A b I e R f u P l H l I y L I p P a P

OPLE - IPL NOTES Basis of the Intellectual Property Law (R.A. 8293, as amended) Section 2. Declaration of State Policy. - The State recognizes that an effective intellectual and industrial property system is vital to the development of domestic and creative activity, facilitates transfer of technology, attracts foreign investments, and ensures market access for our products. It shall protect and secure the exclusive rights of scientists, inventors, artists and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such periods as provided in this Act. It is also the policy of the State to streamline administrative procedures of registering patents, trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement of intellectual property rights in the Philippines. (n) RA 10055, Sec. 4 (a)"Intellectual Property (IP)" is the term used to describe intangible assets resulting from the creative work of an individual or organization. IP also refers to creations of the mind, such as inventions, literary and artistic works, and symbols, names, images and designs used in commerce. IP CODE, Sec. 3. International Conventions and Reciprocity Any person who is a national or who is domiciled or has a real and effective industrial establishment in a country which is a party to any convention, treaty or agreement relating to intellectual property rights or the repression of unfair competition, to which the Philippines is also a party, or extends reciprocal rights to nationals of the Philippines by law, shall be entitled to benefits to the extent necessary to give effect to any provision of such convention, treaty or reciprocal law, in addition to the rights to which any owner of an intellectual property right is otherwise entitled by this Act. (n) Sec. 6. The Organizational Structure of the IPO 6.1. The Office shall be headed by a Director General who shall be assisted by two (2) Deputies Director General. 6.2. The Office shall be divided into six (6) Bureaus, each of which shall be headed by a Director and assisted by an Assistant Director. These Bureaus are: a) The Bureau of Patents; b) The Bureau of Trademarks; c) The Bureau of Legal Affairs; d) The Documentation, Information and Technology Transfer Bureau; e) The Management Information System and EDP Bureau; and f) The Administrative, Financial and Personnel Services Bureau. 6.3. The Director General, Deputies Director General, Directors and Assistant Directors shall be appointed by the President, and the other officers and employees of the Office by the Secretary of Trade and Industry, conformably with and under the Civil Service Law. (n) CASES: Pest Management Association of the Philippines vs. Fertilizer and Pesticide Authority G.R. No. 156041, February 21, 2007 Facts The case commenced upon PMAPs filing of a Petition For Declaratory Relief With Prayer For Issuance Of A Writ Of Preliminary Injunction And/Or Temporary Restraining Order with the RTC on January 4, 2002. Petitioner, a non-stock corporation duly organized and existing under the laws of the Philippines, is an association of pesticide handlers duly licensed by respondent Fertilizer and Pesticide Authority (FPA). It questioned the validity of Section 3.12 of the 1987 Pesticide Regulatory Policies and Implementing Guidelines, which provides thus: 3.12 Protection of Proprietary Data Data submitted to support the first full or conditional registration of a pesticide active ingredient in the Philippines will be granted proprietary protection for a period of seven years from the date of such registration. During this period subsequent registrants may rely on these data only with third party authorization or otherwise must submit their own data. After this period, all data may be freely cited in support of registration by any applicant, provided convincing proof is submitted that the product being registered is identical or substantially similar to any current registered pesticide, or differs only in ways that would not significantly increase the risk of unreasonable adverse effects. Issues Whether or not FPA encroach upon the jurisdiction of the Intellectual Property Office? Held There is no encroachment upon the powers of the IPO granted under R.A. No. 8293, otherwise known as the Intellectual Property Code of the Philippines. Section 5 thereof enumerates the functions of the IPO. Nowhere in said provision does it state nor can it be inferred that the law intended the IPO to have the exclusive authority to protect or promote intellectual property rights in the Philippines. On the contrary, paragraph (g) of said Section even provides that the IPO shall "[c]oordinate with other government agencies