Philippines

ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS (IPR)
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1.  INTRODUCTION TO IPR ENFORCEMENT IN THE PHILIPPINES

Under Republic Act No. 8293 or the Intellectual Property Code (IP Code, effective January 1998), the Intellectual Property Office of the Philippines (IP Philippines) is primarily tasked to administer and implement the state policies on the protection, utilization and enhancement of enforcement of IPR in the country. Furthermore, the IP Code mandates the IP Philippines to coordinate with other government agencies and the private sector to strengthen IPR protection. Consequently, IP Philippines convened the Intellectual Property Rights Enforcement Action Panel (IP-REAP) in 2002. The Panel is a joint government and private sector body established to provide coordination and cooperation among the various government enforcement agencies and the private sector. Among the enforcement agencies that comprise the Panel are the Bureau of Customs (BOC), the Philippine National Police (PNP), the National Bureau of Investigation (NBI), the Department of Justice (DOJ), and the Optical Media Board (OMB). Also part of the Panel is the Supreme Court, which controls the Judiciary, and takes part in the enforcement of IPR through its adjudicatory function.

Extending its network, IP Philippines joined the National Law Enforcement Coordinating Council (NALECC) to ensure closer coordination and a concerted approach towards IPR enforcement.

In 2005, Director General Adrian S. Cristobal, Jr., seeing the need to further strengthen and enhance government efforts on IPR protection, assembled the National Committee for Intellectual Property Rights, an inter-agency group composed essentially of the enforcement agencies belonging to IP-REAP, with the inclusion of the National Book Development Board. The Committee formulated a 2005-2006 Action Plan to pursue their objectives.

The BOC has, way back in 2002, issued Customs Administrative Order No. 06-2002, which provides for the administrative guidelines to expedite the handling and disposition of infringing goods pursuant to the provisions of the IP Code and the provisions on border measures of the TRIPS Agreement. The following year, the BOC created a permanent Intellectual Property Unit to further strengthen customs border control and centralize border policy development and implementation.

A new law primarily enacted to address the problem of video piracy was in effect since March 2004. Known as the Optical Media Act (Republic Act No. 9239), the law regulates the manufacture of optical media, regardless of content, as well as the importation of materials and equipments used in the production thereof. The law is implemented by the Optical Media Board, which was created out of the old Videogram Regulatory Board whose mandate was limited only to the regulation of entertainment media.

The Electronic Commerce Act (Republic Act No. 8792) was enacted in 2000 in the aftermath of the “I love you� virus that wreaked havoc to computers globally. It complements the IP Code as it defines the liability for computer hacking and piracy. The Department of Trade and Industry, in coordination with the National Computer Center and other relevant government agencies, is tasked to implement the law.

In February 2002, the Supreme Court introduced the new “Rules on Search and Seizure in Civil Actions for Infringement of Intellectual Property Rights�, which provided for an ex parte procedure in the application for such warrants and can be availed of even if no case has yet been filed.

2.  CIVIL IPR ENFORCEMENT

2.1  Competent Courts
The Supreme Court, through a Resolution (A.M. No. 03-03-03-SC) effective 01 July 2003, has designated sixty-six (66) Regional Trial Courts as Special Commercial Courts that would have jurisdiction over cases involving intracorporate and intellectual property issues, apart from the usual civil and criminal cases that are assigned to them.

2.1.1 First instance
Intellectual property cases would be adjudicated in the first instance with the abovementioned courts.

2.1.2  Appeal
Decisions of the Special Commercial Courts are appealable to the Court of Appeals on questions of fact and law, whose decisions are, in turn, appealable to the Supreme Court on questions of law.

2.2  Remedies available (compensation, injunctions - preliminary and final)

Under the IP Code, the following remedies are available for patent infringement:

Sec. 76. Civil Action for Infringement

76.1. The making, using, offering for sale, selling, or importing a patented product or a product obtained directly or indirectly from a patented process, or the use of a patented process without the authorization of the patentee constitutes patent infringement.

76.2. Any patentee, or anyone possessing any right, title or interest in and to the patented invention, whose rights have been infringed, may bring a civil action before a court of competent jurisdiction, to recover from the infringer such damages sustained thereby, plus attorney’s fees and other expenses of litigation, and to secure an injunction for the protection of his rights. 

76.3. If the damages are inadequate or cannot be readily ascertained with reasonable certainty, the court may award by way of damages a sum equivalent to reasonable royalty.

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

76.5. The court may, in its discretion, order that the infringing goods, materials and implements predominantly used in the infringement be disposed of outside the channels of commerce or destroyed, without compensation.

76.6. Anyone who actively induces the infringement of a patent or provides the infringer with a component of a patented product or of a product produced because of a patented process knowing it to be especially adopted for infringing the patented invention and not suitable for substantial non-infringing use shall be liable as a contributory infringer and shall be jointly and severally liable with the infringer.

Sec. 77. Infringement Action by a Foreign National. - Any foreign national or juridical entity who meets the requirements of Section 3 and not engaged in business in the Philippines, to which a patent has been granted or assigned under this Act, may bring an action for infringement of patent, whether or not it is licensed to do business in the Philippines under existing law.

