thecopyright owner may elect, at any time before final judgment
is rendered, to recover instead of actual damages and profits, an
award of statutory damages for all infringements involved in an
action in a sum equivalent to the filing fee of the infringement action
but not less than fifty thousand pesos (P50,000.00). In awarding
statutory damages, the court may consider the following factors:
(1) The nature and purpose of the infringing act;
(2) The flagrancy of the infringement;
(3) Whether the defendant acted in bad faith;
(4) The need for deterrence;
(5) Any loss that the plaintiff has suffered or is likely to suffer
by reason of the infringement; and
(6) Any benefit shown to have accrued to the defendant by
reason of the infringement.
In case the infringer was not aware and had no reason to
believe that his acts constitute an infringement of copyright, the
court in its discretion may reduce the award of statutory damages to
a sum of not more than P10,000.00.424
The amount of damages to be awarded shall be doubled against
any person who circumvents effective technological measures and/
or alters or removes electronic rights management information.421
220. Jose Santos has written many poems, some of which have been
published in Panorama Magazine but never registered with the
Copyright Office. Among his published works was the poem
4212020 Rules, supra.
4z2Section 216.2, IPC, as amended.
423Section 217.1, IPC, as amended.
™Supra.
’“Section 216.1, IPC
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 351
entitled “In a Rose Garden." About a year from its publication,
Jose was surprised to hear over the radio a song whose lyrics
were copied from his poem. It appears that music sheets of
the song have been published and sold under the name of the
composer, without any acknowledgment in favor of Jose. Jose
wants to know what his rights are and whether he can secure
an injunction against the composer and/or the publisher,
perhaps with damages. How will you advise him? Explain.
I would tell Santos that he has a right to file an injunction
proceeding to restrain the composer and/or his publisher from
further committing any act of infringement of his copyright. Under
the present law, copyright is acquired from the moment of creation
of the work. Registration and deposit of the work are no longer
necessary for its acquisition. The moment Santos wrote his poem, he
acquired the right to restrain any infringement on his copyright, as
well as the right to have the infringing copies and devices impounded.
He may recover actual damages, including legal costs and other
expenses, as he may have incurred due to the infringement as well
as the profits the infringer may have made due to such infringement,
and in proving profits the plaintiff shall be required to prove sales
only and the defendant shall be required to prove every element of
cost which he claims, or, in lieu of actual damages and profits, such
damages which to the court shall appear to be just and shall not be
regarded as penalty.
He may also recover moral and exemplary damages, which the
court may deem proper, wise and equitable.426
221. What are the defenses available against an action for copyright
infringement?
The defenses are as follows:
a. The work is not copyrightable;
b. The term of the copyright has expired;
C. The use of the work falls within the limitations on
copyright;
d. The plaintiff/complainant is not the owner of the copyright;
e. Non-participation in the commission of the infringing
activities;
,!6BAR 1981 but answered under the IPC.
J9JC9B0M
352 DIVINA ON COMMERCIAL LAW:
A COMPREHENSIVE GUIDE VOLUME II
f. If the basis of the complaint is the benefit derived from
the infringing activity, lack of notice thereof and/or did
not have the ability to control the infringement;
g- Prescription; and
h. Lack of evidence to support the allegations of the
complaint.
222. Is there copyright infringement in the following cases?’”
a. Sale of illicit copies of software programs.
Yes. The mere sale of illicit copies of software programs is
enough by itself to show the existence of probable cause for copyright
infringement.428
b. Importation of DVDs and CDs of music, movies, and
foreign books into the Philippines by an individual for
personal purpose.
There is no infringement as long as the foregoing items are not
pirated and the number of copies is compatible with fair use. The
economic rights of the author do not include the right to prevent
importation or exportation of the copyrighted work. R.A. No.
10372 removed the limitation on the number of copies that may be
imported into the Philippines by an individual but this should not
mean without any limit.
c. Public display of a painting after its purchase from the
artist.
Yes, this is one of the limitations on copyright.429
d. Reproduction of the entire copy of a thesis by a person
other than the author.
There is no infringement provided that the reproduction is only
for a single copy, made by a natural person exclusively for research
and private study.430
427The assumption is that the copyright owner did not give his consent to any
of the acts enumerated.
428Microsoft Corporation v. Manansala, G.R. No. 166391, October 21, 2015.
429Section 184. l(j), IPC, as amended.
430Section 187, IPC, as amended.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 353
e. Use of layout or appearance of book without the consent
of the author.
There is no infringement as long as the use is with the
permission of the publisher. The copyright to the layout belongs to
the publisher and not to the author.431
f. Use of an ornamental design embossed in a coffee mug
as a design for T-shirt.
There is infringement. The design can be detached from the
usefulness of the product and as such, it is copyrightable under the
Denicola test.
9- Removing restrictions on what and how apps content can
be stored and used or "jail breaking’!
Circumvention of technological measure does not amount to
copyright infringement but is only an aggravating circumstance
which may cause the imposition of the maximum penalty or doubling
the award of damages.432
h. Receipt of rentals by the owner of a mall or lessor of
an establishment where the lessee commits acts of
infringement.
The owner of the mall or lessor of the establishment is Hable
for infringement if he has been given notice of infringing activity but
did not stop the infringement. Benefiting from infringing activity is
a form of copyright infringement.433
i. The composer of a song assigned his right to the
composition. Fifty years after the composer's death, the
assignee changed the tempo from ballad to rock and
claimed to be the owner of the musical composition.
By claiming to be the owner of the original composition, the
assignee violated the moral right of attribution of the original
composer and therefore infringed copyright. The right of attribution
of an author shall last during his lifetime and in perpetuity after his
death.434
“'Section 174, IPC, as amended.
“"Based on Section 216.1, IPC, as amended.
“Section 216, IPC, as amended.
“Section 198, IPC, as amended.
J9JC9B0M
354 DIVINA ON COMMERCIAL I .AW:
A COMPREHENSIVE GUIDE VOLUME II
Purchase of a book and then selling it for a price higher
j-
than cost of acquisition.
There is no infringement of copyright. The first sale doctrine
provides that an individual who knowingly purchases a copy of a
copyrighted work from the copyright holder receives the right to sell,
display or otherwise dispose of that particular copy, notwithstanding
the interests of the copyright owner. The copyright holder’s right to
control the distribution of his work goes away after the “first sale”
of the work.
k. The buyer of a copyrighted book reproduced it in its
entirety and shared it with his classmate for their private
study.
There is infringement of copyright. The person who photocopied
the book violated the economic right of reproduction of the work of
the copyright owner. The law excludes books from the right granted
by law to an individual allowing a single-copy-private-reproduction
of a published work.435
I. Commercial reproduction of published articles in a
specialized format for the use of the blind, visually and
reading-impaired persons indicating the copyright owner
and date of publication.
There is copyright infringement. The reproduction of published
articles in a specialized format for the use of the blind, visually and
reading-impaired persons is a limitation on copyright only if the
distribution of the copies is done on a non-profit basis.438
m. Cover song or new performance or recording of a
contemporary or previously recorded, commercially
released song or popular song by someone other than
the original artist without modification on the lyrics and
melody, then uploading it on the YouTube.
There is no infringement of copyright because cover song
assumes that the song, as a copyrightable work, has been lawfully
made accessible to the public, provided that the singer, (other than
the original artist), did not receive any royalty from YouTube or did
not gain any profit for the cover song.437
’“Section 187.1, IPC, as amended.
’“Section 184.1(1), IPC, as amended.
’37Based on Section 184.1(a), IPC, as amended.
J9JC9B0M
 VII. INTELLECTUAL PROPERTY CODE 356