and the private sector efforts to formulate and implement plans and policies to strengthen the protection of intellectual property rights in the country." Clearly, R.A. No. 8293 recognizes that efforts to fully protect intellectual property rights cannot be undertaken by the IPO alone. Other agencies dealing with intellectual property rights are, therefore, not precluded from issuing policies, guidelines and regulations to give protection to such rights. Lastly, FPA emphasize that the provision on protection of proprietary data does not usurp the functions of the Intellectual Property Office (IPO) since a patent and data protection are two different matters. A patent prohibits all unlicensed making, using and selling of a particular product, while data protection accorded by the FPA merely prevents copying or unauthorized use of an applicant's data, but any other party may independently generate and use his own data. It is further argued that under Republic Act No. 8293 (R.A. No. 8293), the grant of power to the IPO to administer and implement State policies on intellectual property is not exclusionary as the IPO is even allowed to coordinate with other government agencies to formulate and implement plans and policies to strengthen the protection of intellectual property rights. Ching vs. Salinas, G.R. No. 161295, June 29, 2005 Facts Jessie G. Ching is the owner and general manager of Jeshicris Manufacturing Co., the maker and manufacturer of a Utility Model, described as Leaf Spring Eye Bushing for Automobile made up of plastic. On September 4, 2001, Ching and Joseph Yu were issued by the National Library Certificates of Copyright Registration and Deposit of the said work described therein as Leaf Spring Eye Bushing for Automobile. On September 20, 2001, Ching requested the National Bureau of Investigation (NBI) for police/investigative assistance for the apprehension and prosecution of illegal manufacturers, producers and/or distributors of the works. After due investigation, the NBI filed applications for search warrants in the RTC of Manila against William Salinas, Sr. and the officers and members of the Board of Directors of Wilaware Product Corporation. It was alleged that the respondents therein reproduced and distributed the said models penalized under Sections 177.1 and 177.3 of Republic Act (R.A.) No. 8293. Issues Whether or not the subject matter is covered by the Copyright of the Intellectual Property Code? Held It is worthy to state that the works protected under the Law on Copyright are: literary or artistic works (Sec. 172) and derivative works

OPLE - IPL NOTES (Sec. 173). The Leaf Spring Eye Bushing and Vehicle Bearing Cushion fall on neither classification. 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 authentic works of applied art. They are not even artistic creations with incidental utilitarian functions or works incorporated in a useful article. In actuality, the personal properties described in the search warrants are mechanical works, the principal function of which is utility sans any aesthetic embellishment. Neither are we to regard the Leaf Spring Eye Bushing and Vehicle Bearing Cushion as included in the catch-all phrase other literary, scholarly, scientific and artistic works in Section 172.1(a) of R.A. No. 8293. Applying the principle of ejusdem generis which states that where a statute describes things of a particular class or kind accompanied by words of a generic character, the generic word will usually be limited to things of a similar nature with those particularly enumerated, unless there be something in the context of the state which would repel such inference,[46] the Leaf Spring Eye Bushing and Vehicle Bearing Cushion are not copyrightable, being not of the same kind and nature as the works enumerated in Section 172 of R.A. No. 8293. Samson vs. Daway G.R. Nos. 160054-55, July 21, 2004 Facts: Samson, owner/proprietor of ITTI Shoes/Mano Shoes Manufactuirng Corporation located at Robinsons Galleria, EDSA corner Ortigas Avenue, Quezon City, did then and there willfully, unlawfully and feloniously distribute, sell and/or offer for sale CATERPILLAR products such as footwear, garments, clothing, bags, accessories and paraphernalia which are closely identical to and/or colorable imitations of the authentic Caterpillar products and likewise using trademarks, symbols and/or designs as would cause confusion, mistake or deception on the part of the buying public to the damage and prejudice of CATERPILLAR, INC., the prior adopter, user and owner of the following internationally: CATERPILLAR, CAT, CATERPILLAR & DESIGN, CAT AND DESIGN, WALKING MACHINES and TRACK-TYPE TRACTOR & DESIGN. Caterpillar Inc. sued Samson for unfair competition in RTC. Samson filed a motion to for the quashal of information for lack of jurisdiction. Samson contended that since under Section 170 of R.A. No. 8293, the penalty of imprisonment for unfair competition does not exceed six years, the offense is cognizable by the Municipal Trial Courts and not by the Regional Trial Court, per R.A. No. 7691. xxx Under Section 170 of R.A. No. 8293, which took effect on January 1, 1998, the criminal penalty for infringement of registered marks, unfair competition, false designation of origin and false description or representation, is imprisonment from 2 to 5 years and a fine ranging from Fifty Thousand Pesos to Two Hundred Thousand Pesos. (jurisdiction of Municipal Trial Courts) xxx Under Section 27 of of R.A. No. 166 (The Trademark Law) SEC. 27. Jurisdiction of Court of First Instance. All actions under this Chapter [V Infringement] and Chapters VI [Unfair Competition] and VII [False Designation of Origin and False Description or Representation], hereof shall be brought before the Court of First Instance. Issues: Whether or not R.A. No. 166 was expressly repealed by R.A. No. 8293? Held: No, R.A. No. 8293 does not expressly repealed R.A. 166. SEC. 239. Repeals. 239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are hereby repealed. Notably, the aforequoted clause did not expressly repeal R.A. No. 166 in its entirety, otherwise, it would not have used the phrases parts of Acts and inconsistent herewith; and it would have simply stated Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended are hereby repealed. It would have removed all doubts that said specific laws had been rendered without force and effect. The use of the phrases parts of Acts and inconsistent herewith only means that the repeal pertains only to provisions which are repugnant or not susceptible of harmonization with R.A. No. 8293.7 Section 27 of R.A. No. 166, however, is consistent and in harmony with Section 163 of R.A. No. 8293. Had R.A. No. 8293 intended to vest jurisdiction over violations of intellectual property rights with the Metropolitan Trial Courts, it would have expressly stated so under Section 163 thereof. Kho vs. CA, G.R. No. 115758, March 19, 2002 Facts Kho is doing business under the name and style of KEC Cosmetics Laboratory, the registered owner of the copyrights Chin Chun Su and Oval Facial Cream Container/Case, that she also has patent rights on Chin Chun Su & Device and Chin Chun Su for medicated cream after purchasing the same from Quintin Cheng, the registered owner thereof in the Supplemental Register of the Philippine Patent Office. Summerville advertised and sold Khos cream products under the brand name Chin Chun Su, in similar containers that Kho uses, thereby misleading the public, and resulting in the decline in the Khos business sales and income; and, that the Summerville should be enjoined from allegedly infringing on the copyrights and patents of the Kho. Summerville on the other hand, alleged as their defense that they are the exclusive and authorized importer, re-packer and distributor of Chin Chun Su products manufactured by Shun Yi Factory of Taiwan; that the said Taiwanese manufacturing company authorized Summerville to register its trade name Chin Chun Su Medicated Cream with the Philippine Patent Office and other appropriate governmental agencies; that KEC Cosmetics Laboratory of the of Kho obtained the copyrights through misrepresentation and falsification; and, that the authority of Quintin Cheng, assignee of the patent registration certificate, to distribute and market Chin Chun Su products in the Philippines had already been terminated by the said Taiwanese Manufacturing Company. On December 20, 1991, Elidad C. Kho filed a complaint for injunction and damages with a prayer for the issuance of a writ of preliminary injunction, against the Summerville General Merchandising and Company (Summerville, for brevity) and Ang Tiam Chay. Issues Whether the copyright and patent over the name and container of a beauty cream product would entitle the registrant to the use and ownership over the same to the exclusion of others? Held Trademark, copyright and patents are different intellectual property rights that cannot be interchanged with one another. 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. In relation thereto, a trade name means the name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic works which are original intellectual creations in the literary and artistic domain protected from the moment of their creation. Patentable inventions, on the other hand, 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.