Sec. 79. Limitation of Action for Damages. - No damages can be recovered for acts of infringement committed more than four (4) years before the institution of the action for infringement.

For trademark infringement:
Sec. 156. Actions, and Damages and Injunction for Infringement

156.1. The owner of a registered mark may recover damages from any person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his rights, or the profit which the defendant actually made out of the infringement, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant or the value of the services in connection with which the mark or trade name was used in the infringement of the rights of the complaining party.

156.2. On application of the complainant, the court may impound during the pendency of the action, sales invoices and other documents evidencing sales.

156.3. In cases where actual intent to mislead the public or to defraud the complainant is shown, in the discretion of the court, the damages may be doubled.

156.4. The complainant, upon proper showing, may also be granted injunction.

For copyright infringement:
SEC. 216.  Remedies for Infringement

216.1. Any person infringing a right protected under this law shall be liable: 

(a)  To an injunction restraining such infringement. The court may also order the defendant to desist from an infringement, among others, to prevent the entry into the channels of commerce of imported goods that involve an infringement, immediately after customs clearance of such goods. 

(b)  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. 

(c)  Deliver under oath, for impounding during the pendency of the action, upon such terms and conditions as the court may prescribe, sales invoices and other documents evidencing sales, all articles and their packaging alleged to infringe a copyright and implements for making them. 

(d)  Deliver under oath for 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. 

(e)  Such other terms and conditions, including the payment of moral and exemplary damages, which the court may deem proper, wise and equitable and the destruction of infringing copies of the work even in the event of acquittal in a criminal case. 

2.3  Execution of Court Orders

2.3.1  Local Court Orders
Under Section 1 Rule 39 of the Rules of Court, execution shall issue as a matter of right, on motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly perfected.

If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders sought to be enforced and of the entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the writ of execution.

2.3.2  Overseas Court Orders
Per Section 48 Rule 39 of the Rules of Court, the effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows:

(a) In case of a judgment or final order upon a specific thing, the judgment or final order is conclusive upon the title to the thing; and

(b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title. 
 

In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.

3.  CRIMINAL IPR ENFORCEMENT                             

3.1  Police Authorities (commercial, market, economic police etc.)
Philippine National Police.

3.2  Competent courts and jurisdiction (including appeal)
See 2.1.

3.3  Penalties

For patent infringement
Sec. 84. Criminal Action for Repetition of Infringement. - 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 offenders shall, without prejudice to the institution of a civil action for damages, be criminally liable therefor and, upon conviction, shall suffer imprisonment for the period of not less than six (6) months but not more than three (3) years and/or a fine of not less than One hundred thousand pesos (PhP 100,000) but not more than Three hundred thousand pesos (Php 300,000), at the discretion of the court. The criminal action herein provided shall prescribed in three (3) years from date of the commission of the crime.

For trademark infringement
SEC. 170. Penalties. - Independent of the civil and administrative sanctions imposed by law, a criminal penalty of imprisonment from two (2) years to five (5) years and a fine ranging from Fifty thousand pesos (P50,000) to Two hundred thousand pesos (P200,000), shall be imposed on any person who is found guilty of committing any of the acts mentioned in Section 155, Section 168 and Subsection 169.1. (Arts. 188 and 189, Revised Penal Code)

For copyright infringement
SEC. 217. Criminal Penalties. –
217.1. Any person infringing any right secured by provisions of Part IV of this Act or aiding or abetting such infringement shall be guilty of a crime punishable by: 
(a)  Imprisonment of one (1) year to three (3) years plus a fine ranging from Fifty thousand pesos (P50,000) to One hundred fifty thousand pesos (P150,000) for the first offense. 
(b)  Imprisonment of three (3) years and one (1) day to six (6) years plus a fine ranging from One hundred fifty thousand pesos (P150,000) to Five hundred thousand pesos (P500,000) for the second offense. 
(c)  Imprisonment of six (6) years and one (1) day to nine (9) years plus a fine ranging from Five hundred thousand pesos (P500,000) to One million five hundred thousand pesos (P1,500,000) for the third and subsequent offenses.

In all cases, subsidiary imprisonment in cases of insolvency. 
216. 2. In an infringement action, the court shall also have the power to order the seizure and impounding of any article which may serve as evidence in the court proceedings 

4.  BORDER CONTROL                         

4.1  Registration Procedure

An IPR holder/Owner, or his agent, shall accomplish the prescribed Application Form and submit it to the Bureau of Customs’ Intellectual Property Unit (IPU) Secretariat together with the following requirements:

a.  Affidavit attesting that:
a.1 the applicant is the rightful owner of the IPR sought to be recorded, or,
a.2 in the case of a representative or an agent, that he is duly authorized by the IPR Holder/Owner to make the application, and
a.3 that the persons or other entities in the submitted list, if any, are so authorized or not so authorized to make the importation or distribution of such products covered by the IPR, together with a sufficient description of the products covered by the IPR sought to be recorded, and samples thereof, if possible.