n. CD burning. DIVINA ON COMMERCIAL LAW:

356
A COMPREHENSIVE GUIDE VOLUME 11
To “burn” a CD simply means to copy or write information into
a compact disc. There is copyright infringement because distributing
S. Rebroadcast of a radio program after 25 years from the
a copy of the copyrighted material (like the music CD) can only be date the broadcast took place without the consent of the
done with the permission of the copyright holder. broadcasting organization which owns the copyright.

o. Reprinting by a private library of a book that has gone out
of stock.
There is copyright infringement because only a library allowed
by law to receive copies of a printed work is entitled to reproduce
copy of a published work which is necessary for the collection of
the library but which out of stock.-138 A private library has no such
privilege.
P- Legislative bill pirated by another congressman and
introduced as his own.
There is no copyright infringement. Copyright does not subsist
on works of government.-139 A legislative bill is a work of government.
No copyright infringement. The term of broadcast is only 20
years from the date the broadcast took place.442
t. Reproduction of the photograph by the owner without
the consent of the person, subject of the photograph.
No copyright infringement. The photographer, not the subject,
has the copyright to the photograph and as such, enjoys the economic
right of reproduction.
u. X's painting of Madonna and Child was used by her
mother to print some personalized gift wrapper. As
part of her mother's efforts to raise funds for Bantay
Bata, the mother of X sold the wrapper to friends. Y,
an entrepreneur, liked the painting in the wrapper and
made many copies and sold the same through National
Bookstore.

q- Reproduction of a collection of classical books on There is infringement because artistic works are protected
literature (those which have been published more than 50 from the moment of creation.
years after death of the authors) by someone other than
the person who made the compilation and arrangement.
There is copyright infringement. While the classical books have
become public dominion in view of the expiration of the term of the
copyright, the collection of the classical books, as a derivative work,
is independently copyrighted from the original works by reason of
the selection or coordination or arrangement of its contents.410
r. Reproducing back-up copies or adaptation of a licensed
computer program for archival purposes.
There is copyright infringement. The law only allows
reproduction of one (1) back-up copy of a computer program for
archival purposes■1■1, except when reproduction of more than one
adaptation is allowed by the terms of the license agreement with
the copyright owner.
442Section 215.2, IPC, as amended.
“Section 188.2, IPC, as amended.
“’Based on Section 176, IPC, as amended.
“’Based on Section 173.1(b), IPC, as amended.
“'Based on Section 189.1(b), IPC, as amended. J9JC9B0M

J9JC9B0M