OPLE - IPL NOTES Kho has no right to support her claim for the exclusive use of the subject trade name and its container. The name and container of a beauty cream product are proper subjects of a trademark inasmuch as the same falls squarely within its definition. In order to be entitled to exclusively use the same in the sale of the beauty cream product, the user must sufficiently prove that she registered or used it before anybody else did. The petitioners copyright and patent registration of the name and container would not guarantee her right to the exclusive use of the same for the reason that they are not appropriate subjects of the said intellectual rights. Consequently, a preliminary injunction order cannot be issued for the reason that the petitioner has not proven that she has a clear right over the said name and container to the exclusion of others, not having proven that she has registered a trademark thereto or used the same before anyone did. AIR PHILIPPINES CORPORATION vs. PENNSWELL, INC. G.R. No. 172835 December 13, 2007 FACTS: Respondent delivered and sold to petitioner sundry goods in trade. Under the contracts, petitioners total outstanding obligation amounted to P449,864.98 with interest at 14% per annum until the amount would be fully paid. For failure of the petitioner to comply with its obligation under said contracts, respondent filed a Complaint for a Sum of Money with the RTC. In its Answer, petitioner contended that its refusal to pay was not without valid and justifiable reasons. Petitioner alleged that it was defrauded by respondent for its previous sale of four items. Said items were misrepresented by respondent as belonging to a new line, but were in truth and in fact, identical with products petitioner had previously purchased from respondent. Petitioner asserted that it was deceived by respondent which merely altered the names and labels of such goods. During the pendency of the trial, petitioner filed a Motion to Compel respondent to give a detailed list of the ingredients and chemical components of the products.The RTC rendered an Order granting the petitioners motion and directed Pennswell, Inc. to give Air Philippines Corporation, a detailed list of the ingredients or chemical components of the chemical products. Respondent sought reconsideration of the foregoing Order, contending that it cannot be compelled to disclose the chemical components sought because the matter is confidential. It argued that what petitioner endeavored to inquire upon constituted a trade secret which respondent cannot be forced to divulge. The RTC reversed itself and issued an Order, finding that the chemical components are respondents trade secrets and are privileged in character. Alleging grave abuse of discretion on the part of the RTC, petitioner filed a Petition for Certiorari under Rule 65 of the Rules of Court with the CA, which denied the Petition and affirmed the Order of the RTC. ISSUE: Whether or not the chemical components of respondents products are privileged in character. RULING: Section 24 of Rule 130 draws the types of disqualification by reason of privileged communication, to wit: (a) communication between husband and wife; (b) communication between attorney and client; (c) communication between physician and patient; (d) communication between priest and penitent; and (e) public officers and public interest. There are, however, other privileged matters that are not mentioned by Rule 130. Among them are the following: (a) editors may not be compelled to disclose the source of published news; (b) voters may not be compelled to disclose for whom they voted; (c) trade secrets; (d) information contained in tax census returns; and (d) bank deposits. The Court, ruled against the petitioner and affirmed the ruling of the CA which upheld the finding of the RTC that there is substantial basis for respondent to seek protection of the law for its proprietary rights over the detailed chemical composition of its products. TAN v. BAUSCH & LOMB, INC. December 