b.  Documentary requirements:
b.1 In the case of IPR registered with the IPO, three (3) certified true copies of the Certificate of Registration issued by the said office.
b.2 In the case of IPR not registered with the IPO, three (3) certified true copies of a decision or resolution of a court or other competent authority declaring or recognizing the claim to an IPR.
b.3 In the case of copyright and related rights, an Affidavit executed by the IPR Holder/Owner or his duly authorized representative stating that:
(i)  at the time specified therein, copyright subsists in the work or other subject matter;
(ii)  he or the person named therein is the owner of the copyright; and
(iii)  the copy of the work or other subject matter annexed thereto is a true copy thereof.

c.  Payment of recordation fee of PhP Two Thousand (P 2,000.00) per product but in no case to exceed PhP Twenty Thousand (P 20,000.00) per IPR Holder/Owner.
Upon compliance of the above requirements, the IPU Secretariat shall prepare, for the Commissioner’s signature, a Customs Memorandum Circular addressed to all Collectors of Customs setting forth the fact of recordation together with a description or model of the registered product/s.

4.2  Registration Authority
Bureau of Customs.

4.3  Relevant Courts
See 2.1.

4.4  Remedies (Injunction)
See 2.2.

5.  ADMINISTRATIVE IPR ENFORCEMENT                            

5.1  Role of Patent Office (If any)

Sec. 5. Functions of the Intellectual Property Office (IPO)
x x x
f)          Administratively adjudicate contested proceedings affecting intellectual property rights; and
x x x

Sec.10. The Bureau of Legal Affairs . - The Bureau of Legal Affairs shall have the following functions:  
10.1. Hear and decide opposition to the application for registration of marks; cancellation of trademarks; subject to the provisions of Section 64, cancellation of patents, utility models, and industrial designs; and petitions for compulsory licensing of patents;  
10.2. (a) Exercise original jurisdiction in administrative complaints for violations of laws involving intellectual property rights: Provided, That its jurisdiction is limited to complaints where the total damages claimed are not less than Two hundred thousand pesos (PhP 200,000): Provided further, That availment of the provisional remedies may be granted in accordance with the Rules of Court. The Director of Legal Affairs shall have the power to hold and punish for contempt all those who disregard orders or writs issued in the course of the proceedings.
(b) After formal investigation, the Director for Legal Affairs may impose one (1) or more of the following administrative penalties:  
(i)  The issuance of a cease and desist order which shall specify the acts that the respondent shall cease and desist from and shall require him to submit a compliance report within a reasonable time which shall be fixed in the order; 
(ii)  The acceptance of a voluntary assurance of compliance or discontinuance as may be imposed. Such voluntary assurance may include one or more of the following:  
(1) An assurance to comply with the provisions of the intellectual property law violated; 
(2) An assurance to refrain from engaging in unlawful and unfair acts and    practices subject of the formal investigation; 
(3) An assurance to recall, replace, repair, or refund the money value of defective goods distributed in commerce; and 
(4) An assurance to reimburse the complainant the expenses and costs incurred in prosecuting the case in the Bureau of Legal Affairs.  
The Director of Legal Affairs may also require the respondent to submit periodic compliance reports and file a bond to guarantee compliance of his undertaking
(iii)  The condemnation or seizure of products which are subject of the offense. The goods seized hereunder shall be disposed of in such manner as may be deemed appropriate by the Director of Legal Affairs, such as by sale, donation to distressed local governments or to charitable or relief institutions, exportation, recycling into other goods, or any combination thereof, under such guidelines as he may provide; 
(iv)  The forfeiture of paraphernalia and all real and personal properties which have been used in the commission of the offense; 
(v)  The imposition of administrative fines in such amount as deemed reasonable by the Director of Legal Affairs, which shall in no case be less than Five thousand pesos (PhP 5,000) nor more than One hundred fifty thousand pesos (PhP 150,000). In addition, an additional fine of not more than One thousand pesos (PhP 1,000) shall be imposed for each day of continuing violation; (vi)                       The cancellation of any permit, license, authority, or registration which may have been granted by the Office, or the suspension of the validity thereof for such period of time as the Director of Legal Affairs may deem reasonable which shall not exceed one (1) year;
(vii)  The withholding of any permit, license, authority, or registration which is being secured by the respondent from the Office;
(viii)  The assessment of damages;
(ix)  Censure; and;
(x)  Other analogous penalties or sanctions. 

5.2  Relevant Courts
See 2.1.

6.  COMMENTS                             

• Continue relentless enforcement operations.
• Promote the creation of permanent IP units in relevant government agencies with proper budgetary and staff support.
• Conduct vigorous public awareness and education campaign with the help of the government’s media and information agencies, the Department of Education, and the private sector.
• Focus on prosecution and conviction with the new IP Prosecutors unit in the Department of Justice and the designated IP prosecutors nationwide. 
• Continue collaboration with the Supreme Court and the Philippine Judicial Academy for the specialized IP training and support for judges and court personnel.
• Creation of two or three Special IP and International Trade Courts similar to Thailand’s. 
• Promote Mediation as an alternative to litigation in the resolution of cases and disputes involving IPR.