15, 2005 FACTS: Assailed in this petition for review[1] are the decision[2] and resolution[3] of the Court of Appeals which set aside the December 22, 1998 order[4] of Judge Genis Balbuena of Branch 21, Regional Trial Court (RTC), Cebu City and ordered the transfer of Criminal Case No. CBU45890 to Branch 9, RTC, Cebu City. On April 8, 1997, an information[5] for violation of paragraph 1, Article 189 [6] of the Revised Penal Code (RPC) was filed before Branch 21, RTC, Cebu City against petitioners Andrea Tan, Clarita Llamas, Victor Espina and Luisa Espina of Best Buy Mart, Inc. The information read: That on or about June 27, 1996 and sometime prior or subsequent thereto, in the City of Cebu, Philippines, and within the jurisdiction of this Honorable Court, abovementioned accused, conspiring and mutually helping each other, did then and there willfully, unlawfully and feloniously distribute and sell counterfeit RAY BAN sunglasses bearing the appearance and trademark of RAY BAN in the aforesaid store wherein they have direct control, supervision and management thereby inducing the public to believe that these goods offered by them are those of RAY BAN to the damage and prejudice of BAUSCH AND LOMB, INC., the exclusive owner and user of trademark RAY BAN on sunglasses.[7] On January 21, 1998, respondent filed a motion to transfer the case to Branch 9, RTC, Cebu City. Administrative Order No. 113-95[8] (A.O. No. 113-95) designated the said branch as the special court in Region VII to handle violations of intellectual property rights. On March 2, 1998, petitioners filed a motion to quash[9] the information on the ground that the RTC had no jurisdiction over the offense charged against them. The penalty[10] provided by the RPC for the crime was within the jurisdiction of the Municipal Trial Court in Cities (MTCC). On March 6, 1998, respondent filed an opposition to the motion to quash,[11] explaining that BP 129 had already transferred the exclusive jurisdiction to try and decide violations of intellectual property rights from the MTC and MTCC to the RTC and that the Supreme Court had also issued Administrative Order No. 104-96 (A.O. No. 104-96)[12] deleting and withdrawing the designation of several branches of the MTC and MTCC as special intellectual property courts. On December 22, 1998, the court a quo denied respondents motion to transfer the case and granted petitioners motion to quash. It ruled: Accused [wa]s charged for violation of Art. 189 of Revised Penal Code the penalty for which is prision correccional in its minimum period or a fine ranging from P500.00 to P2,000.00, or both. Hence, within the jurisdiction of the metropolitan and municipal trial courts (Sec. 32(2), B.P. Blg. 129, as amended). Administrative Orders Nos. 113-95 and 104-96, cited by plaintiff, cannot prevail over the express provisions of Batas Pambansa Blg. 129, as amended, jurisdiction of courts being a matter of substantive law. If this Court has no jurisdiction over the case, the same is true with Branch 9 of the same court, Therefore, the motion to transfer the case to the latter should fail. The case is thus dismissed. Respondent received the order on January 21, 1999 but filed neither an appeal nor a motion for reconsideration. Rather, it filed a petition for certiorari[14] in the Court of Appeals on March 23, 1999 or one (1) day beyond the period allowed in Section 4, Rule 65[15] of the Rules of Court. Respondents procedural lapses notwithstanding, the appellate court gave due course to the petition and set aside the trial court order: WHEREFORE, the petition is GIVEN DUE COURSE and GRANTED. The assailed Order of December 22, 1998 is VACATED and another is entered ordering the transfer of Crim. Case No. CBU-45890 to Branch 9 of the Regional Trial Court of Cebu City, and directing the public respondent to accordingly transmit the records thereof. issues: I. THE COURT OF APPEALS SERIOUSLY ERRED IN NOT DISMISSING THE PETITION OF RESPONDENT THAT IS FRAUGHT WITH FATAL INFIRMITIES.

OPLE - IPL NOTES II. THE COURT OF APPEALS SERIOUSLY ERRED IN REVERSING THE CORRECT RULING OF THE TRIAL COURT THAT THE REGIONAL TRIAL COURT HAS NO JURISDICTION OVER THE OFFENSE OF UNFAIR COMPETITION UNDER ARTICLE 189 OF THE REVISED PENAL CODE.[17] There is no merit in the petition. As to the first assigned error, petitioners contend that the Court of Appeals erred in giving due course to the petition for certiorari because respondent failed to appeal or file a motion for reconsideration of the trial courts order granting the motion to quash. Worse, respondent filed the petition in the appellate court one day after the reglementary period expired. Needless to state, the acceptance of a petition for certiorari as well as the grant of due course thereto is, ing eneral, addressed to the sound discretion of the court.[18] Besides, the provisions of the Rules of Court, which are technical rules, may be relaxed in certain exceptional situations.[19] Where a rigid application of the rule that certiorari cannot be a substitute for appeal will result in a manifest failure or miscarriage of justice, it is within our power to suspend the rules or exempt a particular case from its operation.[20] Under certain special circumstances,[21] a petition for certiorari may be given due course notwithstanding that no motion for reconsideration was filed in the lower court. The exception applies in this case since the order of the trial court was, as will be discussed later, a patent nullity. Likewise, the one-day delay in the filing of the petition may be excused on the basis of equity to afford respondent the chance to prove the merits of the complaint. In Yao v. Court of Appeals,[22] we held: In the interest of substantial justice, procedural rules of the most mandatory character in terms of compliance may be relaxed. In other words, if strict adherence to the letter of the law would result in absurdity and manifest injustice or where the merit of a partys cause is apparent and outweighs consideration of non-compliance with certain formal requirements, procedural rules should definitely be liberally construed. A party-litigant is to be given the fullest opportunity to establish the merits of his complaint or defense rather than for him to lose life, liberty, honor or property on mere technicalities. Hence, the only relevant issue left for our resolution is whether or not the jurisdiction over the crime allegedly committed by petitioners is vested on the RTC. Section 5 (5) of the 1987 Constitution empowers the Supreme Court to promulgate rules concerning pleading, practice and procedure in all courts. The limitations to this rule-making power are the following: the rules must (a) provide a simplified and inexpensive procedure for the speedy disposition of cases; (b) be uniform for all courts of the same grade and (c) not diminish, increase or modify substantive rights.[23] As long as these limits are met, the argument used by petitioners that the Supreme Court, through A.O. Nos. 113-95 and 104-96, transgressed on Congress sole power to legislate, cannot be sustained. A.O. No. 113-95 designated special intellectual property courts to promote the efficient administration of justice and to ensure the speedy disposition of intellectual property cases. A.O. No. 104-96,[24] on the other hand, was issued pursuant to Section 23 of BP 129[25] which transferred the jurisdiction over such crimes from the MTC and MTCC to the RTC and which furthermore gave the Supreme Court the authority to designate certain branches of the RTC to exclusively handle special cases in the interest of the speedy and efficient administration of justice. Accordingly, the RTC was vested with the exclusive and original jurisdiction to try and decide intellectual property cases. The transfer of jurisdiction from the MTC and MTCC to the RTC did not in any way affect the substantive rights of petitioners. The administrative orders did not change the definition or scope of the crime of unfair competition with which petitioners were charged. Both administrative orders therefore have the force and effect of law, having been validly issued by the Supreme Court in the exercise of its constitutional rule-making power. The trial court, being a subordinate court, should have followed the mandate of the later A.O. 104-96 which vested jurisdiction over the instant case on the RTC. Thus, the appellate court correctly found that the court a quo committed grave abuse of discretion. Furthermore, the order of the trial court was a patent nullity. In resolving the pending incidents of the motion to transfer and motion to quash, the trial court should not have allowed petitioners to collaterally attack the validity of A.O. Nos. 113-95 and 104-96. We have ruled time and again that the constitutionality or validity of laws, orders, or such other rules with the force of law cannot be attacked collaterally. There is a legal presumption of validity of these laws and rules. Unless a law or rule is annulled in a direct proceeding, the legal presumption of its validity stands.[26] The trial courts order was consequently null and void. The transfer of this case to Branch 9, RTC, Cebu City, however, is no longer possible. A.M. No. 03-03-03-SC[27] consolidated the intellectual property courts and commercial SEC courts in one RTC branch in a particular locality to streamline the court structure and to promote expediency. The RTC branch so designated will try and decide cases involving violations of intellectual property rights, and cases formerly cognizable by the Securities and Exchange Commission. It is now called a special commercial court. In Region VII, the designated special commercial court is Branch 11, RTC, Cebu City. The transfer of this case to that court is therefore warranted. WHEREFORE, the Court of Appeals decision dated October 20, 2000 is hereby AFFIRMED with the MODIFICATION that Criminal Case No. CBU-45890 shall be transferred to Branch 11, RTC, Cebu City. Let the records of the case be transmitted thereto and the case tried and decided with dispatch.